According to the World Economic Forum, roughly a fifth of U.S. workers fear AI will make them obsolete. This anxiety has been termed “FOBO” or “the fear of obsolescence,” meaning that the innovation and technology we create will evolve humans into irrelevance. Yet, savvy manufacturing leaders recognise the transformative power that artificial intelligence can have when applied to their operations, especially when paired with human intelligence.
As manufacturing leaders prioritise the pursuit of operational excellence (OPEX) through lean manufacturing, quality management, and supply chain optimisation to meet the modern challenges of today, there are very few tools that will augment their progress in this area as much as AI will.
According to McKinsey and Co, “Operators in the industrial sector that have applied AI in industrial processing plants have reported a 10 to 15 per cent increase in production and a 4 to 5 per cent increase in EBITA.”
This example, though impressive, is only the tip of the iceberg of what AI can do but manufacturing leaders must take care to dispel any misconception that AI can work on its own without the human element. AI implementation can only successfully support OPEX by maintaining a delicate balance with human expertise, working together to optimise efficiency and productivity, and collaborating with skilled workers to drive innovation and improve overall performance.
Both actors simply cannot work in silos and a collaborative approach between AI systems and skilled workers is demanded to remain competitive while driving innovation and improving overall operational performance.
AI’s place within operational excellence (OPEX)
To unlock the full potential of AI, CEOs must face the challenges of AI integration head-on, transforming obstacles into opportunities for growth. Despite the prediction that AI investments will grow by 57 per cent, from $1.1 billion in 2020 to $16.7 billion by 2026, manufacturers must contend with ensuring their data sets are AI-ready, that they address required customisation and updates to systems, and resolve the mismatch between AI capabilities and operational needs.
Yet with AI, manufacturers will benefit from gains like streamlining overall production processes, enabling predictive maintenance, and supply chain optimisation, as well as providing companies with the necessary tools to achieve operational excellence.
Additionally, there are two key aspects of how AI can support OPEX: AI can help humans work smarter, not harder, and AI-powered tech can drive operational efficiencies in ways never possible before.
Human skills augmentation through AI
Some employees have expressed concern over job security in relation to AI, but the Operational Excellence Hub suggests that AI and humans can work together with great impact, offering unparalleled enhanced data-driven design making.
Through the implementation of AI on repetitive tasks and using AI-powered software to analyse vast amounts of data, manufacturers are able to achieve greater accuracy, reduce downtime, and improve overall operational efficiency while staying relevant in an increasingly digitised industrial landscape.
AI technologies driving operational efficiency
Businesses are also fast learning they need to implement several key AI-driven technologies across their manufacturing processes, addressing separate areas of the manufacturing process.
The leveraging of certain Autonomous Mobile Robots (AMRs), for example, to perform repetitive tasks that ensure continuous operation, precision, and consistency, as well as maintaining safety by reducing physical injuries in the workplace. The robotics marketplace Qviro reports that AMRs can reduce labour costs by 30 to 40 per cent and decrease accident rates by up to 70 per cent, highlighting the potential of AMRs and AI in manufacturing.
Additionally, Gartner reported that 67 per cent of manufacturers agree that generative AI (GenAI) will be highly important over the next decade in terms of data insights that will improve operations and support business objectives.
Balancing humans with AI and not becoming over-reliant on AI
It is clear that AI can help manufacturers to reach high levels of operational excellence, but AI technology was created to be deployed by humans, not to replace them.
An over-dependence on AI could result in cutting corners, not costs. According to Kajian Perniagaan Harvard, humans are needed to review AI tasks to ensure errors like inaccurate or unexpected results, hallucinations or errors in text-based results, and embedded bias that arise are addressed, highlighting the need for humans and AI to collaborate.
The human element in the deployment of AI
Leaders must champion and encourage their people as a key ingredient to AI implementation success. Indeed, an over reliance on AI tech in the manufacturing sector without human intervention can lead to unfavourable outcomes such as production delays, compromise in output quality as well as heightened costs (due to a lack of allocation planning).
Managers can also support their employees with AI while the industry grapples with a worldwide skill shortage to upskill and leverage AI technologies. Staff should also be aware of ethical factors that come with the introduction of such advancements, such as the protection of customer data privacy, adhering to governmental compliance and regulations, as well as the bias that comes with machine learning tools.
Show your team the value of AI and alleviate their FOBO anxieties
The challenges surrounding the implementation of AI across the manufacturing industry are largely due to the way in which they are executed. A relatively new phenomenon for many leaders, AI must integrate with other tech functionalities and current company processes – not replace them entirely.
Leaders should start by aligning their company’s direction by alleviating concerns about job security in regard to displacement and reskilling. This is where HR teams can play a pivotal part – ensuring that staff are reassured about their futures and given the necessary skillsets to stay abreast to work alongside new implementations. They need to make sure that people understand that although AI might replace specific jobs, it will mostly make their current jobs easier and create new opportunities for further career development and advancement.
AI and humans working together – the future of operational excellence
With the integration of AI and the emergence of innovations such as agentic AI (AI that requires minimal human intervention), manufacturing leaders are on notice to adapt their business strategies to become not only AI-savvy but innovation-ready. It’s no longer a question of “if” manufacturing businesses will adopt new advancements but “when.” So, why not take the lead in innovation to stand out amongst your peers?
CEOs who are on this path can fast-track their progress with our soon-to-be-released Industrial Artificial Intelligence Readiness Index (AIRI), which is designed to assess your company’s readiness for AI adoption. We can help you benchmark your industry’s AI maturity, identify the most relevant AI elements for your specific needs, and define a clear roadmap for your next steps in AI transformation.
To learn more about how INCIT can improve your AI readiness to streamline your manufacturing processes in an AI-driven world, hubungi kami today!
