Beyond Prediction: How ‘Explainable AI’ is Reshaping Manufacturing Cost Estimation

By Angela Gray

Long Beach, CA – For decades, manufacturers have relied on complex modeling and often-manual processes to estimate costs, a process fraught with inaccuracies, delays, and inherent risks. Now, a new generation of artificial intelligence is promising to fundamentally reshape this critical function, moving beyond simple prediction to deliver explainable intelligence. Galorath Incorporated’s SEERai platform, recently awarded Gold in the 2025 Merit Awards for Technology, exemplifies this shift, prioritizing auditability and trust in an industry increasingly demanding transparency.

While AI has been touted for its potential in manufacturing for years, many early implementations focused on predictive maintenance or quality control – areas where the “black box” nature of the algorithms was less problematic. Cost estimation, however, is different. In aerospace, defense, and other heavily regulated sectors, every number must be defensible, every assumption justified. Simply knowing a project will cost a certain amount isn’t enough; manufacturers must demonstrate why that estimate is accurate.

“The traditional approach to cost estimation often involves layers of spreadsheets, expert opinions, and historical data, making it difficult to trace the logic behind the final number,” explains a leading analyst specializing in manufacturing technology. “Manufacturers are realizing that AI can automate this process, but they need solutions that provide verifiable data trails and explainable insights.”

The Rise of ‘Explainable AI’

SEERai, built on Galorath’s established SEER® modeling framework, tackles this challenge by prioritizing what’s known as ‘explainable AI’ (XAI). Unlike many general-purpose AI tools that generate predictions without revealing the underlying reasoning, SEERai connects directly to trusted historical and operational data through its proprietary ‘Instant RAG™’ (Retrieval-Augmented Generation) technology. This allows manufacturers to trace the logic behind every estimate, ensuring compliance with stringent regulatory requirements.

“What sets SEERai apart is its ability to provide a clear, auditable path from the initial assumptions to the final cost estimate,” says a project manager at a leading aerospace company. “We need to be able to demonstrate to our clients and regulators that our estimates are based on sound data and logical reasoning. This platform allows us to do that with confidence.”

Instant RAG™ doesn't just present data; it verifies it. In a sector where data integrity is paramount, the ability to trace the source and validity of every input is critical. While standard RAG approaches can enhance AI responses with external knowledge, Galorath’s implementation goes a step further by ensuring that all referenced data is trustworthy and verifiable.

Beyond Automation: Driving Business Impact

While transparency and auditability are key benefits, SEERai’s impact extends beyond regulatory compliance. By automating the cost estimation process, the platform significantly reduces the time and effort required to generate accurate estimates. This allows manufacturers to respond more quickly to new opportunities and streamline their bidding processes.

“The manual process of cost estimation can be incredibly time-consuming and prone to errors,” explains a supply chain manager at a defense contractor. “This platform allows us to generate accurate estimates much faster, giving us a competitive advantage in the bidding process.”

The platform also helps manufacturers identify potential cost savings and optimize their designs. By analyzing historical data and identifying patterns, SEERai can highlight areas where costs can be reduced or efficiencies can be improved. This proactive approach helps manufacturers stay ahead of the curve and maintain their profitability.

The Future of Manufacturing Intelligence

SEERai isn’t just about automating existing processes; it’s about unlocking new possibilities. The platform’s ability to analyze vast amounts of data and identify hidden patterns opens the door to more sophisticated cost modeling and optimization techniques. This allows manufacturers to explore new design options, optimize their supply chains, and improve their overall competitiveness.

However, the integration of advanced AI also raises important questions about the future of the manufacturing workforce. As AI systems automate more tasks, it’s crucial to invest in reskilling and upskilling programs to ensure that workers have the skills they need to thrive in the new economy.

“The transition to AI-driven manufacturing will require a significant investment in workforce development,” notes a technology analyst specializing in manufacturing automation. “We need to equip workers with the skills they need to manage and maintain these systems, as well as to interpret and act on the insights they generate.”

The rise of ‘agentic AI’ – AI systems that can autonomously perform tasks and make decisions – promises to further transform the manufacturing landscape. While these systems are still in their early stages of development, they have the potential to revolutionize everything from product design to production planning.

Galorath’s SEERai platform represents a significant step forward in the evolution of manufacturing intelligence. By prioritizing explainability, auditability, and business impact, the platform is helping manufacturers navigate the challenges of the 21st century and unlock new opportunities for growth and innovation. As AI continues to evolve, the demand for solutions that provide transparency, trust, and verifiable results will only continue to grow.