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Manufacturers are deep into digital transformation, but approaches vary by company type, industry and region. Of note are the unique requirements and paths of two distinct types of industrial firms: continuous process and discrete manufacturers. Those in each group have much to gain from digitalizing their operations and modernizing their energy consumption, yet they also have distinct operational challenges that are reflected in their respective digital priorities.
This report is based on a survey commissioned by Eaton and conducted by S&P Global Market Intelligence of 250 industrial respondents involved in their organization’s digital transformation efforts in eight countries across North America and Europe and the Middle East. Of the 250 industrial respondent organizations, 41% are continuous process manufacturers, primarily producing or extracting products via ongoing processes (e.g., food, pharmaceuticals, chemicals, mining, oil and gas, paper and pulp). Discrete manufacturing (e.g., automobiles, furniture, electronics) accounts for 53%. The remaining 6% identify as hybrid.
Long-standing issues such as labor shortages and a widening digital skills gap have historically hindered the sector’s ability to grow and innovate. But recent trends suggest that manufacturers are overcoming challenges like the “great crew change” with new, digitally fluent young workers and emerging technologies.
This report explores how manufacturers are addressing workforce challenges, with a focus on recent improvements and the growing role of digital transformation in reshaping the industry. Through an examination of survey data, emerging trends and real-world applications, it provides a comprehensive view of the sector’s progress and opportunities that remain.
42% of manufacturers are investing in AI and machine learning.
29% report staff shortages, down from 39% in 2022.
22% cite over-reliance on legacy technology, down 12% since our last survey.
Survey data highlights a significant increase in adoption of digital tools and technologies has begun to reshape operations. No matter where they are in their journey, manufacturers report starting small, with sensors to capture data from new or legacy equipment.
Many manufacturers also report replacing older equipment with digitally enabled installations and focusing on process improvement. This includes supporting their workforce with IIoT monitoring and optimization tools, preventive maintenance software, and advanced tools including digital twins,[WP1] which track and replicate physical operational processes, all of which reduce manual tasks and provide actionable insights to make work more efficient and effective.
[WP1]I recommend linking the products and software solutions with the relevant words here. E.g., the IIoT monitoring & optimization tool can be linked here.
While the manufacturing sector is making significant progress, barriers to digital transformation persist. Organizational resistance remains a key challenge, with 23% of respondents citing apprehensions about operational risk in 2022 versus 24% in 2024 – even though over-reliance on legacy technologies has decreased, falling from 24% to 22%.
Manufacturers are adopting new tools but must also address resistance to change – in other words, cultural and behavioral factors rather than technical ones. To overcome resistance, manufacturers must implement change management strategies focused on communication, collaboration and incremental adoption, with leaders advocating for digital transformation initiatives and demonstrating their value to the organization.
Survey data indicates that widespread adoption of IIoT, AI and cloud-based manufacturing solutions reflects a shift toward more data-driven and connected operations where these technologies enable manufacturers to pr optimize ocesses, improve decision-making and enhance workforce productivity. As the sector continues to adopt digital technologies including AI and machine learning, it becomes easier to recruit tech-savvy candidates to apply digital insights to physical systems and real-world challenges. This momentum creates a virtuous cycle, reinforcing alignment between technology investments and operational goals.
Discover more about how digital transformation is reshaping manufacturing and industrial operations, tackling workforce challenges, and driving sustainability. Download our free report now.
