Can you run a manufacturing company in the cloud?
The technology often appears best suited to service industries, with manufacturing based firmly in the bricks and mortar world. However, a lot of that is changing – the technology applied to the manufacturing environment can indeed go into the virtual world and is starting to do so.
There’s independent research to back this up. This item on Channel Insider is just one of the articles that points to a huge shift to cloud adoption in many industries.
Driver: The Internet of Things
A number of factors are driving the manufacturing sector to the cloud. One of these is the Internet of Things. Readers will be familiar with the idea of objects talking to each other but it may not be clear that this can take a lot of inefficiencies out of the production process.
Once the production equipment is equipped with machine to machine (M2M) communication and able to talk to itself, it’s possible to have fuller integration between business systems, production systems and smart plant equipment. The equipment itself can report back to a console for plant managers and offer a holistic view of all operations, allowing processes to be improved by making inefficiencies more transparent. Smarter manufacturing equipment will also be able to take orders direct from customers when (for example) they put a deposit down.
The cloud can transform a manufacturing business in a number of other ways. Some of these include:
- Mobility support, so that the data being fed into analytics can be up to the minute and captured in real time. For organisations running just in time/build to order, easy access to data from remote locations will increase the timeliness and therefore value of the available management information
- Accelerated time to market as collaboration with remote colleagues becomes simpler
- Sales tracking in real time becomes more accurate, with both direct and indirect sales traceable through the right apps
There are a number of benefits to cloud computing common to markets other than manufacturing and they shouldn’t be underestimated. Efficiency working across multiple sites and even multiple countries is enhanced as each territory finds itself working from the same data rather than having its own local version. Scope for errors to creep in as people have their own “current” version and work from and amend that instead of a definitive document is eliminated. This will improve processes overall as data is available across any device in any location.
Communications are also maximised; one manufacturer recently used a constantly open video conferencing window between its Amsterdam and UK offices to extend the exchange of ideas. As the technology is young this is likely to be only the beginning. Reporting depends on data, and hand-held instruments sending this data into a cloud repository in real time means there will always be real time information on which to base decisions.
Finally consider some unexpected benefits of the cloud in manufacturing, reported by another article on Forbes. First, it can be massively flexible and as has already been mentioned it’s possible to share information with people outside your company as well as inside. This in turn means it’s easier to share best practice and learnings, and it’s simpler to offer self-service apps to clients.
There are a number of inhibitors to cloud adoption in the manufacturing sector. One is that many manufacturers are already tied in to older legacy systems and almost worse – they work perfectly so there is no immediate imperative to get rid of them. Often the answer is some sort of business process management (BPM) system to knit the old and the new together without actually getting rid of the legacy system.
There are other infrastructure issues to consider. The shop floor needs not only WiFi but a group of workers willing to accept changes. By now they’re used to using the cloud with Gmail accounts, iTunes and so forth – but a reluctance to adopt new technologies and processes at work is all too common. This culture needs to change and so does the attitude to some processes in their own right; the processes themselves need to be considered a company asset rather than a means to an end.
Security is also flagged as a concern among many potential users and understandably so, manufacturing companies are often specifically targeted for their intellectual property, technology and business processes. However, the fear of transferring to the cloud often comes from the misconception that having your data physically on site guarantees its security. The reality is that most cloud vendors have the capability to provide a security infrastructure far greater than the manufacturer themselves, because of the economies of scale afforded by the shared service model.
Manufacturing certainly takes place in the real world rather than in cyberspace. However, the back office systems required to keep production moving do not need to be on site. Thankfully, the cloud has made streamlining back office functions easy, allowing managers to review and process information through web-based software applications, rather than from a direct server connection or one computer.
This will grow over time. One of the main technologies that underpins manufacturing is SCADA – Supervisory Control And Data Acquisition – and this is in use in a number of industries and is growing at a rate of 5% CAGR. It is forecast to continue in this vein from now until 2020, according to Transparency Market Research the cloud is going to grow, and manufacturing as a sector can only benefit.