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February 26, 2026
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.
By adopting predictive analytics software, manufacturers can streamline logistics operations, such as inventory and delivery management, and prevent supply chain disruptions.
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.
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.
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.
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.
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.
| 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%. | |
|---|---|
| % of manufacturing AI leaders said AI accounts for more than 10% of their | |
| 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%). | |
| 75% of advanced manufacturing companies consider adopting technologies such as artificial intelligence their top engineering and R&D priority. | |
| 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. | |
| 74% of manufacturing AI leaders use machine learning, while 67% rely on agentic AI. | |
| 24% of manufacturers have deployed generative AI at the facility or network level, while 38% are piloting this technology. | |
| Almost 80% of manufacturers have invested or planned to invest in AI-powered vision systems. | |
| 74% of manufacturing companies make significant use of AI-powered data platforms. |
Scheme title: Top AI use cases in manufacturing by adoption
Data source: NAM
| 77% of manufacturing decision-makers believe artificial intelligence is essential to improving an organization's efficiency. | |
|---|---|
| Implementing generative AI across manufacturing operations can lead to productivity improvements of up to two times. | |
| 62% of manufacturing AI leaders experienced more than 10% ROI for their AI initiatives. | |
| 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. | |
| 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%. |
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
| 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. | |
|---|---|
| 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. | |
| 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. | |
| Although 78% of manufacturing respondents say their organisation has provided formal education on working with AI, 55% of them would like more AI training. | |
| 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. | |
| 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. | |
| 78% of manufacturing AI leaders consider meeting sustainability targets more important than AI, which is notoriously energy-intensive. |
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-powered product assembly automation helps companies improve labor productivity, maximize production output, and speed up manufacturing cycles.
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.
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.
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.
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. |
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.
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.
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.
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