Tacton, a global leader in Configure, Price, Quote (CPQ) solutions for manufacturers of complex, highly configurable products, today released its annual State of Manufacturing report . The report reveals that increasing product complexity, despite continued investments in digital transformation and AI, is exposing critical cross-functional gaps.
The study, based on a survey of 280 manufacturing executives in eight countries, revealed that 67% now describe their products as “very” or “extremely” complex, an increase of 20 percentage points in just one year. At the same time, only 7% use consistent product configuration rules across all teams and systems involved in sales and manufacturing, which is crucial for mitigating margin risks stemming from siloed functions and data.
The report highlights an emerging reality in the industry: While digital transformation has modernized operations, increasing complexity reveals discrepancies between systems, teams, and data across the entire manufacturing cycle.
“Digital transformation has laid the foundation, but many manufacturers are still working with disconnected systems, fragmented data, and inconsistent processes,” said Klaus Andersen, CEO of Tacton. “The companies that will lead the next phase of industrial growth are those that understand configuration logic as the backbone of their entire lifecycle. With the ever-accelerating adoption of AI, the companies that will benefit most are those that build on a connected foundation of shared data, standardized processes, and lifecycle-wide transparency.”
Complexity is no longer limited to engineering.
The report showed that complexity now affects every stage of the manufacturing value chain:
- 43% of manufacturers cite individual customization as their biggest challenge when preparing offers.
- 62% are experiencing moderate to significant margin losses between supply and delivery.
- 40% are “not very” or “only somewhat” confident about delivery commitments when the offer is being prepared.
- 93% of development teams have to expend a medium to very high amount of effort to manage the configuration logic of different, unconnected systems.
- Only 23% automatically generate validated manufacturing bills of materials directly from sales quotes.
The results indicate that while manufacturers have made progress in modernizing their operations, handoffs between design, quotation, production and supply chain continue to stall at every stage.
AI continues to gain momentum, but the fundamentals are more important than ever.
The report also shows that manufacturers are rapidly increasing their investments in AI and automation:
- 79% are actively investing in AI or examining its potential applications, compared to 64% in 2025.
- AI-powered automation and optimization were ranked as a top priority in the overall digital transformation.
- Manufacturers who have already made extensive investments in AI showed significantly better visibility of product and configuration performance data.
- Manufacturers in the USA are more likely to invest heavily in AI (34%) than European manufacturers (20%), while European companies continue to lag behind in terms of configuration-level transparency and analytics maturity.
However, the Tacton study warns that AI alone will not be able to handle the complexity of manufacturing without reliable, interconnected data throughout the entire lifecycle.
Building a better connected manufacturing lifecycle
The report reveals a broader shift in manufacturers’ approaches to growth, customization, and operational scaling. Faced with increasingly complex product portfolios and ever-rising customer expectations, leading companies are working to better integrate commercial, technical, and operational processes through shared data and a unified configuration logic.
Manufacturers with stronger connectivity across the entire product lifecycle are more likely to reduce downstream rework, improve delivery reliability, secure their margins, gain greater transparency regarding performance at the configuration level, and use AI more effectively in sales and operations.
About the report
The State of Manufacturing 2026 report is based on a survey of 280 manufacturing executives in North America and Europe and analyzes six critical phases of the manufacturing lifecycle, from managing increasing complexity and customer-specific offerings to protecting margins, improving connectivity, increasing data transparency, and optimizing through AI. The findings are broken down by business unit, region, and digital maturity to reveal how manufacturers are making their operations more connected and resilient.
About Tacton
Tacton is a global leader in software for manufacturers of complex, highly configurable products. Tacton delivers the Buyer-Centric Smart Factory, which connects customer engagement with engineering and order fulfillment through a single source of truth. By integrating Configure, Price and Quote, Configuration Lifecycle Management (CLM), and Configured Order Fulfillment (COF), Tacton helps manufacturers manage complex processes, protect their margins, and ensure reliable delivery throughout the entire product lifecycle.
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