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IFS's Transformative Insights on Manufacturing's Future

Recently, IFS, a frontrunner in Industrial AI software, released an impactful global research study titled the State of Service 2025 Manufacturing Transformation Report. In collaboration with Accenture, this report delineates a crucial shift in the manufacturing sector, moving away from traditional product-focused approaches to prioritizing service-driven growth strategies. The findings, backed by insights from 800 senior leaders in manufacturing, bring to light the urgent need for businesses to adapt to rapidly evolving market dynamics.

The Role of Service in Manufacturing

Historically, the service function within the manufacturing industry has been viewed as a basic support mechanism. However, according to the report, a staggering 39% of survey participants deem servitization as a cornerstone for sustained growth. Service is no longer merely a support function; it now operates as a critical profit-driving engine for manufacturers. 94% of manufacturers acknowledge that transitioning to new service models has already begun to reshape their operational processes, further emphasizing the importance of this evolution.

As companies embark on this transformative journey, they must recognize the intrinsic value of integrating Industrial AI, sustainability, and servitization as key elements in redefining how they compete, operate, and create value.

Challenges and Opportunities Ahead

Despite the promising insights, the report identifies barriers that manufacturers must overcome to fully leverage AI technology. 63% of participants indicated a laser focus on cloud infrastructure and emerging technologies such as AI, IoT, and AR for future growth. However, the disparity is glaring—as 96% utilize AI for service delivery, yet nearly three-quarters have not effectively integrated it across operational layers. Accelerating AI adoption and modernizing infrastructures are paramount for manufacturers aiming to stay relevant in a crowded market space.

Mark Moffat, CEO of IFS, stated, _"Manufacturing is undergoing a defining transformation. Service has evolved from a support function into a core profit engine... Industrial AI and sustainability are now central to delivering smarter, faster, and more personalized service."_

Workforce Reskilling for a New Era

The shift towards service-oriented models demands a workforce that is trained and equipped for new challenges. As companies migrate from traditional warranty and break-fix services to outcomes-based contracts, the need for skilled labor rises. Alarmingly, 98% of manufacturers reported existing labor shortages, necessitating a concentrated effort toward building internal capabilities. To address this, many organizations are implementing cutting-edge strategies, such as internal training academies, e-learning platforms, and academic collaborations, fostering a workforce adept in a digital, service-driven environment.

Sustainability at the Forefront

The study also underlines the growing commitment to sustainability, with 97% of manufacturers recognizing it as a strategic priority. Moreover, 79% track service-related emissions, while 37% monitor them in real-time. Adopting practices associated with a circular economy—such as refurbishing components and optimizing service routes—has become vital in reducing waste and prolonging asset lifecycles.

Navigating Supply Chain Turbulence

Supply chain disruptions remain a pressing issue, impacting 95% of surveyed respondents over the past year. Nevertheless, confidence in the resilience of supply chains is noticeably lacking. Only 32% of manufacturers conveyed a sense of 'very confident' in their strategies, revealing ample room for improvement in planning, scenario modeling, and local sourcing.

Conclusion: Preparing for the Future

The report accentuates the urgent need for manufacturers to modernize their service models, scaling up AI utilization and addressing workforce and sustainability challenges for the future. Those who can successfully integrate industrial AI, adapt to new service models, and cultivate a skilled workforce will define the next era of industrial competitiveness. To gauge how your organization compares and to delve deeper into the findings, the complete report can be accessed online.

As manufacturing evolves, embracing change today will ensure firms remain linchpins of innovation and success in the years ahead.