Smart Manufacturing 2025: Technology’s rise - and why it still comes down to people

While the survey was conducted in the US, the implications stretch far beyond. Nordic manufacturers are facing many of the same pressures: global uncertainty, rising complexity, talent shortages, and sustainability demands. The US experience offers valuable insight into where manufacturing is heading - and what it takes to get there.

Smart manufacturing is no longer a future ambition - it’s a competitive imperative. 92% of manufacturers surveyed believe it will be the main driver of competitiveness over the next three years, up from 86% in 2019.
For COO’s focused on long-term performance, this is a clear signal: digital operations are becoming foundational to agility, growth and resilience. The challenge is no longer whether to act - but how to lead transformation effectively.

Operational value in focus: Tangible results from transformation

Smart manufacturing is not just a technology agenda. It's delivering real business outcomes:

• 10–20% uplift in production output
• 7–20% increase in employee productivity
• Up to 15% in unlocked capacity

These improvements are driven by strategic investments in technologies such as:

• Cloud computing and data analytics (in use by over half of respondents)
• Industrial IoT (46%) and 5G (42%)
• Automation hardware, sensors and vision systems, which rank among the top investment priorities for the next two years
  
  

78% of manufacturers are already allocating over 20% of their improvement budgets to smart manufacturing initiatives, and 88% expect those investments to increase or hold steady going forward.

Implementation isn’t easy: Headwinds on the transformation journey

Despite the momentum, the path to maturity is far from straightforward. The most frequently cited challenges include:

• Leadership alignment
• Change management
• Resource constraints
• Business disruption risks

 In fact, 65% of executives consider operational risk to be one of the biggest concerns with threats ranging from unauthorised access and intellectual property theft to downtime and cybersecurity breaches.

Manufacturers are responding by building robust internal capabilities:

• Over half have formed central teams or working groups to lead transformation
• 44% have developed centres of excellence
• 42% have implemented structured measurement and value trackingThe shift from pilots to enterprise-scale execution is well underway – but it requires disciplined leadership and end-to-end coordination.

The human factor: Upskilling and cybersecurity in a digital world

As technologies evolve, the workforce must evolve with them. Yet, human capital remains the least mature area of smart manufacturing today.

• 35% of executives cite “adapting workers to the factory of the future” as their top workforce challenge
• Only 48% have a training and adoption standard in place
• And still, workforce capability is the area where leaders have the highest aspirations for improvement

To address the growing gap, manufacturers are employing a mix of strategies:

• 53% offer in-house leadership training, and 43% leverage external training programmes
• 68% are focused on attracting new talent, while 40% supplement with contingent labour
• 65–70% outsource key roles in OT, IT, analytics and cybersecurity

At the same time, cybersecurity has become mission critical.

• 68% of companies have conducted a cybersecurity maturity or risk assessment in the last year
• On average, manufacturers dedicate 15.74% of their IT budgets to protecting digital operations

For COO’s, this is a dual imperative: safeguard operations while building a workforce that can operate confidently and effectively in a data-rich, connected environment.

The COO's leadership role: Enabling business-wide transformation

The responsibility for driving smart manufacturing transformation rests squarely with operational leaders.

51% of surveyed companies report that smart manufacturing initiatives are owned by operations leaders, including COO’s - with another 38% led by technology executives like CTO’s. This underscores a central point: real transformation only happens when operations and technology come together.

As custodians of performance, COO’s are in a unique position to:

• Lead the integration of smart technologies across factory floors and networks
• Establish internal governance and value measurement frameworks
• Drive workforce engagement, enable upskilling and foster a culture of innovation
• Collaborate closely with CIO’s and CTO’s to align strategic objectives with execution capabilities

Because while technologies may power tomorrow’s factories, it’s people - led by bold, cross-functional leadership - who make the difference.