Tech is advancing at an unprecedented rate.
ERP systems are shifting from costly, custom-built setups to more accessible cloud-based options. AI is helping people work more efficiently, automating tasks, and learning new skills in areas they might not have tried before. By 2026, these technologies will be standard in supply chains.
Manufacturers who have not adopted integrated systems by then, will struggle to keep up with the speed, transparency, and accuracy that others already provide. As the landscape around us changes, one thing becomes clearer:
The time of relying on spreadsheets is coming to an end.
Key highlights:
- 37% of manufacturers have no ERP experience
- 22.9% are starting to use or already using ERP
- 80% of manufacturers would invest more in smart manufacturing tech
- 94% of spreadsheets contained mistakes and errors
- 66-day lead time reduction in switching from spreadsheets to ERP
Manufacturers are falling behind with spreadsheets
According to the MDPI article, Key Drivers of ERP Implementation in Digital Transformation, published on MDPI, 37% had no ERP experience, while 22.9% were either starting to use or already using expensive legacy systems.
This means the other participants in the research are still relying on spreadsheets, and other paper-based methods to manage their businesses. The biggest issue with this approach is that spreadsheets are great for quick data views, but they’re not ideal for long-term data storage. Still, the manual entry and the inability to perform automated analysis with that data mean spending more time collecting and typing data than using it to make decisions.
And when more than one person updates the spreadsheet, chaos ensues.
I’ve seen this play out in real manufacturing environments. One early company we worked with ran sales, production, and fulfillment out of a single massive shared spreadsheet. Every order lived there: sales ownership, production status, shipping details, all manually updated by multiple teams. Rows were constantly being cut, pasted, and reordered as jobs moved from in production to ready to ship.
Over time, the data became unreliable. Ship dates would contain a sales rep’s name because someone accidentally overwrote a cell, or finished orders would sit on the floor for days because a row was never moved and no truck was scheduled. Nothing was wrong with the factory itself. The breakdown happened because there was no single source of truth and no guardrails around how data was updated.
By the time someone catches it, orders need rescheduling, customers need explanations, and days are spent reconciling numbers instead of running production. Handling large amounts of data in Excel or similar tools is too risky.
By the time someone catches it, orders need rescheduling, customers need explanations, and days are spent reconciling numbers instead of running production. Handling large amounts of data in Excel or similar tools is too risky. There are not many good ways to check or control the data, so mistakes often happen.
Spreadsheets work fine for what they are, but they can’t enforce rules, catch inconsistencies, or show how one decision affects everything else. When data depends on manual updates across multiple people, small mistakes quietly turn into operational problems.
Why Spreadsheets Fail at Scale
According to Spreadsheet quality assurance: a literature review, research on spreadsheet quality problems over a 35.5-year period from January 1987 to June 2022, a massive 94% of spreadsheets contained faults.
The reason for this high error rate is that, over the decades, the responsibility for managing spreadsheets shifted from a highly qualified IT specialist to an additional task for others to perform. Realistically, the only way to use spreadsheets effectively as a tool for managing your business is to hire someone to become your spreadsheet master. And even that leads to issues in and of itself, as the data is now extremely siloed and potentially accessible only to one person.
That’s why we predict that, in 2026, you’ll see more and more manufacturers shifting toward adopting ERP systems into their processes, fueled by AI and automation advancements.
Implement an ERP in 2026 or lose your competitive edge
According to Grand Review research, in 2022, the ERP software market was valued at $55 billion, a figure forecast to grow 11% year-over-year.
The valuation is due to more and more organizations looking for ways to make their processes more efficient, improve data collection to make better business decisions, and take advantage of mobile and cloud technologies.
According to a Deloitte survey, 80% of 600 manufacturing leaders said they would allocate at least 20% of their improvement budgets to smart manufacturing. And it’s not just large enterprises adopting these systems, as small and medium-sized businesses are moving to cloud-based ERP, a more affordable alternative to traditional systems with the added benefit of being accessible from anywhere and highly compatible with other software.
Depending on your sources, implementing an ERP can help your company save money by cutting inventory costs by up to 30% and reducing raw material expenses by about 15%.
I’ve seen companies sitting on hundreds of thousands and sometimes millions of dollars tied up in inventory they didn’t actually need. Raw materials, work-in-process, and finished goods were overproduced because planning was done in spreadsheets that couldn’t accurately forecast demand or balance capacity. That inventory represented cash already spent that was just sitting on shelves, taking up warehouse space and limiting flexibility. In some cases, simply moving away from spreadsheet-based planning freed up millions in working capital.
One example is On Foot Innovations. They chose and implemented Digit as their manufacturing ERP software. They shared that after fully onboarding with Digit, they reduced their lead times from 16 weeks to 4 days.
Drastically reducing this lead time, enabled them to increase capacity, handle more orders, and achieve a larger output.
Cloud-based ERP: Accessible and scalable
As well as improving your processes and saving you money and time in the long run, another great thing about modern ERP solutions is that they’re very easy to fine-tune and tailor to your specific workflows.
Take, for example, Digit. It comes with native integrations, so you can easily plug-and-play Digit with your favorite tools and ensure that your sales, production, inventory, and shipping are all interconnected. But many tools now come with APIs, allowing you to build your own integrations and define exactly how software and hardware should interact.
In the past, coding was intimidating. But with the rise of AI and vibe-coding, the entry level to customizing your software has been lowered, allowing manufacturers to flesh out their tech stack and even learn coding along the way.
As technologies and ways of working evolve on a day-to-day basis, the importance of getting set up with an innovative manufacturing system, such as an ERP, becomes imperative if you want to keep up with the competition in this new revolution.
Teams often start with flexible tools like spreadsheets because they work quickly and reflect how the business actually runs. At Prodigy, lightweight systems were stitched together using Google Sheets and Zapier to uncover inefficiencies, improve throughput, and support early growth. In the short term, this approach worked. Over time, however, those same tools became execution systems that still required manual updates and broke when sheets or automations failed. The limitation was the lack of a stable system underneath it.
Once a manufacturer starts selling through multiple channels, having a single system to manage orders, inventory, and production stops being optional. That insight directly informed how Digit was built.
That experience helped shape the philosophy behind Digit. Core execution is handled through structured, reliable workflows, while integrations, data, and automation are used to extend the system and surface insights where flexibility is needed.
As more manufacturers adopt cloud-based ERP and layer automation on top of stable systems, expectations around speed, visibility, and coordination continue to rise. By 2026, these capabilities are likely to be part of standard operations rather than differentiators. For small manufacturers, the conversation is shifting from whether ERP is necessary to when it makes sense to transition away from spreadsheet-based execution.
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