top of page
  • Writer's pictureMatthew Barber

An Overview of the MES Market

Introduction

The Manufacturing Execution System (MES) market is experiencing rapid growth as it becomes the backbone of operational digital transformation initiatives across industries. With organisations recognising the importance of digitising their operations, MES solutions are at the forefront of enabling this transformation.


MES Underpins Operational Digital Transformation Initiatives

MES had been around for a while, but in recent years demand has grown exponentially. This is due to a number of factors, including the need for greater efficiency, increased productivity, and improved quality control. Companies are being driven to modernise and standardise in order to compete in their markets, and are often choosing to implement digital transformation strategies to remain competitive.


Digital transformation (DX) is a process of using digital technologies to improve business operations and performance. In manufacturing industries, digital transformation is essential to improve productivity, increase efficiency, and reduce costs. MES is the backbone of any digital transformation initiative in manufacturing operations, leading to rapid MES market growth, and substantial projected future growth. Forecasts vary, but the MES market is currently $12bn, expected to be around $32bn in 2032. Companies are increasingly looking for ways to leverage emerging technologies such as artificial intelligence (AI), machine learning (ML), smart manufacturing, automation, and energy management to improve their operations. MES is a critical component in this effort, providing a platform for collecting, analysing, and sharing data across the manufacturing value chain. MES is the foundational system of smart manufacturing, everything else can be layered on top to compliment the MES functionality. AI/ML algorithms are only as good as the data they are built on, and MES provides them with an incredibly rich and acurate data set.


MES plays a pivotal role in driving operational digital transformation initiatives by bridging the gap between the shop floor and the digital world. It provides real-time visibility into production processes, allowing manufacturers to make data-driven decisions and optimise their operations.


One of the key advantages of MES is its ability to integrate with other systems such as Enterprise Resource Planning (ERP) and Supply Chain Planning (SCP) software. This integration enables end-to-end visibility and control over the entire manufacturing process. Manufacturers can connect MES with their existing systems, ensuring a smooth flow of information and efficient coordination across departments.


Over the years, applications like ERP have extended onto the shop floor, but this isn't what the market wants. The current initiative in the market is "Composable ERP". What this really means is "Retract ERP back to it's core functions", letting ERP play to it's strengths, and letting other specialised and more flexible applications like MES do what they are designed to do. This reduces the load on ERP, simplifies ERP implementations, and allows operational users to use applications designed for them, not designed for office users.


MES Market Growth

The MES market is witnessing significant growth, driven by the increasing adoption of digital transformation initiatives.

Today, MES is a vital component of the modern manufacturing landscape. With the growth of Industry 4.0 and the need for smart manufacturing, MES has become more important than ever. It is projected that the MES market will continue to grow in the coming years, with a CAGR of around 12% between 2020 and 2028 (although this projection does vary by source).


This growth can be attributed to several factors, some of which are covered below.


Increased competition means manufacturers are looking to MES for a competitive edge

The demand for MES is propelled by the drive for operational excellence through digital transformation. Global initiatives like Industry 4.0, and Smart Manufacturing are raising awareness, and accelerating the adoption of MES.


Manufacturers are constantly striving to improve their efficiency, reduce costs, and minimise errors in their production processes. MES systems provide real-time visibility into operations, enabling businesses to identify bottlenecks, track performance metrics, and optimise resource allocation.


Manufacturers increasingly want to standardise business process globally, and benchmark across plants

MES provides a centralised platform for monitoring and managing production operations and business processes, enabling businesses to standardise operations globally, make data-driven decisions, and respond quickly to market changes.


Manufacturers are leveraging MES to gain productivity boosts, without investing in new equipment

By automating manual tasks, streamlining workflows, and providing operators with real-time instructions, MES enables manufacturers to achieve higher output rates and reduce cycle times. This not only enhances efficiency but also allows businesses to meet customer demands in a timely manner.


MES provides the data required for continuous improvement activities. For example, using MES manufacturers can:

  • Reduce downtime

  • Reduce scrap

  • Streamline changeovers

  • Increase product quality

  • Reduce customer complaints


All of which significantly reduce costs.


MES and Automation are a winning combination

Another driver of the MES market is the need for automation. As manufacturers look to optimise their production processes and reduce costs, automation has become a key strategy. MES can help companies achieve this by providing real-time data on production processes and allowing for better decision-making. Increased automation can reduce the need for labour resources in some areas, and can increase production speed, product quality, and process consistency.


Supply chain visibility has become increasingly important

The complexity of global manufacturing networks is increasing, causing manufacturers to try and improve their supply chain efficiency and reduce lead times. MES can provide real-time data on production processes and allow for better coordination with suppliers. MES also helps reduce WIP (Work In Progress) inventory or the shopfloor, and stock levels, reducing the overall cost of inventory on the balance sheet.


MES supports compliance for industry regulations

The increasing need for regulatory compliance is driving investment in MES.


Compliance is being driven from two directions:

  1. Governments and industries around the world are imposing more regulations on manufacturers. We see trends here in compliance around waste, and health and safety procedures. In industries such as pharmaceuticals, food and beverage, and aerospace, manufacturers are required to adhere to strict quality and safety standards. MES helps businesses ensure compliance by providing traceability, documentation, and real-time monitoring of critical parameters.

  2. Supply chains are defining stricter rules on their suppliers. Often imposing new initiatives, such as OEMs (Original Equipment Manufacturers) expecting "Zero Defect" materials to be supplied in the automotive industry. Customers are also focussed on auditing their suppliers, not only for product quality, but also for other factors like safety, environmental impact, and cyber security.

MES can help companies meet some of these requirements by providing real-time monitoring and control of manufacturing processes. MES also provides a full history of any data collected, and anytime that data changes.


Mobile accessibility

With the proliferation of smartphones and tablets, manufacturers are seeking solutions that allow operators to access and interact with MES functionalities on mobile devices. This enables real-time data capture, instant notifications, and remote control of production processes.

Manufacturers "want-in" on advanced Analytics, AI, and ML

Analytics-driven insights are becoming a key differentiator in the MES market. Manufacturers are leveraging advanced analytics and machine learning algorithms to gain actionable insights from their production data. These insights help identify patterns, optimise processes, predict maintenance needs, and improve overall operational efficiency.


Energy and ESG initiatives

With the rising costs of energy and the need to reduce carbon emissions, manufacturers are looking for ways to reduce their energy usage. Pressure from consumers is also driving manufacturers to act. MES can help by providing real-time data on energy usage and identifying areas for optimisation, but be warned, not all MES applications support enery monitoring.


The COVID-19 pandemic

COVID has further accelerated the adoption of MES solutions as manufacturers seek to minimise disruptions, streamline operations, and ensure business continuity.


The pandemic highlighted the importance of agility and resilience in manufacturing operations, prompting businesses to invest in MES.


Rising Costs

Finally, rising costs are driving the need for MES. With the cost of raw materials and labour on the rise, manufacturers are looking for ways to reduce costs and improve efficiency.

Understanding the current state of the MES market

The MES market is currently marked by intense competition, technological advancements, and strategic partnerships. The market is experiencing significant attention and growth, similar to ERP in the 1990's.


Nowadays, most manufacturers are replacing an ERP, rather than coming to market for the first time. Conversely, many manufacturers are seeking to invest in MES for the first time. Manufacturers are transitioning away from paper based systems, Excel, and home grown or specialised departmental solutions.

Despite the hype around modern technological advancements, most manufacturers aren't actually ready for the cutting-edge solutions. MES is a good step in the right direction for many manufacturers, who can use MES as a platform to build out other technologies in future.

I speak to many customers who want to run before they can walk, but it's crucial to get the MES right as an initial foray into digital manufacturing. Implementing an MES is a huge investment, one of the biggest barriers is actually the capability and availability of the resources on the manufacturers side. It's often best to ramp-up over time to allow your internal resources to build up their knowledge and skillsets.


Conclusion

The MES market has come a long way since its inception. As manufacturers face increasing regulatory compliance, supply chain issues, rising costs, and the need for automation and energy optimisation, MES has become a vital tool for success. With the projected growth of the MES market in the coming years, it is clear that MES will continue to be a key component of the modern manufacturing landscape.


Above all of that, the need for digital transformation is very clear. Companies are keen to invest in digital transformation initiatives, and MES is at the heart of manufacturers business processes, their manufacturing operations. Companies who don't invest soon will likely face tough competition from those who do make the investments in smart manufacturing. This makes it an interesting time, where smaller companies can potentially seek out a competitive advantage through their digitalisation strategy in manufacturing.

142 views0 comments

Recent Posts

See All

Comments


7-01.png
bottom of page