Research Note: Manufacturing Execution Systems, Strategic Theme Analysis
Cloud and Deployment Evolution
The manufacturing execution systems market is demonstrating a clear evolution toward cloud deployment while maintaining crucial operational resilience through edge computing capabilities. SAP projects that 65% of new manufacturing execution implementations will be cloud-based through SAP Digital Manufacturing Cloud by 2027, reducing infrastructure costs by 30-40% compared to on-premises deployments while accelerating time-to-value by 25-35% (High Confidence). Similarly, ABB anticipates that 50% of new implementations will incorporate cloud components specifically for analytics and visualization while maintaining critical operational capabilities at the edge, reducing infrastructure costs by 20-30% while preserving manufacturing reliability for environments with connectivity constraints (Moderate Confidence). This hybrid approach acknowledges manufacturing's unique requirements where cloud scalability delivers cost benefits for analytics while edge computing ensures operational continuity.
Edge computing capabilities are receiving significant investment from both vendors to address manufacturing environments' need for operational resilience during connectivity disruptions. SAP and ABB both project that by 2026, their edge computing capabilities will enable 50% of critical manufacturing processes to continue operating during cloud connectivity disruptions while maintaining data integrity and synchronization. This focus on manufacturing resilience reflects industrial environments' zero-tolerance for production disruptions and the mission-critical nature of manufacturing execution systems. Furthermore, SAP is expanding strategic partnerships with cloud hyperscalers to deliver enhanced manufacturing execution capabilities, reducing deployment time by 25-35% through pre-configured environments while improving scalability and performance for global manufacturing operations (High Confidence). These partnerships demonstrate how manufacturing execution is becoming increasingly integrated into broader cloud ecosystems while maintaining the specialized capabilities required for industrial environments.
AI and Advanced Analytics
Artificial intelligence is rapidly transforming manufacturing execution capabilities, with both SAP and ABB making significant investments in this area. SAP projects that by 2028, organizations leveraging its AI capabilities within manufacturing execution systems will reduce quality deviations by 25-35% compared to traditional quality management approaches, delivering improved product quality and reduced waste through predictive quality insights and automated root cause analysis (High Confidence). Similarly, ABB anticipates that through 2027, manufacturers using its AI capabilities will reduce unplanned downtime by 20-30% compared to traditional maintenance approaches, delivering improved operational reliability and reduced maintenance costs through predictive maintenance and anomaly detection (Moderate Confidence). These AI applications directly address manufacturing's most costly challenges—quality deviations and unplanned downtime—demonstrating how AI is being applied to manufacturing's highest-value use cases rather than merely theoretical applications.
Generative AI represents the next frontier for manufacturing execution systems, with SAP projecting that through 2028, it will integrate generative AI capabilities enabling 30-40% faster problem resolution through AI-assisted root cause analysis and providing 20-30% improvement in manufacturing process optimization through generative design and simulation capabilities (Moderate Confidence). These capabilities leverage large language models and other generative technologies to assist manufacturing personnel in complex problem-solving tasks and process optimization scenarios. The moderate confidence level reflects the emerging nature of generative AI in industrial applications, where governance, accuracy, and specialized knowledge integration present unique challenges. As these technologies mature, they promise to transform how manufacturers identify optimization opportunities, resolve complex production issues, and capture institutional knowledge, ultimately driving significant productivity improvements beyond what traditional analytics can deliver.
Industry Specialization and Implementation Acceleration
The manufacturing execution systems market is increasingly focusing on industry-specific solutions and accelerated implementations to reduce time-to-value and implementation costs. SAP anticipates that through 2027, it will expand its industry-specific manufacturing accelerators to cover 80% of manufacturing scenarios across its target industries, reducing implementation time by 35-45% compared to custom implementations while incorporating industry best practices and compliance requirements (Moderate Confidence). Similarly, ABB projects that by 2026, it will cover 75% of manufacturing scenarios across its target industries, reducing implementation time by 30-40% through industry-specific accelerators (High Confidence). These industry-specific solutions embed domain knowledge, regulatory requirements, and best practices for sectors like pharmaceuticals, automotive, consumer packaged goods, and other discrete and process manufacturing verticals, significantly reducing the customization burden that has historically made MES implementations lengthy and expensive.
Low-code development capabilities are emerging as a key enabler for faster, more flexible manufacturing execution implementations. SAP projects that by 2026, it will transform 60% of its manufacturing configuration capabilities to low-code/no-code approaches, reducing implementation time and cost by 30-40% while increasing flexibility for manufacturing adaptations without specialized technical expertise (High Confidence). This evolution addresses a chronic challenge in the manufacturing execution space: the scarcity of specialized talent combining manufacturing domain expertise with technical implementation skills. By empowering manufacturing specialists to configure and adapt systems without extensive technical expertise, these low-code approaches promise to reduce implementation timelines and increase manufacturing agility in response to changing requirements. The combination of industry-specific accelerators and low-code capabilities represents a fundamental shift in how manufacturing execution systems are deployed, moving from lengthy, custom-coded implementations toward more modular, configurable approaches that can be implemented and adapted more rapidly to meet evolving manufacturing needs.
Enterprise and Automation Integration
The integration capabilities of manufacturing execution systems are increasingly becoming a primary competitive differentiator and value driver for organizations. SAP projects that through 2026, organizations implementing SAP Manufacturing Execution Systems in environments already leveraging SAP S/4HANA will achieve 40-50% faster implementation timelines and 30-40% lower integration costs compared to competitive solutions requiring custom interface development (Very High Confidence). This enterprise integration advantage reflects SAP's strength in ERP systems and its ability to create seamless data flows between business planning and shop floor execution. Similarly, ABB anticipates that by 2027, 65% of manufacturers implementing ABB Manufacturing Execution Systems alongside ABB's automation technologies will achieve 25-35% faster implementation timelines and 30-40% lower integration costs compared to solutions requiring custom interface development for automation connectivity (High Confidence). This projection highlights how manufacturing execution vendors are leveraging their broader technology ecosystems as competitive advantages, with SAP emphasizing enterprise application integration and ABB focusing on automation system connectivity.
The convergence of operational technology (OT) and information technology (IT) represents a critical evolutionary path for manufacturing execution systems. ABB projects that through 2028, it will strengthen its position at the convergence of OT and IT, with 65% of implementations leveraging its ability to bridge these domains, reducing integration complexity by 25-35% and creating seamless data flows that enable more effective manufacturing decision-making (Very High Confidence). This OT/IT convergence remains a significant challenge for many manufacturers due to differing technologies, protocols, security requirements, and organizational structures between these traditionally separate domains. Vendors with expertise spanning both domains, like ABB with its automation heritage, are positioning themselves at this critical intersection to reduce integration complexity and enable more comprehensive manufacturing visibility. The integration capabilities in both enterprise and automation domains are becoming increasingly important as manufacturers seek to create unified digital environments that connect business planning, manufacturing execution, and automation systems, eliminating data silos and enabling more responsive, data-driven manufacturing operations.
Digital Transformation and Advanced Manufacturing
Digital transformation in manufacturing is driving the evolution of execution systems toward more comprehensive capabilities encompassing digital threads, digital twins, and industrial IoT. SAP projects that through 2028, it will strengthen integration between its manufacturing execution systems and product lifecycle management capabilities, creating seamless digital threads from product design through manufacturing execution that reduce new product introduction time by 20-30% and improve first-time quality by 15-25% (High Confidence). This digital thread creates continuity between product design and manufacturing execution, addressing a traditional pain point where design intent is often lost in translation to manufacturing processes. ABB anticipates that through 2027, it will significantly enhance its Digital Twin capabilities for manufacturing operations, enabling 40% of clients to create comprehensive virtual representations of production processes that reduce new product introduction time by 15-25% and optimize manufacturing operations through advanced simulation capabilities (Moderate Confidence). These digital twins allow manufacturers to simulate and optimize manufacturing processes virtually before implementing them physically, reducing costly trial-and-error on the production floor.
Industrial IoT integration is rapidly expanding the scope and granularity of manufacturing execution systems. ABB projects that through 2027, its Manufacturing Execution Systems will expand industrial IoT integration capabilities, with 70% of implementations incorporating comprehensive sensor networks that provide 30-40% more granular production visibility and enable 20-30% more effective manufacturing optimization through enhanced data collection (Moderate Confidence). This expanded IoT connectivity transforms manufacturing execution systems from transaction-processing platforms into comprehensive data collection and analysis environments that capture unprecedented detail about production operations. The combination of digital threads connecting design and manufacturing, digital twins enabling simulation and optimization, and expanded IoT connectivity creating more granular visibility collectively represents a fundamental evolution in manufacturing execution capabilities. These advances are transforming manufacturing execution systems from isolated shop floor applications into central components of comprehensive digital manufacturing strategies, enabling manufacturers to achieve higher levels of efficiency, quality, and agility through digitally-enabled optimization across the entire manufacturing lifecycle.
Process Manufacturing Specialization
Process manufacturing presents unique challenges and requirements for manufacturing execution systems, driving specialized capabilities from vendors with deep domain expertise in these industries. ABB projects that by 2028, it will maintain its strong position in process manufacturing execution with 70% of process manufacturers selecting ABB Manufacturing Execution Systems citing industrial automation integration as a primary decision factor, leveraging ABB's deep domain expertise to achieve 15-20% faster time-to-value compared to general-purpose solutions (High Confidence). This specialization reflects process manufacturing's distinct characteristics, including continuous or batch production, material transformation, complex quality parameters, regulatory requirements, and tight integration with process control systems. ABB's automation heritage provides advantages in this domain, with its ability to integrate seamlessly with distributed control systems, programmable logic controllers, and other automation technologies commonly found in process industries.
Process manufacturing industries like pulp and paper, chemicals, pharmaceuticals, food and beverage, and oil and gas require specialized execution capabilities substantially different from discrete manufacturing. According to McKinsey research cited by ABB, digital technologies incorporating manufacturing execution capabilities can offer pulp and paper producers a 15% reduction in total cost and a 5% improvement in overall equipment effectiveness, demonstrating tangible business value. These industries often operate in highly regulated environments with strict compliance requirements, making specialized capabilities for electronic batch records, material genealogy, and quality assurance essential. Process manufacturing's focus on material transformation and utilization also drives specialized requirements for material balance calculations, yield optimization, and batch consistency that general-purpose manufacturing execution systems may not adequately address. Vendors with industry-specific process manufacturing expertise, like ABB, can deliver significant advantages by embedding industry-specific workflows, calculations, and compliance features that align with the unique requirements of these complex manufacturing environments.
Sustainability Integration
Sustainability is rapidly becoming a core capability within manufacturing execution systems rather than a separate consideration. SAP projects that through 2027, 70% of its Manufacturing Execution Systems implementations will incorporate sustainability metrics and optimization capabilities, enabling manufacturers to reduce energy consumption by 15-25%, minimize waste by 20-30%, and provide comprehensive environmental impact reporting directly from manufacturing operations (Moderate Confidence). Similarly, ABB anticipates that by 2026, 60% of its implementations will incorporate such capabilities, enabling energy consumption reduction of 10-20% and waste minimization of 15-25% (High Confidence). These projections reflect how sustainability is being embedded directly into core manufacturing execution workflows rather than treated as an afterthought or separate initiative, allowing manufacturers to optimize environmental performance simultaneously with traditional metrics like efficiency, quality, and throughput.
The integration of sustainability capabilities into manufacturing execution systems provides manufacturers with unprecedented visibility and control over environmental impacts at the operational level. By capturing energy consumption, material utilization, waste generation, and emissions data in real-time at the production process level, these systems enable more granular optimization than traditional facility-wide approaches. This operational-level sustainability visibility allows manufacturers to identify specific equipment, processes, and practices contributing disproportionately to environmental impacts and target improvement efforts precisely. Furthermore, the integration of sustainability metrics into manufacturing execution systems enables these considerations to be incorporated into day-to-day operational decisions and continuous improvement initiatives rather than addressed only in periodic sustainability reviews or reports. As regulatory requirements, consumer expectations, and corporate commitments around sustainability continue to increase, manufacturing execution systems with embedded sustainability capabilities will become essential tools for manufacturers to achieve environmental goals while maintaining competitiveness and profitability through optimized operations.
Bottom Line
For CEOs and CIOs making manufacturing technology investment decisions, these strategic themes reveal fundamental shifts in manufacturing execution systems that will significantly impact competitive advantage in the coming years. Cloud deployment with edge resilience offers the potential to reduce infrastructure costs by 30-40% while accelerating time-to-value, but requires thoughtful architecture to maintain operational continuity in manufacturing environments. AI capabilities in quality management and predictive maintenance can reduce quality deviations by 25-35% and unplanned downtime by 20-30%, directly impacting bottom-line performance through reduced waste and improved asset utilization. Industry-specific accelerators and low-code capabilities promise to reduce implementation time by 30-45%, addressing the historical challenges of lengthy, expensive MES deployments that have limited adoption and time-to-value.
Integration capabilities have emerged as critical competitive differentiators, with enterprise integration reducing implementation costs by 30-40% for organizations leveraging consistent technology ecosystems, while automation integration delivers similar benefits through seamless connectivity to shop floor systems. Digital transformation capabilities including digital threads, digital twins, and industrial IoT create the foundation for next-generation manufacturing optimization, with potential to reduce new product introduction time by 20-30% and improve production efficiency by 20-30% through more granular visibility and advanced simulation. Process manufacturing specialization remains essential for industries with unique requirements, delivering 15-20% faster time-to-value through purpose-built capabilities. Sustainability integration enables energy consumption reduction of 10-25% and waste minimization of 15-30% while satisfying increasing regulatory and market demands for environmental performance.
These strategic themes collectively represent a transformation of manufacturing execution systems from isolated shop floor applications to core components of comprehensive digital manufacturing strategies. The executives who recognize these shifts early and align their manufacturing technology investments accordingly will achieve significant competitive advantages through faster implementation, reduced integration costs, improved operational performance, and enhanced sustainability. The manufacturing execution space is evolving rapidly beyond traditional capabilities, and organizations that continue to view these systems merely as production tracking tools rather than strategic digital manufacturing platforms risk falling behind competitors who leverage these advanced capabilities to achieve step-change improvements in efficiency, quality, agility, and sustainability. Forward-thinking manufacturing leaders should evaluate their current manufacturing execution capabilities against these emerging trends and develop strategic roadmaps to leverage these advancements for competitive advantage in their specific manufacturing contexts.