UK manufacturers risk being left behind in the race to capitalise on artificial intelligence (AI) unless they start to embed the technology across their operations.
That’s according to a recent report by Make UK, the industry body that represents and supports manufacturers, which argued that “addressing the digital gap in UK manufacturing is a critical economic priority”.
The report found that while AI is already helping some firms streamline administrative processes, most manufacturers remain stuck at the pilot or early adoption stage, with many use cases concentrated in back-office functions rather than production, supply chain or quality control.
Manufacturing is trailing other sectors in the AI race
The UK is not alone. Analysis published by ING found that just 17% of EU manufacturers were using at least one AI technology in 2025 — that compares with 20% across the broader economy.
The message appears to be that when it comes to the adoption of AI, manufacturing is lagging behind other sectors. And one of the reasons cited by ING is down to data.
“Sound data infrastructure is the basis for success,” it said, arguing that more digitised manufacturers can implement AI faster and reap the benefits sooner.
It went on: “Many industrial companies would therefore do well to make their processes more transparent, clean up data and make it more consistent, and to link IT and operational technologies (OT) to ensure reliability.
“The better the data is unlocked and structured, the more effectively AI can make connections and create value,” it said.
Data, data everywhere
They have a point, not least because the one thing manufacturers have in abundance is data. Much of it comes from enterprise resource planning (ERP) platforms, manufacturing execution systems (MES), and machine logs, to name a few, which create a constant stream of information.
But with so much data coming from so many different sources, it’s understandable that some business leaders might question whether this information is suitable for an AI-powered world.
So, let me put their minds at rest. The answer, for the most part, is ‘yes’, because modern ERP and MES platforms are designed to provide the structured and semi-structured data that AI tools can work with.
In fact, a 2024 insight by business advisory firm BDO sought to debunk some of the myths surrounding manufacturing data and AI readiness.
Modern ERP is pivotal to AI
It argued that manufacturers often underestimate their data readiness, when, in truth, modern ERP platforms provide that foundation by bringing together information from across production, inventory, procurement, finance and customer operations into a single environment.
That connected view is what starts to make the data genuinely useful. Instead of production teams, finance departments and warehouse managers each working from separate systems, manufacturers can build a more complete picture of what is happening across the business.
That improves visibility and decision-making in its own right, but also gives AI the context it needs to spot relationships between different datasets and surface something meaningful.
Take inventory as an example. Knowing how much stock is sitting in a warehouse is useful, but AI becomes far more powerful when it can also take account of customer demand, production schedules, supplier performance and seasonal fluctuations.
The same principle applies elsewhere. Connected data can help AI identify suppliers at risk of delay, flag emerging quality issues, support cash-flow forecasting and even help maintenance teams predict equipment failures before they happen.
When legacy systems become a liability
The natural conclusion, therefore, is that data is important, but so too are the systems they run on. The trouble is, many manufacturers are still relying on legacy ERP platforms that were never designed for today’s operations.
What’s important to remember is that modern ERP systems are not simply a newer version of the same software. Moving to a cloud-based platform gives businesses access to integrated data, automation, better visibility and the ability to connect other applications and tools around a common operational core.
And it doesn’t just affect manufacturers. For example, a recent report on ERP modernisation in the distribution sector byIDC found that many businesses continue to cling on to old systems even when they know they are past their best.
A modern user experience
It also found that a well-integrated modern ERP system can change the way people experience technology at work. Systems that are easier to navigate, mobile-friendly and increasingly supported by automation or AI are simply more enjoyable to use.
“We’ve been able to integrate our new ERP with our warehouse operations, our website, and our finance systems,” said Steve Standley, Operations Manager at plumbing, heating and gas supplies company BES.
He was quoted in the IDC report and explained how having a modern system made life so much easier for everyone.
“Our employees have the data they need to process orders more accurately and quickly, our customers have all the data they need at their fingertips, and accounting sees everything as it happens.
“So, modernising our ERP has helped bring out new capabilities in other systems and processes, and helps us grow at the pace we want,” he said.
AI as a catalyst for business transformation
What’s clear to me is that what started out as a discussion about AI has ended up touching a host of other issues, including data, legacy technology, cloud, productivity and the employee experience.
Of course, that’s no coincidence. Why? Because AI doesn’t exist in isolation.
It’s impossible to talk about it without addressing issues such as the broader business objectives and digital transformation. And perhaps that is the real lesson here.
Manufacturers, distributors — in fact, any organisation that makes, moves or sells products — shouldn’t treat AI as a separate technology project.
Instead, it’s far better to look at the systems, data and processes that AI relies on before asking whether they are fit for what comes next. After all, if AI is going to make the impact many predict, it must become a natural extension of a business rather than another experiment sitting on the sidelines.
Steve O’Keeffe
Steve O’Keeffe is UK&I RVP at Epicor where he leads the sales and go-to-market strategy across the UK&I region, focusing on customer success within the make, move, and sell industries.
