June 10, 2025 - Manufacturing and distribution leaders noted that technology has had a major impact on their businesses over the last three years, with artificial intelligence (AI), cybersecurity, and business intelligence (BI) improving their efficiency the most.

Those three are followed by internal integrations, vendor systems, and a new ERP system. Keen observers will note, however, that these later items are a prerequisite for the first three. One cannot implement true business intelligence without well-integrated data and an upgraded ERP system. Nor can any company achieve much progress without developing the most important resource of all: Advanced tech talent.

This article shares findings from our latest Manufacturing and Distribution Pulse Survey and discusses the role talent will play in holding a technological competitive edge.

All Companies Use AI, But the Largest Benefit the Most

Sixty-nine percent of manufacturing and distribution leaders say AI has had the greatest impact of any technology in the past three years. However, in terms of tangible, bottom-line impacts, the story grows somewhat murkier. Perhaps the AI “impact” is more an intellectual exercise at this point, as it has everyone thinking differently about training, staffing, and change management. While many companies are using it, not all are using it effectively.

Just 7% of respondents say they have a mature adoption of AI, while 39% have an emerging organizational adoption. A mere 1% do not use AI at all.

Companies over $1 billion in revenue are the most avid AI adopters. Fifty-percent report having comprehensive and mature AI adoption. This is likely because a majority of enterprises still prefer to build rather than buy AI, and far fewer mid-market companies can afford the hardware and training costs.

When it does work, AI can assist across all functions. Companies tell us that AI helps them operate more efficiently, generates content and code in seconds, and offers around-the-clock support.

However, these tools can expose sensitive company data to the open internet and introduce cybersecurity risks, especially for manufacturers and distributors without much of an existing security posture.

“AI chatbots may store sensitive inputs which could be leaked in a breach,” says Kevin Ricci, partner, Risk Advisory and Compliance Practice and Cybersecurity Practice. “Even reputable AI platforms are not immune to data leaks. A past incident involving ChatGPT exposed user chat histories due to a bug in an open-source library. The best response is to implement clear usage policies and training long before an incident occurs.”

Leaders See Upgrading Technology as Key to Success

Seventy-one percent of manufacturing and distribution leaders expect tariffs and supply aftershocks to have an impact on their operations. It is no surprise then that more than half of respondents believe their future ability to compete is tied to either:

1. Better use of ERP system data to predict supply chain delays and cost changes; or
2. Using customer data to better predict those customers’ behaviors.

It is clear that leaders recognize the need for responsive, intelligent, and real-time business intelligence. By aggregating, normalizing, and analyzing data across the supply chain, they can detect risks earlier. They are better able to model cost scenarios under different tariff regimes and align their inventory planning to real-time demand signals.

“Over half of respondents cited the ability to analyze ERP data from suppliers and anticipate customer behaviors as critical capabilities for the next 3–5 years,” says Jory Weissmann, partner, Digital Services Practice. “These insights reinforce a broader trend: Businesses must shift from reactive to predictive decision-making.”

AI can then provide additional help — provided companies can work their data supply chains out.

“Despite decades of evolution in ERP technology, many companies still struggle to realize the full benefits of their investments,” says Weissman. “While this is relatively low compared to historical norms, it is important to note that 65% either experienced no positive change or underwhelming results — highlighting a persistent challenge in ERP adoption.”

Two-thirds of manufacturers and distributors say they have upgraded their ERP systems in the past five years to make better use of that technology and open up new integrations. Thirty-five percent say those upgrades were part of a larger digital transformation effort.

“In a global landscape where disruption is the norm, robust ERP systems, business intelligence, and forecasting are not luxuries — they are table stakes for staying competitive,” says Weissmann.

Companies Face a Technology Skill Gap

Manufacturing and distribution leaders are clear about the value and purpose of their technology initiatives. However, not all companies are confident they have the skilled talent to make the most of the technology.

• Eighteen percent do not believe their employees have the skills to manage software currently in place.
• Nineteen percent do not believe their employees have the tech skills needed to stay competitive.

Further, 37% of companies say that if they were to sell their company and tried to rapidly increase its value, they would improve their organizational structure, talent, and hiring policies. All this suggests that upskilling continues to be a major challenge, and that leaders view it as essential to continuing to make use of new technology.

“I have seen this trend with most of my manufacturing and distribution clients,” says Anthony Harrypersad, partner, Manufacturing and Distribution Industry Practice. “First, they upgraded ERP systems, operational processes, and equipment. This work was the first step in maximizing value. Then came upgrading talent through financial reporting, sales, and customer service.”

Many manufacturers and distributors have found themselves in this talent phase. It will be the challenge to overcome if they want to remain competitive.

Looking Forward to Faster Intelligence

As manufacturers and distributors turn towards a digital future, upskilling their internal tech talent will aid them in moving forward. Where they cannot hire, they can easily bring in outside specialists to bridge the gap and train their team. Specialists can provide AI workshops to introduce employees to its capabilities as well as train team members on its usage. Business leaders can also consider outsourcing their technology function entirely. What once seemed radical is now commonplace.

How Citrin Cooperman Can Help

Powered by the industry expertise of our Manufacturing and Distribution Industry Practice, Citrin Cooperman’s dedicated Digital Services Practice is well-equipped to help manufacturers and distributors audit their ERP systems and back office financial and accounting operations for AI readiness. For more information, contact a member of our team.

To learn more about the latest trends, challenges, and opportunities affecting the manufacturing and distribution industry, access our 2025 Manufacturing and Distribution Pulse Survey Report.