Digital Transformation in the Manufacturing Industry is expected to reach USD 767.82 billion by 2025

The digital transformation in manufacturing market was valued at USD 263.93 billion in 2019 and is expected to reach USD 767.82 billion by 2025, at a CAGR of 19.48% over the forecast period 2020 – 2025.

The United States and China were the two largest geographic markets for Digital spending, delivering more than half the worldwide total in 2019.

Definition / Scope
Market Overview
Key Metrics
Market Risks
Market Trends
Industry Challenges
Technology Trends
Market Size and Forecast
Market Outlook
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References
Appendix

Definition / Scope

Digital trends in manufacturing mean using new technologies like data analytics, cloud computing, and the Internet of Things (IoT) to enables manufacturers to increase productivity across their entire value chain, from design and engineering to production, sales, and service.

In concrete terms, this means faster time-to-market, greater flexibility and enhanced availability of systems on the plant floor.

Digitization can take any form with a manufacturing industry including operation and supply chain applications, software, and hardware. Factory automation and social media for marketing are just two examples of digital trend happening across manufacturing industry.

Digital transformation and automation reduce processing cost and enhance the cost efficiency in the manufacturing industry. Earlier, legacy manufacturing used to focus less on the production cost of a product, which led to high end-product cost.

However, with the rising integration of digital transformation, leading to automation has helped in reducing unnecessary cost. For instance, digital manufacturing can reduce development cycles and ascend the rate of product innovation; thus, mitigating the manufacturing cost.

Furthermore, the enhancement of a product through low-cost manufacturing also helps in the quicker launch of the product and high revenue generation.

The implementation of IoT in the manufacturing industry helps in detecting any error at an early stage, which further lessens errors and mistakes, which in turn mitigates the number of products returned to the company.

Additionally, cloud computing enables functional jobs to be operated simultaneously from multi-platforms. Also, digital marketing helps in closely engaging with the customers about the product offering.

One of the major benefits of integrating digital transformation, such as robotics and IoTs, is that the robots can work 24×7, wherein it can work without having any glitch or error.

In addition, on-demand manufacturing trend is expected to grow and the industry 4.0 is expected to help in making efficient decisions and enhance supply chain operations.

The fourth industrial revolution encompasses a wide array of technologies across the value chain, wherein it is considered as the information and automation hub.

However, the rapid adoption of automation and digital transformation in the manufacturing industry is demanding high skilled labors to handle big data and operate required machinery.

Market Overview

The share of major industrialized countries in world manufacturing output has fallen slightly in the last decade representing 55% share. The major exception is China, which has surpassed the United States as the leading manufacturer contributing 25% of the global manufacturing.

India is also ranked among the 10 largest producers in the world and has successfully increased its manufacturing. The Republic of Korea continues to hold its manufacturing capacity, being the sixth largest manufacturer in the world.

Canada and Mexico, which used to appear on the top 10 manufacturers list, are pushed out from the lists. The 13 countries including China, USA, Japan, Germany, India, and Indonesia together represented 75.4 percent of world manufacturing.

GCC Region:

The GDP growth in the GCC region remained sluggish during 2016-2019. The growth heavily derailed in 2017 recording a negative growth of 0.8%. In 2018, the growth rate levelled off comparing in 2016 before plunging again in 2019.

GCC GDP Growth Rate (%)
2016	2017	2018	2019
2	-0.8	2.1	1.2

Country	Saudi Arabia	UAE	Kuwait	Qatar	Oman	Bahrain
Oil Production (Million barrels per day):	10	3	3	2	1.5	0.2
Gas Production (in Billion cubic meters)	115	65	18	178	39	18

Saudi Arabia possesses around 18 percent of the world’s proven petroleum reserves and ranks as the largest exporter of petroleum.

Qatar is world’s fifth largest gas producer and second largest gas exporter in the world. In chemical manufacturing, GCC region holds 2.5% share of the world’s total chemical production (over USD 4 trillion in revenue).

Industry/ Manufacturing growth rate (%) in Qatar

2016	2017	2018	2019
2.5	2	1.4	1.4

The manufacturing sector in Qatar remained consistent in 2016 and 2017 achieving 2% growth rate and 1.4% subsequently in 2018 and 2019.

Africa Region:

Nigeria

The manufacturing industry in Nigeria held for 13% of USD 446.5 billion GDP in 2019.

South Africa

Manufacturing industry accounted for 40% of USD 358.8 billion GDP in 2019.

Asia-Pacific and North America Region:

Major Countries	Manufacturing as a % share of GDP	Manufacturing Market Size in USD
China	31	4.38 Trillion
Russia	32	1.4 Trillion
South Korea	29	490.1 Billion
Indonesia	21	233.52 Billion
Germany	21	813.74 Billion
Japan	21	1.08 Trillion
Turkey	21	156.18 Billion
India	21	588 Billion
Mexico	18	234 Billion
Italy	17	416 Billion
US	12	2.57 Trillion
France	11	298.1 Billion
Canada	11	191 Billion
UK	10	274 Billion

China, USA, Russia, and Japan are the four major economies surpassing manufacturing market value over a trillion dollars. China is the leading manufacturer with manufacturing industry contributing USD 4.38 trillion.

The USA is the second largest manufacturer hinging USD 2.57 trillion to GDP. Russia and Japan each has over a trillion-dollar contribution to the GDP.

Europe Region:

Overall, the manufacturing sector generated over USD 2.5 trillion (15% of GDP) of value added to the GDP in Europe. Manufacturing sector accounts for 30% of the non-financial business economy in Europe.

Manufacture of machinery, manufacture of motor vehicle, and manufacture of food product are the three largest sectors each comprising over 10% of added value to the overall manufacturing industry.

In Europe, Germany, France, and UK are the top three economies contributing most to the GDP share from the manufacturing sector. Germany contributes over USD 800 billion from manufacturing industry to its GDP while France and UK each generated over USD 250 billion in added value from the manufacturing industry.

Key Metrics

Indicator	Base Year 2019
Market Size	USD 263.93 Billion
CAGR	19.48%
Market Size by 2025	USD 767.82 Billion

Market Risks

Risks related to manufacturing:

Decelerating Growth in China

GDP growth slowed down to 6% in 2019 in China. Growth in 2020 and ahead is further estimated to decelerate by a combination of global pandemic amid Covid-19, tighter domestic financing, and weaker investor confidence.

Factors that declined production of automobiles, computers, and other electronic equipment include trade tensions, weak global demand, and tighter emission standards. Moreover, the import contraction in China was led by sanctions on imports by US in 2019.

Falling Global Industrial Production (%)

In 2019, the production rate has significantly declined to half of what it was in 2018.

2016	2017	2018	2019
2.4	4.1	4	2

Slower Production Growth in Europe

2016	2017	2018	2019
2	4	2	-0.8

Industrial production in Europe expanded at a rate that is less than half of its early 2018 peak. The sluggish demand for cars and declining production of cars had an important effect on European activity, reflecting both structural factors (for example, tighter emissions standards) and sluggish world demand.

Covid-19 Impact

The baseline forecast estimates a 5.2 percent contraction in global GDP in 2020, the deepest global recession in eight decades.

The slowdown in GDP is mainly due to measures taken to contain the virus such as halting airline industry, banning international tourists, and closing down schools, shopping malls, hotels, restaurants, and restricting movement of people.

The direct impact of the pandemic has been precipated in the oil sector showing unprecedented collapse in oil demand and hence, oil price globally. The domestic COVID-19 outbreak and associated large-scale pandemic-control measures have massively disrupted activity.

The domestic COVID-19 outbreak and associated large-scale pandemic-control measures have massively disrupted manufacturing activity in the US.

Compared to the global financial crisis, weekly unemployment claims have raised much faster, while industrial production and retail sales have fallen much more sharply.

China, the world’s largest manufacturer, was hit hard by COVID-19 in the first quarter of 2020, registering an unprecedented decline of manufacturing output.

According to seasonally adjusted index numbers, China’s manufacturing output plunged by 14.1 percent, mainly because of the COVID-19 lockdown measures. A slowdown in manufacturing growth figures was, however, also observed in China in 2019.

Risks related to digitization:

Risk of cyber-attack

According to the source, manufacturing is the third-most targeted sector by cyber criminals, and around half of manufacturers report suffering financial or operational losses due to cyber-attacks.

Cyber-attack risks are widely expected to increase due to digital transformation. Manufacturing now ranks as the biggest investor in IoT compared to any other industry. As manufacturers integrate more digital sensors and other connected devices into their daily operations, their attack surfaces will widen.

Risks introduced by third parties

Manufacturers have always had to contend with having a large supplier ecosystem, but as more of their production facilities and products involve digital elements, they now need to re-assess the digital risks that their partners introduce. In fact, there’s evidence that many data breaches are linked to direct or indirect third-party access.

One interesting example is product tampering where malicious technology can be introduced into a product as it moves through the supply chain. This has led to the rise of e-pedigree, which is essentially electronic documents that show exactly who has handled the product. Lack of block chain technology integration has posed risk to the manufacturers.

Risks around collecting and storing data

Alongside the growing use of new technologies, collection and sharing of data has become a prominent part of the industry.

At the same time, the mistreatment of data that has been collected for commercial reasons can lead to infringement of privacy regulations.

Risk of disruption to operations

As business-critical infrastructure becomes more complex, connected and data-driven, this can have a significant impact on how businesses should deal with disruption to their operations. Manufacturers going transition from legacy system to digital system will impose many losses.

Market Trends

Outdated Processes

With manufacturing connected digitally, it is challenging to rely on traditional paper-based processes and operate in silos; there is no longer a place for manual, time-consuming processes.

To be efficient and provide employees a flexible approach to work seamlessly, manufacturers need a modern and agile digital solution that replaces outdated and error-prone paper-based processes and converts them to digital.

Digital Data

Capturing, processing and analyzing digital data allows predictive analysis. Engineering Analytics solution enables manufacturer to leverage data from all aspects of the manufacturing value chain to derive the insights required for process reengineering, value creation and value delivery.

Industrial manufacturers also have the opportunity to use big data resources to control costs, optimize consumption of resources and manage sustainability efforts amid changing regulations.

In the asset-intensive manufacturing industry, equipment breakdown and scheduled maintenance is a regular feature. Big data analytics can reduce breakdowns by as much as 26 percent and unscheduled downtime by as much as 23 percent. In automotive manufacturing, robotic arms in assembly lines are a regular feature.

These robots perform various tasks like welding of parts in an automobile, gluing, cabling etc. As per study, downtime costs auto industry approximately USD 22,000/min.

Automation

Combining traditional technologies with artificial intelligence is increasingly giving rise to systems that work autonomously and organize themselves. This reduces error rates, adds speed and cuts operating costs.

A study conducted in 2015 found that 478 billion of the 749 billion working hours (64 percent) spent on manufacturing-related activities globally were automatable with currently demonstrated technology.

These 478 billion working hours represent the labor equivalent of 236 million out of 372 million full-time employees (USD 2.7 trillion out of USD 5.1 trillion of labor) that could be eliminated or repurposed, assuming that demonstrated technologies are adapted for use in individual cases and then adopted.

These figures suggest that, even though manufacturing is one of the most highly automated industries globally, there is still significant automation potential within the manufacturing sites.

Connectivity

Interconnecting the entire value chain via mobile or fixed-line high-bandwidth telecom networks synchronizes supply chains and shortens both production lead times and innovation cycles.

The network capability enables mobility for connected devices, agility in operations and an increasing level of device density. Wireless allows manufacturers to connect widespread assets and processes in real time, allowing integration with contributing workflows.

Compared to a fixed network, the scope and ease of wireless contributes to new connections and services that can increase value, limit waste and address more pain points.

Digital Customer Access

The Internet gives new intermediaries direct access to customers to whom they can offer full transparency and new kinds of services. This capability can lead to increased customer loyalty, as customers are more loyal to brands that create differentiated and personalized experiences.

Consumer brands have led the way in developing compelling digital customer experiences at this stage; many digital commerce platforms have shaped customer expectations around the ability to easily research, evaluate, buy, and service purchases online across devices.

More granular customer information captured through digital commerce and service platforms can help manufacturers better understand the risk of attrition or service defection within their existing customer base and potentially address it preemptively.

Legacy manufacturers lack visibility into customers’ usage of the manufacturer’s products, leading to an inability to predict maintenance requirements and the potential to affect uptime and performance.

Industry Challenges

Shift from legacy manufacturing to digital manufacturing

Any digital transformation initiative can place demands on the IT department’s technology stack and development structure. This may require the use of new release cycles, processes, APIs, or innovating in other areas of digital performance.

There’s a significant skill gap when it comes to completing the type of change that most businesses need. Digital transformation can be most difficult in traditional organizations with a long running history of success and low employee turnover.

Employees’ resistant to change can become a challenge when people start to confuse their daily. When a digital transformation is taking place, it forces people to change their daily working norms and culture.

Cost and resource factor

Digitalization in the manufacturing industry incurs costs on human resources. The workforce can feel disillusioned in the face of changing workplace realities. Employee reluctance and communication issues also pose a challenge to manufacturers.

Being in a dynamic and cash-sensitive industry, manufacturers need to carefully address any budget and resource limitations. This can lead to reservations about sticking to their digital transformation strategy.

ROI

Manufacturing operations are complicated with tight schedules and numerous resource constraints. As a result, management doesn’t take kindly to ill effects on operations before seeing any benefits from their digital transformation.

Technology Trends

Advanced industrial robotics (AIR)

Advanced industrial robotics deals with the development of robots, which, through the use of sensors and high-level and dynamic programming, can perform tasks requiring more flexibility and accuracy than traditional industrial robots.

Digitally enabled robots working within industrial environments are equipped with advanced functionality (for example, sensors detecting potential collisions and halting or performing a programmed motion with a very limited lag), allowing them to deal with less structured applications and to collaborate with humans. By 2025, spending on robotic systems will reach USD 67 billion.

Additive manufacturing (AM)

Additive manufacturing blends successive layers to build a product rather than it being cut out of existing materials (subtractive manufacturing).

The key prerequisite of the AM process is that products can be digitally modeled before being physically generated. AM is sometimes called 3D printing. The additive manufacturing market is expected to reach USD 55.8 billion by 2027.

Industrial Internet of Things (IIoT)

Sensors applied in the manufacturing process create cyber-physical systems where the information collected from the sensors is fed, through the Internet, to computers in order to gather and analyze production data.

In advanced cyber-physical systems, a whole factory can be digitally mapped and enabled using such sensors. 11 billion commercial and industrial IoT devices will be shipped by 2025, with growing implementation of AI/ ML functionality.

Industrial biotechnology (IB)

Industrial biotechnology is the use of biotechnological science in industrial processes. Modern biotechnology is based on the most recent scientific insights into the specific mechanisms of biological processes within living organisms (for instance, through systems genomics and metabolomics research).

These are used to design processes in industry using yeasts, bacteria, fungi and enzymes (biological catalysts that improve reaction processes and that are relatively easy to obtain) to produce biomaterials and biofuels.

AI performs manufacturing, quality control, shorten design time, and reduce materials waste, improve production reuse, perform predictive maintenance, and more.

Predicting when machines/equipment are likely to fail and recommending optimal times to conduct maintenance (condition-based maintenance) is the most popular use case of AI in manufacturing today.

General Motors analyzes images from cameras mounted on assembly robots, to spot signs and indications of failing robotic components with the help of its supplier. In a pilot test of the system, it detected 72 instances of component failure across 7,000 robots, identifying the problem before it could result in unplanned outages.

Nokia launched the video application that uses machine learning to monitor an assembly line process in one of its factories in Finland. It alerts the operator of inconsistencies in the process so that issues can be corrected in real time.

Danone Group is a French multinational food-products manufacturer who is using a machine learning system to improve its demand forecast accuracy today.

They’re using machine learning to improve planning coordination across marketing, sales, account management, supply chain, and finance, leading to more accurate forecasts. Using machine learning, Danone can meet demand from product promotions and achieve its target service levels for channel or store-level inventories.

The system led to a 20% reduction in forecast error, a 30% reduction in lost sales, a 30% reduction in product obsolescence, and a 50% reduction in demand planners’ workload. The following is an overview of how machine learning-based demand planning and forecasting systems are being designed today.

Machine Execution Systems

MES provides information that helps manufacturing decision makers understand how current conditions on the plant floor can be optimized to improve production output.MES works in real time to enable the control of multiple elements of the production process (e.g. inputs, personnel, machines and support services).

The driving forces for using MES are new production-related developments, new production and logistic concepts as well as changed products and product development processes.

The real-time capability of MES spans multiple interdisciplinary requirements (such as order planning and control, material management, PDA, MDC, quality management, and document management) and provides a direct connection with the production process.

NetSuite Manufacturing Edition by Oracle offers an integrated inventory, warehouse management, accounting and financial management, order management, customer relationship management (CRM), and e-commerce platform offered as a cloud-based solution and delivered over the web,

Fishbowl Manufacturing is another business automation and inventory management platform for small to midsize manufacturing companies that offers QuickBooks integration for accounting management, as well as tools for inventory control, material requirements planning (MRP) and job shop floor control/manufacturing execution.

Market Size and Forecast

Manufacturing Industry:

Over half of the manufacturing industry is regulated representing 65% by formal segment worldwide. Another 35% market is fragmented and informally operated globally.

The purchasing managers index (PMI) for global manufacturing ticked up to 54 points in 2018 from 50 points in 2016. However, the index derailed to 51 points in 2019 and is estimated to further fall off to 40 points in 2020.

The manufacturing Purchasing Managers Index (PMI) is an indicator of economic health for the manufacturing sector.

Each country PMI survey for the manufacturing sector is based on questionnaire responses that cover the following economic variables: output, new orders, new export orders, backlogs of work, output prices, input prices, suppliers’ delivery times, and stocks of finished goods, quantity of purchases, stocks of purchases, employment, and future output.

The manufacturing PMI is a number from 0 to 100.

A PMI above 50 represents an expansion when compared with the previous month. A PMI reading under 50 represents a contraction, and a reading at 50 indicates no change.

Global Manufacturing PMI
2016	2017	2018	2019	2020
50	52	54	51	40

The worldwide manufacturing grew during 2016-2017 but suddenly the industry started witnessing bad signs showing declining performance afterwards. The growth rate went down to 3.5% in 2019 from the previous year’s growth rate of 3.8%.

Both the industrialized and developing economies felt the fluctuating trend with overall declining growth rate during 2017-2019.

Manufacturing Growth %	2016	2017	2018	2019
Industrialized Economies	1.8	2.2	2.8	2.4
Developing Economies	4.7	5.5	5.2	5.4
World	2.9	3.9	3.8	3.5

The following sub-segments of manufacturing shows positive growth during 2nd and 4th quarter of 2019:

2019 Growth Rate %
Sub-segments	Q2	Q4
Food Products	2.2	1.7
Beverages	2.8	1.9
Wearing Apparel	3.9	0.2
Leather & related products	2	0.1
Chemicals	2.8	0.6
Pharmaceutical	2.9	3.7
Metal	4.9	4.1
Non-metal	3.9	1.9
Computer	3.2	4.7
Electronics	2.2	2.1
Transport	5	3
Furniture	-0.2	0.3

Printing showed negative growth in the 1st quarter of 2019. Printing, motor vehicle, and furniture sub-segment showed negative growth in the 2nd quarter of 2019.

The other sub-segments including tobacco, textiles, paper, printing, carbonated beverage, rubber, motor showed negative growth in 3rdand 4th quarter of 2019.

Digitization in Manufacturing Industry:

Worldwide IT spending totaled USD 3.7 trillion in 2019, an increase of 0.4% from 2018. Global IT spending is expected to rebound in 2020 with forecast growth of 3.7%, primarily due to enterprise software spending. It will increase at a rate of 3.8% CAGR ahead till 2025.

Manufacturing and natural resources processing industries spent USD 594.6 billion on IT in 2019; spending will grow at a CAGR of 4.2% from 2018 through 2025.

The global smart manufacturing market size was valued at USD 215.8 billion in 2019 and is expected to witness a CAGR of 11.8% from 2020 to 2027.

The two industries that invested the most in digital transformation in 2019 are discrete manufacturing (USD 221.6 billion) and process manufacturing (USD 124.5 billion).

Hardware and services investments accounted for more than 75% of all digital transformation spending in 2019. Services spending were led by IT services (USD 154 billion) and connectivity services (USD 102 billion).

Hardware spending will be spread across several categories, including enterprise hardware, personal devices, and IaaS infrastructure.

Digital transformation-related software spending totaled USD 253 billion in 2019. The fastest growing technology categories were IaaS (35.9% CAGR), application development and deployment software (26.7% CAGR), and business services (26.5% CAGR).

The United States and China were the two largest geographic markets for Digital spending, delivering more than half the worldwide total in 2019. In the U.S., the leading industry was discrete manufacturing (USD 63 billion. In China, the industries spending the most on Digital was discrete manufacturing (USD 55 billion) and process manufacturing (USD 31 billion).

Key Sector Market Size by Region:

North America

The North America digital transformation in manufacturing market size was valued at USD 10.03 billion in 2019. It is anticipated to witness a CAGR of 17.2% over the forecast period.

In Mexico, Machinery and instrument sub-segment comprise 45% of the total manufacturing export followed by 33% export contribution by transport equipment.

GCC and Africa

The factory automation and industrial controls market in the Middle East & Africa is expected to reach USD 17.13 billion by 2020 from USD 14.44 billion in 2019, growing at a CAGR of 4.17% over the forecasted period.

South Africa alone accounted for over 36% of the regional market in 2015, owing to higher industrialization and the growing automotive and food industry in the country.

Asia-Pacific

Manufacturing industry had a major share of digital transformation spending in 2019, representing around 37% (USD 140.3 billion) of the overall spending on digital transformation solutions in 2019.

Europe

European spending on technologies and services that enable the digital transformation of business practices, products, and organizations is forecast to reach USD 576.69 billion in 2025, achieving a CAGR of 15.1%.

The market for digital transformation was recorded at USD 256 billion in 2019. The market for digital transformation was recorded at USD 64 billion (25% of total spending on digitization) in 2019.

Market Outlook

North America (US) is the largest market for digital transformation in manufacturing market with digital spending reaching USD 84.46 billion in 2019 and the market is estimated to surpass USD 245 billion by 2025.

Asia-Pacific region (China) ranks second in terms of spending on digital transformation in manufacturing. The market recorded USD 55.42 billion in spending in 2019 and is forecasted to value USD 161.22 billion by 2025.

In the European region, the digital transformation in manufacturing will witness upward trend with market size shifting from USD 52 billion to USD 153 billion by 2025. Japan holds 7% share of global digital spending on manufacturing with market size estimated to reach USD 53 billion by 2025.

Nearly 50% of the digital transformation in manufacturing market will be captured by five segments: Industrial IOT, Cloud Computing, Industrial Robotics, Additive Manufacturing, and AI.

Industrial IOT will command the largest share with market size reaching USD 156.74 billion by 2025, growing at a CAGR of 22.8%. The second largest segment will be cloud computing, which will be worth USD 134.05 billion in market size by 2025.

The cloud computing adoption will proliferate at a CAGR of 19.8%. The AI segment will witness the highest CAGR of almost 50%.

Key Technology Segments	CAGR	Market Size by 2025 (in Billion USD)
Industrial IOT	22.8%	156.74
Cloud Computing	19.8%	134.05
Industrial Robotics	15.1%	47.92
Additive Manufacturing	20.9%	28.78
AI	49.5%	17.2

Competitive Landscape

The market for digital technology vendors in manufacturing is highly competitive, characterized by a large number of participants and subject to rapid change.

Competitors may include systems integration firms, contract programming companies, application software companies, cloud computing service providers, traditional consulting firms, professional services groups of computer equipment companies, infrastructure management companies, outsourcing companies and digital companies.

Some of the major competitors include, among others, Accenture, Capgemini, Cognigant, IBM, Oracle, Cisco, and SAP. In addition, these big players compete with numerous smaller local companies in the various geographic markets in which they operate.

Region wise segments, North America dominated the global digital transformation with almost 34.4% market share. The Asia-Pacific is the second-largest market not very far from North America and will be growing at the fastest growth rate of 15.0% during the forecast period. The manufacturing industry, especially in the United States is the early adopter of digital transformation.

However, Asia-Pacific is expected to dominate the digital transformation market driven by heavy demand from manufacturing hubs such as China, Taiwan, and Japan. Also, developing manufacturing industry in economies such as India and Indonesia will be driving the adoption of digital transformation.

Competitive Factors

The principal competitive factors affecting the markets include the provider’s reputation and experience, digital services capabilities, performance and reliability, responsiveness to customer needs, financial stability, and competitive pricing of services.

Key Market Players

Accenture

Accenture was found in 2009 as a professional services company serving clients in a range of industries providing management and technology consulting services.

The company’s segments include Communications, Media & Technology; Financial Services; Health & public service; Products, and Resources. Its services and solutions include Accenture Strategy, Accenture Consulting, Accenture Digital, Accenture Technology and Accenture Operations.

The Accenture Strategy provides a range of strategy services focused on areas, such as digital technologies; enterprise architecture and applications; information technology; security; mergers and acquisitions; operations; advanced customer services, and talent and organization. The Accenture Consulting provides industry insights and management and technology consulting capabilities.

The Accenture Digital provides digital services across three areas, including Accenture Interactive, Accenture Mobility and Accenture Analytics. The Accenture Technology comprises two primary areas: Technology Services, and Technology Innovation and Ecosystem. The Accenture operations provide business process services, infrastructure services, security services and cloud services, including the Accenture cloud platform.

Accenture Consulting provides industry experts with the insights and management and technology consulting capabilities to transform the world’s leading companies. It helps clients with the digital transformation of industries, enhancing our consulting services with digital, cloud, cyber security, artificial intelligence, block chain and other capabilities.

Accenture Digital brings together global digital capabilities to help clients unlock value and transform their businesses.

Accenture Industry X.0. Helps clients across industries digitally reinvent their design, engineering, manufacturing and production to create smart, connected products and services faster and at lower cost.

Technology Services includes application services spanning systems integration and application outsourcing and covering the full application lifecycle, from custom systems to all emerging technologies, across every leading technology platform (both traditional and cloud/software-as-a-service based).

It also encompasses our cloud and infrastructure services, including security services, and our portfolio of products and intelligent platforms and services, as well as our Advanced Technology Centers.

The company generated USD 43.22 billion revenue in 2019. Consulting segment made USD 24.18 billion revenue (55.95% of total revenue) in 2019.

Capgemini

Capgemini SE is a France-based company specialized in consulting, technology services and digital transformation. It operates through four segments: Application services, Technology and Engineering services, Consulting services and Other Managed services.

Application services designs and develops technological solutions and help customers optimize their applications, among others. Technology and Engineering services assists and supports internal information technology (IT) and engineering teams within client companies.

Consulting focuses on strategy, technology, data science, and creative design to support customers in creating new models and new products and services within the digital economy.

Other Managed services integrates, manages, and/or develops clients’ IT infrastructure systems, among others.

Total revenue earned was USD 15.82 billion USD. Manufacturing segment represented 20% (USD 3.16 billion) of the total revenue.

Cognizant

Cognizant Technology Solutions Corporation was incorporated in 1988 as a professional services company. The company operates through four segments: Financial Services, Healthcare, Manufacturing/Retail/Logistics, and Other. The company’s services include consulting and technology services and outsourcing services.

Its services include digital services and solutions, consulting, application development, systems integration, application testing, application maintenance, infrastructure services and business process services

Products and Resources segment includes manufacturers, retailers and travel and hospitality companies, as well as companies providing logistics, energy and utility services.

The Manufacturing/Retail/Logistics segment includes manufacturers, retailers, travel and other hospitality customers, as well as customers providing logistics services. The company’s customers in this sector include manufacturers of automotive and industrial products as well as processors of natural resources, chemicals and raw materials.

Total revenue generation in 2019 reached USD 16.78 billion. Products and resources segment accounted for 22.4% (USD 3.76 billion) of total revenue in 2019.

IBM

International Business Machines Corporation (IBM) is a technology company offering products and services through five segments: Cognitive Solutions, Global Business Services (GBS), Technology Services & Cloud Platforms, Systems and Global Financing.

The GBS segment provides clients with consulting, application management services and global process services. The Technology Services & Cloud Platforms segment provides information technology infrastructure services. The Systems segment provides clients with infrastructure technologies.

IT earned USD 77.15 billion in revenue in 2019. GBS segment accounted for 21.57% of revenue. GBS segment is further divided into Consulting (USD 7.99 billion in revenue), Application Management (USD 7.65 billion in revenue), and Global Process Services (USD 995 million in revenue). Global Technology Service segment held 35.46% share of revenue.

Cisco

Cisco was incorporated in 1984, engaging in designing and selling a range of technologies across networking, security, collaboration, applications and the cloud. The company’s product and technologies includes infrastructure platforms; applications; security and other products. It also offers technical support services and advanced services.

Infrastructure Platforms consists of company’s core networking technologies of switching, routing, data center products and wireless that are designed to work together to deliver networking capabilities and transport and store data. These technologies consist of both hardware and software offerings that help to build networks, automate, orchestrate, integrate and digitize data.

Application product category consists primarily of software-related offerings that utilize the core networking and data center platforms to provide their functions. It consists of both hardware and software-based solutions, including both software licenses and software-as-a-service.

Security product category primarily includes company’s unified threat management products, advanced threat security products, and web security products. Security offerings cover the following network-related areas: network and data center security, advanced threat protection, web and email security, access and policy, unified threat management, and advisory, integration, and managed services.

It reported USD 51.9 billion as revenue for 2019. The infrastructure platform segment constituted for 58% of the company’s revenue while American market contributed 60% towards total revenue.

Oracle

Oracle Corporation supplies software for enterprise information management. The company offers databases and relational servers, application development and decision support tools, and enterprise business applications.

Oracle’s software runs on network computers, personal digital assistants, set-top devices, PCs, workstations, minicomputers, mainframes, and massively parallel computers.

Oracle Corporation supplies software for enterprise information management. The Company offers databases and relational servers, application development and decision support tools, and enterprise business applications.

Oracle’s software runs on network computers, personal digital assistants, set-top devices, PCs, workstations, minicomputers, mainframes, and massively parallel computers.

In 2019, it made total revenue of USD 39.51 billion. 55.33% of revenue came from American market, EMEA region held for 28.52% share of revenue, and Asia-Pacific market represented the remaining revenue share. Cloud and license business accounted for 83% of its revenue and the remaining 17% revenue came from hardware and service offering.

SAP

SAP offers enterprise application software.

The company operates through three segments:

Applications, Technology & Services segment, which is engaged in the sale of software licenses, subscriptions to its cloud applications, and related services, primarily support services and various professional services, and support services, as well as implementation services of its software products and education services on the use of its products;
the SAP Business Network segment, which includes its cloud-based collaborative business networks and services relating to the SAP Business Network, including cloud applications, professional services and education services, as well as the Company markets and sells the cloud offerings developed by SAP Ariba, SAP Fieldglass and Concur,
and the Customer Experience segment, which comprises on-premise and cloud-based products that run front office functions across the customer experience.

Total revenue earned was USD 30.25 billion in 2019. Cloud and software revenue held for 85% revenue share.

Strategic Conclusion

To maximize the operational profitability, manufacturers need to put heavy investment in digitization of their business. Despite the contraction and expansion of digital trend as indicated by the fluctuating PMI, the heavy labor market will seek for alternative manufacturing shift as their operation strategy.

The ongoing labor and trade uncertainties that pose risk to manufacturing industry will drive implementation of the digital technology such as AI, robotics, and additive manufacturing.

North American region will drive the most of the demand for digital transformation. The two technologies that manufacturers will demand for implementation will be advanced manufacturing and replacement for subtractive manufacturing by additive manufacturing in the near future.

References

Appendix

PMI- Purchasing Managers’ Index