NEWS

By Alan Whittaker , Head of Sector Growth, RTC North

For manufacturers, the question is where AI can make a useful difference. Writing emails and reducing administration have value, but the bigger opportunity is improving production, quality and delivery.

My view is straightforward: start with the business problem, not the technology. Be clear about what needs to improve, what success looks like and whether the investment will pay back.

The British Chambers of Commerce’s March 2026 report, The Growing Threat to Entry-Level Jobs in the Age of AI, reported that 54% of SMEs used AI tools, up from 25% in 2024. That measures general use, not adoption in production.

Make UK’s 2026 report, AI, Skills and the Future of the UK Manufacturing Sector, found just 2% of manufacturers surveyed had widely embedded AI; 37% were running small pilots, 43% were experimenting, and 18% had not adopted it. The surveys are separate, not directly comparable.

Opportunities include predictive maintenance, scheduling, quality inspection, and reducing scrap and energy use. The same Make UK report cites a potential £150 billion boost to UK GDP by 2035 from closing the wider digitalisation gap—not a guaranteed return from AI alone.

This matters more now than ever

The Office for National Statistics’ Producer price inflation, UK: September 2026, released on 21 October, reported annual increases of 8.3% in input prices, 4.6% in factory gate prices and 51.0% in crude oil input prices. These industry-wide measures show cost pressures, not every manufacturer’s experience.

Businesses cannot pass every increase to customers. Productivity means getting more value from existing people, equipment and space. Technology needs to solve a defined problem and deliver measurable improvement.

The barriers haven’t changed

The barriers are familiar: knowing where to start, finding reliable advice, making time for change and having the skills to implement it. The same issues affect investment in automation and wider digitalisation.

Start by identifying where time, capacity or value is lost: downtime, poor planning, rework or unreliable information. That assessment comes before choosing a system, even when day-to-day demands make it difficult.

A convincing demonstration is not enough. Suppliers need to understand manufacturing, work with existing systems and explain costs, limitations and expected benefits. The business case must stand up before the purchase.

Make UK’s 2026 AI and skills report also identifies skills gaps and workforce readiness as constraints. People need the knowledge and confidence to use the technology, not simply access to it.

Businesses need to protect cash while improving competitiveness. Make a manageable change, test the benefit and build from there, rather than adopting AI for its own sake.

What has changed is the pace

AI capabilities are developing quickly, although progress varies by application. Concerns about choosing the wrong tool are understandable, but waiting will not remove uncertainty or make every decision easier.

I would focus on building the ability to identify opportunities, test them, and adapt. Choose a tool that fits the problem and establish whether it improves performance in practice.

At RTC North, we help manufacturers turn this into a practical plan. As outlined in our November 2025 article, Made Smarter: Supporting Yorkshire and Humber Manufacturers, support includes digital roadmaps, specialist expertise and workforce development. Support and funding depend on programme eligibility and availability.

That means understanding operations, identifying where improvement has greatest value and finding appropriate support. Involving the people using the technology helps changes become part of everyday work.

We are applying the same thinking within RTC North, evaluating and piloting improvements to workflows, administration and reporting. This remains work in progress, not organisation-wide AI adoption.

The priority is better decisions, not keeping up with the noise around AI. Start with a clear problem, understand the costs, and measure the result. That is better than rushing in or standing still.