Over three-quarters (77%) of manufacturers expect physical artificial intelligence (AI) to have a significant or transformational impact on warehouse operations, while 75% anticipate the same across assembly and manufacturing, research from Tata Consultancy Servies (TCS) has revealed.
The Future-ready manufacturing: TCS physical AI readiness report 2026 was based on a survey of 300 manufacturing CXOs and vice-presidents across North America and Europe, representing sectors such as automotive, electronics and high-tech manufacturing, industrial equipment and machinery, process industries, and aerospace and defence.
It noted that as enterprise-wide deployment of physical AI ramps up, manufacturers were committing to long-term investment in a fast-growing area. As manufacturers increased their AI investments, the focus is shifting from standalone automation projects to larger physical AI ecosystems.
It highlighted how companies see physical AI as a people-first transformation. Instead of replacing the workforce, manufacturers are using intelligent systems to help employees work more safely, efficiently and productively while supporting workforce redeployment where needed in a human plus AI operating model.
Among the data generated, the report highlighted four key findings: Investment is long term, logistics is a major opportunity, there is a focus on augmenting workers, and governance remains a barrier to scale.
For example, no surveyed organisation plans to reduce physical AI investment, while 26% plan to increase spending, and as many as 72% expect significant or transformational impact across logistics and material movement. Just over two-fifths expect “significant” workforce benefits, particularly through improved safety and support for employees working in hazardous, repetitive or complex environments.
About the same amount of firms reported unclear or no formal accountability structure for physical AI failures, while 40% said they were unprepared for emerging regulatory requirements. TCS said this gave a clear signal as to where manufacturers should focus as deployment accelerates.
The report also highlighted how enterprises were preparing to scale physical AI across factories, warehouses, logistics networks, maintenance operations and quality management environments. Manufacturers are preparing for longer value-realisation timelines, underscoring, sustained transformation over short-term pilots, said TCS.
High impact was expected in warehouse operations, with 77% anticipating significant or transformational impact, followed by assembly and manufacturing operations at 75%, and logistics and material movement at 72%.
Human-centric transformation was already being seen to be taking shape. Some 42% of manufacturers expect significant workforce augmentation through physical AI by improving safety and supporting workers in complex, hazardous or repetitive industrial environments.
Looking at where companies were along their physical AI journey, the study found that 68% of manufacturers remained in non-deployment or experimental stages, with legacy system integration, data infrastructure and workforce skills identified as the primary paths to enterprise-scale deployment.
Assessing what insights the study offered, TCS president of manufacturing Anupam Singhal said physical AI was taking intelligence beyond the screen and onto the shop floor, where machines sense, adapt and act in real time: “The manufacturers that scale it successfully will define the next era of manufacturing. TCS’ ‘infrastructure to intelligence’ approach positions them to lead that transformation.
“With all the manufacturers in our study planning to either maintain or increase the investment, the direction is clear: towards more resilient, adaptive, and future-ready manufacturing enterprises.”
TCS has a partnership with Google Cloud, following the March 2026 launch of the TCS Physical AI Gemini Experience Centre in Michigan, US. The centre is designed to help manufacturer explore, test and scale physical AI use cases for safety, quality and operational efficiency.
Offering opinion on the survey results, Kevin Ichhpurani, president of Global Partner Ecosystem at Google Cloud, said: “Physical AI is moving manufacturing from digital insight to autonomous real-world action. Through our partnership with TCS, we are bringing Gemini’s multimodal reasoning to the factory floor, enabling robots and systems to operate safely and intelligently in complex industrial environments.”
