The manufacturing sector is embracing observability practices with growing fervor, as it seeks to bolster security, facilitate the integration of artificial intelligence (AI) and the Internet of Things (IoT), and enhance overall operational efficiency. This trend is articulated in a recent report by New Relic, entitled ‘State of Observability for Industrials, Materials, and Manufacturing,’ which provides an extensive examination of how observability is aiding manufacturers in navigating the multifaceted challenges and opportunities presented by the Fifth Industrial Revolution.
Transitioning To Industry 5.0
As manufacturers move beyond the paradigms of Industry 4.0—which emphasized advancements such as robotics, digital twin simulations, and virtual reality—they are now entering the realm of Industry 5.0. This new phase prioritizes AI, human-machine collaboration, and sustainable product development, necessitating more advanced methods for monitoring and managing intricate, technology-driven operations. Observability, offering holistic insights into system performance, emerges as an indispensable tool in this dynamic environment.
Driving Forces Behind Observability Adoption
According to the report, several pivotal factors are propelling the widespread adoption of observability within the manufacturing industry:
Security and Compliance: A considerable 50% of survey respondents indicated that heightened focus on security, governance, risk, and compliance is the primary motivator for deploying observability tools. As manufacturers manage sensitive data and intricate supply chains, the imperative for stringent security measures is greater than ever.
AI and IoT Integration: The integration of AI technologies is cited by 44% of organizations as a driving force for observability adoption. Meanwhile, 43% of respondents pointed to the adoption of IoT technologies as equally significant. These technologies are core to modern manufacturing operations, necessitating real-time monitoring and data analysis to guarantee peak performance.
Operational Efficiency and Uptime: Observability also plays a crucial role in boosting operational efficiency, with 40% of respondents reporting enhancements in this area. Additionally, 38% noted that observability contributes to improved system uptime and reliability, crucial for maintaining production schedules and meeting customer expectations.
Challenges and Return on Investment
Despite the clear advantages, manufacturers face significant hurdles in fully implementing observability tools. Budget limitations represent the foremost challenge, with 26% of respondents attributing their struggles to insufficient funding, and 25% indicating that the tools are prohibitively expensive. Complexity also poses a considerable challenge, with 23% of respondents noting that the proliferation of monitoring tools complicates the deployment process.
Nevertheless, the return on investment (ROI) for observability remains compelling. Manufacturers report a median annual ROI of 100%, with those achieving full-stack observability experiencing returns as high as 114%. Furthermore, organizations with mature observability practices—that is, those deploying a multitude of capabilities and extensive monitoring—reported a median annual ROI of 250%.
Looking to the Future
Projecting into the future, the report suggests that manufacturers will continue to expand their observability capabilities. By mid-2026, the majority of respondents anticipate implementing advanced monitoring tools, including AI and machine learning (ML) model performance monitoring, with over 78% planning to deploy these technologies. Additionally, 46% of organizations aim to streamline their observability tools within the next year to maximize investment value.
As manufacturers increasingly incorporate AI, IoT, and other advanced technologies into their operations, the role of observability will become ever more critical. It will serve as the bedrock for ensuring security, reliability, and efficiency, thus enabling the manufacturing industry to meet the challenges of the future head-on.