The digital imperative: The need for urgency in manufacturing
If you are not thinking about digitising your manufacturing processes, you’re already behind the curve, advises Cian Kelliher of KPMG.
, management consulting partner at KPMG. looks at how industrial manufacturing is setting the pace for digital transformation
Industrial manufacturing has always been to the forefront of technological innovation, from the printing press to the spinning jenny to the world’s most advanced semiconductors.
At a time of economic uncertainty, the KPMG Global Industrial Manufacturing CEO survey cites 74% of manufacturing companies identify digital transformation as their number one challenge but also their number one opportunity, in essence how best to digitise your manufacturing in a way that boosts productivity, reduces waste, and improves the quality of your finished product.
It’s a challenge that must be met and arguably more quickly in Ireland than elsewhere.
That’s because of the deep importance of the manufacturing sector here, much of which has developed and evolved to service the multinational companies that make up the base of our foreign direct investment.
The problem however is that a sense of overwhelm can be a serious barrier to progress, and understandably so.
The pace at which new developments are emerging, in areas such as generative artificial intelligence and even artificial superintelligence, makes it hard to know where news cycles begin and hype cycles end. The upending of assumptions around AI by DeepSeek is only the most recent case in point.
Not alone does the pace of technological development make investment decision-making difficult it is allied with a nervousness to act, making it even harder.
Most wrongheaded of all however is to do nothing. Yes, it’s important to avoid a misstep, but when it comes to digital transformation it is more important to be moving forward.
That’s because, while you may be uncertain how best to proceed, your competitors are already figuring it out.
KPMG’s Global Tech Report surveys 2,450 top executives from 26 countries and found that for the second year running, industrial manufacturing is setting the pace for digital transformation.
Over three quarter of industrial manufacturing firms report having a “strong willingness” to embrace cutting-edge technology, the highest among all sectors surveyed.
Four of five leaders say they are empowering their organisation to strategically innovate so that they can capitalise on market trends with AI.
They are increasingly looking to third-party guidance to help inform their investment decisions, the survey found, a move that is paying dividends. Already just over one-third of organisations are achieving a return on investment from multiple AI use cases.
It is not surprising, 72% industrial manufacturing executives report that their organisation is satisfied by the value generated by their tech investments, above the cross-sector average.
Some 80% say AI is saving them time and allowing them to be more productive and focus on higher-value activities.
That’s good because the drivers for this are manifold, including increased expectations from clients who require more agile and responsive production capabilities.
But digital transformation goes far beyond the factory floor, extending into operational workflows in supply chain, procurement, sales and finance, among others.
Indeed, the entire value chain of industrial manufacturing is being connected and enhanced by digital features, helping to do everything from boosting energy efficiency to reducing machine idle times.
The use of AI-driven performance diagnostics allows workers to analyse real-time data from machine components. AI-powered predictive maintenance schedules fixes before breaks occur.
Both artificial intelligence and machine learning are helping manufacturers find and deploy more sustainable strategies and gain environmental efficiencies — more important now than ever as ESG targets are rolled out.
The use of image recognition technologies is helping workers to evaluate the quality of finished products in real-time, enabling instant interventions that improve later batches.
AI is being used to address talent shortages too, with four in five manufacturing executives reporting that AI is plugging skills gaps among knowledge workers.
It is why, just as industrial manufacturers must ramp up deployment to of AI in their business models, they must also promote upskilling programmes that target analytical decision making among staff, helping to create a data centric culture.
That’s because the true potential of AI is only realised when data from a host of disparate systems — from customer relationship management to procurement platforms — are collected, breaking down traditional siloes to give a holistic view.
To capitalise on the opportunities AI offers, companies first need to assess and address shortcomings in data availability and integration. They must then identify and pursue the early use cases that can have a direct impact on revenue, cost, risk or other critical outcomes.
And they must do it fast because, guaranteed, their competitors already are.
