Tacton has published its annual State of Manufacturing report, based on a survey of 280 manufacturing leaders across North America and Europe.
The findings point to a widening gap between investment in digital tools and manufacturers' ability to connect sales, engineering, production and delivery. Rising product complexity is central to that challenge, with 67% of respondents describing their products as very or extremely complex, up 20 percentage points from a year earlier.
That complexity is affecting more than engineering teams. The report found that 43% of manufacturers cite customisation as their main quoting challenge, while 39% said buyers struggle to navigate product options, causing delays and stalled purchasing decisions.
Manufacturers also expressed limited confidence in turning quotes into reliable delivery commitments. Four in 10 said they were not very confident or only somewhat confident in delivery commitments at the time of quote, suggesting many sales promises are still made without clear visibility into downstream production constraints.
Margin pressure is another recurring theme in the data. According to the report, 62% of respondents reported moderate to severe margin erosion tied to disconnected systems and processes between quote and delivery.
Fragmented systems
A central finding is the lack of shared product logic across the manufacturing lifecycle. Only 7% of respondents said they define configuration rules once and reuse them across every team and system involved in selling and building products.
That low level of reuse suggests many companies still rely on separate data structures and handoffs between commercial and operational functions. The report also found that 93% of engineering teams spend moderate to very high effort maintaining configuration logic across disconnected systems.
In practical terms, this fragmentation affects how quickly and accurately manufacturers can move from a customer request to a deliverable order. Just 23% said they automatically generate valid manufacturing bills of materials directly from sales quotes, leaving most companies to close the gap through manual work or disconnected software tools.
Klaus Andersen, Chief Executive Officer at Tacton, said the problem is not a lack of digitisation, but how many manufacturers have implemented it.
"Digital transformation laid the foundation, but many manufacturers are still operating with disconnected systems, fragmented data and inconsistent processes," said Klaus Andersen, Chief Executive Officer at Tacton.
He said the next phase of change will depend on connecting those systems and processes around shared configuration data.
"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 organisations seeing the greatest impact are building on a connected foundation of shared data, consistent processes, and lifecycle-wide visibility," Andersen said.
AI push
The survey found that 79% of manufacturers are investing in or exploring artificial intelligence, up from 64% the previous year. AI-driven automation and optimisation ranked as the top digital transformation priority.
Even so, the report argues that AI spending will have limited effect if the information used by sales, engineering and production teams remains inconsistent. Manufacturers already investing heavily in AI showed stronger visibility into product and configuration performance data, indicating that better data discipline may be a prerequisite for broader gains.
The regional split in investment was also notable. US manufacturers were more likely to be investing heavily in AI, at 34%, compared with 20% in Europe. European organisations, meanwhile, lagged in configuration-level visibility and analytics maturity.
Buying friction
The results also show how internal complexity can spill into the customer buying experience. When product options become harder to understand and customise, buyers face longer decision cycles and greater uncertainty over what can actually be delivered.
This is particularly important for manufacturers selling configurable products, where sales teams often need to balance customisation demands with engineering feasibility, cost control and production lead times. If those functions are not working from the same product logic, quoting accuracy and delivery confidence can deteriorate quickly.
The report covers six stages of the manufacturing lifecycle, from complexity management and customised quoting to margin protection, connectivity, data visibility and the use of AI. Its overall message is that many manufacturers have modernised individual parts of their business, but far fewer have connected those parts into a single operating model.
For companies trying to protect margins while offering more tailored products, that gap may become harder to ignore. Only 7% of respondents said they use the same configuration rules across the full lifecycle.