India ranks third on AI implementation in manufacturing, tops Germany: BCG report

India ranks third on AI implementation in manufacturing, tops Germany: BCG report
27 Apr, 2018

India has ranked third on the implementation of artificial intelligence (AI) in manufacturing, topping Germany (sixth) but trailing the US and China, which came first and second, respectively, according to a new study by the Boston Consulting Group (BCG).

The proportion of pioneers is highest in the US (25%), China (23%) and India (19%). In Germany, only about 15% of companies currently use AI to any significant extent in manufacturing.

“While most German executives are still wrestling with the basic question of whether and how to apply AI, businesses in China and India are already optimising their smart factories”, said Daniel Küpper, a BCG partner and global head of the firm’s Innovation Center for Operations. “Emerging-market players show more courage when it comes to AI and they keep identifying opportunities to apply the new technologies and improve them on an ongoing basis,” said Küpper.

The results were arrived at by BCG after a survey of manufacturing and technology managers from about 1,100 industrial companies across the world. The survey asked the managers how they apply artificial intelligence to processes and their willingness to invest in AI. 

"Almost 90% of executives say they aim to integrate AI into their processes in the next three years. So far, only 28% have created a clear strategy for AI in manufacturing. In Germany, only 23%, or one in four German industrial companies, have developed an AI strategy," the company said in a statement.

The study showed that nine out of ten executives worldwide plan to apply artificial intelligence (AI) in manufacturing in the next three years. The study said the companies that are already using AI in manufacturing are testing prototypes at an earlier stage and later readjusting them to their work processes. 

The study showed that automotive and technology industries are at the forefront of AI implementation. One company in five has already integrated AI into their business in those sectors, it said. At the other end of the scale are the pharmaceutical, medical technology, machine construction and process sectors. There, only about one in seven companies uses intelligent manufacturing systems, the study showed.

Interestingly, the study also showed that nearly 70% of executives surveyed admit that their company lacks the AI skills to speed up the introduction of new technologies. 

“Companies can no longer advance purely on the basis of their engineering knowledge. Employees have to know how to use AI,” Küpper said. 

“The opportunity for companies now lies in training their employees and attracting AI experts, for example, in the field of Deep Learning,” he added.