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Although manufacturing firms’ adoption of cloud computing technology has been a slow one, the trend is changing. According to a recent survey, 71 % of the respondents cite that cloud penetration in manufacturing will significantly increase in the next 5 years.
This changing scenario of cloud adoption stems from a myriad of forces disrupting the manufacturing industry. Let’s have a look at some of the benefits which will prompt you to adopt cloud.
While traditional IT is very expensive to acquire and cumbersome to set up, getting on to the cloud is more affordable and easy to set up. As an example, by moving to a cloud model, removing ongoing licensing and hardware costs, Tata Steel, one of the world’s largest steel producers has cut collaboration costs by 40 per cent.
Also, the scope for scalability solves the problem of provisioning new servers, computing resources and applications, and saves a lot of your crucial time and money which makes a huge difference to the implementation of innovation projects. So if your idea or approach is viable, it’s easy to scale up capacity at a very low cost. When you are going for a merger or acquisition, you are faced with the humongous task of integrating your IT infrastructure which can be made easy with the help of cloud.
For example, if you’re doubling the capacity of your company through an acquisition or merger, you may find yourself thinking about doubling your server capacity which would not be required if you are moving to cloud as you can scale up your capacity anytime. Asset light cloud model will help your organization achieve a significant reduction in your carbon footprint and energy consumption.
According to a report published by the Carbon Disclosure Project (CDP), minimizing hardware needs and energy requirements and moving to the cloud could potentially prevent 85.7 million metric tons of annual carbon emissions by 2020.
Cloud Computing provides multiple avenues for driving competitive advantage in the manufacturing industry. Many manufacturing companies are bundling existing products with cloud-based services to create new business models.
Some of these new age services include cloud-based precision farming services to leverage farm data in building timely and actionable information, intelligent aircraft cabins with built-in sensors in seats that monitor passengers’ fatigue, temperature or hydration levels to automatically change the cabin environment or alert crew to take a specific action.
Companies embracing cloud computing early will surely stay ahead of the curve in grabbing business opportunities. This value creation will further enable them to fortify customer relationships and steer themselves towards growth and profitability.
Realizing Benefits across the value chain
As a manufacturer, you would be able to appreciate how cloud computing holds immense potential across each aspect of the manufacturing value chain listed below:
Product Development – If you are a manufacturer with a large global scale of operations, cloud computing will serve as an essential enabler for online collaboration. Anywhere-anytime data access through the advent of cloud-based PLM solutions will help you witness a seamless product development environment thus ensuring a shorter time to market and reduced product development costs. The emergence of cloud-enabled crowdsourcing platforms provides a medium to integrate customer ideation into product development more effectively.
Manufacturing – Data is gold and you will be able to receive aggregation of key operational metrics such as OEE, capacity utilization etc. in the shop floor which provides critical information about the performance of machines on a real-time basis through cloud-based IoT platforms, thus enabling ad hoc decision making. Also, cloud-based ERP systems can provide inventory data, job orders, scheduling and capacity planning data on a real-time basis thus reducing delays and inaccuracy.
Supply Chain Management – The extremely volatile nature of supply chain makes it imperative for manufacturing companies to have real-time visibility of their supply chain. So if you want to engage on a real-time basis with your suppliers, vendors or customers, features like dynamic provisioning, high availability and anytime anywhere access will ensure you remain connected 24*7. Also, the scope for scaling up and down operations using cloud helps to mitigate the volatility of market demand.
Customer Experience – Enhancing the customer experience is a key ingredient of a manufacturer’s growth strategy. Aggregation of customer data from multiple channels and the provision of a unified view of the customer can be done more efficiently by harnessing the capabilities of the cloud. The emergence of cloud-based CRMs and CSS portals will accelerate your level of engagement with the customers on a real-time basis, thereby leading to enhanced customer experience.
Challenges and the road ahead
In spite of cloud computing’s indubitable capabilities in transforming manufacturing from product-oriented industry to a service oriented industry, there are some caveats in the implementation. Data security and privacy threats still remain a concern for manufacturers. Regulatory compliance requirements also pose a hindrance in adopting cloud based solutions.
Cloud computing is definitely poised to grow in the future and manufacturers will sooner or later embrace it to pave the way for a successful digital transformation. Mitigation of security issues and maturity of cloud in the coming days will bolster the change and help manufacturers to reimagine their businesses. Does cloud computing hold value for the manufacturing industry? Well, the question has been answered with a strong “yes”. The only question that manufacturers should be asking now is “when” and “how”.
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