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Key Takeaways from the 9th Annual State of Smart Manufacturing Report

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What’s new. What’s now. And what’s happening next. The 2024 State of Smart Manufacturing Report offers a comprehensive look at where 1,500+ manufacturers see challenges and opportunities both today and in the future. From the expanding use of generative artificial intelligence (GenAI) to the ongoing need for a skilled, adaptive workforce, here’s a rundown of the report’s biggest takeaways that will inform your operations.

The Industry Right Now

Manufacturers worldwide told us that economic, technology, workforce, and sustainability issues comprise their primary areas of focus this year.
When asked about external obstacles to growth, inflation tops the list for the second straight year, followed by rising energy costs. Third on the list is cybersecurity, a compelling indication of the increasingly close digital-physical infrastructure connection. This is the first year that cybersecurity has appeared in the top five list of obstacles to growth.

To mitigate risks brought about by inflation and rising energy costs, manufacturers report that they plan to use new technology:

  • Technology investments are up 30% over last year
  • 95% are using or evaluating smart manufacturing technology, up from 84% in 2023
  • Cloud/SaaS is seen as delivering the most ROI

New this year, artificial intelligence (AI) and machine learning (ML) are seen as delivering bigger business outcomes than all other smart manufacturing capabilities — and data is a big part of the conversation. Respondents believe industry leaders are setting the pace by using data to fuel AI and ML and optimize processes. However, those surveyed say their own organizations use only 44% of collected data effectively.

Using AI won’t mean losing the need for human supervision, however. Having a skilled workforce is seen as essential for piloting technology and processes, with 94% of manufacturers saying they expect to maintain or grow their workforce as a result of smart manufacturing technology adoption.

The high level of attention paid to economic, technology, and workforce issues has not, however, diminished manufacturers’ focus on improving sustainability. An impressive 98% of the manufacturers surveyed said they have at least some form of sustainability/ESG policy. In fact, 48% say they have a formal, company-wide policy, showing that factors such as energy management, reducing waste, recycling, and carbon offsetting are becoming higher priorities.

The Biggest Challenges

The areas that hold the most promise for manufacturers also present the biggest obstacles to success.

The lack of a skilled workforce is the top hurdle manufacturers say they face when trying to maintain competitiveness, as labor concerns persist post-pandemic. In 2024, communication and teamwork, along with knowledge of smart technology and cybersecurity practices and standards, are the top skills employers are seeking. Manufacturers also believe that staying competitive requires helping employees adapt to change, whether it’s industry-wide or job-specific. The top three workforce-related barriers to success are change management, training employees on updated processes, and helping employees stay engaged and feel valued in their roles.

Along with the workforce worries of today, manufacturers also grapple with the longstanding issues of quality and efficiency. Improved quality is the number one outcome respondents hope to achieve from existing smart manufacturing technology. Nearly half of respondents said that quality control tops the chart for planned AI and ML use this year, putting it ahead of cybersecurity, process optimization, supply chain management, and robotics. On the efficiency side, ideal competencies include reducing energy usage, repurposing and recycling, and maximizing resources. The quest for greater efficiency — and the benefits it brings — is the chief motivation behind the development and adoption of manufacturers’ ESG and sustainability goals.

Manufacturers say that these challenges with workforce, quality, efficiency, and sustainability, along with the rapidly growing need for cybersecurity, are driving them to choose data-centered solutions. To that end, a convincing 83% say the obstacles they face are accelerating digital transformation within their companies.

The Future

What’s next? When manufacturers talk about the ways in which they are future-proofing their businesses in order to stay competitive, capitalizing on AI is clearly the primary goal. Their top three investment areas over the next 12 months are:

  1. Gen AI or causal AI
  2. Collaborative robots (Cobots)
  3. Autonomous Mobile Robots (AMRs) and Automated Guided Vehicles (AGVs)

In fact, 85% have already invested or plan to invest in AI or ML this year. And when asked to specify the main driver of their technology investments, 62% gave the reason as the long-term impact on their business. Respondents predict that by 2027, AI will have made the biggest positive impact on quality and cybersecurity.

On the horizon to help alleviate workforce issues, manufacturers plan to increase their use of automation, smart manufacturing technology, and AI and ML over the next 5 years, and invest in employee training that will accelerate successful technology adoption and optimization. Consequently, respondents say they foresee their biggest leadership challenge will be to balance people, processes, and technology.

Rightfully, manufacturers also want to make the future a sustainable one. The top way respondents are mitigating against internal risk, alongside upskilling existing talent, is adopting technology for tracking and quantifying sustainable practices, an increase from third place last year.

The Complete Report

These key takeaways from the 9th Annual State of Smart Manufacturing Report represent just a fraction of the information that can be found in the full report. No matter your company’s goals or desired KPIs, there are further data points inside that can inform your strategy. For more insights from decision-makers at top manufacturers from around the world, download the complete report here.
 


Plex Team
Plex Team
Plex, by Rockwell Automation, is the leader in cloud-delivered smart manufacturing solutions, empowering the world’s manufacturers to make awesome products. Our platform gives manufacturers the ability to connect, automate, track and analyze every aspect of their business to drive transformation. The Plex Smart Manufacturing Platform includes solutions for manufacturing execution (MES), ERP, quality, supply chain planning and management, Industrial IoT and analytics to connect people, systems, machines, and supply chains, enabling them to lead with precision, efficiency and agility.

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