Manufacturing AI and Automation Outlook 2026: 98% of Manufacturers Exploring AI, but Only 20% Fully Prepared

New research from Redwood Software reveals automation maturity plateau, data readiness gaps and what separates AI-ready manufacturers.

VIENNA, Va., Jan. 20, 2026 /PRNewswire/ -- Redwood Software™, the leading orchestration platform for the autonomous enterprise, today released its "Manufacturing AI and automation outlook 2026," based on a global survey of 300 manufacturing professionals, with data collected via panel by independent research firm Leger Opinion.

The research reveals a growing automation gap in manufacturing. While most manufacturers have invested heavily in operational technology (OT), engineering technology (ET) and information technology (IT) automation and are eager to adopt AI, the majority remain trapped in mid-stage automation maturity. Many automate tasks or processes in individual systems while critical workflows, data flows and exception handling remain fragmented and manual.

Key findings: 2026 manufacturing trends

• 98% of manufacturers are exploring or considering AI-driven automation, yet only 20% say they feel fully prepared to use it at scale
• Seven in ten manufacturers have automated 50% or less of their core operations
• 60% report reducing unplanned downtime by at least 26% through automation
• Only 40% have automated exception handling, despite citing it as one of the most disruptive processes
• 78% have automated less than half of their critical data transfers, limiting real-time decision-making
• Inventory turns remain difficult to improve, even as automation drives uptime and throughput gains, highlighting the limits of siloed execution
• Redwood customers are 2.7x more likely to be in mid-to-high stages of automation maturity

Key takeaways from the research

• Automation tends to stall at system boundaries, where workflows and data must be coordinated across environments
• AI ambition is widespread, but manual data transfers, script-based automation and disconnected enterprise resource planning (ERP), manufacturing execution systems (MES) and supply chain systems prevent AI from operating with real-time context
• Manufacturers who focus on orchestrating workflows, data flows and exception handling across systems are better positioned to move beyond the mid-maturity trap and prepare for AI-driven operations

"Manufacturers aren't failing at automation — they're hitting the limits of siloed execution," said Kevin Greene, CEO of Redwood Software. "They have powerful automation across their enterprises, but it operates in fragmented workflows, slowed by friction at handoffs, unmanaged exceptions and delayed or unreliable data flows. Even the best AI models and tools can't scale in that kind of execution pipeline. A well-orchestrated operation, powered by a Service Orchestration and Automation Platform (SOAP) like RunMyJobs by Redwood, connects those fragmented pieces into a single automation fabric, allowing manufacturers to scale automation and AI as they evolve toward autonomous operations."

As manufacturers push toward AI-driven operations, the research shows that orchestration is what enables faster production without compromising quality.

Access the report

The "Manufacturing AI and automation outlook 2026" provides detailed benchmarks on automation maturity, AI readiness, operational bottlenecks and the perception gap between leadership and frontline teams. Download the full report here.

About Redwood Software

Redwood Software is the leading orchestration platform for the enterprise, driving business transformation at the lowest total cost of ownership. Redwood empowers organizations to intelligently automate and orchestrate mission-critical business and IT processes across complex ERP, hybrid cloud, data and emerging agentic AI systems. Through its SaaS-first automation fabrics — with AI embedded across the entire automation lifecycle — Redwood accelerates your path to the autonomous enterprise. Backed by 30 years of experience, the trust of more than 50% of the Fortune 50 and a culture of customer obsession, Redwood unleashes the human potential in your enterprise to focus on innovation, growth and what's next. For more information, visit www.redwood.com. Follow Redwood Software on LinkedIn, @Redwood Software.

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