Manufacturing firms that fully integrate AI will gain significant edge
About 93 per cent industry leaders across eight countries, including in India, believe that manufacturing organisations that fully integrate AI will gain a significant competitive edge, a report showed on Monday.
About 96 per cent have experienced operational and efficiency improvements and 62 per cent experiencing an ROI of greater than 10 percent, while 80 per cent of organisations have invested in AI knowledge and skills training, said the KPMG International report.
About 74 per cent are using machine learning, 72 per cent predictive analytics and 67 per cent are using agentic AI.
For production and supply chains, AI enables real-time decision-making, predictive analytics and self-optimising workflows.
According to the ‘Intelligent Manufacturing Report,’ AI can combine external and internal data points, such as client consumption patterns and global indices, to provide a meaningful decision support system around cost optimisation and intelligent commodity forecasting.
Agentic AI can act centrally understanding demand and supply to suggest an optimal inventory and enhanced customer delivery compliance.
In the workforce, AI and augmented reality help train employees on best practices while automating routine tasks, supporting predictive maintenance and enabling dynamic scheduling.
Finally, in the back office, AI streamlines finance, procurement and HR functions areas that remain largely under-digitized in traditional manufacturing, the report mentioned.
“AI is no longer a choice but a strategic necessity. As organisations embrace intelligent technologies, they're not only enhancing efficiencies but redefining the existing industry operating models,” said S Sathish, Partner and National Sector Leader, Industrial Manufacturing, KPMG in India.
With sustainability, data-driven insights, and structured AI adoption at the core, manufacturers have a unique opportunity to unlock lasting value and competitive advantage in an ever-evolving landscape, he added.
AI adoption is having the greatest impact on R&D and IT functions, according to 77 per cent of industry leaders. However, its influence extends across the value chain, with 70 per cent citing significant operational improvements as AI becomes embedded into core business functions
Encouragingly, 89 per cent believe employees are quickly adapting to AI tools and technologies, supporting widespread adoption across the workforce, said the report.
