Abstract: China's traditional manufacturing industry has gradually weakened its low cost competitive advantage, and the pressure of manufacturing transformation is increasing. It is a problem worthy of further discussion whether Service-oriented Manufacturing can improve the productivity of the enterprise and promote the structural reform of the supply side of the manufacturing industry. This paper selects the panel data of 30 provinces in China for 2007-2016 years, introduces technological innovation, manufacturing cost and transaction cost as an intermediary variable, and uses the intermediary effect model to explore the internal mechanism of Service-oriented Manufacturing efficiency of manufacturing industry. The results show that Service-oriented Manufacturing can significantly improve the efficiency of manufacturing industry. In terms of the internal mechanism of Service-oriented Manufacturing to improve the efficiency of manufacturing, Service-oriented Manufacturing can significantly improve manufacturing efficiency by promoting technological innovation in manufacturing, reducing manufacturing costs and transaction costs. For Service-oriented Manufacturing related services industries, wholesale and retail, transport, postal and financial industries are all able to improve the efficiency of manufacturing. The excessive prosperity of the real estate industry has hindered the effective allocation of resources, improved manufacturing costs and transaction costs of manufacturing, led to the negative impact on the improvement of manufacturing efficiency.