Larson: The report shows manufacturers facing workforce shortages, cybersecurity risk, rising energy costs, inflation, economic instability, raw material volatility and supply chain issues. How are manufacturers managing that cluster of risks?

Stump: Manufacturers today are operating in a much more interconnected environment, and those challenges don’t just show up one at a time anymore. Workforce shortages, rising costs, cybersecurity threats and economic uncertainty all influence each other. That changes how organizations have to respond.

Cybersecurity is a good example. It has become a central part of operations. The report shows that nearly half of manufacturers reported a cyber incident in the past year. That highlights that cybersecurity is no longer a periodic concern. It’s something manufacturers have to manage continuously.

As manufacturers connect IT and OT environments, exposure continues to grow, which makes this even more complicated. We’re also seeing new regulations and broader expectations around cyber resiliency. More broadly, this environment is pushing organizations to operate differently.

Instead of reacting to individual problems as they have in the past, manufacturers are investing in integrated solutions and the ability to bring visibility, so they can make better, faster decisions under those pressures and drive more consistent performance.

Larson: You mentioned that digital transformation is now seen as necessary to stay competitive. What digital technologies are manufacturers betting on most heavily right now?

Stump: When we look at where manufacturers are investing, the focus is clearly on technologies that improve performance across operations. AI and machine learning continue to lead in terms of impact, but we’re also seeing strong investment in core automation, robotics and digital twins.

At the same time, there’s a strong emphasis on connecting systems together so data can move across the enterprise. Manufacturers need better access to contextualized data, and that helps deliver higher value from AI investments. But it also creates cybersecurity challenges because of increased connectivity. That can then lead to using AI to help address cyber risk. So, multiple loops are coming together.

This year’s report shows that almost 30% of operating budgets are now dedicated to industrial technology, which is a significant amount of investment. What’s different is how those investments are being approached. Rather than focusing on individual tools and technologies, organizations are combining capabilities to support end-to-end process flow and better decision-making.

Those investments are closely tied to outcomes manufacturers want, like quality improvement, reducing costs and managing risk, rather than deploying technology for technology’s sake.

Larson: Looking across the findings, what’s the biggest indicator that the industry has moved beyond experimentation and into an execution phase?

Stump: We see clear evidence in how organizations are approaching investments differently. It’s no longer about pilots. It’s more holistic across the enterprise. The question is no longer whether to adopt digital technologies. For the most part, that step has already been taken.

The focus now is on how manufacturers integrate those capabilities into their core operations, because they have to use them to deliver consistent results. That’s what they’re being measured on, not just deploying technologies.

We’re seeing fewer pilot programs and more enterprise-wide applications of technology. Manufacturers are deploying at scale, and that signals a move beyond experimentation. This phase is defined by consistency: the ability to produce measurable outcomes repeatedly, not just demonstrate them in isolated use cases.

As technology becomes more widely available, it’s no longer the differentiator it may have been five or 10 years ago. The difference now comes down to how effectively organizations implement and connect their systems, bring their workforce along and apply those capabilities to improve performance.

That progression from isolated implementations to broad, consistent execution is what defines this next phase and sits at the core of this year’s report.

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Get the full picture of how manufacturers are moving from digital experimentation to enterprise-wide execution. Download the 11th Annual State of Smart Manufacturing Report.

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This conversation has been lightly edited for clarity and length.