Manufacturers around the world are losing up to 7.5 per cent of their annual revenue due to inefficiencies caused by closed, hardware-dependent industrial automation systems, according to a new report by Schneider Electric.
Released on Tuesday in collaboration with research firm Omdia, the study found that mid-sized manufacturers, those with revenues between $500 million and $1 billion—lose an average of $11.28 million each year to downtime, limited data visibility, and interoperability issues.
Large manufacturers reported average annual losses of around $45 million, while smaller firms faced losses of approximately $2.87 million.
The report highlighted that manufacturers are grappling with legacy systems that add complexity, restrict operational flexibility, and raise maintenance and compliance costs.
The Executive Vice President for Industrial Automation at Schneider Electric, Barbara Frei, said the increasing dependence on closed systems has become a significant barrier to digital transformation.
“Closed automation limits choice, slows innovation and puts manufacturers at a disadvantage in a highly competitive market,” Frei said.
The findings are based on a survey of 400 senior decision-makers across the Americas, Europe, Africa, and the Asia-Pacific, spanning industries including food and beverage, pharmaceuticals, mining, oil and gas, and manufacturing equipment.
Schneider Electric noted that adopting open automation could help manufacturers reduce system integration complexity, enhance data flow, and unlock new opportunities for cost savings and innovation.
The Principal Analyst at Omdia, Anna Ahrens, said the financial and competitive pressure on manufacturers makes flexibility critical.
“In a world where product life cycles shrink, supply chains fracture and talent gaps widen, agility and flexibility aren’t optional. They are survival. Every quarter a business delays addressing the cost of closed automation ecosystems is another $1m-plus in lost value,” she said.
The study draws on ten C-suite interviews across various industries and a global survey of 320 participants in sectors including energy, chemicals, manufacturing, mining, warehousing, water, wastewater, and waste, conducted between September and October 2025.
