Technological advancements, consumer demand and global markets have always had the power to change the manufacturing industry, and in the coming years it is inevitable that we will see some big changes. Here are some of the key catalysts of the transformation of modern manufacturing set to shape the industry to 2028.
The rise of the "smart factory"
The manufacturing sector is already seeing fundamental shifts thanks to the evolution of digital innovations. Automation and AI are transforming the factory floor, and this trend is set to continue.
Despite the obvious advantages of digitalization, McKinsey estimates that only 30 per cent of manufacturers have successfully scaled Industry 4.0 innovations beyond pilot stage. That’s a missed opportunity, considering the potential to unlock $37 trillion in additional value. However with smart manufacturing set to double by 2030, it looks as though more businesses are seizing its potential. The 2024 World Manufacturing Report projects that in the next few years, smart factories will be the norm.
In a smart factory, automation and AI are essential tools for efficiency and competitiveness. Robotics and digital twins are streamlining production lines, while predictive maintenance cuts costly downtime by flagging issues before they happen. AI-driven quality control enhances precision, reducing defects and minimizing waste.
Beyond the production line, AI-driven supply chains and real-time monitoring are transforming operations. Businesses can now anticipate disruption, manage inventory more efficiently and reduce delays. The result? A more agile, intelligent manufacturing ecosystem. By 2028, those that integrate AI and digital tools will be better placed to handle market volatility, shifting consumer preferences and sustainability pressures.
Hotspots for manufacturing expansion
Emerging markets, driven by cost advantages and rising demand, are changing the face of global manufacturing. We can expect to see these newer markets carving out niches for themselves over the next few years.
In Asia, powerhouses like China, India and Vietnam continue to dominate, with vast workforces and booming economies maintaining their competitive edge.
Africa is also gaining ground. Its young population and growing industrial base are driving expansion in consumer goods, textiles and food production. Across the Atlantic, Latin America — led by Mexico and Brazil — is becoming a vital manufacturing hub thanks to favorable trade agreements and proximity to the U.S.
While high-growth markets drive expansion, Europe and North America are taking a different approach — modernizing infrastructure, ramping up automation and embedding sustainability into their strategies. By 2028, expect a manufacturing landscape where emerging markets expand while developed economies refine their competitive edge. Adaptability will be the key to staying ahead.
The sustainability challenge
Sustainability will be a dominant force in manufacturing’s transformation, but reaching net-zero targets won’t be easy. Manufacturing is energy-hungry, supply chains are emission-heavy and green solutions often come with a hefty price tag. Rising consumer demand only adds pressure, making sustainability seem like a Herculean task.
Take the food and beverage (F&B) industry — it consumes 30 per cent of the world’s energy and contributes over 33 per cent of global emissions. By 2030, demand for energy in food production will rise by 45 per cent, with food waste alone adding another eight to ten per cent to emissions.
Manufacturers face a delicate balancing act: cutting environmental impact while remaining competitive. Shifting to renewable energy, optimizing energy use and collaborating more closely with suppliers are vital steps in meeting demand without further damaging the environment.
The F&B sector is also a great example of how to navigate this challenge, and Nestlé stands out as a leader in circular economy innovations. It has rethought its approach to packaging, using recycled materials and cutting virgin plastic use by 10.5 per cent since 2018. In 2022 alone, it cut total packaging weight by 200,000 tonnes, eliminating 280,000 tonnes of greenhouse gas emissions. This highlights the incredible impact a company can have by centering responsible sourcing, waste reduction and lowering carbon footprints while maintaining product quality.
By 2028, sustainability will be embedded into the core of manufacturing. Companies that fail to adapt will risk falling behind as regulation tightens and consumer pressure grows. Investment in carbon-neutral operations, AI-driven resource optimization and eco-friendly production methods will be the new standard.
A new era of manufacturing
The years ahead will bring lasting change, with smart factories, emerging markets and sustainability steering the course of manufacturing. To stay competitive, manufacturers must shift from reactive to proactive strategies, using innovation not just for efficiency, but to build resilience, long-term value in an increasingly dynamic industry.
The assembly line revolutionized manufacturing in 1913, and over the next three years the industry will continue to be defined by pioneering technology and forward thinking. By 2028, the manufacturers that embrace these changes will set the new standard. The future belongs to those who adapt — shaping a smarter, more sustainable industry for the years ahead.
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