Modern Manufacturing Execution System (MES) Market Size, Share & Trends Analysis Report By Component (Software, Services), By Deployment (On-Premise, Cloud, Hybrid), By Discrete Industry (Automotive, Aerospace and Defense, Medical, FMCG, Electronics, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global modern manufacturing execution system (MES) market size was valued at USD 15.23 billion in 2023. It is estimated to reach USD 16.11 billion by 2032, growing at a CAGR of 11.30% during the forecast period (2024–2032).

A modern manufacturing execution system (MES) comprises hardware or software components that help manage and optimize production activities from the launch of orders to finished goods. It acts as a control system that monitors and controls the work in progress on the factory floor. These systems help keep track of all manufacturing information in real time and enable continuous receiving of updated data from robots, machine monitors, and employees. Moreover, it can automatically perform timed operations as part of the routing used in workstation scheduling.

MES systems have been evolving, and their capabilities are broadening; this helps manage the internal quality and supply chain. In addition to its core functions, an MES allows manufacturers to overcome the challenge of regulatory compliance set by the Food and Drug Administration (FDA) for regulated industries such as food and beverage, pharmaceuticals, medical device class, and biotechnology.

Market Dynamics

Global Modern MES Market Drivers

Growing Need for Real-Time Visibility

Tracking and monitoring processes in real time are increasingly becoming vital for business processes. Supply chain managers, especially, need a system that provides them with real-time visibility and alerts associated with issues in the supply chain. Moreover, manufacturers are under tremendous pressure to increase productivity and reduce costs. Therefore, businesses have adopted these systems that connect multiple plants and sites and help integrate easily with controllers, equipment, and enterprise business applications.

In manufacturing processes, MESs also provide real-time feedback to quickly identify and resolve issues for the continuous improvement and optimization of products and processes. They help track and accurately manage work-in-process (WIP) activities, thus improving product quality and enhancing plant performance. Furthermore, the real-time capability of MES spans multiple interdisciplinary requirements, including order planning and control, manufacturing data collection (MDC), quality management, material management, and document management. It also provides a direct connection with the production process. Thus, as manufacturing execution systems provide accurate, real-time visibility of production processes and factory floors, they are considered critical components of the modern manufacturing environment, fueling the market’s growth.

Increasing Demand for Industrial Automation

Several sectors have adopted industrial automation over the past several years due to its many advantages, including better productivity, improved quality, and improved safety at low costs. Production monitoring systems and business applications become substantially more sophisticated when data from an entire plant and its surroundings are gathered to feed optimization algorithms. Industrial businesses have installed smart factories and implemented smart manufacturing machinery for increased efficiency.

Additionally, companies now use complete manufacturing execution systems (MESs) to plan, coordinate, track every production stage, and monitor factory activities. Process monitoring is helpful in industrial automation to improve uptime, cut costs, boost production, and produce documentation that complies with laws. As a result, manufacturing technology has advanced, becoming more complicated and precise.

Global Modern MES Market Restraint

High Initial Investment

The expense of training personnel to use this complex technology is a significant portion of the adoption of MES. Some businesses charge implementation costs for uploading and producing work instructions since they must convert them to the templates or formats required by the relevant software. This process is time-consuming and inefficient. Additionally, combining several capabilities makes the solution more complicated, which raises the final cost. Due to the high expense of MESs, many firms choose function-specific applications instead. For instance, enterprise quality management systems are becoming more popular among manufacturers primarily interested in quality modules on an MES.

Global Modern MES Market Opportunities

Increasing Penetration of MES in Industrial Internet of Things (IIoT)

Industrial Internet of Things (IIoT) technology has increased over the past five years. It is now a crucial component of the manufacturing sector, influencing all sectors from planning to delivery. Due to the rising volume of data in the IIoT environment, cross-communication and component interaction have risen. Manufacturing execution systems are utilized as middleware because they link enterprise resource planning (ERP) software and machine data, lowering communication costs and boosting system efficiency. By controlling and tracking the status of all ongoing processes, they aid in optimizing factory floor operations by offering real-time visibility and enabling the traceability of materials and goods.

The agility and interoperability of MES are anticipated to be increased to manage the added business complexity as Industry 4.0 and IIoT are progressively implemented in manufacturing facilities. Additionally, it is expected that the upgraded MES systems will be connected to various platforms and come with advanced functions that can manage challenging circumstances on the shop floor in real-time. As a result, MES is a link between different plant floor systems, establishing an integrated ecosystem for real-time information interchange and better decision-making, opening up enormous growth potential for market participants.

Regional Analysis

Based on region, the global modern MES market is divided into North America, Europe, Asia-Pacific, and the Rest of the World (RoW).

North America Dominates the Global Market

North America is the most significant shareholder in the global modern manufacturing execution system market and is anticipated to grow at a CAGR of 16.4% during the forecast period. The leading modern manufacturing execution system suppliers in the region with the most significant market share are anticipated to contribute to this region's supremacy in the market. The market for modern manufacturing execution systems has consistently grown in the US over the past ten years, among the major North American nations, due to the significant demand for these systems from industries such as water and wastewater treatment, food and beverage, and power. Due to government incentives and backing, the adoption rate of low-cost automation technology is exceptionally high in the US and Canada. In addition, the market for modern manufacturing execution systems in North America is expanding significantly due to the growing need for real-time data tracking, increased data visibility, and the requirement for off-site production activity control. Emerson Electric Co., General Electric Co., Honeywell International Inc., and Rockwell Automation Inc. are a few businesses active in the North American market.

Asia-Pacific is anticipated to grow at a CAGR of 14.7% over the forecast period. Government initiatives to support industrial automation drive the demand for modern manufacturing execution systems market in Asia-Pacific. Manufacturing plants in the region heavily invest in R&D for industrial automation, the Industrial Internet of Things (IIoT), and cloud technology. These manufacturing companies are increasingly adopting new and improved modern manufacturing execution systems. Furthermore, regular events and conferences such as the International Robot Exhibition (iREX) and System Control Fair (SCF) in the region deliver unique insights into major Asia-Pacific countries' views on Industry 4.0 and the industrial Internet of Things (IIoT). Major companies operating in the Asia-Pacific regional market are Yokogawa Electric Corporation, Mitsubishi Electric Corporation, and FanucCorporation, among others.

Europe accounted for nearly one-third of global investment in Industry 4.0, and the countries of western and northern Europe, mainly Germany, are the principal markets. The rapid adoption of IOT and industrial automation has enhanced the growth of the modern manufacturing execution system market to a fair degree. Furthermore, government initiatives at regional and national levels facilitate the development of industry 4.0 and the reduction of the barriers to entry, thereby creating opportunities for modern manufacturing execution system providers. Market players in the region are investing heavily in research and development to integrate modern manufacturing execution systems with automotive and manufacturing processes. Major companies operating in the European market are ABB Ltd, Andea solutions, Dassault systems SA, SAP AG, Schneider Electric SE, Siemens AG, and Werum IT solutions GmbH among others.

The Rest of the World comprises South America and the Middle East and Africa. Gradual advancements in the manufacturing and industrial sectors define the South American modern manufacturing execution system market. The key technologies that support the digital transformation of factories in the region are artificial intelligence, analytics, and IoT. Furthermore, the region is witnessing increased investments and government initiatives to support technological advances. In this regard, the developments in the manufacturing and industrial sectors in the region are anticipated to drive the modern manufacturing execution system market toward growth during the forecast period.

Additionally, the digital transformation of factories in the Middle East and Africa is a significant driver of the need for modern manufacturing execution systems. An increase in investment and government initiatives to support advances in industrial automation in these regions significantly contribute to the growth of the modern manufacturing execution systems market. An increase in the number of manufacturing/ production units in various industries, such as oil and gas, automotive, power, and pharmaceuticals, drives the demand for modern manufacturing execution systems in the region.

Segmental Analysis

The global modern manufacturing execution system market is segmented into component, deployment, and discrete industries.

Based on components, the global modern MES market is divided into software and services.

The software segment is the highest contributor to the market and is expected to grow at a CAGR of 15.1% during the forecast period. The software subsegment is bifurcated further into enterprise resource planning, warehouse management, product lifecycle management, and others. Enterprise resource planning is software designed to integrate the main functional areas of the business process into a unified system. Warehouse management software allows enterprises to administer and control warehouse operations from the procurement of raw materials to the dispatch of raw materials from the warehouse. Furthermore, product lifecycle management (PLM) manages engineering and manufacturing workflows, collaborations, and complex product information. Other software solutions include standalone tools and integrated platforms that enable customer relationship management, human resource management, process development and execution, and operations analytics.

The services segment comprises training and support, consulting and development, and integration. Many major IT players dealing in the manufacturing execution system market provide training and support services to customers. Training programs ensure that technicians or engineers are skilled and updated about the latest software versions. In addition, consulting and development services help organizations to successfully work in a manufacturing facility with clear strategic plans, differentiated customer experience, an efficient supply chain, streamlined operations, innovative offerings, and robust technology. Further, integration services deliver actionable information to the shop floor and enterprise. Integration improves production, logistics, and business operations synchronization using machine-to-machine and industrial IoT (IIoT) technology. Other services include managed contractual services like maintenance and support.

Based on deployment, the global modern MES market is divided into on-premise, cloud, and hybrid.

The cloud segment owns the highest market share and is estimated to grow at a CAGR of 16.9% during the forecast period. The organizations focus on saving critical data from malware by deploying cost-effective and time-efficient services on the cloud. The rapid advances in digital technology and the growth of cloud computing are leading to the adoption of cloud-deployed MES at a large scale. Further, the likelihood of possible vulnerabilities and data breaches has grown as more businesses move their operations to the cloud. Most enterprises migrate to the cloud via the IaaS, PaaS, or SaaS models.

A hybrid cloud combines a private cloud with a public cloud. Public infrastructure as a service (IaaS), creating a private cloud, and sufficient wide area network (WAN) connection are required to establish hybrid cloud architecture. In addition, a hybrid cloud enables manufacturers to take advantage of the cloud to minimize risk and meet compliance needs. A hybrid cloud improves fault tolerance, ensures availability, and offers support for disaster recovery.

Based on discrete industries, the global modern MES market is divided into automotive, aerospace and defense, medical, FMCG, electronics, and others.

The automotive segment is the highest contributor to the market and is anticipated to grow at a CAGR of 13.0% over the forecast period. The automotive industry generates a tremendous amount of manufacturing data daily. MES used in the automotive sector is generally production process, overall equipment effectiveness (OEE), and saves indirect labor cost through automated collection of data from various sources. MES also enables just-in-time and made-to-order operations with the smooth material flow throughout the supply chain to the end user.

The electronics segment is expected to grow faster during the forecast period. The main aim of MES is to combine document, equipment, and material management into electronic work procedures to create an optimized manufacturing environment. Cantier Systems, Inc. provides MES to the semiconductor and electronics industry for real-time traceability, reducing cycle time and scrap, improving the supply chain, and reducing risk exposure to quality incidents. This company also provides integrated smart manufacturing solutions to various end-users.

Recent Developments

• November 2022- Rockwell Automation simplified the development of intelligent machines and enhanced the Micro800 controllers and design software. With the upgraded Allen-Bradley Micro850 and Micro870 2080-Lx0E controllers and the newest Connected Components Workbench software from Rockwell Automation, machine makers can save engineering time and expenses.
• December 2022- Rockwell Automation introduced FactoryTalk Vault to automate project analysis, store and protect industrial files, and streamline work processes. For manufacturing design teams, FactoryTalk® VaultTM provides centralized, secure, cloud-native storage. With its contemporary version and access control, FactoryTalk Vault, with enhanced Design Tools, enables deeper examination of controller projects for more essential insights into designs.