AI technologies, including machine learning, generative AI and agentic AI, are playing a crucial role in addressing some of the challenges facing manufacturing operations, says audit and assurance firm PwC in its 'AI in Operations: Revolutionising the manufacturing industry' report.

Energy costs, inflation, tighter regulations and a growing skills gap are pressing forces that are reshaping the sector while the manufacturing industry undergoes rapid transformation driven by the green transition, digital innovation and shifting supply chain dynamics, the company says.

The survey results from more than 400 operations executives across more than 30 countries in Europe, the Middle East and Africa show that manufacturing companies believe strongly in AI’s potential to increase profitability.

Nearly 70% of global respondents and 81% of South African respondents expect it to increase operating profits by at least three percentage points by 2030, and more than 56% of South African respondents anticipate an even greater rise of five percentage points in operating profits.

However, although expectations are high, only 15% of South African respondents report significant financial returns from AI in operations. Additionally, while 50% have moved beyond pilot phases, the pace of implementation and return on investment remain measured, PwC notes.

“Despite this, AI is already delivering measurable improvements in decision-making, productivity, flexibility and delivery volumes,” PwC South Africa partner Pieter Theron points out.

The biggest hurdles to AI adoption in South Africa include the cost of AI software, data quality and a shortage of specialised AI talent.

However, despite these challenges, 72% of South African companies plan to adopt or expand AI initiatives in the next 12 months, says PwC Africa consumer and industrial products and services industry leader Nqaba Ndiweni.

“Leaders are taking a balanced approach to AI adoption and prioritising purposeful implementation rather than rushing to match global adoption rates, while still achieving comparable or better efficiency gains when they do implement,” he says.

Further, confidence in the integrity and reliability of these technologies is essential, as companies increasingly rely on AI to drive critical decisions and operations. Trust is also critical to reap the rewards of GenAI, the company states.

PwC’s twenty-eighth annual 'Global CEO Survey: Sub-Saharan Africa perspective' shows that 34% of CEOs express high and very high trust in AI integration, which matches global confidence levels.

AI is complex and many pieces of the puzzle need to come together to successfully scale AI use cases across the organisation and realise tangible business benefits.

However, operations leaders should not wait to set out AI strategies and commit to AI investments, PwC recommends.