FEATURE Smart factories & software
IT’S TIME TO FASTEN YOUR DIGITAL SEATBELTS IT’S TIME TO FASTEN YOUR DIGITAL SEATBELTS
Maggie Slowik, Global Industry Director for Manufacturing, IFS, says 2026 will be the year when AI gets its hands dirty on the shop sustainable operations and supply chain resilience
T
he manufacturing industry has had a tumultuous 2025. Supply networks have been reshaped faster
and trade shifts have redrawn production footprints, labour shortages continued to squeeze margins and expose critical skill gaps, and sustainability mandates piled on complexity to planning, sourcing, and operations. Amid all this turbulence, AI moved from the edges of experimentation to the centre of industrial strategy. But modernising core systems and adopting investment structures, and organisational implications. which directly threatens the as many manufacturers are still working through legacy upgrades, fragmented data architectures, and competing transformation priorities. AI progress has been uneven. Connected factories and intelligent supply chains exist in pockets, while the technical, organisational, and cultural foundations needed for AI to operate end-to-end are still being built. In 2026, manufacturing leaders expect to double down on the practical adoption of AI. A global survey of more than 100 COOs that 93% plan to increase investments in AI years. But they need to identify where to begin, how to scale, and how to deploy the technology in ways that deliver measurable outcomes across production, supply chain, experience.
But fasten your digital seatbelts. AI is primed to transform the shop manufacturers must be ready to put the work in. The year ahead will bring changes to traditional organisational structures,
12 February 2026 | Automation
priorities:
Prediction 1:
Organisations will break rigid structures to make AI work
Most manufacturing
organisations were built hierarchies, and departmental
optimisation. Through previous waves of digital transformation, systems have digitised, but the structure around the work stayed the same. That structure is now the bottleneck. AI can connect planning, production, supply chain, service, and workforce activity in real time, but when an organisation is still designed for linear, sequential work, the value stalls at departmental boundaries. Intelligence gets trapped in functions. Progress defaults to the pace of approvals and hierarchy, not the speed of what technology makes possible. Removing the ceiling that holds back human ingenuity This year, manufacturers will begin
reassessing their design, not to reduce roles, but to remove the structural barriers that limit what people can achieve with AI. This is not about replacing humans, it’s about removing the friction that holds them back. Governance will always matter, but governance is not the constraint here. The constraint is the When structure aligns with how work
ceiling on what’s possible rises. To realise returns on AI investments, organisations will need to move beyond hierarchies built for a shift is less about adopting a new org chart template and more about designing around how work, decisions, and outcomes actually move through a business in order to unlock new levels of speed, clarity, and performance. Prediction 2: Humanoid robots are primed to be the next factory powerhouse Productivity challenges have been a familiar story in manufacturing for years, and they’re only accelerating. Recent OECD data shows annual productivity gains have fallen from 2-3% in the early 2000s to less than 1% today. After years of digital transformation investment, many manufacturers are asking, why hasn’t output kept pace? Legacy systems and fragmented processes
play a role, but the deeper constraint is capacity. The global labour shortage has reached a breaking point. Skilled technicians are retiring faster than replacements enter the for months. In factories already running lean, every vacancy compounds downtime and lost throughput.
But side-by-side collaboration will require new working models The next leap in industrial productivity will
come from a fundamentally new workforce model, one where robots and AI-enabled systems operate side by side. Humanoid and mobile robots are no longer science projects. They’re proving their value on production
automationmagazine.co.uk
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