Manufacturers lose millions to automation inefficiencies – Report

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Manufacturers worldwide are losing as much as 7.5 per cent of their annual revenue to inefficiencies linked to closed, hardware-driven industrial automation systems, Schneider Electric said in a new report.

The study, released on Tuesday and conducted with research firm Omdia, found that mid-sized manufacturers, those generating between $500m and $1bn, lose an average of $11.28m each year due to downtime, poor data visibility, and interoperability challenges. Large manufacturers reported average annual losses of about $45m, while smaller companies said they lost about $2.87m annually.

The report noted that manufacturers are struggling with legacy systems that increase complexity, limit operational flexibility, and drive maintenance and compliance costs.

The Executive Vice President for Industrial Automation at Schneider Electric, Barbara Frei, said the growing reliance on closed systems has become a major obstacle to digital transformation.

“Closed automation limits choice, slows innovation and puts manufacturers at a disadvantage in a highly competitive market,” Frei said.

The findings were drawn from a survey of 400 senior decision-makers across the Americas, Europe, Africa, and the Asia-Pacific region, covering industries such as food and beverage, pharmaceuticals, mining, oil and gas, and manufacturing equipment.

Schneider Electric said open automation could help manufacturers cut system integration complexity, improve data flow, and create new opportunities for cost savings and innovation.

The Principal Analyst at Omdia, Anna Ahrens, said the financial and competitive pressure on manufacturers makes flexibility critical.

“In a world where product life cycles shrink, supply chains fracture and talent gaps widen, agility and flexibility aren’t optional. They are survival. Every quarter a business delays addressing the cost of closed automation ecosystems is another $1m-plus in lost value,” she said.

The research is based on ten C-suite interviews across industries and a global survey of 320 participants in the energy, chemicals, manufacturing, mining, warehousing, water, wastewater, and waste sectors, conducted between September and October 2025.

Justice has over three years experience spanning digital and print media. At The PUNCH, he currently covers the automobile sector with special interest in features and industry analysis.

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