Artificial intelligence will have a significant impact on the competitive landscape of the manufacturing industry in the coming years, according to the company leaders interviewed for Gofore’s AI research. The leaders believe in their organisations’ ability to execute AI projects that grow their business. Companies also have increasingly clear visions of how they can achieve a competitive advantage with AI. Furthermore, those who succeed in using AI are expected to stand out as industry pioneers in ten years.
The digital transformation consultancy Gofore conducted an interview study Utilising AI for Competitive Advantage in the Manufacturing Industry in June 2024. Thirteen leaders working in Finnish manufacturing industry* companies were interviewed for the study.
The results were published on 8 October at Gofore’s Intelligent Industry 2024 event in Helsinki.
The aim of the research was to determine how the manufacturing industry intends to gain a competitive advantage from AI, the companies’ ability to execute large-scale AI projects, how AI-related innovations arise and how organisational leadership supports innovation culture. The interviewed organisations had a turnover of more than EUR 100 million.
Based on the interviews, the companies have increasingly clear visions of how AI can enable a competitive advantage, and they are very confident in their ability to successfully execute large-scale AI projects that grow the business. The confidence stems from their prior successful digitalisation and development projects.
Half of the organisations did not have an AI strategy. However, nearly half of the interviewees either already had a strategy or were currently developing one.
Many interviewees stated that their AI projects have mainly focused on so-called support functions, such as sales, marketing and HR.
“It is quite common and understandable that the development of AI solutions starts with operations that are less risky for the business. Nevertheless, it is great how the manufacturing industry is setting an example for the entire industry in how AI can improve production, processes and quality. Competitive advantage ultimately arises from how well the organisation’s solutions benefit the customer and increase customer value. I believe this is what determines the winners”, says Harri Laukkanen, Director of Industrial Digitalisation at Gofore.
Several interviewees mentioned preparing for the AI future by improving their current data architecture. When there is plenty of data, the threshold for initial experiments is lower. Leading and utilising experimentation culture is common in executing digitalisation projects, however, the manufacturing industry still struggles with the approach.
“It was surprising to find out that even organisations with a turnover of 100 million seemed to lack innovation processes. These could include, at their simplest, a systematic method for collecting ideas and assessing their potential and feasibility as well as agile piloting of those ideas. Organisations have clearly identified this bottleneck as well. On the other hand, the last time innovation management was needed to such an extent was during the digitalisation wave back in the early 2000s, when technology enabled an infinite number of new innovations in a short timeframe”, states Karoliina Partanen, Director of the AI Finland network that operates under the Technology Industries of Finland.
According to the company leaders, integrating AI as a genuine part of the organisation’s operations and expertise requires more than just the initiatives of individual active actors and teams. You also need knowhow to lead the development of the organisation’s AI capabilities.
Questions and answers with the 13 leaders
On a scale of 1 to 5, how clear is it to you how you could achieve a competitive advantage from AI solutions?
2.65/5: How to achieve a competitive advantage is somewhat clear or not very clear
On a scale of 1 to 5, how do you rate your company’s ability to execute large-scale AI projects?
3/5: Companies believe that their ability to execute large-scale AI projects is good
On a scale of 1 to 5, how much do you believe AI solutions will affect your market’s competitive situation in the next…
…2 years: 2.6/5, it is expected to have little or some impact
…10 years: 4/5, a fairly large impact
Does your organisation have an AI strategy? No: 54%, Yes: 8%, Currently in development: 30%, Don’t know: 8%
Carrying out the research
- Gofore conducted phone interviews with thirteen leaders working in Finnish manufacturing industry companies.
- The leaders and their companies were selected for the interviews from Alma Talent’s target group service based on their roles (CEO or business management) as well as the size of their organisations (turnover class over 100 million) and industry (17 manufacturing-related industries).
- The interviews were conducted in June 2024.
* Manufacturing industry focuses on transforming raw materials and components into finished products through various production stages. The production stages often form value chains and can include activities such as design, production, assembly and quality control. The end products of the manufacturing industry can be machinery and consumer goods, for example.
More information:
Harri Laukkanen, Director of Industrial Digitalisation, Gofore Plc
tel. +358 43 8200 482, harri.laukkanen@gofore.com
More information on how the reserach was conducted:
Henrik Vuoksenmaa, henrik.vuoksenmaa@gofore.com