Data is what drives the factory of the digital economy.
ABI Research forecasts spending in the industrial and manufacturing sector on these applications to grow from US$18 billion in 2019 to just over US$27 billion in 2024.
Manufacturers have become dependent on software applications such as Electronic Resource Planning (ERP), Manufacturing Execution Systems (MES), Manufacturing Operations Management (MOM), Product Lifecycle Management (PLM), Inventory Management, and CRM and Demand Planning.
“Data underpins activities such as onboarding raw materials, optimizing the production line, organizing the facility, and even to understand clients and the final customer,” said Michael Larner, principal analyst at ABI Research.
ERP systems account for over 50% of the spend providing manufacturers with a single solution to monitor activities on the production line, to understand the firm’s ability to fulfil orders as well as automate many back-office functions.
However, MES software will overtake ERP solutions as manufacturers look to optimise the performance of individual machines and the production line. ABI Research forecasts spend on MES to grow by 13.5% CAGR and be worth US$2.3 billion in 2024.
Within the industrial sector, traditional vendors like ABB, GE, and Honeywell will find an even more competitive marketplace with the likes of Oracle, Salesforce and SAP, as well as more specialist vendors like Dassault Systèmes, Siemens, Katana and Archdesk.
“Supplier propositions are evolving. For example, ERP suppliers continue to add modules such as MES and MOM while inventory management providers are adding demand planning capabilities. Both are blurring segment definitions,” Larner continued.
The software applications no longer just provide data regarding the current conditions. As a result of suppliers investing in AI and machine learning, the applications’ analytical capabilities can help manufacturers plan for future scenarios in their facilities and the wider operating environment.
“Data now flows from the production line to the boardroom and, thanks to APIs, between the software applications. Manufacturers should partner with system integrators to design and assemble their data jigsaw,” Larner concluded.