Manufacturers succeed these days by competing on speed and agility rather than size. That shift has influenced the way they track and share data with their suppliers and customers, and plays directly into the strengths of doing business in the cloud. Cloud-based platforms and applications provide a greater degree of precision and speed than the old systems often built by the manufacturers themselves. Manufacturers with dozens of these legacy systems are finding that cloud computing platforms free them up from having to deal with the daunting task of creating and supporting enterprise software. No manufacturer today has the time or budget to be in the IT infrastructure or software business.
More manufacturers are also looking to the cloud to more easily make use of the data that’s beginning to pour in from proliferation of connected sensors embedded in their factories, inventories, raw materials and at all segments along the supply chain. That data is most valuable if it’s easily accessed and analyzed by various organizations within the enterprise or even by partners in the value chain, a form of open collaboration the cloud makes more possible than old software systems. According to a 2014 study by IDC, almost half of European manufacturers have adopted or will adopt enterprise resource planning software (ERP) running in the public cloud. In the Asia-Pacific region, 49% of manufacturing respondents are using cloud – public or private – or intend to use cloud, based on the 2014 IDC Manufacturing Insights Asia/Pacific Business and IT Priorities Survey.
Cloud computing is emerging as a catalyst of global manufacturing growth across the entire industry. The typical manufacturer relies on outside suppliers for 70% or more of the assemblies, components and parts used in their products, making supplier collaboration essential for growth. Scaling global manufacturing operations to support increasingly complex, intricate and often compliance-driven supply chains is a leading catalyst driving cloud computing adoption throughout manufacturing today. One aerospace and defense manufacturer estimates that every new jet will require a minimum of 70% sourced parts, assemblies and subassemblies from outside the manufacturer, making supplier orchestration and quality critical to the success of their new aircraft.
For manufacturers competing in highly regulated industries that also have tight time-to-market requirements, cloud computing is emerging as a means to trim the time taken from months to days on strategic sourcing, supplier qualification, supplier quality audits and during production, supply chain planning, management and optimization. Cloud computing platforms are also making it possible for manufacturers to design entirely new supply chain networks that span vast geographies, sourcing the best possible assemblies, components and parts from anywhere in the world.
Scaling manufacturing intelligence globally is achievable with cloud platforms at a lower cost and with greater accuracy than legacy systems. Knowing the performance of manufacturing processes, programs and product lines in real-time can make the difference between catching product quality errors before they ever leave the factory. Cloud-based manufacturing systems that capture manufacturing data are delivering this level of insight and intelligence and more. A disk storage systems manufacturer is relying on cloud-based integration hubs to ensure pricing, procurement, production scheduling and delivery are all orchestrated across legacy and recently implemented cloud systems. Many cloud platforms are specifically built to provide for greater analytics and reporting accuracy, with the long-term goal of being a potential system of record for an entire manufacturing operation.
Two-tier ERP system strategies are becoming commonplace globally, further accelerating production efficiency. Enterprise Resource Planning (ERP) systems often anchor the centralized production operations of companies who for decades have competed using mass production strategies. Customers, not production efficiency alone, are defining the future of this industry. As a result, legacy ERP systems often need to be extended to support products and customers. Cloud computing is making it possible for the most relevant data from legacy ERP systems to be used to define entirely new analytics, key performance indicators (KPIs) and metrics so they can profitably expand in new markets.
Legacy ERP systems weren’t designed for complex compliance reporting requirements, yet cloud platforms are enabling global governance across manufacturing centers today. All manufacturers are facing exponentially greater compliance and regulations than they ever have before. ERP systems designed and implemented decades ago don’t have the specific features needed to keep manufacturers in compliance today. Cloud platforms and applications purpose-built for manufacturing are providing strategic views of quality for the first time for many manufacturers. Bottom line: Moving beyond mass production and into entirely new business models, manufacturers today are adopting cloud computing platforms and applications to focus all their operations around the customer.
This article was written by Louis Columbus from Forbes and was legally licensed through the NewsCred publisher network.