Manufacturing AI and automation outlook 2026 report
Maturity, bottlenecks, AI readiness and the path to orchestrated operations
Contents
Contents
1. About this research
This report is based on survey responses from 300 manufacturing professionals across operations, engineering, supply chain and executive roles. 57% are director-level or above. 38% of respondents represent manufacturers with $250M–1B in annual revenue, and 62% work in organizations with $1B–5B in revenue. They have hands-on involvement, decision-making authority or direct knowledge of automation in their organizations.
2. Executive snapshot
Manufacturing is at a turning point with automation — seeing real impact today, yet leaving significant potential unrealized.
Strengths of the current state
What’s working in manufacturing automation, and what can orchestration unlock?
Gaps and future potential
Where are most manufacturers stuck — and what requires action now?
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As manufacturing CIOs and technology leaders take on greater responsibility for connecting enterprise, factory and supply chain systems, Redwood Software works with organizations facing the practical challenges of coordinating automation across those environments. This research reflects that reality, examining how manufacturers are applying automation today and where gaps in orchestration are limiting progress toward more connected operations. |
3. Islands of automation: Lots of tools, limited coverage
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High adoption doesn’t equal effective automation. Many organizations have tools but haven’t applied them to the processes that matter most.
4. The perception divide
What leadership thinks vs. what the front line experiences
Who decides what gets automated? 73.6% require some level of approval.
When most automation decisions are made above the shop floor, it’s no surprise that leadership and front-line teams have different views of how automated operations really are.
5. Automation delivers — when applied to the right processes
Uptime gains prove the value.
Productivity is manufacturers’ top reason for investing in automation — well ahead of cost reduction. And the impact is clear: about 6 in 10 say automation has cut downtime by at least 26%, and a quarter of those report reductions of more than 50%. Throughput and uptime remain the strongest, most consistent areas of impact.
At the same time, some high-priority KPIs, like inventory turns and data accuracy, lag behind, showing where many manufacturers still have opportunities to strengthen how automation is applied across interconnected operations.
While automation is clearly delivering on throughput and downtime, it’s not being utilized to its full potential for inventory turns and data accuracy, compared to how often those KPIs are prioritized.
6. Maturity is concentrated in the middle stages
Nearly 3 in 4 describe their automation stage as Managed or Controlled, where some or most tasks and processes are automated but not yet autonomous. Only about 2% say they have fully autonomous processes.
Mid-level maturity means critical processes still depend on people to bridge gaps between systems, limiting the reliability and speed gains manufacturers expect from automation.
7. Disconnected automation creates friction
66% of automation challenges are in the following three categories.
8. What’s holding progress back?
It’s not cost or lack of appetite that gets in the way of modernization.
When organizations consider changing automation platforms, integration with existing systems is their top concern, followed by retraining teams and change management — well ahead of cost.
Top barriersAmong organizations that already use a workload automation solution, these are the most common reasons they hesitate to migrate. |
Top catalystsAmong organizations that don’t currently use a workload automation solution, these are the traits most likely to make them adopt one. |
| 1. Integration: 24.3% | 1. Low TCO: 15% |
| 2. Retraining: 22% | 2. Easy migration: 12.1% |
| 3. Downtime concerns: 19.6% | 3. Scalability: 12.1% |
| 4. Complexity: 17.8% | 4. Reliability: 11.4% |
| 5. Cost: 14.7% |
At the workforce level, the #1 challenge for effectively adopting automation is a skills gap for advanced automation technologies, not resistance to change.
Redwood’s automation fabric solutions address these barriers with pre-built connectors, on-demand training, a proven and guided migration approach, simplified workflow design and value-based pricing. Manufacturing teams can adopt and scale orchestration more quickly and with lower risk.
9. AI ambitions on shaky data foundations
Most critical data movement is partially automated or still manual, limiting how far AI can go.
8 in 10 manufacturers have automated less than half of their critical data transfers.
27.2% still rely on manual/email-based methods to transfer sensitive internal documents like financials and contracts.
You can’t build AI on manual file transfers and email attachments. Those in manufacturing who feel most AI-ready are typically those who have invested in automating and orchestrating these flows.
10. The AI readiness gap
There’s near-universal interest, with nearly 98% thinking about AI, but only 1 in 5 feel fully prepared to operationalize it.
Top AI use cases for the next 3–5 years
AI won’t run on manual data transfers, manual exceptions and scheduled scripts. The gap between interest and readiness is an orchestration gap.
11. What high-maturity manufacturers do differently
| High-maturity manufacturers are more likely to … | Automate exception handling, production scheduling and data transfers across systems | Report greater downtime reduction with automation | Use centralized, event-driven orchestration |
| Low-maturity manufacturers are more likely to … | Focus on simpler, single-system automation | Have manual or fragmented data flows between systems | Rely on scheduled jobs and manual handoffs between systems |
12. Advancing toward orchestration
In the survey dataset, some organizations show clearer progress toward orchestrated, end-to-end automation.
Respondents using Redwood solutions are:
13. Gain momentum
Most manufacturers have implemented and seen some results from automation, but critical workflows, data transfers and exception handling are still fragmented. And AI readiness is lagging behind ambition. The next step isn’t more point solutions — it’s orchestrating the systems you already rely on, so that production, supply chain and finance processes run through one centralized platform. RunMyJobs by Redwood is a Service Orchestration and Automation Platform (SOAP) that connects your ERP, MES, supply chain and other core systems, automating end-to-end workflows and laying the foundation for AI-ready manufacturing.
Connect what you already automate
All data represented in this report was gathered by Redwood Software and Leger Opinion, a third party whose panel was used in whole for data collection.
