Rising product complexity is exposing critical cross-functional gaps despite continued investment in digital transformation and AI, according to Tacton’s annual State of Manufacturing report.
In fact, research found that 67% now describe their products as “very” or “extremely” complex, a 20-point increase in just one year. At the same time, only 7% use the same product configuration rules across every team and system involved in selling and building products, which is critical for reducing margin risk because of siloed functions and data.
"Digital transformation laid the foundation, but many manufacturers are still operating with disconnected systems, fragmented data and inconsistent processes,” says Klaus Andersen, CEO of Tacton. "The companies leading the next phase of industrial growth are those treating configuration logic as the backbone of their entire lifecycle. As AI adoption accelerates, the organizations seeing the greatest impact are building on a connected foundation of shared data, consistent processes, and lifecycle-wide visibility.”
Key takeaways:
· The report found that complexity now impacts every stage of the manufacturing value chain: 43% of manufacturers cite customization as their top quoting challenge; 62% experience moderate to severe margin erosion between quote and delivery; 40% are “not very” or “only somewhat” confident in delivery commitments at quote time; 93% of engineering teams spend moderate to very high effort maintaining configuration logic across disconnected systems; and only 23% automatically generate valid manufacturing Bills of Material directly from sales quotes.
· The report also shows manufacturers rapidly increasing investment in AI and automation: 79% are actively investing in or exploring AI, up from 64% in 2025; AI-driven automation and optimization ranked as the top digital transformation priority overall; manufacturers already investing heavily in AI demonstrated significantly stronger visibility into product and configuration performance data; and U.S. manufacturers are more likely to be heavily investing in AI (34%) compared to European manufacturers (20%), while European organizations continue to lag behind in configuration-level visibility and analytics maturity.
