While ChatGPT captured the public’s imagination, the staid manufacturing sector was already putting AI to work – potentially reaping more benefits than any other sector, according to McKinsey. Find out how tapping AI is a natural step in the evolution of industrial automation.
In the grand tradition of Henry Ford and Bell Labs, manufacturers are using cutting-edge AI tools to automate tasks, predict disruptions and make new discoveries.
Three case studies: a design software firm helps users build AI-powered digital twins; a high-tech manufacturer leverages AI to build specialty electronics for clients; and an internet giant uses AI to discover previously unknown materials for building new technologies.
In the search for tomorrow’s manufacturing leaders, we look for firms that are embracing AI to uncover patterns in complex and interwoven sets of data, unlocking new efficiencies.
In the news: AI is transforming industrial automation
Manufacturers have long used automation to improve operational efficiency, decrease defects, reduce factory downtime and maximise productivity. Decades ago, research and development companies such as Bell Labs—and trailblazing individuals such as Henry Ford—were on the cutting edge. More recently, 3D printing, robotics and computer vision have helped upgrade production methods across many industries—from aerospace to metals & mining. Today, artificial intelligence (AI) is leading the way, with digital twins*, generative AI and other technologies transforming industrial automation in ways Henry Ford could never have imagined. Here are three notable examples.
Case studies: Using AI in new ways to aid manufacturing and material discovery
A design software provider (“DSP”) offers proprietary digital twin software1
DSP built advanced software to help organisations create and operate digital twins in real time. Many organisations already use DSP’s existing 3D software solutions to design products, buildings and manufacturing processes, so the new digital twin software is a natural fit. DSP’s AI-powered simulations help solve issues early, and help operators better manage product lifecycles and improve on subsequent iterations. Automated factory production lines have already been built with input from DSP’s digital twin software, and we see many more applications across industries - from automotive to food production to retail.
A manufacturing services company (“MSC”) leans into AI2
MSC is an electronics manufacturing services company that helps customers design and build electronics products. Among MSC’s many innovations are the AI- and machine learning based detection systems used on the company’s factory floors. The systems help identify defects quickly and accurately, saving costs and enhancing efficiency—and they get more intelligent over time. The company also uses AI to optimize production processes, reducing redundancies and improving throughput. MSC even helped design an automated barista system that uses AI to serve coffee and cocktails.
A large internet company (“LIC”) uses AI to discover millions of new materials for high-tech manufacturing3
Researchers at LIC used AI to discover 2.2 million new crystal structures, including an estimated 380,000 that are sufficiently stable for synthesis and further research. This significantly expands the number of known stable inorganic materials by nearly tenfold. In the past, materials scientists identified new crystals through a time- consuming trial-and-error process. The announcement demonstrates how AI can significantly accelerate the discovery process for new materials, which can be a key enabler of the next hardware or industrial breakthrough.
Why it matters
Today, industrial manufacturing is undergoing a sea change powered by AI innovations. Not only do most companies already recognise AI’s potential to improve their operations (Exhibit 1), but the evidence shows that it’s working. A recent survey by McKinsey suggested that manufacturing is the function that may be poised to reap the biggest benefits from AI adoption. Of the hundreds of organisations actively using AI, 55% anticipated at least a 10% decrease in manufacturing costs, while 66% expected at least a 5% increase in manufacturing revenue.4
Exhibit 1: Most companies are already tapping AI’s potential
Source: Samsara 2023 State of Connected Operations Report, March 2023.
*A digital twin is a virtual replica of a physical object, operation or process, frequently powered by AI and continuously updated with a steady flow of data.
1 Architect Magazine, February 2021 2 Bisinfotech, November 2023 3 Venturebeat, November 2023 4 McKinsey & Company, August 2022
Cyber-attacks are good for business – if your business is cyber security
In a world plagued by escalating cyber threats, businesses are forced to prioritize cyber security like never before. Here are some alarming examples of high-profile cyber-attacks in 2023, emphasizing the need for robust security solutions.
Chipmakers rode the first generative AI wave. Who’s next?
Artificial intelligence certainly made headlines in 2023, but how many companies actually made money from it? ChatGPT and other generative AI tools have directly benefited a small number of stocks so far – particularly the semiconductor firms that make essential chips.
Investing involves risk. The value of an investment and the income from it will fluctuate and investors may not get back the principal invested. Past performance is not indicative of future performance. This is a marketing communication. It is for informational purposes only. This document does not constitute investment advice or a recommendation to buy, sell or hold any security and shall not be deemed an offer to sell or a solicitation of an offer to buy any security.
The views and opinions expressed herein, which are subject to change without notice, are those of the issuer or its affiliated companies at the time of publication. Certain data used are derived from various sources believed to be reliable, but the accuracy or completeness of the data is not guaranteed and no liability is assumed for any direct or consequential losses arising from their use. The duplication, publication, extraction or transmission of the contents, irrespective of the form, is not permitted.
This material has not been reviewed by any regulatory authorities. In mainland China, it is for Qualified Domestic Institutional Investors scheme pursuant to applicable rules and regulations and is for information purpose only. This document does not constitute a public offer by virtue of Act Number 26.831 of the Argentine Republic and General Resolution No. 622/2013 of the NSC. This communication's sole purpose is to inform and does not under any circumstance constitute promotion or publicity of Allianz Global Investors products and/or services in Colombia or to Colombian residents pursuant to part 4 of Decree 2555 of 2010. This communication does not in any way aim to directly or indirectly initiate the purchase of a product or the provision of a service offered by Allianz Global Investors. Via reception of this document, each resident in Colombia acknowledges and accepts to have contacted Allianz Global Investors via their own initiative and that the communication under no circumstances does not arise from any promotional or marketing activities carried out by Allianz Global Investors. Colombian residents accept that accessing any type of social network page of Allianz Global Investors is done under their own responsibility and initiative and are aware that they may access specific information on the products and services of Allianz Global Investors. This communication is strictly private and confidential and may not be reproduced, except for the case of explicit permission by Allianz Global Investors. This communication does not constitute a public offer of securities in Colombia pursuant to the public offer regulation set forth in Decree 2555 of 2010. This communication and the information provided herein should not be considered a solicitation or an offer by Allianz Global Investors or its affiliates to provide any financial products in Brazil, Panama, Peru, and Uruguay. In Australia, this material is presented by Allianz Global Investors Asia Pacific Limited (“AllianzGI AP”) and is intended for the use of investment consultants and other institutional /professional investors only, and is not directed to the public or individual retail investors. AllianzGI AP is not licensed to provide financial services to retail clients in Australia. AllianzGI AP is exempt from the requirement to hold an Australian Foreign Financial Service License under the Corporations Act 2001 (Cth) pursuant to ASIC Class Order (CO 03/1103) with respect to the provision of financial services to wholesale clients only. AllianzGI AP is licensed and regulated by Hong Kong Securities and Futures Commission under Hong Kong laws, which differ from Australian laws.
This document is being distributed by the following Allianz Global Investors companies: Allianz Global Investors GmbH, an investment company in Germany, authorized by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin); Allianz Global Investors (Schweiz) AG; Allianz Global Investors UK Limited, authorised and regulated by the Financial Conduct Authority;in HK, by Allianz Global Investors Asia Pacific Ltd., licensed by the Hong Kong Securities and Futures Commission; in Singapore, by Allianz Global Investors Singapore Ltd., regulated by the Monetary Authority of Singapore [Company Registration No. 199907169Z]; in Japan, by Allianz Global Investors Japan Co., Ltd., registered in Japan as a Financial Instruments Business Operator [Registered No. The Director of Kanto Local Finance Bureau (Financial Instruments Business Operator), No. 424], Member of Japan Investment Advisers Association, the Investment Trust Association, Japan and Type II Financial Instruments Firms Association; in Taiwan, by Allianz Global Investors Taiwan Ltd., licensed by Financial Supervisory Commission in Taiwan; and in Indonesia, by PT. Allianz Global Investors Asset Management Indonesia licensed by Indonesia Financial Services Authority (OJK).
Grassroots Research® division of Allianz Global Investors commissions investigative market research for asset-management professionals. Research data used to generate Grassroots Research® reports are received from independent, third-party contractors who supply research that, as far as permissible by applicable laws and regulations, may be paid for by commissions generated by trades executed on behalf of clients.