North American Manufacturers Embrace Digital Transformation
Manufacturing companies across North America are investing heavily in digital transformation to remain competitive, according to a new research report from global advisory firm Information Services Group (ISG).
The 2024 ISG Provider Lens Manufacturing Industry Services and Solutions report for North America highlights how economic fluctuations, shifting customer expectations and technological advancements are compelling manufacturers to rethink traditional approaches to product design and production.
“The changes of the past several years have spurred manufacturers into action,“ said Jan Erik Aase, partner and global leader, ISG Provider Lens Research.
“Digital transformation and a culture of continuous improvement can position them for long-term success.”
The actions manufacturers are taking? Reimagining factory operations, enhancing supply chain efficiency, prioritising sustainability and integrating after-sales services into their business models.
Supply chain resilience, cybersecurity & AI
North American manufacturers are making substantial investments in digital technologies, particularly artificial intelligence (AI) and machine learning (ML), to accelerate product design and production.
Facing increasing pressure to bring products to market faster, companies are adopting AI-enabled tools to improve efficiency and facilitate rapid prototyping.
Generative AI platforms are already being deployed in some organisations, helping to streamline product development and engineering processes.
“North American manufacturers have embraced the factory of the future,” says Bob Krohn, partner at ISG.
“Working with service providers, many companies are using AI and the cloud to make production systems more efficient and resilient.”
A critical dimension to this embrace of the factory of the future is the desire among many North American manufacturers to enhance cybersecurity.
Threats continue to grow in addition to regulatory requirements, meaning there is a growing imperative to shore up critical infrastructure.
Many of these manufacturers have outdated OT systems without built-in security that are extremely vulnerable to cyberattacks.
As IT and OT integration grows, tackling this vulnerability through digital transformation is a necessity.
Manufacturers are also using digital transformation to address supply chain disruption, the impact of which has been highlighted by the COVID-19 pandemic, geopolitical tensions and rising tariffs.
By leveraging cloud-based supply chain management, advanced analytics, real-time IoT tracking and AI-driven optimisation manufacturers can mitigate risks.
Many are also exploring reshoring or nearshoring production, shifting operations to neighbouring countries like Mexico to improve supply chain stability.
An evolving business model & workforce
To enhance revenue streams and boost customer satisfaction, North American manufacturers are expanding their focus beyond traditional products by introducing service-based models.
Many companies are now offering subscription-based, pay-per-use and asset-as-a-service options.
Additionally, a heightened emphasis on after-sales servicing, repairs and condition monitoring is helping extend product life cycles, ensuring greater customer loyalty and long-term profitability.
Sustainability is also becoming a central focus for these manufacturers, driven by regulatory requirements and investor expectations.
Implementing greener practices and reducing environmental impacts is becoming core to long-term business strategies.
North American manufacturers also face challenges in attracting skilled workers, as many professionals are drawn to the IT sector.
AI-driven training programmes are emerging as a solution to bridge the skills gap and prepare employees for the demands of modern manufacturing.
Industry leaders & the future of manufacturing
The ISG report evaluates 35 providers across five key categories: Product Design and Development Services, Smart/Digital Factory Solutions, Manufacturing Supply Chain and Procurement Services, Aftermarket Services and Industry Transformation Services.
Several firms have been recognised as leaders in these areas, including Accenture, Capgemini, Cognizant, HCLTech, IBM Consulting, Infosys, TCS and Wipro, all of whom lead in five categories.
Other notable leaders include Deloitte, NTT DATA, Tech Mahindra, Akkodis, EY, HARMAN, LTIMindtree, LTTS, Genpact and PwC.
Rising Stars—companies identified as having strong potential for future growth—include Cyient, Hexaware, Hitachi Digital Services, Kyndryl and NTT DATA.
In terms of customer experience, Capgemini has been named the global ISG CX Star Performer for 2024, achieving the highest customer satisfaction ratings in ISG’s Voice of the Customer survey.
As manufacturers navigate an era of rapid technological and economic change, embracing digital transformation, AI and innovative business models will be key to ensuring long-term success.
By prioritising cybersecurity, supply chain resilience, sustainability and workforce development, North American manufacturers are positioning themselves at the forefront of the industry’s evolution.
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