Manufacturing companies around the world are now betting big on artificial intelligence — many are directing nearly half of their modernization budgets toward AI, expecting that the technology will significantly boost profits within the next two years. According to a recent survey by Tata Consultancy Services (TCS) in collaboration with Amazon Web Services (AWS), 88% of manufacturers believe AI will contribute at least a 5% boost to operating margins, while one in four expect increases of over 10%.
Still, many firms are discovering that the path from investment to payoff isn’t straightforward. While spending on “intelligent systems” is climbing rapidly, most factories lack a strong data infrastructure: only about 21% of manufacturers claim they are “fully AI‑ready” with clean, unified data across plants. The majority struggle with fragmented information, legacy systems, and manual processes — all of which hinder the effective deployment of AI at scale.
Despite these gaps, the industry is moving toward more autonomous operations. A growing number of manufacturers expect “agentic AI” — systems that make and act on decisions with limited human oversight — to manage a significant portion of routine production tasks within the next few years. By 2028, many believe up to half of basic production decisions could be delegated to AI agents, and already some plants plan to allow AI to approve routine work orders without human sign‑off.
The shift isn’t only about replacing labor — it’s about boosting efficiency, quality, and resilience. AI can streamline scheduling, predictive maintenance, supply‑chain optimization, and quality control, reducing downtime and defects, while helping firms respond more quickly to demand and volatility. If manufacturing leaders can address infrastructure and governance challenges, AI could truly transform operations and unlock substantial profitability gains.
