How AI Is Reshaping Financial Planning and Analysis for Manufacturers and Distributors
Why Manufacturers and Distributors Are Prioritizing AI
Manufacturers and distributors are increasingly recognizing the value of AI in managing complexity. According to Citrin Cooperman’s 2025 Manufacturing and Distribution Pulse Survey Report, 69% of leaders say AI has had the most significant technological impact on their business over the last three years, more than cybersecurity, ERP, or automation platforms. These companies are leveraging AI to identify revenue trends, predict cost fluctuations, and more effectively manage working capital. Technology helps surface opportunities and risks that are buried in massive volumes of financial and operational data, supporting quicker and more informed decisions.
Varying Levels of AI Maturity
Interest in AI is high, but adoption remains uneven. Our survey found that just 7% of manufacturers and distributors describe their AI capabilities as “mature,” while 39% are still in the early stages. Among companies with more than $1 billion in revenue, that figure rises to 50%, underscoring a widening gap between larger enterprises and smaller players. Yet across the board, nearly all respondents are investing in or planning AI integration — viewing it as critical to staying competitive in the years ahead.
Building the Right Foundation
AI is only as effective as the systems and data behind it. For many organizations, outdated ERPs and siloed processes remain significant barriers. The good news: two-thirds of survey respondents have upgraded their ERP systems within the past five years, and more than a third have linked these upgrades to broader digital transformation efforts. This modernization is a critical enabler of AI-powered FP&A, providing the clean, connected data environments needed for AI models to learn continuously, align with operational realities, and deliver real-time insights.
The Workforce Challenge
Technology isn’t the only barrier — talent is equally critical. According to the 2025 Manufacturing and Distribution Pulse Survey, 18% of businesses doubt their teams have the skills to manage current systems, while 19% worry about future readiness. Today’s FP&A professionals are expected to move beyond traditional number-crunching to become analytical thinkers adept with data models and automation tools. To close this skills gap, forward-looking companies are investing in training, hiring strategically, and working with external advisors to build AI literacy across the finance function.
Real Results: What AI Brings to FP&A
Here’s where AI delivers the most value to manufacturers and distributors:
- Forecasting precision: AI models analyze historical data alongside real-time inputs such as supply delays or pricing volatility to project future performance more accurately.
- Agile scenario modeling: AI enables finance teams to simulate “what-if” scenarios instantly, such as raw material spikes or changing labor rates, supporting faster pivots.
- Cash flow optimization: Predictive capabilities help track expected receivables and payables and simulate their impact on liquidity.
- Variance detection: AI identifies deviations from budgeted targets early, allowing time to course-correct before problems escalate.
- Reduced cycle times: By automating data ingestion and reporting, companies shorten the budget and forecast process, freeing time for strategic planning.
Challenges to Keep in View
AI is far from a plug-and-play solution. Data integrity challenges persist, particularly for organizations still reliant on fragmented systems. Without strong executive sponsorship or clear success metrics, AI initiatives risk stalling. Compliance requirements and cybersecurity risks also demand careful attention before scaling AI across finance operations. The path forward starts small: pilot programs that build momentum while aligning technology and talent for long-term success.
A Competitive Necessity, Not a Luxury
The demand for fast, data-driven financial insights has never been greater. Ongoing supply chain disruptions, regulatory changes, and demand volatility are putting increasing pressure on already thin margins. AI gives manufacturers and distributors the real-time intelligence needed to protect profitability and build resilience. The Pulse Survey highlights a clear trend: companies investing in AI are better positioned to adapt, forecast, and succeed — even amid economic uncertainty.
Turning AI into Action with Citrin Cooperman and Prophix
For manufacturers and distributors ready to move from possibility to implementation, Prophix provides a modern, AI-powered FP&A platform that centralizes data, streamlines planning, and enhances forecasting with explainable automation. By integrating ERP, supply chain, and financial systems, finance teams can replace static spreadsheets with dynamic, real-time scenario models.
But implementing AI isn’t just about software; it requires strategy, structure, and support. That’s where Citrin Cooperman comes in. Backed by decades of experience in the manufacturing and distribution industry and a leading Prophix partner, our advisors work closely with finance and operations teams to evaluate readiness, design scalable FP&A processes, and build AI capabilities that deliver long-term value.
Connect with our Digital Services Practice team at Citrin Cooperman today to build a smarter, faster, AI-driven finance function, equipped to meet evolving market demands and secure your business’s future success.
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