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Smart factory market overview in 2021

Source:Market Updates     Date:2021-03-08
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The global smart factory market was valued at US$211.74 billion in 2017. This market is expected to reach US$358.01 billion by 2023, at a CAGR of 9.17% during the forecast period (2018 - 2023). Smart factory refers to various fully-integrated automation solutions adopted for manufacturing facilities. This integration helps streamline the material flow during all the processes involved in the manufacturing, thus, enabling effective movement of materials across the factory floor. Combining the digital and physical worlds has revolutionized the automation industry, thereby, enabling optimum performance. Several manufacturing companies are now capable of achieving zero waste production and shorter time to market. The judicious adoption of smart systems could extend a way in reducing the need for human labor, particularly in challenging environments. Quality control processes have historically relied on human intervention; however, a greater availability of these smart factory systems, with more user-friendly controls, is expected to gain popularity in complex manufacturing settings.

Industry digitization and end-to-end supply chain visibility to drive the market growth

Digitization in industries allows for improved efficiency and optimum resource management. The definition of digitization of the industrial sector varies from industry to industry, depending on whether the focus is on connected systems or automation. IT and telecom and finance sectors have been the pioneers in adopting digitization in North America. However, manufacturing and processing industries have realized the potential of advanced technologies and deploying connected and smart systems. Digitization in the industries allows end-to-end visibility of industrial supply chain. Smart factory technologies constantly collect data from different equipment for performance monitoring. Smart factory systems, thus, allow easy data access of production volumes and operational data. This also enables companies to deploy advance data analysis tools to analyze and identify the flaws in the operation and rectify them to improve the overall efficiency.

Automotive to dominate the market by end user

The rapid development of the digital economy is changing consumer expectations and old business models are being adapted, changed and even scrapped as a result. In order to reclaim its leading position in production technologies, the American manufacturing industry has launched a digital transformation offensive. The United States and Canada produced 8,263,780 and 1,568,214 commercial vehicles respectively, in 2016, where the output level is expected to increase further during the forecast period. The automotive industry is dominated by three major manufacturers, namely General Motors, Ford, and Chrysler. The automotive sector is, however, on the edge of dramatic change. Constant technological advancements are creating a host of opportunities that allow innovations and the development of safer, cleaner, and more efficient vehicles.

US dominates the smart factory market in North America

The United States is on the verge of the fourth industrial revolution, where data is being used on a large-scale for production while integrating the data with a wide variety of manufacturing systems throughout the supply chain. The United States is also one of the largest automotive markets in the world and is home to over 13 major auto manufacturers. The automotive manufacturing has been one of the largest revenue generators for the country in the manufacturing sector. Manufacturing industries from the United States are shifting their base to Mexico, due to the huge availability of inexpensive labor. This shift is expected to pose a major challenge for the US market. Hence, there is a need to come up with innovative technologies for reducing the costs, which can be achieved by implementing smart factory solutions to reduce human intervention.

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