2025 Manufacturing Predictions: AI, Sustainability, and Data

One thing’s for sure in 2025: Manufacturers will be facing an uncertain business climate because of higher costs, potential policy changes following global elections, and geopolitical upheaval. 

That doesn’t mean companies should sit back and “wait and see.” In fact, many of history’s biggest business triumphs occurred because the winning organization took advantage of its competitors’ complacency. (Examples: Netflix vs Blockbuster, Apple vs Nokia, Amazon vs big-box brick-and-mortar retail.)  

Here are five 2025 manufacturing predictions that industrial companies and suppliers should pay attention to and get ahead of, despite all the uncertainty. 

Artificial Intelligence Gets Real …

2025 will be the year where the rubber hits the road for AI. We’ve read and heard a ton about how AI is set to revolutionize manufacturing operations. It now needs to come down to reality and scale; to go from one to 100.  

Pfizer says it used IBM’s supercomputing capabilities to develop new drugs like Paxlovid, reducing computational time by 80%-90% and helping their teams design the drug in four months. (It usually takes 10-15 years.) BMW’s Spartanburg, S.C., manufacturing facility, which produces 60% of all BMW cars sold in the U.S., uses AI for stud placement and correction, inspection processes, and more, reducing costs by $1 million per year. Imagine the efficiency gains and business savings when prescriptive technology plus automation, whether it’s explicitly called AI or not, is rolled out to an x-multiplier of plants, product lines, and units. 

… But Humans Will Still Be in the Driver’s Seat

2024’s labor strikes made clear that there’s still an enormous need for qualified people to work in manufacturing. Nearly 60% of manufacturers cited the inability to attract and retain employees as their top challenge in a 2024 third-quarter outlook survey by the National Association of Manufacturers (NAM). 

Companies will put more focus on meeting workers’ needs where they are and at the time they need it, including on-the-floor coaching, upskilling, and reskilling. Job training, historically an HR responsibility, will begin to show up on the operations side as workers expect knowledge sharing and real-time collaboration to be integrated in their day-to-day work—at their fingertips, delivered digitally. 

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Electrification Accelerates for Automotive 

The electric vehicle (EV) revolution will reach full throttle, with battery electric vehicles (BEVs) expected to account for a higher-than-ever portion of new car sales by 2025. According to a BCG report, BEVs are projected to make up 20% of global light-vehicle sales in 2025 and surge to more than half of sales (59%) within 10 years. 

The shift toward electric mobility is driving automotive suppliers to adapt even more quickly. Traditional internal combustion engine components will be in less demand, eclipsed by the growing appetite for EV-specific parts like advanced batteries and electric drivetrains. 

Supply Chains Continue to Build Resiliency

The need for more agile supply chains was laid bare during the COVID-19 pandemic, and the work is not done. Being prepared for disruptions, great or small, will remain top of mind through 2025 and beyond.  

Manufacturers and suppliers will continue to invest in ways to improve flexibility, from diversifying its sourcing to adopting digital tools for real-time monitoring and risk mitigation. For instance, Magna is embedding more resiliency into its supply chains through enhanced tracking, predictive modeling, and crisis management in 2025; it’s also implementing dual sourcing and reshoring to reduce risk exposure and ensure continuity. 

Data Will be Everywhere, But Not All at Once 

Manufacturing generates over 1.8 exabytes (EB) of data every year, more than the communications, finance, and retail industries. All this information makes decision-making impossibly complicated. Manufacturers are realizing that they must process and utilize this deluge of data more efficiently—they need the right information, at the right time, for the right people.  

Technologies that surface data right at the moment it’s needed are already here. But because of manufacturing’s complexity, adoption has been lagging. Being slow is no longer an option in 2025 (see above regarding AI). Priorities will evolve from data collection and analysis to data-based prompting, where data fuels prescriptive actions where the action is: on the plant floor. Imagine a worker conducting a standard operating procedure (SOP) on a production line—instructions delivered digitally, of course—but with suggested “next best steps” based on real-time inputs, trends, and analysis.  

Only time will tell what 2025 will bring. But during uncertainty, the ability to adapt and stay ahead of the curve will be critical to maintain and grow a competitive advantage.