The AI Revolution and its Impact on UK Manufacturing

Artificial intelligence has been the subject of endless discussion – and hype – in the media. Its potential impact on jobs, in particular, has been talked about in almost apocalyptic terms, with fears that entire professions could be all but wiped out over the coming years.

So far, however, the reality seems to be rather more nuanced. Businesses and other organisations across a wide range of sectors are adopting AI tools not to do their human employees out of their jobs, but to free them up to perform other – perhaps more important and less menial – tasks.

We recently asked a group of UK manufacturers a series of questions around the big issues facing the sector, as part of our State of UK Manufacturing survey. In this blog, we’ll take a closer look at what they had to say regarding AI – and what this could mean for the industry over the longer term.

Manufacturers’ tech investment plans

In our State of UK Manufacturing survey, NexSys asked a participating group of manufacturers about whether they were using AI – and, if so, how they were using it. Our findings indicate that while relatively few manufacturers are currently making use of the technology, a substantial proportion are planning to introduce it over the next 12 months.

We asked respondents whether their business currently made use of AI, and only 10.7% said that it did. By contrast, 89.3% of those who took part in the survey told us that their company did not currently use artificial intelligence technology.

In addition, our survey asked participants which technologies their businesses intended to invest in over the next 12 months. Exactly a quarter (25%) of respondents said that they planned to invest in AI within the coming year.

Nearly two-thirds of those surveyed (62.5%) said that their business intended to invest in ERP software, with 60.7% stating that their company had plans to invest in automation. Just over a third (34%) said they were looking to machine integration.

“Automation is high on our agenda. We are always looking at ways to streamline financial processes and scale the business without incurring extra costs,”

Another meanwhile, explained: “The main goal is… to get as much automation going as possible. We have put in an OCR [optical character recognition] platform – all the sales orders come in automatically, [with] less manual input, [fewer] errors.”

Only 12.5% said they had plans to invest in the Internet of Things and just 3.6% indicated that they would invest in virtual or augmented reality – both of which have been much hyped in the media in recent years.

How manufacturers are using AI

Artificial intelligence has a wide range of potential applications in manufacturing. These include, for example, predictive maintenance (anticipating mechanical problems before they occur), quality control, product design and development, supply chain optimisation and demand forecasting.

There has, inevitably, been much discussion about the potential impacts artificial intelligence could have on the manufacturing industry. Our State of UK Manufacturing survey therefore asked those respondents who did make use of AI just how they were doing so.

Overwhelmingly, these participants (83%) said they used AI for administrative tasks. This suggests that they see the technology as a way not of replacing of human labour but supplementing it, allowing employees to focus their attention on other tasks while letting AI handle the more menial admin jobs.

“[We] definitely see AI taking a stronger place in the business in the future,” said one customer. “Anything that can make the business slicker – get as much automation as we can [and] reduce errors.”

However, participants were equally split when it came to other uses for AI technology in manufacturing; 16.7% said they used artificial intelligence for marketing, general research, document translation and design.

AI and the future of manufacturing

We are already seeing manufacturers adopting artificial intelligence to help drive innovation and boost productivity while also enhancing efficiency. As the technology becomes more accessible and affordable, we can expect to see an increasing proportion of smaller and medium-sized manufacturers embrace this technology.

There is little doubt that AI holds the potential to revolutionise the manufacturing sector. It could deliver significant improvements in productivity and efficiency, reducing downtime and complementing human creativity and innovation, rather than eliminating them.

It is also important to bear in mind that AI could play a role in making manufacturing more environmentally sustainable, helping firms to adopt more environmentally friendly practices. In particular, AI could help firms cut carbon emissions and minimise waste, thereby reducing the sector’s impact on the climate.

Having said all that, manufacturers will need regulatory clarity if they are to deliver on the promise of artificial intelligence. How policymakers will respond to AI remains unclear, and while flexible and intelligent regulation could serve as a spur to sustainable growth and innovation, knee-jerk legislation could stifle both.

Ethical and regulatory considerations – such as data protection, algorithmic bias and the possible implications for employment – will continue to be the focus of much debate in the years ahead. Thoughtful management of the challenges and opportunities presented by AI will be crucial if we are, collectively, to make the most effective and responsible use of it.

NexSys’ State of UK Manufacturing survey aims to provide a snapshot of the major challenges facing the industry and how manufacturers are addressing them. You can read the full report by clicking here, or contact us to find out more about our range of ERP+ solutions.