How can aerospace and defense organizations modernize legacy systems without disrupting operations?

Legacy IT infrastructure is one of the industry’s most pressing challenges, limiting data accessibility, slowing AI‑driven analytics and creating operational and security gaps. With 36% of A&D leaders prioritizing infrastructure modernization, organizations are seeking ways to improve performance while supporting emerging technologies. Protiviti supports A&D organizations in modernizing technology foundations so they can reduce risk, improve reliability and accelerate innovation.

What AI adoption challenges are slowing progress for A&D organizations?

A&D executives cite the inability to deploy AI at a competitive pace (29%), uncertain ROI (29%), and increased third-party risk (27%) as their top hurdles. Many organizations also struggle with integration and workforce readiness, making it difficult to scale AI beyond early pilots. Protiviti helps organizations implement responsible AI frameworks and operational strategies so AI delivers sustained, enterprise-wide value.

What cybersecurity risks should A&D leaders prepare for in 2026?

Cyber threats are the #1 near-term risk for the A&D sector, driven by CMMC requirements and rapidly advancing, state-sponsored attack tactics. These attacks increasingly target intellectual property, supply chains and critical systems using methods such as zero-day exploits and AI-enabled reconnaissance. Protiviti helps organizations strengthen cyber resilience, improve third-party oversight and meet evolving regulatory expectations.

Where are aerospace and defense executives planning to invest most in the next two to three years?

The top investment areas include data privacy (48%), cybersecurity (42%) and infrastructure modernization (36%), reflecting the sector’s focus on safeguarding sensitive information and enabling advanced technology. These priorities support improved resilience, readiness for AI and compliance with expanding global regulations. Protiviti helps A&D organizations turn these investment areas into measurable improvements in performance, security and operational agility.

What long-term risks should A&D executives prepare for as they plan the next decade?

The top 10-year challenges include long-term security and privacy concerns (58%), evolving AI deployment risks (41%) and increasing sustainability requirements (38%). These areas reflect expanding regulatory expectations and the growing complexity of autonomous systems and digital platforms.

Top Risks 2027: Manufacturing & Distribution Insights

5 min read

2027 Executive Perspectives on Top Risks and Opportunities

For manufacturing and distribution industry leaders, the next few years will test more than the ability to withstand disruption. Protiviti's 2027 findings show leaders growing more optimistic about revenue, geographic expansion and ecosystem development, even as trade policy, talent shortages, supply chain uncertainty and cyber threats to operational technology (OT) continue to build. Leaders are responding with investment in supply chain resilience, operational improvements, infrastructure modernization, workforce skills and practical AI integration, and they're connecting those priorities to improve execution and agility rather than funding them separately. Read the manufacturing and distribution brief to see what separates leaders from laggards.

Explore the 2027 manufacturing & distribution insights

Watch the 2027 cross-industry webinar on-demand

Where M&D leaders see the greatest growth opportunities over the next two to three years

Manufacturing and distribution leaders grew more optimistic across all three growth areas. For an industry already built on supplier and logistics networks, ecosystem growth is less about new relationships and more about strengthening existing ones and coordinating better across supply chains.

70 %

see revenue potential as an opportunity

61 %

see opportunity in geographic expansion

62 %

see opportunity in ecosystem development

Explore featured solutions and industries

Explore how Protiviti helps manufacturers and distributors build resilient supply chains, develop their workforce, adopt AI and stay secure.

Artificial Intelligence (AI)

Prioritize, build and embed AI in real workflows, with governance and change enablement that help teams adopt it and deliver measurable results.

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Cybersecurity

Protect data and critical assets across every layer of the organization, from vulnerability management and identity to incident response and recovery.

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Workforce Transformation

Align people and business strategies to attract and retain talent, manage change and build a culture that keeps teams engaged through ongoing disruption.

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Supply Chain Optimization & Resilience

Build supply chain networks that hold up under disruption, with support across sourcing, procurement, supplier risk, intelligent warehousing and distribution.

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Manufacturing & Distribution

Work with teams that help manufacturers and distributors manage global suppliers, logistics and regulations while addressing cyber, technology and data challenges.

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Discover our full catalog of insight briefs for additional research findings and expert commentary related to the 2027 report on Top Risks and Opportunities.

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Insights by industry

Aerospace & Defense

CPG & Retail

Financial Services

Energy & Utilities

Healthcare

Higher Education

Private Equity

Non Profit

Technology, Media & Telecommunications

Insights by organizational role

Finance Teams

Information Security Teams

Internal Audit Teams

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Technology & Data Teams

FAQs

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What are the top risks for manufacturers and distributors in 2027?

Trade policy ranks first for the second straight year at 3.46 on a five-point impact scale. Talent availability, economic conditions, supply chain uncertainty, and skills and succession challenges all follow at 3.38. Trade, supply chain, geopolitical and regulatory risks all rose year over year. The pressure is cumulative rather than coming from one threat, and these forces can move from policy decisions to operational disruption faster than traditional planning cycles can adjust.

How is the talent shortage affecting manufacturers?

Five of the industry's top 12 near-term risks are workforce-related, and talent and labor availability rose to 3.38 from 3.18. The nature of the problem is changing. Labor costs still matter, but the bigger concern is whether organizations can find, develop and retain the human, technical and digital skills needed to operate in a more complex, technology-enabled environment.

Where are manufacturers and distributors investing in 2027?

Business process improvements lead at 50%, up from 44%, followed by supply chain management (44%), infrastructure modernization (36%) and cybersecurity (36%, up from 30%). Leaders see process improvement as the foundation for everything else, with modernization enabling it. Cyber investment rose even as cyber threats fell in the risk rankings, a reminder that legacy operational technology (OT) systems and IT/OT connectivity still leave manufacturers exposed.

How are manufacturers approaching AI?

Manufacturers and distributors are approaching AI with an operational mindset. 53% rank integrating AI with existing processes, technologies and the workforce as a top priority for maximizing AI value. AI-related risks rank lower than in cross-industry results, and advanced data analytics ranks only seventh among planned investments, suggesting leaders are balancing AI initiatives against more immediate operational needs.

Which long-term risks will have the greatest impact on manufacturer competitiveness?

Over the next decade, manufacturing and distribution leaders rank markets and economies (46%), supply chains and third-party ecosystems (42%), and customers and competition (38%) as their top long-term risks. Supply chains posted one of the largest increases, up from 34%, signaling that leaders see resilience as a lasting strategic priority rather than a short-term response to recent disruptions.