State of the Industrial Manufacturing Industry: 2025

Industrial manufacturing supply chains operate in one of the more complex environments in recent memory. Variables like global disruptions, rising input costs, and increasing customer demands continue to challenge even the most sophisticated supply chains. That means that manufacturers need more than incremental improvements to keep their heads above water; they need connected data, real-time decision-making, and digital-first operations.

In this article, we first examine the major challenges facing industrial manufacturers today, how o9’s platform helps address them and, finally, what real-world success looks like through world-class transformation case studies.

Eight Key Challenges Facing Industrial Manufacturers

From end-to-end planning to supplier collaboration, complexity is the new norm in manufacturing. Here are the eight key areas we see many manufacturers feeling the pressure:

1. Product complexity and configuration challenges
   Engineer-to-order (ETO) and configure-to-order (CTO) products often involve thousands of components and frequent engineering change orders. Long lead times clash with short customer delivery expectations, and part revision cycles make inventory planning difficult. The result is inflated inventory, missed promise dates, and high freight costs.
2. Disconnected sales and supply chain planning
   In deal-based sales environments, opportunities sit in CRM systems while supply chain planning happens elsewhere (often in spreadsheets). This disconnect limits visibility into demand drivers and makes it difficult to assess the financial and operational impact of sales shifts.
3. Project-based milestone management
   For products requiring field installation like wind turbines or elevators, planners need to align production with project milestones. Delays in design, payment, or construction schedules are hard to manage with static tools, often leading to rushed orders or idle inventory.
4. Multi-tier manufacturing networks
   Complex routings, constrained capacity, and material availability make it difficult to coordinate across component and assembly plants. Labor shortages, unavailable tooling, and missed dependencies frequently lead to stoppages, overtime costs, and reduced OEE.
5. Uncontrolled inventory growth
   Many companies use inventory buffers to manage uncertainty but lack clear visibility into what’s driving growth. Poor forecasts, outdated targets, and minimum order quantities all contribute to excess working capital and write-offs.
6. Limited OEM–supplier collaboration
   Most collaboration is still one-way. While OEMs share demand schedules, suppliers often lack tools to analyze shifts in demand or provide commitments. This results in bullwhip effects across the supply chain and reactive procurement decisions.
7. Gaps in risk management
   Global disruptions are common, but many tools don’t connect risk signals to live transactional data like open POs or work orders. This leaves planners guessing which risks are relevant and how to respond.
8. Business model transformation
   New go-to-market models, such as direct-to-consumer, and the rise of connected product ecosystems (e.g., telematics) are changing the game. Many manufacturers collect rich operational data but haven’t built the infrastructure to act on it.

How o9 Helps Industrial Manufacturers Adapt

o9’s platform helps industrial manufacturers shift from reactive, spreadsheet-based processes to a digital operating model that brings speed, visibility, and alignment across every function.

• Integrated Business Planning (IBP)
  o9 enables real-time coordination across Sales, Supply Chain, Manufacturing, Procurement, and Finance. Instead of managing S&OP through static reports and slide decks, teams collaborate on a single platform—viewing dashboards, running simulations, and aligning around shared KPIs.
• Demand Planning
  o9 supports both automated demand generation and collaborative demand management. The platform integrates with CRM systems to bring in sales opportunities and automatically identifies cycle-over-cycle changes. ML-based forecasting uses internal and external indicators like market trends or weather data to proactively adjust plans. Planners can align on forecasts weekly, monthly, or quarterly, depending on business needs.
• Supply Planning
  With AI-powered segmentation and advanced solvers, o9 generates level-loaded master production schedules, purchasing requirements, and distribution plans. Planners can simulate multiple supply plans and evaluate their impact on cost, margin, and service. Multi-echelon inventory optimization also sets intelligent inventory targets and flags potential issues before they become bottlenecks.
• Supplier Collaboration and Risk Management
  The o9 Supplier Relationship Management suite connects OEMs and suppliers on a single platform. Planners can collaborate on forecasts, orders, and capacity, while supplier performance is automatically tracked with delivery and quality KPIs. Integrated risk management highlights geopolitical events or disruptions and links them to specific orders, enabling targeted mitigation.

Case Study: HPE

As a global tech leader, HPE was up against major planning complexity: over 100,000 SKUs, 12-level BOMs, and 72-week lead times clashed with customer expectations for immediate delivery. Their Salesforce pipeline included over 4 million opportunities, and they relied on 60+ contract manufacturers with limited inventory visibility.

After a failed implementation with another provider, HPE adopted o9 and made rapid gains. The team could now evaluate deals as small as $1M in under 24 hours (down from a $5M threshold), increasing deal coverage 10x and reducing response time by 70%.

By integrating deal and demand planning, using ML for deal predictability, and deploying a two-step supply planning process (Final Requirements Plan and Supplier FRP), HPE saw:

• $300M+ in inventory savings
  
• $27M reduction in carrying costs
  
• 63% improvement in win rates
  
• Customer lead time improvement from 89% to 93%
  
• A single source of truth for planning and execution

Case Study: Marelli

This Tier 1 automotive supplier contended with volatile OEM forecasts and unreliable supplier collaboration. Capacity agreements often broke down under short-term fluctuations, creating supply disruptions and operational inefficiencies.

Marelli used o9 to:

• Triangulate OEM forecasts with IHS data and production schedules to improve forecast accuracy
  
• Run constrained S&OP cycles with what-if simulations
  
• Implement a request-and-commit process to improve supplier accountability
  
• Establish a cross-functional IBP process, including Finance, Engineering, and key suppliers

The results were significant:

• 30% reduction in premium freight costs
  
• 6% improvement in inventory turns
  
• 6–15 point gain in forecast accuracy
  
• Over 88% platform adoption across the organization

Conclusion

The industrial manufacturing sector is certainly under pressure to change, but it’s also full of opportunity. That means that complexity will only increase, but so will the tools available to manage it.

o9 enables manufacturers to move from siloed, manual planning to an integrated, intelligent operating model, driving better decisions, faster responses, and more resilient operations. As companies like HPE and Marelli demonstrate, the result is not just more efficiency, but also stronger margins, smarter resource allocation, and a foundation for lasting growth.

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