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https:/lwww2.deloitte.com/us/en/insights/industrymanufacturing/2025-smart-manufacturing-survey.html1/19
2025/5/1309:192025smartmanufacturingsurveyDeloitteInsights
2025smart
Manufacturingandoperationssurvey:Navigating
chaengesto
impementation
Deloitte'ssurveyof600executivessbowsthatas
factoriesandoperationsgetsmarter;manufacturersworktoovercomeobstaclesintalentacquisition,
managecomplextransformations,andmitigate
operationalrisk
ARTICLE12-MINREAD.01MAY2025
withitsabilitytocaptureandintegratedatafromacrossfacilitiesfueledby
automationandanalytics,smartmanufacturingandoperations(alsocalled"smartfactories")cananswerthemanystubbornchallengesrelatedtocapacityand
competitiveness—eventhoseposedbytoday'smarketvolatility."Industry4.0"hasbeenmakingambitiouspromisesforyears,butthemomentofvaluerealizationisfnallyarriving·
Deloittesurveyed600executivesfromlargemanufacturingcompanieswith
headquartersoroperationsintheunitedstates,fromAugusttoseptember2024
2025/5/1309:192025smartmanufacturingsurveyDeloitteInsights
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(seemethodology).withrespondentsfromindustrialproducts,energyand
chemicals,biopharma,automotive,consumerproducts,andothersectors,it'sclearthesmartmanufacturingtideisshifting·
Thesurveyresultsshowthatcompaniesembracingthetrendaremoreagile,moreattractivetotalent,andmoreproductive.Theresultsalsorevealkeychallengesinimplementingsmartmanufacturingsystems,suchasmanagingcomplex
transformationsandmitigatingoperationalrisks.Toovercomethesehurdles,executivesareinvestingincoretechnologiesanddataanalytics,allocating
signifcantresourcestocybersecurityprocessesandcontrols,andfocusingon
workforceupskilling.Additionally,organizationsareformingdedicatedinternalteamstomanagechangeanddriveorganizationaltransformation.
smartmanufacturingandoperationstransformationsarencreasg
Thereiswidespreadandgrowingconfdencethatsmartmanufacturingand
operationswillbeanindispensablefactorinproductivityandenterprisegrowth.Ninety-twopercentofmanufacturerssurveyedsaidtheybelievesmart
manufacturingwillbethemaindriverforcompetitivenessoverthenextthreeyears,asix-percentage-pointincreasefromasurveyweconductedin2019.
similarly,85%ofrespondentsbelievetheirsmartmanufacturinginitiatives
transformhowproductsaremade,improveagility,andattractnewmanufacgtalent.
Theinterestandinvestmentinsmartmanufacturingisfueledbywhat
manufacturersseeasitsprimarybenefts:Almosthalf(49%)。frespondentsreportedoperationalbeneftsastheprimaryvaluesoughtwithsmart
manufacturing,while44%notedfnancialbeneftsasthesecondmost-soughtvalue.
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smartmanufacturing'svalueisemerging
Interestandinvestmentinsmartmanufacturingandoperationsareencouragedbygrowingreturns.Respondentswereaskedwhichbusinessmetricshavebeen
impactedbytheimplementationofsmartmanufacturinginitiatives.Intermsofnetimpactsinceimplementation,respondentssaw,onaverage,a10%to20%
improvementinproductionoutput,a7%to20%improvementinemployee
productivity,and10%to15%inunlockedcapacity.
Respondentscitedimprovementsderivedfromsmartmanufacturinginitiatie
encouragingsimilarinvestmentsinsupportingfunctions.whilerespondentr
theirorganizationsasmostmatureintheareasofqualitymanagement,operations,continuousimprovement,andtechnology,theyreportedrelativelylowmaturityinhumancapitalandmaintenance.BYanalyzingthegapbetweencompanies'currentandaspirationalmaturitylevels,threefunctionsseemripeforinvestment:humancapital,materialmanagement,andmaintenance.
https:/lwww2.deloitte.com/us/en/insights/industrymanufacturing/2025-smart-manufacturing-survey.html4/19
withgrowingmaturity,investmentisalsoontherise
Lookingahead,manufacturersaretargetinghumancapitalforthelargest
improvement,withaspirationsforinformationtechnology,datacapture,analytics,andapplicationdevelopmcentinfrastructurematurityclosebehind.AStriking78%ofrespondentsallocatemorethan20%oftheiroverallimprovementbudget
towardsmartmanufacturinginitiatives.Eighty-eightpercentexpectinvestme
continueorincreaseinthenextfscalyear.Asexpected,thescaleofinvestment
roughlytrackswithenterprisesize,withsmallercompaniesinvestingmodestlyandmuchlargercompaniesinvestinganorderofmagnitudemore.
2025/5/1309:192025smartmanufacturingsurveyDeloitteInsights
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Howareorganizationsinvestinginsmartmanfacturng?
Adopting,connecting,andoptimizingtechnologies(suchassensors,edgeandcloudcomputingpower,cybersecurity,andanalytics)clearsthewayfor
manufacturerstomovefartherandfasterdowntheroadtosmartmanufactu
operations.Thefocustodayisonestablishingthesmartmanufacturingtechngyanddatafoundations.Manufacturerinvestmentspaintapictureoftheirpriorities.
2025/5/1309:192025smartmanufacturingsurveyDeloitteInsights
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Doinvestmentsinautomationsignalaresponsetotalentshortages?
Intermsofpriorityfocusareasforinvestmentwithinthenexttwoyears,almosthalf(46%)。frespondentsrankedprocessautomationasthefrstorsecond
priority.ASomewhatsmallerproportion(37%)rankedphysicalautomationfrst
orsecond,while24%rankedfactorysynchronizationfrstorsecond.Investmentinautomationmaybeseenasanimportantelementinalleviatingskilledlabor
shortagesandmaximizingproductivity,whilefactorysynchronizationmaymitigatetheimpactoflabor,asset,andmaterialsconstraints.
Forty-eightpercent(48%)。frespondentssaidtheyhavemoderatetosignifcantchallengesinfllingproductionandoperationsmanagementroles,and46%
2025/5/1309:192025smartmanufacturingsurveyDeloitteInsights
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reportedthesameforplanningandschedulingroles.Themostcommonhuman
capitalconcernwasnotenterprisecultureorevenhealthandsafety.Instead,morethanathird(35%)。frespondentscitedadaptingworkerstothe"FactoryoftheFuture"asatopconcern,includingbyequippingthemwiththeskillsandtools
theyneedtoharnessthefullpotentialofsmartmanufacturingandoperations.Thechallengeofaddressingtheskillsgapcomesalongsideagapinapplicationsfor
openpositions,asfoundinthe2024DeloitteandTheManufacturingInstituteTalentstudy·
Investmentsindatareadinessandconnectivityaresettingthestageforincreasedautomation
Reportedsmartmanufacturingtechnologyadoptionisfocusedonsensors,data,
physicalautomation,andAI.Intermsofrespondents'frstandsecondprioritiesfor
thenext24months,41%saidtheywillprioritizeinvestinginfactoryautomationhardware,34%saidtheywillfocusonactivesensors,and28%reportedvisionsystems.Theinvestmentsenablethecapacitytomonitorandsensethe
manufacturingenvironment,aswellastheabilitytodriveincreasedautomation.sensing,datacapture,andautomationareprerequisitesformoreadvancedsmartmanufacturingvalue,includingthoroughanalytics,deeperoperationalinsights,andproductioneffciency.someofthisvalueisalreadycomingtofruition.
Atthefacilityornetworklevel,57%ofmanufacturersareusingcloudcomputing,thesameproportionareleveragingdataanalytics,almosthalf(46%)areusin
industrialIOT(IOT)solutions,and42%areleveraging5G.Tomanagescaled
deploymentsandgovernance,manufacturersareadoptingenterprisestandard:
Forty-fvepercent(45%)reportleveraginganarchitecturestandard;54%reportadatastandard(throughaunifeddatamodel);and48%reportatrainingand
adoptionstandard.Adoptionofanarchitecturalstrategyandstandardscanhelpsimplifydatamanagementandenhanceoperationalagility,asarticulatedinthisIndustrialDataopsanduniedNamespacecasestudy·
RespondentsarestillestablishingAlfoundationsforsmartmanufacturingandoperations
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surveyrespondentsreportedmoderateadoptionofAIforsmartmanufacturing,althoughmanyarestillearlyinexploringAICapabilities.Twenty-ninepercentareusingAI/machinelearning(AI/ML)atthefacilityornetworklevel,and24%havedeployedgenerativeAIatthesamescale.Moderateinvestmentsarealsobeing
madeinexperimentsandproofsofconcept.Twenty-threepercent(23%)。f
respondentsarepilotingAI/ML,and38%arepilotinggenerativeAI.withgenAIspecically,technologyandusecasesarestillmaturinginmanufacturing,but
acrossenterprisesandindustries,experiments,proofsofconcept,andscaled
deploymentsarepickingup,accordingtoDeloitte'sstateofGenerativeAIintheEnterpriseQ4survey.
Thatreport'sfndingstrackwithsurveydataonsmartmanufacturingpriority
investmentsforthenext24months.Lookingahead,reportedinvestmentprioritiesremaindatafocused,with40%investingindataanalytics,29%incloud
computing,29%inAI,and27%inIIOT.Byinvestinginthefoundational
technologyneededtocapture,connect,andanalyzeoperationalandenterprisedata,manufacturersareadvancingonthesmartmanufacturingmaturitycurve.
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Encounterigchaengesadrisksinsmartmafacturingtranstions
Thevalueofsmartmanufacturingmaybecomingintofocus,butsotooarethechallengesthataccompanycomplextransformations.whileorchestratingchangeandaccessingtheskilledhumancapitaltodoso,manufacturersarecontendingwithstrategicrisk,talentshortfalls,andcybersecuritypreparedness.
Thepotentialriskofbusinessdisruptionincomplextransformations
Theprimaryheadwindstosuccessfulsmartmanufacturingprogramsincludeleadershipbuy-in,technologyinvestment,resourceconstraints,change
managementandadoption,andvaluetrackingandrealization.secondary
headwindsarelabormanagement,collaborationacrossbusinessfunctions,andmacroeconomicexternalities.
Riskmanagementisalsoapriority.Almosttwo-thirds(65%)。frespondentsrankedoperationalriskasthefrstorsecondconcernrelatedtosmart
2025/5/1309:192025smartmanufacturingsurveyDeloitteInsights
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manufacturinginitiatives.Therisksincludebusinessdisruptionandlosses
stemmingfromfailedinitiatives.Lookingmorecloselyatrisksintheoperationaltechnology(OT)environmentspecically,55%stronglyagreedthatunauthorizedaccesswasahighconcern,47%citedintellectualpropertytheft,and46%notedoperationaldisruption.Mitigatingstrategicriskisnearthetopoftheprioritylist,withsomewhatlowerreportedattentiontocomplianceandfnancialrisks.
workforceexpansionandupskiing
Manufacturersfaceasignicanttalentgap.withasmanyas3.8millionnetnew
employeesrequiredby2033tosatisfylabordemands,accordingtoa2024Deloitte
manulfactulringstuldy,smartmanufacturingmaybepartofthesolution.Themajority(85%)。fsurveyrespondentsagreedorstronglyagreedthatsmart
manufacturinginitiativeswillattractnewtalenttotheindustryasavibrantandviablecareerpath.
yet,thereremainsaneedtodaytoequiptheexistingworkforcewiththedigitalskillsforsmartmanufacturingandoperations.whilenearlyhalf(48%)。f
respondentsreportedhavingasmartmanufacturingtrainingandadoption
standardinplace,humancapitalwasatthelowestmaturitylevelofallsmart
manufacturingcategoriessurveyed.perhapsforthisreason,humancapitalisthecategoryinwhichmanufacturersexpresssomeofthehighestaspirationsfor
improvement.
cybersecurityandsmartmanufacturingtechnologypreparedness
Thechallengeofcybersecuritybecomesallthemorepressingasenterprisespursuesmartmanufacturinginitiativestocaptureandusedataforoperationalandprocessimprovements.cybertoolsareinsomecasessharedbetweenmanufacturingand
enterpriseenvironments,and44%ofrespondentssaidtheirmanufacturing
cybersecuritysolutionsareamixofbothdedicatedandsharedtools.withsomuchattentiontocybersecurity,ittracksthatsomemanufacturersarededicating,on
average,15.74%oftheirITbudget.
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Despitetheallureofcutting-edgetechnologies,suchasAI,virtualprogrammablelogiccontrollers,andevendigitaltwins,respondents'average(self-assessed)
technologymaturityreflectsthattheyaremeetingindustrystandardsfor
technology,data,andautomationbutnotexceedingthem.Inthis,thereisstill
signifcantroomforimprovement.Asitrelatestosmartmanufacturingmaturity,thesecondlargestaspirationalchange(behindhumancapital)isintechnology
readiness,whichincludestheneedtoprotecttechnologiesanddatafromcyberadversaries.
Howthesurveyedexectivesare
transformingpeope,processes,andtechooges
ontheroadtovalueandtransformation,manufacturersarepursuingwinning
approachesthatacceleratechangeacrossthetechnologyecosystem,theworkforce,andenterpriseprocesses.
coreandemergingtechnologyadoption
Manymanufacturersareintheprocessofadoptingcoretechnologieslikesensors,cloudandedgecomputing,andAI,aswellasemergingtechnologiessuchasvirtualprogrammablelogiccontrollers,robotics,andsimulations.yetrespondents
indicatedthatthestrategicapproachtodayislessaboutdeployingthelatest
innovationthanitisaboutinvestinginandadoptingcoresystemstoenablesmartmanufacturingandoperations.surveyrespondentsreportedthat,intermsof
systemsprioritizedforinvestmentinthenexttwoyears,thefrstorsecondhighest
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investmentprioritiesareadvancedproductionscheduling(35%),executionsystems(33%),andqualitymanagement(28%).
coresysteminvestmentscomealongsidesolutioninvestments,with40%ofsurveyrespondentsrankingdataanalyticsasthefrstorsecondhighestpriorityfor
investmentwithinthenext24months.solutionsofthiskindarenecessary,asmostoftheothersmartmanufacturingtechnologiesbeingadoptedgenerateorconsumedata,suchasvisionsystems,factoryautomationhardware,andactivesensors.
withanalytics-drivenvisibilityintooperationsandcyber-physicalsystems,
manufacturersenjoyafoundationuponwhichtopursuebroadertransformation.
Thevolumeofdataandconnectedsystemscreatecybersecurityrisk,aswellasvalue.Fortunately,surveyrespondentsindicatedpersistentattentiont。
cybersecuritytactics.sixty-eightpercent(68%)。fsurveyrespondentsreportedperformingacybersecurityriskormaturityassessmentoftheirsmart
manufacturingtechnologystackinthelastyear.Inaddition,asconnectedsystemscreatenewcybersecurityrisks,91%ofrespondentssurveyedforDeloitte's2024
GlobalFutureofcybersurvey,reportedoneormorecybersecuritybreachesinthelastyear:.Inthissurvey,72%to74%ofrespondentscitedinternalandexternal
penetrationtestingandvulnerabilityassessmentsasafocusinenterprise-wide
cybersecurityefforts.Interestingly,whenrespondentswereaskedwhethertheirorganizationenforcesorincorporatessecuredesignwhenimplementingnew
technologysolutions,26%saidtheydo"”henitdoesnotdelaydeployment."Theinsightisthatproductivityisaconsistentpriority,evenintherealmof
cybersecurity.
2025/5/1309:192025smartmanufacturingsurveyDeloitteInsights
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workforceexpansionandupskilling
Themostreportedmethodforbuildingdigitalskillsetsandcapabilitiesintothe
workforcewashiringnewtalent(68%).Therewasalsoarecognitionoftheneedtoupskillemployees,includingleadership.Morethanhalfofsurveyrespondents
(53%)reportedusingin-housetrainingforexecutives,and43%leveragedtrainingcoursesdevelopedbyvendorsorthirdparties.Tosupplementcapabilitiesinthe
nearterm,40%ofmanufacturersreportedusingcontractorcontingentlabor·
whiletalentinvestmentandupskillinghappenedin-house,manufacturersalghttooutsourceaspectsoftheirsmartmanufacturingtransformationand
peration,particularlyinareaswheremanufacturersarelesslikelytoholdaCrecompetency.Between69%and72%ofrespondentsreportedmoderatet。
signihcantchallengesinhiringskilledworkersforIT,OT,datascienceand
engineering,applicationdevelopment,andcybersecurity—alltechnology-focuseddomains.Assuch,between65%and70%ofmanufacturersarecurrently
outsourcingmanyrolesacrosstechnology,data,andcybersecurity,includingthosefocusedonimplementingOT,IT,cybersecurity,analyticsandAI,andautomation.Incybersecurityspecifcally,69%ofrespondentssaidtheyrelyonthirdpartiesforcybersecuritydetectioncapabilities(forexample,asecurityoperationscenter),and73%saidtheyusethird-partysupportforcybersecurityeventresponse.
2025/5/1309:192025smartmanufacturingsurveyDeloitteInsights
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whenconsideringwhetheroutsourcingisexpectedtochangeinthenexttwoyears,onetrendthatemergedisthatmanufacturersthatdonotcurrentlyoutsourcemanyroleswilltendtostayonthattrajectoryandllrolesinternally.conversely,
manufacturersthatdooutsourcesignicantlyreporttheywillcontinuetodoso.
Bothapproachesareviableoptionsforsatisfyingsmartmanufacturingworkforceneeds.Formanufacturersthatelecttofllrolesinternallytoretaindedicated
support,theywillneedtocompeteacrossindustriesfortalentandattract
applicantswheretherearegaps.Formanufacturersthatoutsourceroles,beneftsmayincludefractionalizedresources,task-andtime-basedemployment,and
broaderdomainexpertisepotentiallyatahigherperhourcostbutlowercost
overallcomparedtoin-houselabor.
2025/5/1309:192025smartmanufacturingsurveyDeloitteInsights
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Howaretransformationalprocesschangesbeingdrivenacrosstheenterprise?
Adoptingandimplementingsmartmanufacturingtechnologypromptswidespreadchangetoprocessesandoperations.changecutsacrossfactories,networks,supplychains,andIT/OTenvironments,andmorethanhalf(52%)。fsurveyrespondentreporteddevelopingacentralteamorworkinggrouptaskedwithresearching
developing,anddeployingsimartmanufacturinginitiatives.otherreportedchgmanagementactivitiesincludedevelopingaprocesstocommunicatetoemployeesandcustomerstheimplicationsofsmartmanufacturing(45%),developingasmartmanufacturingcenterofexcellence(44%),anddevelopingvaluetargetsanda
measurementplanforassessingprogressagainstobjectives(42%).
Interestingly,despitethesignicantrelianceonthirdpartiesfortechnology
implementationandmanagement,only32.5%reportedengagingthirdpartiesforsupportinmanagingchangeintroducedthroughsmartmanufacturinginitiatives.Thus,mostmanufacturersaredrivingsmartmanufacturingtransformationfrom
2025/5/1309:192025smartmanufacturingsurveyDeloitteInsights
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within,turningtooutsidesupporttosupplementactivitieswheretalentavailabilityisconstrained.
whoultimatelyownsthesmartmanufacturingchangeinitiative?Morethanhalf(51%)reportedthatsmartmanufacturinginitiativesareownedanddrivenby
operationsleaders,suchasthechiefoperatingofficeranddirectorofoperations,and38%reportedthattechnologyowners,suchaschieftechnologyoffcer,areleadingthecharge.Thefndingsalignwiththeworkforcechallengesmany
manufacturersarefacingandreinforcetheneedforITandoperationst。
collaborate.TheCOisfocusedonfllingfrontlinepositionswherecompaniesrequireskillsforasmartmanufacturingenvironmentwhiletheCTOisseekingtechnicaltalenttobuildandmaintainthetechnologyecosystemenablingsmartoperations.
2025/5/1309:192025smartmanufacturingsurveyDeloitteInsights
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Thesmartmanufactringvisioniswithi
reachandthejourneycontsue
Backin2017,thevisionforsmartmanufacturingwa
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