9 T H

A N N U A L

State of Smart
Manufacturing Report:
Automotive Edition
How the automotive industry is harnessing emergent
technology to reduce risk, generate growth and
maximize workforce potential

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:: THE CURRENT STATE OF SMART MANUFACTURING ::

OBSTACLES AND OUTLOOK FOR AUTOMOTIVE EXTERNAL OBSTACLES

2024 2023
Cybersecurity risks and rising energy costs are the top external 1 Cybersecurity risks Impact of COVID-19
barriers to growth for automotive firms, followed by inflation.
2 Energy crisis / rising energy costs Raw materials / microchip shortage / prices
Cybersecurity risks and rising energy costs are the top external barriers to growth
for automotive firms, followed by inflation. 3 Inflation and economic growth Supply chain disruption

Cybersecurity is an even bigger concern for automotive than other industries: respondents 4 Supply chain disruption Inflation
in our pan-industry report ranked it lower, at number 3 on the list of external pressures.
Recent high-profile data breaches and the proliferation of internet connectivity within 5 Workforce Shortage of skilled workers

automotive may have contributed to cybersecurity leaping up from the ninth biggest risk
Q. What do you see as the biggest external obstacle(s) to your organization’s growth
last year to this year’s top spot. for calendar year 2024? Select all that apply.
Base: 1567

Internally, budget constraints are dampening growth, closely followed by organizational Q. What do you see as the biggest external obstacle(s) to your organization’s growth
for calendar year 2023? Select top 5. Base: 1353
change management. While retaining and upskilling existing employees is a top three
concern, the sector is less challenged by recruitment than other industries. Attracting
employees with desired skill sets sits at ninth place on the internal risks table, despite
topping the chart in our aggregated industry report.
INTERNAL OBSTACLES

2024 2023
1 Internal budget constraints Balancing quality and growth

2 Organizational change management (OCM)* Onboarding new employees

35%
Cybersecurity
26%
Internal budget
Biggest
internal
obstacle
3

4
Worker / knowledge retention

Technology paralysis
Worker retention / knowledge retention

Organizational information / data silos

risk constraints Capturing, understanding, interpreting,

5 and using data to improve the business
Deploying and integrating new technology

Q. What do you see as the biggest internal obstacle(s) to your organization’s growth Base: 1567
for calendar year 2024? Select all that apply.

Q. What do you see as the biggest internal obstacle(s) to your organization’s growth
for calendar year 2023? Select top 5. Base: 1353

9 T H A N N U A L S TAT E O F S M A R T M A N U FA C T U R I N G R E P O R T :: 2
:: THE CURRENT STATE OF SMART MANUFACTURING ::

TECHNOLOGY INVESTMENTS DRIVE ROI

Despite internal budget constraints, automotive firms have Adoption of smart technology and AI is seen by manufacturers as the best way to
mitigate against both external and internal risks.
increased investment in technology by more than one-third;
a higher-than-average rate when compared to the aggregated Automotive manufacturers are generating the most ROI from investments that create
improved connectivity and efficiency in the plant, such as 5G, manufacturing execution
industry responses in this survey. systems (MES) and programmable logic controllers (PLC).

TECHNOLOGY INVESTMENT BIGGEST ROI

31%
5G 18%
23% Manufacturing execution
AVG. 30% system (MES) 18%
3D printers/
Spending in this area increased
additive manufacturing 17%
35% year-over-year: from 23% Programmable logic controllers/
Programmable automation controllers 17%
to 31% of operating budget.
2023 2024
Generative AI or
causal AI 16%
Cloud/SaaS 16%

ABOUT THE RESEARCH

Supply chain planning (SCP) 16%
Automated mobile robots
This report is based on the responses of 182 managers and executives from and automated guide vehicles 15%
automotive manufacturers, automotive supply manufacturers and
electric vehicle manufacturers in 15 countries.
Energy management 15%
It’s part of the 9th annual edition of the State of Smart Manufacturing report,
Enterprise resource
planning (ERP) 13%
which surveyed 1,567 manufacturing leaders across multiple industries.

Q. Which of the technologies that your company has invested in had the biggest ROI over the last 12 months? Select top 3.

Base: 1562

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:: THE CURRENT STATE OF SMART MANUFACTURING ::

BETTER DATA MANAGEMENT NEEDED TO

FUEL INNOVATION AND IMPROVE SECURITY
Respondents believe those at the forefront of the automotive manufacturing industry are HOW LEADERS USE DATA
using data to fuel AI / ML and optimize processes, followed by cybersecurity. Cybersecurity
sat outside of the top three answers in our overall survey, again highlighting automotive’s
particular concern with this topic.

When it comes to their own data, automotive manufacturers

believe their own organizations use less than half of what
Supply and/
or demand
Cybersecurity
they collect effectively. protection
planning

34% 32%

Artificial
intelligence/ Process
Only Applied AI/ optimization

43%
Generative AI/
Machine learning 36%
36%

of data is being
used effectively Improve/ monitor
product quality

34%

Q. How do you perceive leaders in your industry are using the data collected from their currently
employed technologies, processes, connected devices, etc.? Select all that apply.

Base: 1567

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:: THE CURRENT STATE OF SMART MANUFACTURING ::

MAKING STRIDES IN THE FIELD OF ESG

Organizations in the energy transition/renewable energy sector The automotive sector is among the most successful in
have had the most success in implementing some form of implementing environmental, social and governance (ESG)
ESG policy (90%) policies; second only to the energy industry.
Reducing manufacturing waste is most important to automotive ESG programs,
signaling the shift toward a circular economy in this sector.
90%
89%
88% WHAT MATTERS MOST FOR 2024
86%
Reducing manufacturing waste 41%
84%
Energy management 34%
Health and safety 34%
Carbon offsetting/ carbon neutral 32%
Product quality/ safety 32%
Fulfilling supplier/ customer/
Energy transition/ Auto & Tire, Hi-Tech Food and Chemical
partner requirements and standards 31%
renewable Auto Tier, Electronics/ Beverage
energy Suppliers, EV, Semi-conductor Supply chain standards 30%
and Battery

Q. What matters most to your organization's sustainability/ESG policy? Select all that apply.
Q. Which of the following best describes your organization's current efforts around ESG
(Environmental, Social, and Governance/ Sustainability)? Select one. Base:1567

Base: 917

* Only showing respondents from these industries

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 MANUFACTURERS ADOPT SMART MANUFACTURING TECH TO CUT COSTS
:: MANUFACTURERS' BIGGEST CHALLENGES ::

97% of automotive manufacturers are using or evaluating smart However, cost is also seen as the main barrier to adoption of smart
manufacturing technology, up from 85% last year; and most manufacturing in the automotive sector, with a higher percentage
believe it will help them to reduce cost. This is in contrast to our (40%) citing this reason than in the cross-sector survey (37%).
overall survey, where quality improvement topped the table of
expected outcomes.

97% of automotive manufacturers

SMART MANUFACTURING IS DRIVING BUSINESS OUTCOMES AROUND THE WORLD are using or evaluating smart
Increase appeal to
manufacturing technology
Improve financial employees and Drive overall
Reduce Improve position overall/ prospective equipment
cost quality revenue growth employees effectiveness

38% 37% 37% 37% 37%

Q. What positive business outcomes are you looking to achieve from your smart manufacturing technology? Select all that apply.

Base: 1567

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:: THE CURRENT STATE OF SMART MANUFACTURING ::

FACTORY FLOOR PROCESSES SEE MOST SMART MANUFACTURING ADOPTION

PERCENT OF SMART MANUFACTURING ADOPTION
HARDWARE SOFTWARE

Automotive manufacturers are using smart manufacturing Software adoption is also targeted toward improvement of
technology to improve connectivity throughout the plant, factory floor processes, with production monitoring and
with sensors and instruments the most adopted hardware, quality management systems being the most popular – the
and connected devices next on the list. same result as in our cross-sector survey.

84% 84% 84%

83% 83%
81% 81% 79%
78% 78% 76% 76%

Sensors and Connected Industrial Networking Programmable Edge computing Quality Production Supply chain Manufacturing Enterprise Product lifecycle
instruments devices computers hardware logic controllers/ devices management monitoring planning (SCP) execution resource management (PLM)
programmable system (QMS) system (MES) planning (ERP)
automation
controllers
Q. Which of the following smart manufacturing hardware/smart Q. Which of the following smart manufacturing software solutions
devices has your company adopted or has plans to adopt? has your company adopted or has plans to adopt?
Base: 1567 Base: 1567

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 BUILDING A WORKFORCE FIT FOR AN ERA OF CHANGE
:: MANUFACTURERS' BIGGEST CHALLENGES ::

Automotive employers believe employees who can work well in WORKFORCE-RELATED OBSTACLES
teams and are flexible and analytical will help drive the industry
forward. These so-called ‘soft skills’ are rated more highly
than technical abilities around maintenance, repair and smart
technology.
Aging
Manufacturers recognize that keeping their workforce engaged and motivated in an era Change
workforce
management
of seismic change will be crucial: respondents say employee engagement is the biggest
workforce-related obstacle over the next 12 months. 35% 32%

SKILLS EMPLOYERS ARE SEEKING

Automotive manufacturers are using smart manufacturing technology to improve
Training current Employee
connectivity throughout the plant, with sensors and instruments the most adopted engagement
employees on
hardware, and connected devices next on the list. updated processes
40%
36%
Communication/
teamwork 84%
Flexibility/adaptability 84%
Knowledge of
smart technology 83% Integrating 3rd party
resources like contractors,
consultants, and managed
Analytical thinking 79% service providers
Maintenance/
76% 32%
40% of respondents rated employee engagement as
installation/repair

Q. Over the next 12 months, how important are the following knowledge and/or skills

the top obstacle when it comes to the workforce

as your organization recruits its next generation of employees?

Base: 1567

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 PLANNED AUTOMOTIVE TECHNOLOGY INVESTMENTS BUCK THE GENERAL TREND
:: THE FUTURE OF SMART MANUFACTURING ::

Adoption of the industrial metaverse within the automotive sector looks set to outstrip While a fully operational metaverse may be some years away, the technical and operational
other industries. While this technology languishes at the bottom of the table of cutting-edge opportunities offered by the so-called ‘proto-metaverse’ are clearly attractive.
tools already invested in by all sectors in our survey, it’s the one most automotive respondents
Wearables are also seen as having huge potential — automotive respondents ranked them
plan to invest in within the year.
just beneath GenAI/Causal AI at number 3 on the planned-investment table; a full 13 places
higher than in our pan-industry report.

TOP 10 INVESTMENT AREAS OVER THE NEXT 12 MONTHS

46% 42% 40% 37% 36% 36% 36% 35% 34% 34%
3D printers/
Industrial Generative AI or Machine learning/ Zero trust Digital additive
Wearables Robots Blockchain Drones
metaverse causal AI artificial intelligence architecture thread manufacturing

Q. Which of the following technologies has your company invested in?

Respondents selected: Plan to invest in the next 12 months from four options.

Base: 1567

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 LOOKING TO THE FUTURE
:: THE FUTURE OF SMART MANUFACTURING ::

Being clear on the path forward is key to future success. A failure to set clear goals was the Going forward, automotive manufacturers are targeting strategies that will help them retain,
number one leadership obstacle in this sector — rated far higher than in the full cross-sector upskill and engage the workforce in order to thrive and grow. Technologies that complement
report, where it ranked at number 8. We’ve seen elsewhere in this report that organizational and augment the value brought by people — such as smart manufacturing technology and
change management is front of mind for automotive manufacturers, who put leadership automation — are where they see positive business outcomes being created.
siloed by departments in the top 5 leadership-related risks.
Despite the disruption faced within the automotive sector, there’s reason to be positive for
those leaders who focus on the benefits to be had by technology when it’s thoughtfully applied
by an engaged and inspired workforce.

TOP 5 LEADERSHIP OBSTACLES HOW AUTOMOTIVE MANUFACTURERS ARE PLANNING TO DRIVE FUTURE SUCCESS

Setting clear goals/direction from leadership 34% 44%

Identifying and implementing
34% 42%
41%
new technologies
Assessing business need and
32%
38%
technology/talent fit
Access to useful data to make
effective decisions in realtime 31% 37%
Leadership siloed by departments 29%

This data represents the top 5 leadership obstacles that will be

faced in the next 12 months for automotive.

Adopting smart Increased Adopting supply Increased use Adopting cloud

manufacturing automation chain planning of artificial technology
technology software intelligence/
machine learning
Q. How do you plan to drive positive business outcomes over the next five years? Select all that apply. Base: 1567

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Publication INFO-BR028B-EN-P- June 2024 | Supersedes Publication INFO-BR028A-EN-P- May 2023

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