Manufacturers allocate one third of overall IT spend to AI, survey shows
While it's well known that artificial intelligence can serve a range of purposes for the manufacturing sector, a new survey from Google Cloud shows just how invested manufacturers are in AI-powered technologies. Globally, manufacturers on average allocate 36% of their overall IT spend to AI, the survey shows. A quarter of manufacturers allocate half or more of their overall IT spend towards AI.
As many as 64% of manufacturers globally already rely on AI to assist with day-to-day operations, the survey found. Additionally, 66% of manufacturers who use AI in their day-to-day operations report that their reliance on AI is increasing.
The survey, conducted online by The Harris Poll on behalf of Google Cloud, polled 1,154 senior
manufacturing executives across seven countries in late October.
The Covid-19 pandemic has been a large motivating factor for manufacturers adopting more digital technologies, the survey found: as many as 76% of respondents said they've turned to technologies like data and analytics, cloud and AI to respond to the crisis.
While the use of AI is increasing, the survey suggests there's room for more growth. Among manufacturers who currently don't use AI in day-to-day operations, about a third believe it would make employees more efficient (37%) and helpful for employees overall (31%).
"The key to widespread AI adoption lies in its ease of deployment and use," Google says in its report. "As AI becomes more pervasive in solving real-world problems for manufacturers, we see a shift from 'pilot purgatory' to the 'golden age of AI.' The industry is no stranger to innovation -- from the days of mass production to lean manufacturing, six sigma, and more recently, enterprise resource planning. And now, AI promises to deliver even more innovation."
Manufacturing was one of six verticals Google Cloud identified as key to its growth in 2019, along with the public sector, financial services, healthcare, retail and communications/media. Since then, Google Cloud has been hiring executives to bolster its industry expertise, as well as landing customers in manufacturing like Siemens, Ford and Renault.
The new report shows that the top sub-sectors deploying AI to assist in day-to-day operations are automotive/OEMs (76%) and automotive suppliers (68%). Heavy machinery comes in third, with 67% of respondents deploying AI.
While 80% and 79% of manufacturers in Italy and Germany respectively report using AI in day-to-day operations, that percentage drops in the United States (64%), Japan (50%) and Korea (39%).
The top reasons for using AI came down to:
- Assisting with business continuity (38%).
- Helping employees increase efficiency (38%).
- Helping employees overall (34%).
The specific areas where AI is being deployed include quality inspection (39%), supply chain management (36%), risk management (36%), product and/or production line quality checks (35%), and inventory management (34%).
Among manufacturers who aren't currently using AI in day-to-day operations, there was no dominant barrier to adoption. One quarter said they don't have the talent to properly leverage AI, while 23% said they don't have the infrastructure. 21% said it was too expensive, while 19% said the technology is unproven.
Cloud adoption is fairly high among manufacturers, the survey found. Most (83%) already have a cloud strategy, regardless of region or sub-sector. The top five manufacturing sub-sectors relying on the cloud include heavy machinery (92%), automotive/OEMs (87%), industrial & assembly (87%), automotive suppliers (81%), and chemicals (81%).