Manufacturers increasingly adopt GenAI, face key challenges: NTT DATA report

A new global study by NTT DATA reveals that manufacturing companies are rapidly adopting GenAI to modernize operations and improve performance. The report, titled Feet on the Floor, Eyes on AI, is based on a survey of over 500 manufacturing leaders across 34 countries. 

According to the study, 95% of respondents said GenAI is already helping improve efficiency and profitability. Many see the technology as essential for building smart factories, managing supply chains, and driving automation. 

The report also shows that 94% of participants expect integrating data from Internet of Things (IoT) devices into GenAI models to improve the quality of AI-generated insights. In addition, 91% believe combining GenAI with digital twins will enhance the performance of physical assets and increase supply chain resilience. 

Manufacturers are currently using GenAI in several areas, including inventory and supply chain management, knowledge sharing, quality checks, research and development, and process automation. 

Despite growing adoption, the study highlights several challenges. Outdated infrastructure remains a major issue, with 92% saying legacy systems slow down key projects. However, fewer than half have assessed whether their infrastructure is ready for AI integration. 

Skill shortages are another concern. About two-thirds of respondents said their workforce lacks the necessary expertise to effectively use GenAI. Data management also poses a barrier, as only 41% strongly agree they have enough storage and processing capacity for AI workloads. 

Concerns about responsible AI use remain. Just 47% strongly agree their organization has a governance framework in place that balances risks and benefits. 

While NTT DATA highlights strong momentum for GenAI in manufacturing, a repot by McKinsey offers a more cautious view. Its analysis suggests that GenAI’s immediate impact may be greater in areas like customer service and software development than in core manufacturing operations. This is because many current GenAI applications don’t yet address numerical modeling and optimization, which are critical in manufacturing.  

Deloitte’s 2024 report aligns with NTT DATA’s overall optimism but points out that most companies are still in the early stages of using GenAI. It also stresses the ongoing challenges around scaling projects, preparing the workforce, and building responsible AI governance.