THE SEE-THROUGH SUPPLY CHAIN END-TO-END VISIBILITY Trends Remaking Manufacturing SUPPLY CHAIN RESET 7
1 AI, Automation and Digital Solutions Automation and technology solutions such as arti cial intelligence (AI) are starting to help manufacturing supply chain organizations compete in today’s environment, and more manufacturers are taking note Nearly half of respondents to the ETQ Pulse of Quality in Manufacturing 2025 Survey say they plan to implement AI in the next two years, while about one-third already use it. Top functions for applications include automating document processing and core processes, and spotting defects on the factory oor, ETQ says (see charts below) . Over the next few years, AI solutions will continue to take over not just physical manufacturing but also support functions. Demand planning and purchasing will become more automated through AI, since the rapidly shifting market makes historical demand models
less reliable. In contrast, AI solutions can help companies more quickly adapt and update demand models, leading to more ef cient production planning and better control of inventory levels. Better planning also will facilitate a return to just-in-time supply chains. “Disruptions will be more predictable, and building an excess of inventory ‘just in case’ will be costly and less widely practiced,” says Jeremy Tancredi, a partner in West Monroe’s supply chain practice. At the same time, before supply chain leaders invest in technology, including AI solutions, they need to clearly understand the return they can expect. For at least the past few years, many manufacturers have boosted ef ciency and throughput, but because of pricing pressures and higher supply costs, as well as their investments in technology, their own costs have continued to rise. “Despite increasing operational
ef ciency, many manufacturers are not necessarily making more money,” says Cara Walton, director and lead of Wip i’s manufacturing benchmarking tool. So manufacturers need to know— and many do—how they’ll earn a return on their investments or how a solution will bene t the organization’s broader strategic plan. Global technology company Lenovo offers an AI device that can work within harsh factory environments and connect to sensors or cameras to capture data from manufacturing lines. The devices look for quality or other issues and then alert operators in near real time, says Scott Tease, vice president and general manager of the infrastructure group products. Lenovo itself uses AI computer vision to ensure the assembly of servers and other devices is properly completed, Tease says. For example, the solution checks the installation of memory DIMMs within servers. “It delivers higher quality without slowing down the manufacturing process,” he says. 2 Nearshoring and Reshoring The historical preference for “long and in exible supply chains” is shifting rapidly, Javor says. These supply chains are ef cient but they’re also fragile, while shorter supply chains tend to be more resilient. This recognition is prompting interest in more regional supply chains, including nearshoring, reshoring and other variations of shoring. Aided by reshoring, construction in U.S. manufacturing plants grew by 45% in 2023 and 21% in 2024, to $234 billion, according to a recent Bank of America Global Research survey. At the same time, several factors could limit companies’ interest in returning to the United States. One is the uncertainty around tariffs. “There’s a paralysis everywhere because nobody knows what the tariff rates will be,” says Edward G. Anderson, Ph.D., professor for business at the University of Texas. Before companies make signi cant investments in new capacity, most will
AI IMPLEMENTATION PLANS Which of the following best describes your organization with regards to using or planning on investing in AI for manufacturing?
Plan to use in the next two years
49%
Already using
33%
Plan to use but not until 2 years or more from now
17%
1%
Never plan to use
What are the most important things you hope AI can accomplish for your organization?
Automate core processes
47%
Automate document processing Spot defects on the manufacturing oor
46%
45%
38%
Predict future trends
Source: ETQ Pulse of Quality in Manufacturing
28 Inbound Logistics • August 2025
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