MANUFACTURING EXECUTION SYSTEMS (MES) MARKET ( )

MANUFACTURING EXECUTION SYSTEMS (MES) MARKET (2011 2016) BY APPLICATIONS (PROCESS INDUSTRIES CHEMICALS, F&B, OIL & GAS, POWER, WATER MANAGEMENT, PAPER & PULP; DISCRETE INDUSTRIES AUTOMOTIVE, HEALTHCARE, AEROSPACE & DEFENSE, FMCG) GLOBAL FORECAST & ANALYSIS MarketsandMarkets sales@marketsandmarkets.com www.marketsandmarkets.com

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1 EXECUTIVE SUMMARY FIGURE 1 Y-O-Y GROWTH OF MES MARKET REVENUE, 2011 2016 By looking at the growth of applications serving MES, it is expected that MES will have a steady and increasing growth for next five years. As customers awareness regarding MES benefits increase, MES Y-O-Y growth rate will also increase. Finally MES will maintain a CAGR of XX% from 2011 to 2016. MarketsandMarkets 3

2 MARKET OVERVIEW The chart below gives the segmentation according to the application type: FIGURE 2 SEGMENTATION OF MES, BY APPLICATIONS Applications Process Industries Discrete Industries Oil & Gas Chemicals Automotive Healthcare Food & Beverages Pulp & paper Aerospace & Defense FMCG Power Water & Wastewater Others Others Process industries include Oil & Gas, Chemicals, Food and Beverages, Paper and Pulp, Power, Water and Waste Water, and others that comprise packaging, metal, and mining etc. Similarly, discrete industries include automotive, aerospace and defense, FMCG, healthcare, and others that include cement, textile, computers, and electronics and semiconductor industries. MarketsandMarkets 4

2.1 BENEFITS OF MES FIGURE 3 BENEFITS OF MES ON SHORT AND LONG TERM BASIS 10X times MES benefits Value Benefits 3X times Average pay pack is 12 months on 1X benefits Typical project payback ranges from 6 to 24 months Supports collaboration Supply chain visibility Platform for continuous improvement Faster NPI cycle - shorten TTM for innovation Customer audit requirements: traceability and genealogy MES marketed as competitive tool Promotes flow manufacturing Market improvements Increase market share and/ or pursue new markets Process Improvements Increase volume and/ or margins at same cost 1X times Lower WIP & FGI Reduce waste/scrap/materials Reduce cost of regulatory compliance Reduce rework Reduce maintenance costs Reduce Indirect labor costs Shorten cycle/flow time/lead time Improve quality / Reduce process & product variability Cost Reductions Reduce operating costs 3 to 12 months 12 to 16 months 36 months + MES offers various benefits for long term and short term for different industries. Cost reduction benefits like reduction in wastes, reworks, downtime, and maintenance cost can be achieved on a short term basis (up to XX months) from MES. For medium term like XX to XX months, MES helps to improve the process by shortening NPI (new product introduction) time and Time to Market. After couple of years of installation of MES, customer can experience the improvements in the supply chain management and supply chain management becomes more efficient. MarketsandMarkets 5

3 GLOBAL MANUFACTURING EXECUTION SYSTEM MARKET, BY PRODUCTS 3.1 OPERATIONS OF MES FIGURE 4 OPERATIONAL VALUE CHAIN OF MANUFACTURING EXECUTION SYSTEM Corporate Level Enterprise Resource Planning Inf ormation Plant Level Manufacturing Execution System Control Command Acquisition Factory Automation Components Machine Level Detectors Controllers Input / Output Device Accessories Power supplies MES is used to assist production managers and personnel in areas such as scheduling, workflow management, resource, and quality analysis as MES is able to integrate several data systems from various systems such as the sales and service management system, supply chain management system, process control system, enterprise resource planning system, and product and process engineering. MarketsandMarkets 6

MES is at the second level; i.e. the plant level in the complete hierarchy of automation. The figure below explains the complete structure of the factory automation and the position of MES within the hierarchy. MES solution commands and controls the factory automation and acquires data from it; which is passed on to the ERP system of the organization to take the further appropriate decisions. 3.2 BEFORE & AFTER THE IMPLEMENTATION MES FIGURE 5 CHANGES IN THE MODEL OF MANUFACTURING BEFORE & AFTER MES IMPLEMENTATION Before MES Implementation After MES Implementation Supply Chain ERP Operations System People/Paper Practice Sales & Service Product & Process Engineering Supply Chain ERP MES: Integrated production data working without operation management systems, people & practice to support operations excellent Sales & Service Product & Process Engineering Controls Controls PLC Drivers/ Motors/ Relays Data Collection Manual Process Control DCS PLC Drivers/ Motors/ Relays Data Collection Manual Process Control DCS Automation Instruments Automation Instruments With the continuous change in customer behavior and requirements, manufacturers are forced to produce or deliver a tailor-made product or service for an individual customer in a shorter period of time. It is often a question of survival in a cut throat competitive market. To maintain competitiveness in this fast-paced business environment, manufacturers are always looking for ways to increase productivity to a higher level by reducing inventories MarketsandMarkets 7

further. That is to run the plants with the best possible scheduling at the lowest cost. Every manufacturing organization is a complex web of activities and information flow. Most of the manufacturing plants shop floors are managed inefficiently where work is piled up due to improper coordination of factory resources (people, information, materials and tools). It causes confusion amongst the workers on the shop floor whilst the entire production control is under constant challenge to meet customer requirements. The manufacturer is trapped between fastpaced demand and lagging information useful for making decisions. Manufacturers have been using computers with custom-built specific Manufacturing Execution Systems (MES) software in their operations for a long time. However, commercial software products have started penetrating the MES market. Manufacturing Execution Systems represent a collection of functions that provide unique benefits when added to the other enterprise systems, and focus on production activities the core value adding operations of a manufacturing company. MarketsandMarkets 8

4 GLOBAL MANUFACTURING EXECUTION SYSTEM MARKET, BY APPLICATIONS MARKET 4.1 PROCESS INDUSTRY TABLE 1 PROCESS INDUSTRY: MARKET REVENUE OF MES MARKET, BY TYPE OF PROCESS INDUSTRY, 2011 2016 ($MILLION) Type 2010 2011 2012 2013 2014 2015 2016 CAGR% (2011-2016) Oil and Gas XX XX XX XX XX XX XX XX Chemicals XX XX XX XX XX XX XX XX Food and Beverage XX XX XX XX XX XX XX XX Pulp and Paper XX XX XX XX XX XX XX XX Power XX XX XX XX XX XX XX XX Water & Waste XX XX XX XX XX XX XX XX Others* XX XX XX XX XX XX XX XX Total XX XX XX XX XX XX XX XX *(Packaging industry and metal and mining industry) The major reason behind this steady growth of MES market is the increasing number of production plants and the revamping of the existing plants due to the FDA (Food and Drug Administration) Act that regulates the industries like pharmaceuticals, FMCG, food and beverages, etc. Besides, MES is used to get the maximum efficiency of the plant. MarketsandMarkets 9

4.2 DISCRETE INDUSTRIES TABLE 2 DISCRETE INDUSTRIES: MARKET REVENUE OF MES, BY TYPES OF DISCRETE INDUSTRIES, 2011 2016 ($MILLION) Discrete Industries 2010 2011 2012 2013 2014 2015 2016 CAGR% (2011-2016) Automotive XX XX XX XX XX XX XX XX Healthcare XX XX XX XX XX XX XX XX Aerospace & Defense XX XX XX XX XX XX XX XX FMCG XX XX XX XX XX XX XX XX Others* XX XX XX XX XX XX XX XX Total XX XX XX XX XX XX XX XX *(Cement, Computer, Semiconductor and Electronics) Automotive industry was leading the MES market for discrete industries in 2011 and it is expected that it remains the same till 2016. The revenue contribution of automotive industry in the MES market was about US $ XX million in 2011 and it is expected to reach US $ XX million at a CAGR of XX% from 2011 to 2016. MarketsandMarkets 10

5 GEOGRAPHIC ANALYSIS 5.1 INTRODUCTION The MES market has been segmented into four geographies: North America, Europe, Asia- Pacific (APAC), and ROW (Rest of the World). Asia-Pacific is expected to grow at the highest rate due to increase in production activities in APAC, which are accelerated by huge population (customer) base, and supporting government policies. TABLE 3 MES MARKET REVENUE, BY GEOGRAPHY, 2011 2016 ($MILLION) Region 2010 2011 2012 2013 2014 2015 2016 CAGR% (2011-2016) North America XX XX XX XX XX XX XX XX Europe XX XX XX XX XX XX XX XX APAC XX XX XX XX XX XX XX XX ROW XX XX XX XX XX XX XX XX Total XX XX XX XX XX XX XX XX North America leads the MES market with XX% market share amongst all the regions, followed by Europe with XX% market share and APAC holds closely XX% market share in 2011. APAC is becoming the manufacturing hub and in 2016 it is likely to have XX% of the total MES market. MarketsandMarkets 11

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