Global Smart Manufacturing Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Market Overview

The Global Smart Manufacturing Market (henceforth referred to as the market studied) was valued at USD 172.60 Billion in 2020, and it is expected to reach USD 236.12 Billion by 2026, registering a CAGR of 5.75% during the forecast period, 2020-2026. The outbreak of COVID-19 has triggered the manufacturing sector to re-evaluate its traditional production processes, primarily driving the digital transformation and smart manufacturing practices across the production lines. The manufacturers are also collectively being forced to devise and implement multiple new and agile approaches to monitor product and quality control. The pandemic has also created economic turmoil for small, medium, and large-scale industries alike across the globe. Adding to the woes, country-wise lockdowns have been inflicted by the governments to minimize the spread of the virus has further resulted in industries taking a hit. The impact of the COVID-19 crisis has forced businesses to adhere to strict requirements to ensure the ongoing safety of their employees and customers alike. As a result, the need for automation has witnessed a sudden spike. This could be observed as a notable trend in the foreseeable future.

• Industry 4.0 has been aiding the transition of industries from having legacy systems to smart components and smart machines to facilitate digital factories, and later, to an ecosystem of connected plants and enterprises. Anticipating the increased adoption of IoT and digital transformation across industries, the European Commission estimated that the value of IoT in Europe itself is expected to exceed EUR 1 trillion in 2020.
• Smart manufacturing initiatives are also on the rise. Smart Manufacturing Leadership Coalition (SMLC), a combination of US‐based industrial organizations, technology suppliers, laboratories, and universities, is currently working on next-generation Smart Manufacturing Platform and Smart Factory connectivity. Similarly, the Industrial Internet Consortium (IIC), another industry‐led initiative, was established to bring together advanced technologies and organizations necessary to accelerate the growth of industrial automation.
• The use of software and services, such as PLC, SCADA, ERP, DCS, HMI, PLM, and MES, has enabled the industries to gather real-time data and make decisions based on them. This software has been beneficial for the industry in reducing the faults in the product, reducing downtime, scheduled maintenance, and switch, from being in the reactive state to predictive and prescriptive stages and decision making.
• The adoption of international standards on environmental management systems, notably the ISO 50001 standard, has grown significantly over the last few years. This is also forcing manufacturers to invest in energy-saving strategies, hence, developing space for the market studied to grow.
• Smart manufacturing also utilizes Big Data analytics to refine complicated processes and manage supply chains. Big Data analytics allows an enterprise to use smart manufacturing to shift from reactionary practices to predictive ones, a change that targets improving the efficiency of the process and performance of the product.
• Moreover, the rise of Industry 4.0 and the IIoT has made the market more accessible, as it has become easier to turn machines in the manufacturing industry into a form of smart and connected. It has made manufacturing processes and stages available through one control center, wearables, increasing its accessibility, improving the operational processes, and ease of use.

Scope of the Report

Smart manufacturing utilizes Big Data analytics to refine complicated processes and manage supply chains. Big data analytics allows an enterprise to use smart manufacturing to shift from reactionary practices to predictive ones, a change that targets improved efficiency of the process and performance of the product.

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Key Market Trends

Automotive Industry is Expected to Drive the Market Growth

• Automotive manufacturing is expected to gain strong impetus from smart technologies, Industry 4.0, IoT, etc. For instance, discrete manufacturing is the manufacturing or production of distinct parts that can be individually touched and counted. The parts are mainly related to assembly lines. Discrete manufacturing includes products, such as cars, automotive parts, etc., that are getting increasingly connected.
• Smart manufacturing is expected to help in balancing supply and demand, enhancing product design, optimizing manufacturing efficiency, and significantly reducing waste. Field devices, like robotics, sensors, etc., and ICS offer opportunities to the automotive sector to react faster to market requirements, reduce manufacturing downtimes, and enhance the efficiency of supply chains, and expand productivity.
• Smart manufacturing addresses the prime concern of the automotive industry, i.e., the length of a project. Quick return-on-investment projects combined with low-cost automation and cost innovation are helping manufacturers in improving competitiveness through productivity improvement.
• For the past 50 years, the automotive industry has been using robots in its assembly lines for various manufacturing processes. Currently, automakers are exploring the use of robotics in more processes. Robots are more efficient, flexible, accurate, and dependable for these product lines. This technology enables the automotive industry to remain one of the largest robot users and possess one of the most automated supply chains globally. Industrial data suggests that automotive manufacturers expect that 24% of their plants will be smart factories by 2022, and 49% of automakers have already invested more than USD 250 million in smart factories.
• For instance, International Automotive Components (IAC) had earlier implemented manufacturing 4.0 and smart factory applications at its UK site in Halewood, England. The new application is expected to deploy smart logistics, cross-company integration, and collaborative robots (cobots).​
• Further, the growing presence of robots and automation in the European automotive industries is further expected to fuel the market for smart factories in the region. For instance, PSA Group, Europe's second-largest car manufacturer, has been modernizing its European manufacturing sites with Universal Robots' UR10 collaborative robots.
• According to UBS, the projected electric vehicle sales in Europe are expected to reach 6.33 million units by 2025, followed by China, with 4.84 million units. As Europe and Asia-Pacific are leading the electric vehicles demand, the regions are anticipated to see an increase in smart automotive factories' implementation.

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