Forum Institutional

4 ways artificial intelligence could transform manufacturing

Artificial intelligence could help the manufacturing sector deal with pressures including sustainability and geopolitical instability

Artificial intelligence could help the manufacturing sector deal with pressures including sustainability and geopolitical instability Image: Kateryna Babaieva for Pexels

Francisco Betti
Head, Global Industries Team; Member of the Executive Committee, World Economic Forum
Daniel Kuepper
Managing Director & Senior Partner, BCG (Boston Consulting Group)
Our Impact
What's the World Economic Forum doing to accelerate action on Forum Institutional?
The Big Picture
Explore and monitor how Advanced Manufacturing is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Davos Agenda

This article is part of: World Economic Forum Annual Meeting

Listen to the article

  • The manufacturing sector is facing many challenges, including the need for sustainability, a skills shortage and geopolitical instability.
  • Artificial intelligence (AI) can help by improving productivity and efficiency, increasing flexibility and augmenting the workforce.
  • A new global initiative aims to raise awareness of these opportunities.

The world of industrial operations is changing, and manufacturing companies are under considerable pressure. Challenges include rising economic pressure, the sustainability imperative, volatile resource prices and supply chain disruptions as well as increasing capability challenges and talent shortage.

A continuous improvement in production efficiency has always been considered one of the key prerequisites to ensure the competitiveness of globally operating companies. This requirement has not changed. However, the traditional levers for increasing productivity are now less effective. New challenges have emerged, including the COVID pandemic and increased geopolitical uncertainty. These have led to a rapid increase in the importance of resilience and flexibility of entire supply chains. Many industrial companies are also facing a skills shortage; this will affect 90% of organizations by 2025, inhibiting production capacity.

Have you read?

At the same time, climate change and the associated efforts to meet the 1.5-degree target of the Paris Agreement mean a necessary emphasis on sustainability and emission reduction. This has a huge impact on the organizational goals of manufacturing companies.

The role of AI in manufacturing industry

The expanding role of data and advanced manufacturing technologies opens up new opportunities to address the challenges facing the sector. However, while many companies have piloted this over the past decade, most have failed to scale these solutions to achieve the desired value. They have often used data to create transparency on, for example, production processes or to forecast future events based on historical data; few companies have invested in self-controlled systems based on AI. This has the potential to unlock far more value.

In the context of industrial operations, AI is used to enable systems and machines to perform tasks in a smart way. There are four principal ways in which AI can help:

1. Optimizing productivity

Businesses can use AI to increase throughput and yield and to reduce conversion costs. Possible applications include: predictive maintenance to increase equipment efficiency and effectiveness; self-optimization of machine and process parameters; machine vision for automated inspection to improve product quality; and autonomous mobile robots (AMRs) for autonomous in-plant transportation. These applications can lead to significant revenue increases and two-digit conversion cost reductions.

2. Improving sustainability

AI can also help to make operations more sustainable by reducing emissions. For instance, AI-based applications can be used to predict energy consumption and emissions for the future (e.g. the next shift), and to analyze and identify equipment responsible for excess energy consumption and emissions. AI can also reduce emissions by determining, for example, the optimal process parameters or production sequence within production.


How is the World Economic Forum ensuring the responsible use of technology?

3. Increasing flexibility

In the face of ongoing supply chain disruptions, AI can increase the agility of operations and mitigate the impact of external shocks. For instance, AI can offer advanced demand forecasting, improved network optimization or advanced production planning/scheduling.

4. Augmenting the workforce

Finally, AI can help to address manufacturers' capability challenges and talent shortages. On the one hand, AI can allow businesses to automate monotonous, repetitive tasks, so that the workforce can put the focus on other more value-adding activities. On the other hand, AI can augment and support employees in their daily work; for instance, in the context of decision-making processes or through human-robot collaboration.

We have still to fully grasp the possibilities for applying AI in the industrial context. Currently, the biggest hurdle for many manufacturers is to scale effective AI pilot applications in order to fully benefit from their impact. The scaling difficulties arise from different sources and include a missing overarching strategy; a lack of AI capabilities and skills; limited availability, quality, or use of data; and, most importantly, a set of general guidelines on how to manage the implementation of AI at scale.

AI should not be a trial and error – it should follow a systematic approach

Jay Lee, Ohio Eminent Scholar and Founding Director of Industrial AI Center, University of Cincinnati

Supporting manufacturing companies on their AI journey

To address the challenges described and to support manufacturers on their journey towards capturing the full potential of AI, the World Economic Forum in collaboration with the Boston Consulting Group (BCG) has recently launched the new global initiative AI-powered Industrial Operations.

The aims are: to raise awareness on the opportunity offered by AI applications; to outline the most-promising AI applications and required implementation prerequisites; to develop an educational guidebook on how to implement and scale AI in industrial operations; and to demonstrate the impact of AI through the incubation of pilots across the network of Centers for the Fourth Industrial Revolution Affiliates such as these in Turkey and the US.

The World Economic Forum invites manufacturing companies from all industries to join the global community around this initiative and thereby accelerate their transformation towards AI-powered industrial operations.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Forum InstitutionalManufacturing and Value ChainsEmerging Technologies
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Institutional update

World Economic Forum

May 21, 2024

About Us



Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum