hero background image

AI in manufacturing: top use cases,
trends & implementation guidelines

February 26, 2026

AI use cases in the manufacturing sector

Product development

Dedicated AI solutions can streamline critical but time-consuming product development tasks, such as design and prototyping, accelerating time to market and improving product quality.

  • Generative design
    Quickly generating thousands of product design variations based on a set of defined parameters (weight, material, etc.), enabling designers and engineers to select the best alternative.
  • Simulation & testing
    Simulating how a certain product design will perform under real-world conditions, reducing the need for physical prototypes and tests.

Supply chain management

By adopting predictive analytics software, manufacturers can streamline logistics operations, such as inventory and delivery management, and prevent supply chain disruptions.

  • Demand forecasting
    Analyzing sales, market trends, social media sentiment, and other factors to predict future product demand and adjust production plans accordingly.
  • Inventory optimization
    Predicting supply and demand based on component supplier lead times, historical and real-time sales data, and other metrics to optimize inventory levels across warehouses and minimize the risk of overstocking and stockouts.
  • Route planning
    Fine-tuning delivery schedules and routes in real time based on factors like traffic, weather, and vehicle breakdowns to reduce shipping costs and lead times.

Assembly line automation

The implementation of AI technologies like computer vision in smart factories provides industrial robotics systems with superior spatial awareness, making them faster and more accurate.

  • Robots
    Fully automating assembly processes (spot welding, riveting, etc.) across the production line with computer vision-guided mechanical arms and other machines to maximize the output.
  • Cobots
    Assisting human workers with repetitive tasks like component placement to improve their productivity and mitigate physical workloads while ensuring their safety using data from proximity sensors.

Quality control

Unlike traditional quality control systems that rely on a limited set of predefined rules to spot product defects, machine learning-powered anomaly detection software can recognize a wider range of potential outliers or even previously unknown anomalies with utmost accuracy.

  • Automated visual inspection
    Scanning products on the production line to detect scratches, dents, misalignments, or discolorations and sort out any defective items.
  • Root cause analysis
    Investigating product defects from the visual production line inputs to help identify and address potential causes, such as injection molding flash due to a worn mold.

Predictive maintenance

The anomaly detection capabilities of AI systems have already helped multiple manufacturers move from a reactive to a proactive approach to equipment and asset maintenance.

  • Condition monitoring
    Analyzing equipment performance and conditions, such as torque, vibration, or acoustic emissions, to detect subtle changes that can be a sign of degradation.
  • Failure prediction
    Predicting machinery’s remaining useful life based on degradation patterns and schedule maintenance activities accordingly to prevent breakdowns and consequent downtime.

Digital twins are virtual models of a factory or an entire supply chain network created by collecting real-time data on assets and processes with IoT sensors. Combined with AI-powered analytics, these digital replicas enable manufacturers to simulate and predict future scenarios.

  • Production process simulation
    Tracking factory floor operations to identify inefficiencies and simulate the impact of certain changes, such as a different facility layout, on production processes before implementing them.
  • Supply chain risk prediction
    Simulating logistics scenarios to assess how demand spikes, supply shortages, or other events can impact your company and partners and thus create effective contingency plans.

Workforce management

With the help of AI-powered business software for HR administration, manufacturers can streamline various workforce management tasks, optimize labor resources, and ensure safer working environments.

  • Workforce planning
    Analyzing production plans, workloads and skill requirements for specific tasks, staff performance, and labor supply and demand to help HR departments better optimize hiring initiatives, training programs, and shift schedules.
  • Worker safety
    Monitoring the factory floor with computer vision-powered cameras to detect unsafe behavior or potential hazards in real time, such as workers without safety gear, and automatically send alerts to prevent incidents.

Enhance your manufacturing operations with Itransition’s AI solutions

Let’s talk

AI in manufacturing stats & insights

Investments & adoption

The global AI in manufacturing market is expected to grow from $7.60 billion in 2025 to $62.33 billion in 2032 at a CAGR of 35.1%.

Fortune Business Insights

% of manufacturing AI leaders said AI accounts for more than 10% of their
total IT budget. 77%
of them intend to increase this share within one year, with 71% planning an addition of more than 10%.

KPMG

Investment priorities in smart manufacturing for the next 24 months include data analytics (40% of companies surveyed), AI (29%), cloud computing (29%), and IIoT (27%).

Deloitte

75% of advanced manufacturing companies consider adopting technologies such as artificial intelligence their top engineering and R&D priority.

Bain & Company

The percentage of manufacturing decision-makers using AI in their jobs at least once a week increased from 46% in 2024 to 78% in 2025.

TeamViewer

74% of manufacturing AI leaders use machine learning, while 67% rely on agentic AI.

KPMG

24% of manufacturers have deployed generative AI at the facility or network level, while 38% are piloting this technology.

Deloitte

Almost 80% of manufacturers have invested or planned to invest in AI-powered vision systems.

NAM

74% of manufacturing companies make significant use of AI-powered data platforms.

KPMG

Scheme title: Top AI use cases in manufacturing by adoption
Data source: NAM

Adoption payoffs

77% of manufacturing decision-makers believe artificial intelligence is essential to improving an organization's efficiency.

TeamViewer

Implementing generative AI across manufacturing operations can lead to productivity improvements of up to two times.

McKinsey

62% of manufacturing AI leaders experienced more than 10% ROI for their AI initiatives.

KPMG

Industry 4.0 front-runners using AI for demand forecasting heavy-transport equipment routing, and other manufacturing use cases have seen a two to three times increase in productivity and a 30% decrease in energy consumption.

McKinsey

Based on reported AI adoption results, artificial intelligence can help manufacturers reduce failures in the assembly process by 70%, cut quality control efforts by 50%, and increase visual inspection accuracy by 80%.

Bain & Company

Scheme title: Reported benefits of AI adoption in manufacturing
Data source: KPMG

Core

Enablers

Scheme title: AI use cases in manufacturing by impact and feasibility
Data source: Kearney

Implementation roadblocks

56% of manufacturing AI leaders reported data challenges when implementing AI, while 40% of them experienced workforce issues in terms of skill gaps and resistance to change.

KPMG

While over 90% of machinery companies already collect and store production data, most of them don’t know how to extract value from it. A common roadblock is a lack of understanding of where AI can deliver the greatest returns.

Bain & Company

Common obstacles to developing AI use cases in manufacturing include inadequate data quality (according to 57% of companies), weak data integration (54%) , and weak governance (47%). Only about 20% of manufacturers have production assets with data ready for use in existing AI models.

MIT

Although 78% of manufacturing respondents say their organisation has provided formal education on working with AI, 55% of them would like more AI training.

TeamViewer

AI adoption across business functions can hinder productivity in the short term, with firms experiencing a measurable decline in productivity by 1.33%. Common causes include a misalignment between new digital tools and legacy manufacturing processes and a lack of investment in data infrastructure, staff training, and workflow redesign.

MIT

Between 65% and 70% of manufacturers are currently outsourcing many roles across AI, cybersecurity, analytics, and other technology domains due to significant challenges in hiring skilled workers.

Deloitte

78% of manufacturing AI leaders consider meeting sustainability targets more important than AI, which is notoriously energy-intensive.

KPMG

Scheme title: Top AI adoption challenges in manufacturing
Data source: KPMG

Scheme title: Most common data challenges when adopting AI in manufacturing
Data source: MIT

AI adoption benefits for the manufacturing industry

Improved operational efficiency

AI-powered product assembly automation helps companies improve labor productivity, maximize production output, and speed up manufacturing cycles.

Manufacturing cost savings

Automated assembly lines enable manufacturing firms to cut their production expenses, while predictive maintenance helps them reduce the risk of equipment breakdown, thus minimizing repair and downtime costs.

Data-driven decision-making

With the help of AI-based demand forecasting and digital twins, organizations can derive actionable insights from their corporate data to fine-tune and streamline manufacturing operations, including production planning and inventory management.

Superior product quality

By adopting AI systems for generative design and automated visual inspection, manufacturers can build higher-quality products, ensure compliance with product quality standards, and meet customer expectations.

How to overcome AI adoption challenges in manufacturing

Concerns & roadblocks

Recommendations

Meeting data requirements
AI-driven solutions, especially those powered by deep learning, require vast amounts of high-quality data for both initial AI model training and subsequent real-life data analysis. However, manufacturing organizations can have datasets scattered across multiple systems, containing inconsistent or inaccurate data points.

Implement a data management strategy to ensure data quality and availability. Key aspects include mapping reliable data sources, cleansing and transforming data via ETL pipelines, storing it in suitable repositories like data warehouses, and ensuring data exchange across your digital ecosystem via APIs or other integration solutions.

Overcoming the lack of AI readiness
Despite their desire to implement AI-enabled tools, many manufacturing companies are just not ready to adopt them due to the technical limitations of their IT ecosystems, workforce skill gaps and resistance to change, or very rigid business processes.

Assess your IT infrastructure, technical in-house expertise, and business operations to identify potential obstacles to successful AI adoption and define suitable initiatives according to your findings. These can include conducting server and data center upgrades, introducing upskilling programs, or opting for a phased AI software rollout involving a pilot group of early adopters to get the workforce gradually acquainted with the technology.

Ensuring data privacy & security
Given their data-driven nature, AI systems can be the target of cyber criminals seeking confidential information like IP or trade secrets. Furthermore, AI’s reliance on data can raise privacy and security concerns among customers, partners, or even regulatory agencies.

Safeguard your AI solution with robust protection mechanisms and techniques, such as user activity monitoring, data encryption, and IoT device authentication and conduct regular risk assessments with the help of ethical penetration testing. You should also adopt data governance policies defining how data will be handled across your organization.

AI consulting

AI consulting

Rely on our consultants to streamline your artificial intelligence project for faster AI software delivery, as well as making sure the resulting solution fully meets your unique needs and industry-specific requirements.

AI development

Team up with our AI engineers to build high-performing software solutions that will streamline your manufacturing processes and enhance your decision-making with advanced automation and analytics capabilities.

Looking for an AI implementation partner?

Turn to Itransition

AI as the transformation driver in manufacturing

Over the past two decades, as highlighted by McKinsey , the manufacturing sector in advanced economies has experienced progressive stagnation, showing an annual labor productivity growth rate that has become increasingly negligible.

Artificial intelligence looks set to help manufacturers overcome this productivity impasse and better handle complex supply chains, more demanding audiences, and stringent regulations. Consider relying on an experienced IT partner like Itransition to implement AI the right way and maximize its value for your business.