Leveraging data and building intelligent supply chains will be key to success this year

The manufacturing and energy sector is poised to face more headwinds in 2024, thanks to a range of new and nagging challenges. To meet those challenges, industry executives — who have weathered supply chain disruptions, rising costs and talent shortages in recent months — are aiming to build intelligent and sustainable supply chains, protect data and systems from cyberattacks, and create innovation-focused cultures.

“Businesses understand that technology is the key to solving their top challenges. As such, they are looking to take advantage of the data they have, improve the integration between operational technology and information technology, and create a more connected enterprise,” said Onofrio Pirrotta, Senior Vice President, Managing Partner and leader of Kyndryl U.S. Manufacturing & Energy Market. “Many are also realizing they need to focus on modernizing their existing IT estates to extract value from the newer technologies they are investing in.”

As the manufacturing and energy industry continues to evolve, companies are at a crucial point where technology adaptation and innovation are key to future success, said Pirrotta.

Here, Pirrotta discusses key trends impacting businesses in the manufacturing and energy space.

What are the biggest challenges facing manufacturing and energy firms?

Manufacturing and energy businesses face several hurdles right now, with the largest related to technology, sustainability and supply chain issues. The integration and management of diverse IT systems poses significant technological challenges, alongside the struggle of balancing Industry 4.0 digitization with escalating costs. Seamless connectivity between employees and machines is going to be more crucial than ever, while disruptions in the supply chain, demands for smooth experiences and meeting ESG standards add layers of complexity. And this is especially prevalent when we look at automotive manufacturers, as automakers continue to blur the lines between auto and tech companies. Additionally, the growing need for informed decision-making is intensifying the necessity for accurate and clean data, and tools that can help extract insights out of that data.

To address those challenges, where will these businesses look to invest?

There are clearly some investment trends for manufacturing and energy companies. Reducing cost and complexity are always top priorities, especially given the macroeconomic backdrop and supply chain cost pressures. However, increasingly our customers are looking for help in leveraging technology and data to drive growth and improve employee and customer experiences.


New technology 

Leverage data for actionable insights and decisions. Consider artificial intelligence and cobots — a collaborative robot that can work safely with people — to drive decisions. 



Build intelligent supply chains for sustainable manufacturing, and provide customers and stakeholders with data-driven experiences that improve satisfaction. Energy companies must not just commit to ESG policies but be thoughtful with implementation.



Protect data, systems and networks from cyber threats and extended downtime.



Build a foundation of innovation, a dynamic fueled by the talent and passion of employees and stakeholders. Keep in mind the battle for talent is ongoing.


Customer experience

Improve customer engagement, satisfaction and loyalty with personalized and data-driven solutions. For example, in the auto industry, delivering a great customer experience is more crucial than technical skills.

How can businesses drive innovation?

Solving some of these industry challenges starts with a focus on addressing business-critical issues directly. For example, it is important to unlock and deploy mission-critical manufacturing data, digitize and automate processes, and upgrade systems to ensure seamless connectivity between IT and OT environments. Similarly, it is just as crucial to develop sustainable supply chains and cybersecurity protocols to ensure uninterrupted operations and integrate AI and machine learning technologies. 

These innovations will become increasingly important as the competition for the best talent persists — every firm’s operation depends on people, and technological investments can help employees work efficiently and safely. 

And when looking at automotive manufacturing, Software Defined Vehicles are the next step in the industry revolution, providing a better driver experience. However, it opens the door to new technical challenges as a fully autonomous vehicle can require up to 900% more lines of code than an aircraft or smartphone. 

How will AI impact the manufacturing and energy sector?

AI is positioned as a transformative force in the manufacturing and energy landscape, like how computers were viewed in the 1970s, or the internet in the 1990s. AI is not just a tool — it's an opportunity to revamp business operations based on data. It’s crucial for enterprises to improve their data management strategies, especially as many manufacturing executives frequently cite legacy systems as the biggest challenge to implementing new technologies. 

AI will significantly impact competitiveness in the market. Those who adopt it into their processes will gain a competitive edge, while those who don't risk falling behind. However, the challenge with artificial intelligence for business lies in determining appropriate ROI for AI investments and establishing a broad company-wide vision where AI becomes integral to driving outcomes and enabling data-informed decision-making.

Onofrio Pirrotta

SVP, Managing Partner, Leader of Kyndryl U.S. Manufacturing & Energy Market