The “Global Smart Factory Market, By Component(Hardware, Software, and Services) by Market Structure (To Connect, To Collect, To Analyze, To Control ), by Manufacturing Verticals (Automobile & Transportation, Food & Beverages, Electrical & Electronics, Aerospace & Defense, Oil & Gas, Garment & Textile, Chemical & Material, Others (healthcare & pharmaceuticals)), and by Region (North America, Europe, Asia Pacific, and Latin America, Middle East & Africa) - Global Forecast to 2027”, is expected to be valued at US$ 276.12 Billion by 2027, witnessing a CAGR of 13.3 % during the forecast period (2019-2027), as highlighted in a report published by Coherent Market Insights.
A smart factory is a production environment, in which production facilities and logistics systems are organized without human intervention. The primary basis of the smart factory is cyber-physical systems that communicate with each other by utilizing the Internet of Things and services. This allows a more efficient connection of supply chain and better organization within any production environment. These factories can run autonomously on a large scale with the ability to self-correct. A smart factory offers visibility, autonomy, and connectivity. Although companies have already employed automation, smart factories are a step further and run without human intervention. Moreover, smart factories can learn and adapt in real-time, making them more flexible than their predecessors, as they use modern technologies.
The global smart factory market is estimated to account for US$ 116.3 Bn in terms of value in 2019 and is expected to grow at a CAGR of 13.3% during the forecasted period 2019-27.
Growing emphasis on fulfilling consumer demands are expected to boost the global smart factory market growth over the forecast period
A number of factories are becoming increasingly customer-centric, delivering products that offer more benefits and meet specific needs, in order to meet the range of consumer requirements. Currently, consumers demand new varieties of products and have little tolerance with regard to quality issues. Furthermore, a smart factory allows optimized individual customer product manufacturing via intelligent collation of an ideal production system, which affects product properties, logistics, costs, security, reliability, time, and sustainability considerations. Thus, these factors are expected to support the global smart factory market growth during the forecast period.
Rising adoption of IIoT and cyber-physical systems can present significant growth opportunities
Adoption of industrial internet of things (IIoT) and cyber-physical systems (CPS) is expected to revolutionize the global smart factory market. IIoT allows connectivity all along the value chain for better communication among manufacturers, wholesalers, retailers, and consumers. CPS-optimized production processes at factories enable manufacturers to determine and identify various activities, offers several configuration options under different conditions as well as allows independent and wireless communication between factories.
High initial cost requires for installation is expected to hinder the global smart factory market growth over the forecast period
Implementation smart factory measures require a high initial investment. Although smart factories are beneficial in the long-term, initial installation is extremely expensive, especially for small and medium-sized enterprises. As a result of this, SMEs are reluctant to adopt smart factories, which in turn, is expected to hinder the global smart factory market growth over the forecast period.
Increasing investments in smart manufacturing is a major trend in the region
In Europe, governments are taking proactive initiatives to support development of new innovative production technologies, in order to sustain a highly competitive global market. For instance, The European Commission is investing around US$ 2 Bn on “Factories of The Future 2020” initiative, along with The European Factories of the Future Research Association (EFFRA) in the form of a public-private partnership to develop the blueprint for the smart manufacturing sector in the European Union.
Asia Pacific market share is expected to increase
Increasing investments by key players in the region are expected to expand the Asia Pacific smart factory market share in the near future. The revenue contribution is expected to remain the highest during the forecast period. According to Coherent Market Insights’ analysis, by 2015 end, APAC dominated the global smart factory market with a 38.5% market share and US$ 23.7 Bn in terms of market value.
Expanding market share
Currently, MEA commands a small share in the global smart factory market. However, according to Coherent Market Insights’ analysis, by 2025, the market share is expected to increase gradually. Many global players consider this region to be an emerging market with high growth potential. According to CMI, in terms of revenue, smart factory market in MEA is expected to gain 110 BPS over the forecast period.
Key players operating in the global smart factory market are Oracle Corporation, ABB Group, Atos SE, Rockwell Automation, Inc., Accenture PLC, General Electric Co., PTC Inc., Siemens AG, SAP SE, and IBM Corporation.