As 2026 approaches, industrial leaders face a landscape shaped by rising investment uncertainty, accelerating technological disruption, and geopolitical tensions. These pressures are stretching traditional models and forcing executives to rethink how they balance performance, speed, and sovereignty.

“Rather than viewing these pressures as constraints, companies can turn them into levers of competitiveness — but only if they are able to act decisively”, notes Nicholas O’Shea, Partner at Avencore.

The industrial trends for 2026 demonstrate the strategic decisions industrial companies face today.
Artificial intelligence, supply chain sovereignty, shorter development cycles, new supplier models, and CAPEX prioritization will shape the competitiveness of the global industry.

1 – Industrial AI: Moving from Roadmaps to Real-world Impact

Three years after ChatGPT’s emergence, 82% of executives see AI as a growth engine for 2026 (source: Xometry, 2026 Manufacturing Outlook Report). Artificial intelligence now permeates operations: processes, automation, predictive maintenance, people planning, demand forecasting. The rise of “smart factories” (robotics, digital twins, IoT) is accelerating, driven by the multiplication of task-specific AI agents. Gartner, for example, predicts that by 2030, 70% of large organizations will use AI solutions to forecast future demand (source: gartner.com).

In the months ahead, industrial leaders will look to move from “AI on a roadmap” to “AI in production with measurable ROI.” Achieving this calls for a “Test & Learn” mindset — deploying use cases without waiting for every digital brick (ERP, MES, PLM, data visualization) to be perfectly aligned.

 

Avencore’s Perspective — Methods to Capture the Full Value of Industrial AI

Industrial datasets are often partial or inconsistent — yet still exploitable. Companies should not wait for ideal conditions to activate AI. Today’s mathematical models can reconstruct coherent datasets from incomplete inputs and even generate synthetic data by recreating the operational environment and constraints.

  • Design tailored AI solutions with operations teams

AI only creates value when it is anchored in real needs, such as procurement, scheduling, distribution network design, replenishment optimization, and supplier risk assessment. The right approach favors rapid experimentation (MVPs), collaborative design, and precise alignment with the realities of the industry. What matters is not the tool itself but its operational fit.

Example Avencore Project — Unlocking 20% Additional Capacity with AI-enabled Production Planning

A manufacturer of complex industrial systems expected a significant rise in workload and needed to simulate the capacity resilience of its production lines. The combinatorial complexity — diverse routing, cycle times, and constrained resources — required a data science solution to explore millions of scenarios in seconds and converge to an optimum. Modeling the workstations, references, and physical constraints enabled the company to unlock more than 20% additional industrial capacity without additional CAPEX.

 

2 – De-risking Supply Chains and Reinforcing Industrial Sovereignty

Industrial supply chains continue to face repeated shocks: trade tensions, tariff surges, geopolitical instability, and dependency on sensitive regions for critical inputs (as illustrated by Chinese export restrictions on rare earths). Reshoring and nearshoring efforts are accelerating, supported by assertive public policies (e.g., the U.S. IRA).This issue is no longer purely economic; it  has become strategic at the level of states and industry ecosystems.. The priority is to strike the right balance between sovereignty, competitiveness, and flexibility.

 

Avencore’s Perspective — Measuring and Steering Sovereignty

Full sovereignty is never fully achieved; it is built, measured, and managed over time. Companies — individually or within their ecosystem — must prioritize their risk-mitigation levers. Reinforcing sovereignty begins with identifying strengths and vulnerabilities across five dimensions:

  • Geopolitical: How do global shifts (restrictions, tariffs, regulatory changes) affect access to raw materials, components, and inbound flows?
  • Technological: What level of dependency exists on external processes or critical production capabilities (e.g., mineral refining, active material production for batteries)?
  • Operational: How well does the organization anticipate and respond to external shocks?
  • Resources: What guarantees exist regarding skills, workforce, data quality, and energy access?
  • Capital: How much financial latitude exists to invest and react rapidly?

These dimensions can be consolidated into a “Sovereignty Control Tower” to simulate scenarios, anticipate risks, and recalibrate decisions continuously.

Example Avencore Project — Mapping Supplier Risks to Protect Margins Against U.S. Tariffs

A U.S. industrial player heavily exposed to American surtaxes on Chinese imports sought to secure its supply base and protect margins. Avencore identified alternative sources across ten Asian countries, built a comprehensive dashboard for visibility on critical suppliers, and deployed operational action plans enabling the project team to rapidly launch and execute industrial transfers.

 

3 – Accelerating Development Cycles for Complex Systems

As technological complexity rises and market cycles compress, shortening development timelines for complex industrial systems has become critical. Speed is no longer about simply “accelerating the V-cycle”: it requires rethinking the development logic itself to design faster, with lower risk and controlled cost. Industrial players must increasingly rely on proven technology bricks instead of starting from scratch for every new program.

 

Avencore’s Perspective — Focus Innovation on True Differentiation by Maximizing Reuse

In order to thrive in a competitive environment, it is crucial to stop reinventing existing capabilities. The approach: start from available technological building blocks, map their performance and maturity levels, and orient design choices to maximize reuse.
This relies on three levers:

  • Structured, proactive technology scouting

Jointly led by Procurement and Engineering teams outside project cycles, feeding a knowledge base covering available or emerging technologies, their maturity, cost, schedule, and certifications.

  • Strengthened supplier collaboration

Relations should evolve toward co-design: information exchanges under NDA, mutual roadmap understanding, and early supplier involvement in upstream reflection.

  • A value-driven engineering culture

The goal is no longer to optimize each subsystem but to maximize overall industrial performance: reduce non-recurring costs, secure schedules, and focus innovation resources on true differentiation.

Example Avencore Project — Cutting Nine Months from the Development of a Complex Space System

A space industry player sought to reduce development and industrialization lead times by 35% without compromising reliability or performance. Avencore supported a complete redesign of the development process: revisiting make-or-buy choices, identifying strategic partners to “buy” functional bricks, mapping functionalities and TRLs, and defining assembly scenarios. This new approach reduced average development cycles by nine months and halved the number of late-stage iterations.

 

4 – Supplier Relationships: From Transactional Management to Shared Value Creation

In 2026, industrial performance will depend as much on internal efficiency as on the quality of external cooperation within the “extended enterprise.” With tier-one suppliers, purely transactional approaches (competition and price pressure) have shown their limits: weakened partnerships, reduced visibility, and slower innovation. Companies investing in trust-based, long-term relationships with key suppliers will benefit from accelerated innovation, prioritized capacity, and better risk management.

 

Avencore’s Perspective — Becoming a “Preferred Customer”

Being a preferred customer means reshaping the traditionally imbalanced client–supplier relationship. It means creating conditions that motivate suppliers to invest in you with greater commitment. The objective is not only to manage supplier performance but to build a mutually beneficial relationship that encourages partners to bring their best ideas, conditions, and teams. This requires:

  • Making strategic supplier cooperation an explicit corporate priority

Suppliers must see collaboration as a company-wide initiative, supported at Executive Committee level. Clear alignment across all internal teams is essential.

  • Establishing a structured cooperation framework

Shared KPIs, joint roadmaps, regular routines, and collaborative platforms provide the backbone of effective cooperation.

  • Demonstrating organizational stability

Suppliers invest in reliable clients: continuity of contacts, consistent objectives, and controlled change management.

  • Adopting a true partnership mindset

Mutual commitments on forecasts, volumes, and payment terms ; proactive risk anticipation; recognition and sharing of created value. Early on, companies often need to give more than they receive — the foundation of long-term trust.

Example Avencore Project — Collaborative Governance to Reduce Supplier Costs

A defense manufacturer sought to strengthen supplier collaboration to reduce costs and secure critical parts. Avencore identified four priority partners and implemented a collaborative governance model: clarified expectations, shared indicators, joint reviews, and mutual commitments on resources and demand visibility. This resulted in better risk anticipation, smoother negotiations, and lasting cost improvements on recurring programs.

 

5 – Managing CAPEX with Discipline: Navigating Cost / Schedule / Performance Trade-offs

Global industrial investment fell by 26% in 2024, but the Americas moved against the trend. The region increased its share of worldwide industrial investment from 28% to 36%, largely driven by European companies expanding their footprint in the United States (source: Trendeo).
This surge in capital does not lower the execution bar. It raises it. Heightened uncertainty, combined with growing competition for qualified suppliers, engineering talent, and regulatory capacity, makes schedules more fragile, budgets more exposed, and risk mitigation more complex. In this environment, CAPEX success depends on disciplined, early trade-off decisions between cost, schedule, and performance.

 

Avencore’s Perspective — Three Principles for CAPEX Excellence

1) Clarify the definition of success (the cost-schedule-execution triangle).
Not all projects share the same business priority: for some, schedule is paramount (e.g., regulatory deadlines); for others, performance is non-negotiable; elsewhere, cost is the critical constraint. Formalizing this upfront is the first safeguard against deviation.

2) Translate this trade-off into concrete steering
Avencore’s CAPEX assessment framework shows that cost and/or schedule performance depends primarily on five levers: clear scoping, project-management rules, risk mitigation, strict budget and schedule tracking, and supply-chain architecture. Prioritizing maturity of these levers — aligned with the project’s chosen trade-off — significantly increases success rates.

3) Support decision-making at every stage

  • Design to meet the target: technical and functional requirements must be shaped early to stay within the cost/schedule envelope. The aim is to design “right,” not “more”.
  • Thoroughly vet changes: every modification should be evaluated for its impact on cost, schedule, and performance.
  • Align partners on project objectives: contracts and governance must reflect initial trade-offs, with clear shared goals, incentive/penalty structures, and visibility on risks and milestones.

Example Avencore Project — Restoring Control Over CAPEX Schedules and Budgets

A North American nuclear site operator was facing major budget and schedule overruns in its multi-unit refurbishment and life extension program. Avencore began by driving cost clarity and challenging project schedules and risk register assumptions. Using its CAPEX framework, Avencore worked with the client teams over several months to activate appropriate levers, related to scope, engineering design, sourcing practices and cost-focused collaboration with vendors. The result: validated dozens of days off critical path and $150m+ in cost reduction.