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June 26, 2024

Data in Manufacturing and Smart Industry Summit DACH 2024: Key Insights

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This article aims to highlight the key insights from the Data in Manufacturing and Smart Industry Summit DACH 2024, which focused on AI’s possibilities and limitations in enhancing business practices.

In the following sections, we will explore the opportunities presented by AI and smart technologies and delve into the limitations and obstacles that hinder the widespread adoption of AI in the manufacturing sector.

Conference overview

The Data in Manufacturing and Smart Industry Summit DACH 2024, held on June 6-7, 2024, in Munich, brought together industry leaders, innovators, and experts to explore the forefront of AI-driven digital transformation in manufacturing.

This summit provided a platform for discussing the challenges, best practices, and emerging trends shaping the future of smart factories and industrial data applications.

During the conference, Michał Tarkowski, AI Engineering Manager at Addepto, presented a case study depicting how AI solutions can enhance testing efficiency in the manufacturing industry. The presentation, titled “Enhancing Testing Efficiency with AI-Based Parameter Optimization and Production Simulation,” delved into the application of AI technology in optimizing manufacturing processes, particularly parameter optimization and production simulation.

Businesses, including those in manufacturing, are extremely interested in Machine Learning and Generative AI due to the potential benefits promoted by vendors. However, transforming that enthusiasm from a proof of concept into a functional product is proving challenging. Companies face numerous technical complexities, including technical debt from outdated technology stacks, a shortage of skilled personnel, and issues with data governance, security, and privacy. It is crucial to address these fundamental issues to demonstrate a real return on investment (ROI). This will be a significant challenge in the coming years.

Edwin Lisowski, CGO and co-founder of Addepto.

Enhancing Testing Efficiency with AI-Based Parameter Optimization and Production Simulation
[Addepto Case Study]

The conference, however, addressed a broader spectrum of topics critical to modern manufacturing, including AI and digital twins, software-centric automation, cybersecurity, real-time analytics, and the burgeoning role of generative AI models in production processes.

By delving into these areas, the summit highlighted how manufacturers can harness technological advancements to optimize operations, enhance productivity, and maintain a competitive edge in the global market.

Feasibility of Gen AI projects

The Data in Manufacturing and Smart Industry Summit DACH 2024 highlighted significant challenges in the feasibility and adoption of generative AI (GenAI) technologies within the manufacturing sector. Despite the excitement around GenAI, only a limited number of Proof of Concept (PoC) projects are currently considered feasible for real-world applications, while many initiatives remain in the experimental phase.

The transition from experimental PoCs to fully operational systems is a critical challenge, and the gap between PoC and production-ready solutions indicates several underlying issues:

  • GenAI solution validation
  • Scalability
  • Systems interoperability
  • Data-readiness

Manufacturing environments require solutions that can withstand real-world conditions and seamlessly integrate with existing systems, which modern, API-first GenAI solutions often struggle to achieve.

Additionally, concerns around safety and data privacy, the opaque nature of AI’s decision-making processes (black box responses), and the potential for overlooking critical information add to the complexity of adopting GenAI in production settings.

A specific challenge arises in the context of LLM-powered knowledge graphs, where there is a pressing need for more contextual and accurate responses.

Retrieved Augmented Generation (RAG) is seen as a promising method for enhancing the context-awareness of LLM-generated answers, potentially making them more valuable and reliable for business applications.

However, the practical application of RAG and similar technologies is still in its infancy, requiring further development and validation.

Lack of AI use cases

Another significant challenge discussed at the conference was the lack of well-defined AI use cases among manufacturing companies. Many organizations struggle to pinpoint practical applications for AI within their operations, which hampers their ability to leverage these technologies effectively. This issue is often rooted in the difficulty of clearly defining business challenges and aligning them with technological capabilities and data strategies.

The main reason seems to be the lack of proper collaboration between business, technology, and data departments, which often function in silos.

Without a clear understanding of the specific business problems AI can address, evaluating the data that would “feed” the AI solutions, and assessing the capacity of technical infrastructure, AI initiatives tend to fail.

Identifying appropriate AI use cases is essential for moving beyond theoretical discussions to practical, impactful AI applications.

Manufacturing Case Study

LLM quality concerns

A significant hurdle to production deployment for large language models (LLMs) is the quality evaluation process. General-purpose LLMs, despite the buzz surrounding them, are designed for individual consumers, and substantial considerations stop their implementation at scale within corporate environments.

Besides the aforementioned concerns about data security and black box responses, businesses have doubts about these models meeting high standards of accuracy and reliability.

However, this gap presents an opportunity for AI vendors to focus on customizing, tailoring, and enhancing available LLM models to meet specific business needs and accuracy standards.

ContextClue has developed a comprehensive Retrieval-Augmented Generation (RAG) application framework designed to tackle the quality evaluation problem of Large Language Models (LLMs).

This framework employs a combination of algorithms, metrics, LLMs, and other complex logic to ensure that the responses generated by LLMs are accurate and reliable based on the company’s knowledge base.

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Calculating business impact and ROI

AI can provide a wide range of benefits, including increased efficiency, cost savings, revenue growth, improved decision-making, and competitive advantages. However, these benefits span various technologies, processes, and functions, making it challenging to adopt a one-size-fits-all approach to attributing monetary value.

Calculating the business impact and return on investment (ROI) of AI projects poses one of the significant barriers to AI adoption in manufacturing.

The challenges include:

  • Lack of necessary data
    This lack of precise data hampers the ability to measure the tangible benefits derived from AI initiatives.
  • Dynamic performance of AI models
    AI models’ performance can vary over time, necessitating continuous monitoring to prevent value decay, which can erode the gains made.
  • Data quality
    Without high-quality, reliable data, the insights and efficiencies promised by AI cannot be fully realized, leading to skewed or inconclusive ROI assessments.
  • Skilled workforce requirement
    Realizing the full benefits of AI requires skilled workers to develop, deploy, and maintain these systems, which adds to the investment costs that must be accounted for.

Without clear metrics and quantifiable outcomes, it becomes challenging for organizations to justify the initial investments required for AI initiatives and to scale successful projects. This lack of clarity in measuring ROI can hinder the broader adoption of AI technologies as businesses struggle to see tangible benefits and make data-driven decisions about further investments.

Importance of AI and ML-based Simulations

Despite the current hype surrounding Generative AI, it is Machine Learning (ML) that truly forms the foundation for transformative advancements in the manufacturing industry.

ML-based simulations offer tangible benefits across the entire manufacturing lifecycle, from design and engineering to production optimization, predictive maintenance, and quality control. These tools enable manufacturers to innovate rapidly and efficiently, driving significant improvements in productivity and product quality.

By leveraging ML, manufacturers can make data-driven decisions, reduce downtime, enhance operational efficiency, and maintain a competitive edge in the fast-paced industrial landscape.

Simulations using Artificial Intelligence (AI) and Machine Learning (ML) are a crucial area of focus in the manufacturing industry. These simulations go beyond theoretical exercises; they involve replicating real-world machinery and processes in a virtual environment. By doing so, companies can predict the best parameters for their machines and processes.

Additionally, these simulations allow for the exploration and identification of optimal combinations and configurations within the virtual setup. This capability is invaluable for improving efficiency, reducing costs, and minimizing downtime. By experimenting in a simulated environment, manufacturers can avoid the risks and expenses associated with real-world trial and error, leading to more informed decision-making and optimized operational performance.

The popularity of Digital Twins

Digital twins are currently among the most in-demand and value-proven AI solutions in the manufacturing industry due to their significant operational improvements and cost-saving potential.

These virtual replicas of physical assets and processes offer numerous benefits:

  • Process Optimization
    Digital twins analyze vast amounts of data from production lines, equipment sensors, and historical runs to identify inefficiencies, bottlenecks, and areas for optimization, helping manufacturers fine-tune processes, reduce waste, minimize defects, and ensure consistent quality control.
  • Predictive Maintenance
    By leveraging data from sensors, maintenance logs, and machine learning models, digital twins can accurately predict equipment failures or maintenance needs.
  • Virtual Testing and Simulation
    Digital twins provide a virtual environment for testing and simulating manufacturing processes, reducing the need for physical prototypes.
  • Real-time Monitoring and Optimization
    AI-powered digital twins continuously monitor and analyze real-time data from the physical manufacturing environment, enabling real-time adjustments and optimizations to processes, resource allocation, and production schedules.

The integration of Generative AI with digital twins further enhances their capabilities. Generative AI can accelerate the development of digital twins, create universal models for diverse applications, augment training datasets with synthetic data, and conduct advanced predictive modeling.

It can also validate AI model outputs against operational constraints, provide natural language interfaces for user interactions, and streamline data management through advanced data compression and transfer techniques. By combining the predictive power of generative AI with the real-world modeling and simulation capabilities of digital twins, manufacturers can achieve unprecedented levels of process optimization, predictive maintenance, design innovation, and data-driven decision-making.


The manufacturing industry is still in the early stages of exploring the potential of generative AI. While there is considerable interest and a sense of the immense possibilities GenAI offers, most companies are just beginning to grasp how to integrate these advanced technologies into their workflows. This nascent phase underscores both the promise and the current limitations of GenAI in manufacturing.

Moreover, GenAI and its astonishing possibilities should not overshadow the more “traditional” AI and ML techniques, which, especially in the manufacturing industry, can bring many reliable benefits. Among these AI-powered and market-proven solutions, Digital Twins seem to be one of the most promising.



Artificial Intelligence