Manufacturing firms that fully integrate AI will gain significant edge: Report

IANS May 19, 2025 429 views

A groundbreaking KPMG report highlights the transformative power of AI in manufacturing across global industries. Companies are experiencing significant operational improvements, with nearly 96% reporting enhanced efficiency through intelligent technologies. AI is revolutionizing everything from supply chains to workforce training, offering unprecedented decision-making capabilities. The research suggests that AI adoption is no longer optional but a critical strategic imperative for staying competitive in the modern industrial landscape.

"AI is no longer a choice but a strategic necessity" - S Sathish, KPMG India
Manufacturing firms that fully integrate AI will gain significant edge: Report
New Delhi, May 19: 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.

Key Points

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96% report operational improvements through AI integration

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74% using machine learning in production

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AI enables real-time decision-making and predictive analytics

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.

Reader Comments

Here are 6 diverse Indian perspective comments for the AI in manufacturing article:
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Rajesh K.
This is exactly what Make in India needs! AI can help our manufacturing sector compete globally. But we must ensure small and medium enterprises also get access to these technologies, not just big corporations. Government should provide subsidies for AI adoption.
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Priya M.
While AI adoption is impressive, I'm concerned about job losses in manufacturing. The report says employees are adapting, but what about workers who may not have digital skills? Companies must invest in proper reskilling programs. 🤔
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Amit S.
The ROI numbers are convincing! 62% getting >10% returns is no joke. Our factory in Pune started using predictive maintenance AI last year and we've already cut downtime by 30%. More Indian manufacturers should take the plunge.
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Neha T.
Interesting data, but implementation is key. Many Indian companies struggle with basic digital transformation - how will they handle complex AI? We need more success stories from Indian manufacturing units to build confidence.
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Vikram J.
The supply chain optimization potential is massive for India! With our complex logistics network, AI could be a game-changer. But data quality and infrastructure remain challenges. Hope to see more Made-for-India AI solutions rather than just importing tech.
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Sunita R.
As an engineering student, this excites me! 🚀 The future is clearly AI+manufacturing. Indian universities should collaborate more with industry to prepare the workforce. We can't afford to lag behind in this revolution.

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Tags:
AI in Manufacturing KPMG Report Industrial Transformation Machine Learning Artificial Intelligence