Manufacturers invest in AI to counter tightening margins

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Tata Consultancy Services, in collaboration with Amazon Web Services (AWS), this week announced the findings of the Future-Ready Manufacturing Study 2025, revealing that global manufacturers are rapidly advancing toward intelligence-driven operations and higher levels of autonomy in manufacturing processes.

The study provides a data-backed view of how manufacturers are strengthening digital and data foundations to support autonomy, decision intelligence, and future-ready operations. While 75% expect artificial intelligence (AI) to become one of the top three contributors to operating margins by 2026, only 21% say they are fully AI-ready, highlighting foundational gaps in data, integration, and system readiness across plants and supply chains.

The study surveyed 216 senior leaders across North America and Europe, representing automotive, industrial machinery, aerospace and defence, process industries, chemicals, and heavy equipment. It examines how enterprises are reshaping their data estates, workforce capabilities, supply-chain transparency, and operational frameworks to prepare for the next era of manufacturing performance powered by AI, cloud, and real-time intelligence.

Key findings from the study found: 75% of manufacturers expect AI to be a top three margin driver by 2026; only 21% say they are fully AI-ready, exposing significant data and integration challenges
Agentic AI emerges as a priority capability, accelerating autonomous decision-making across plants
74% expect AI agents to manage 11–50% of routine production decisions by 2028; 67% report improved real-time supply-chain visibility, strengthening resilience and responsiveness; and more than 30% forecast meaningful productivity gains from AI-led modernisation.

Anupam Singhal, president of manufacturing at TCS, said: “Manufacturing is an industry defined by precision, reliability, and the relentless pursuit of performance. Today, that strength of foundation becomes multifold with AI in orchestrating decisions—delivering transformational business outcomes through greater predictability, stability, and control. At TCS, we see this as a defining opportunity to help manufacturers build resilient, adaptive, and future-ready enterprise ecosystems that can thrive in an era of intelligent autonomy.”

AI-driven quality
As manufacturers deepen investments in foundational capabilities, a clearer pathway is emerging toward real-time decision intelligence and greater operational transparency across plants and supply networks. At the factory level, organisations are beginning to embed AI-driven quality and planning use cases, with nearly 40% reporting early measurable gains.

Momentum is accelerating around next-generation autonomy, with Agentic AI expected to play a central role in how decisions flow across manufacturing environments. Nearly three-quarters of leaders anticipate AI agents managing up to half of routine production decisions within the next three years, signaling a shift toward self-optimising workflows. At the same time, more than 30% of manufacturers forecast meaningful productivity improvements from AI-led modernisation. Together, these shifts indicate a sector preparing not only to modernise, but to operate with greater intelligence, resilience, and agility across the entire manufacturing value chain.

Ozgur Tohumcu, general manager of automotive and manufacturing at AWS, said: “Manufacturers are facing unprecedented pressure — from tight margins to volatile supply chains and workforce gaps. At AWS, we are revolutionising manufacturing through AI-powered autonomous operations, shifting from manual, reactive processes to intelligent, self-optimising systems that operate at scale.

“By embedding AI into every layer of the operation and leveraging cloud-native architecture, manufacturers can move beyond simple automation to true autonomous decision-making — where systems predict, adapt, and act independently with minimal human intervention. This enables not just faster response times, but fundamentally transforms operations with AI-driven predictability, resilience, and agility. This study makes it clear: the future of manufacturing is not just digital, it is autonomous — powered by AI that learns, evolves, and operates continuously.”

With decades of experience, TCS is a trusted partner for manufacturers across the value chain —supporting cross-sector OEMs, tier-N suppliers, and global value-chain ecosystems. Bringing together consulting, IT modernisation, engineering, digital manufacturing, cloud platforms, and intelligence-led operations, TCS helps enterprises become truly future-ready and shape factories of the future. Through offerings such as TCS Manufacturing AI for Agentic Futures, along with deep domain capabilities in supply-chain resiliency, predictive quality, intelligent factory operations, and sustainable manufacturing, TCS enables organisations to become intelligent, resilient, and perpetually adaptive.