Representative End User Clients
Representative Automation Clients
Representative Software Clients
According to ARC, both suppliers and end users in China are reaching an unprecedented consensus on embracing new technologies—especially in the relatively conservative process industries. Digital transformation has broken traditional concepts, making the procurement and deployment of industrial software, including MES, an important and necessary measure for building digital factories. The integration of IT into production control software has transformed the core OT concepts traditionally upheld by automation professionals.
Diverse Demand from End User Industries
Demand Diversification
Demand tends to be more diversified. Large-scale end users typically expect MES system suppliers to have extensive industry-specific application expertise and delivery experience, while small and medium-sized users prioritize systems that are easy to implement and deploy quickly.
Product Selection
Large-scale end users often have greater customization needs for MES systems, sometimes even developing their own software or conducting extensive secondary development on standard MES products. In general, the more complex the production scenarios of end users, the higher the granularity required in MES functional modules.
Top-Level Design
End users with a clear vision for digital transformation typically engage in more detailed blueprint planning for MES systems. MES has evolved from being an isolated or standalone configured software to becoming a core, indispensable system within the broader digital transformation framework.
Balancing Customization and Productization Strategies
Productization serves as a key indicator of the maturity level of MES software. However, the inherent conflict between productization and customization ensures that no vendor can fully cater to all industries and applications. Meanwhile, the diverse customization requirements from industries and enterprises present challenges such as high implementation complexity and extended project timelines, which in turn hinder the advancement of productization. However, this has not significantly deterred the enthusiasm of emerging MES vendors, who often adopt a productization strategy when entering the market. Despite ongoing debates among end users in China regarding public cloud, the market for cloud-based MES in the country is experiencing rapid growth.
According to ARC, subscriptions and renewals from small and medium-sized customers are expected to account for a larger share of revenue, particularly for SaaS MES vendors in the future. Additionally, the growth rate of productized software delivery is projected to increase significantly over the next five to ten years.
Boundaryless Architecture
In the future, MES will continue to serve as a critical bridge between the planning and control layers, with boundary blurring driving higher levels of integration. With the rise of industrial IoT, MES will no longer be limited to standalone deployments but will increasingly operate on integrated platforms. For instance, platform-based MES solutions will integrate with APS, QMS, and WMS, while also forming combinations with SCM, ERP, and BI systems. Furthermore, ARC defines collaborative production management (CPM) software as a layer between MES and MOM. Unlike traditional MES systems, which focus on production management, CPM and MOM function as manufacturing management integration platforms, offering greater standardization, openness, and a stronger emphasis on overall manufacturing operation management. Over the next five to ten years, MES architecture is expected to continue evolving, with a sustained focus on developing and delivering core functional modules tightly aligned with business processes.
MES products have been present in China for over 30 years, yet their overall penetration across industries remains significantly lower than that of production control software. Driven by the momentum of digital transformation, initiatives like Made in China 2025, and the push for intelligent manufacturing, ARC cautiously predicts that the Chinese MES market will remain dynamic and sustain technological advancements across multiple dimensions within the industrial software landscape. Beyond fulfilling core business functions, an increasing number of MES products leveraging cutting-edge technologies are expected to emerge.