WASHINGTON—Manufacturing is marching toward a future that is highly automated, intelligent and flexible. Increasingly, “smart factories” are made up of connected machines that generate large amounts of data.

Growing use of artificial intelligence and data analytics technology create new ways for manufacturers to improve production processes, product quality and supply chains. However, realizing the benefits of this Industry 4.0 digital transformation can be difficult for many manufacturers. That’s because not all organizations have the resources, capital or talent required to deploy smart factories.

To discover how companies are progressing on this journey and the challenges they face, the National Association of Manufacturers (NAM) recently conducted a survey under the auspices of its Manufacturing Leadership Council.

Manufacturers are committed to new tools and technology. According to NAM, they are spending at a steady—and in some cases growing—basis. Nearly 69 percent of survey respondents said their investments in 2024 would continue unchanged from last year.

More than one half (58 percent) assessed their company’s digital maturity level in manufacturing operations at three to five on a scale of 10, suggesting the industry has moved beyond the initial stages of Industry 4.0 and has reached an early majority of digital-model adoption.

However, only 7 percent of manufacturers claim they have digitized their factory operations extensively. Approximately 15 percent expect to have their manufacturing operations digitized end-to-end by 2026.

Only 5 percent claim their factories are already “very smart,” while 53 percent believe their facilities are getting smarter, but are still works in progress.

While some manufacturers foresee a future of “lights out” factories, or those that mostly run themselves, most don’t think they will ever reach that state. Indeed, 49 percent of respondents expect fully or partially autonomous factories in the future.

Approximately 56 percent cite organizational resistance to change as the top barrier to implementing a smart factory. But, more than one-third of respondents (40 percent) predict that AI will be either very significant or somewhat significant in the years to come.