Making Generative AI Work for Everyone in a Factory Setting
Key Highlights
- Two key applications for Gen AI have emerged: As a universal translator and as a tamer of unstructured data.
- Grounding AI in verified data sources prevents inaccuracies and ensures safety in industrial applications.
- Governance and security are critical to unlock insights from unstructured data using large-language models.
- When implemented thoughtfully, with grounding and governance, Gen AI bridges the gap between complex systems and human ingenuity.
In our last discussion, we framed Industrial AI as a comprehensive toolbox filled with specialized instruments. We argued that generative AI, for all its power, is the newest tool in this box, not a replacement for the entire workshop. Now, it’s time to examine that new tool more closely. To truly leverage its potential, we must move beyond the generalized hype and understand its specific strengths and weaknesses in the demanding industrial environment.
From our research and conversations with manufacturers across the globe, two primary high-impact applications for generative AI have clearly emerged. The first is its revolutionary role as a new type of user interface. The second is its unprecedented ability to unlock knowledge from the vast sea of unstructured data that permeates every factory.
The Rise of the "Gen UI": AI as a Universal Translator
Perhaps the most immediate and profound impact of generative AI in industry is its function as a "generative user interface" or "Gen UI." For decades, interacting with complex industrial software and data systems required specialized training. Engineers needed to learn specific query languages to pull data from a historian; operators had to navigate complex, menu-driven screens on a human-machine interface (HMI); maintenance staff had to know exactly where to find a specific manual in a labyrinthine document management system.
The Gen UI changes everything. It provides a conversational, natural language layer that sits between the human user and these complex backend systems. It acts as a universal translator, radically lowering the barrier to entry for accessing critical information.
The pro: radical accessibility. With a Gen UI, a process engineer can simply ask, "Show me the pressure and temperature trends for Reactor 4 during the last production run of Product XYZ and flag any anomalies." A junior maintenance technician can ask their handheld device, "Walk me through the standard lockout-tagout procedure for the main conveyor belt motor." This democratization of data and knowledge is a paradigm shift, empowering a much broader range of employees to make faster, better-informed decisions.
The con: the persuasive lie. Herein lies the danger. Large language models (LLMs) are designed for fluency and are masters of probability, not truth. They can "hallucinate"—producing an answer that is grammatically perfect, highly confident and completely wrong. In a consumer setting, this is an annoyance. In a factory, a confidently delivered but incorrect answer about a safety procedure, an asset's operating limit or a chemical mixture could be catastrophic.
The solution: grounding in reality. A Gen UI cannot be deployed in an industrial setting without being strictly "grounded" in the company's own factual data. Using a technique called retrieval-augmented generation (RAG), the system is architected so the LLM doesn't invent answers. Instead, it first retrieves verified information from trusted enterprise sources—a data historian, a maintenance database or an approved document library. The LLM's role is then limited to translating the user's question, understanding the retrieved facts and formatting the correct answer in natural language. This grounding in a factual data architecture, like an industrial data fabric, is the essential safety rail that makes the Gen UI viable for industry. Even then, LLM is not 100% accurate. Language nuances can be misinterpreted and lead to inaccurate responses in the process.
Taming the Document Tsunami with Unstructured Data
The second game-changing application for GenAI is taming the document tsunami. Our research at ARC shows that for many enterprises, as much as 80% of their data is "unstructured"—locked away in formats that are difficult for traditional analytics to parse. Factories run on this data: PDF operating manuals, P&ID schematics, environmental compliance reports, maintenance work orders and operator logbooks. For decades, the immense knowledge trapped in these documents has been largely inaccessible at scale.
The pro: unlocking trapped knowledge. LLMs are uniquely suited to ingest, index and understand this massive corpus of text. This unlocks decades of invaluable, hard-won operational knowledge. For the first time, organizations can ask complex questions across their entire document library: "Analyze all maintenance comments from the last five years for our compressor fleet and identify the most common precursor to failure." Or, "Does our current operating procedure for Line 3 comply with the environmental regulations outlined in this 200-page permit?"
The con: the governance nightmare. This power comes with significant risks that must be managed:
Version control: How do you guarantee the AI is referencing the latest approved engineering drawing and not an obsolete draft? The system's knowledge base must be rigorously managed to prevent outdated information from causing errors or safety incidents.
Intellectual property: Using public LLM APIs could mean sending sensitive, proprietary operational data or product information to a third-party cloud. For most industrial companies, this is a non-starter. The solution requires deploying models within a private, secure cloud or on-premise environment.
Access control: Not every employee should see every document. The GenAI system must be integrated with existing enterprise access controls to ensure that users can only get answers from data they are authorized to view.
Generative AI is not a magic bullet, but it is a profoundly valuable addition to the Industrial AI toolbox. Its true power today is unlocked when we see it for what it is: a revolutionary interface that makes other systems easier to use, and a powerful processor for unlocking the value of unstructured text. When implemented thoughtfully, with the guardrails of grounding and governance, it bridges the gap between complex systems and human ingenuity.
But this raises a new question. Now that we have this powerful new conversational tool, how do we make it work in concert with all the other specialized tools in our box? The answer lies in AI agents, the topic of our final article in this series.
About the Author

Colin Masson
Research Director for Industrial AI
Colin Masson is the Research Director for Industrial AI at ARC Advisory Group, where he is a leading voice on the application of artificial intelligence and advanced analytics in the industrial sector. With over 40 years of experience at the forefront of manufacturing transformation, Colin provides strategic guidance to both technology suppliers and end-users on their journey toward intelligent, autonomous operations.
His research covers a wide range of topics, including Industrial AI, Machine Learning, Digital Transformation, Industrial IoT (IIoT), and the critical role of modern data architectures like the Industrial Data Fabric. He is a recognized expert on the convergence of Information Technology (IT), Operational Technology (OT), and Engineering Technology (ET), with a focus on how people, processes, and technology must align to unlock true business value.
Prior to joining ARC, Colin spent 15 years at Microsoft, where he was instrumental in helping global manufacturers architect and implement their digital transformation strategies. He also previously served as a Research Director for Manufacturing at AMR Research (now part of Gartner). This deep, first-hand experience across software development, enterprise sales, and industry analysis gives him a unique and pragmatic perspective on the challenges and opportunities facing modern manufacturers.
Colin is a frequent speaker and author, known for his ability to demystify complex technologies and connect them to tangible business outcomes.