Manufacturing Is Moving to the Cloud, and There's No Going Back

Manufacturers share many of the same business and technology requirements as firms in other industries, but chief among those are, speed, scale and accuracy.  These are typically among the top benefits users cite in survey after survey as their rationale for migrating their apps and workloads to the cloud.  Not surprisingly, the early adopters, or “cloud-adaptive manufacturing firms,”obsess over those three challenges.  And those manufacturers, it’s been shown, exhibit higher labor productivity. 

Manufacturers invariably report that rapid product lifecycles and short time-to-market schedules – which make speed, scale and accuracy critical – are paramount in their decision-making about the manufacturing models they employ.Cloud computing provides a myriad of benefits to manufacturers large and small, including: speeding innovation cycle times, accelerating time to market, facilitating collaboration, supporting supply chain integration, enabling new business models, increasing operational efficiency, reducing costs, and increasing employee and customer satisfaction.

Speed

Accelerating new product development and introduction (NPDI) is shaping up to be the primary driver in meeting time-to-market objectives. Using cloud-based platforms in manufacturing has grown from an imperative to a trend because time-to-market constraints are requiring greater collaboration earlier in design cycles.

Cloud computing has been proven to facilitate research, design, and development of new products, which powers innovation, reduces product development costs, and speeds time to market. 

As for the traditional meaning of speed on the network – where “speed” and “performance” are often considered synonymous, it’s easy to say that neither on-premises or cloud networks have an advantage.  Still, the speed of cloud networks is always and inextricably tied to SLAs, often the cloud provider’s competitive edge. The provider must deliver, or customers will defect. That’s why cloud providers, quite simply, obsess over speed.

Scale

Cloud-based systems can be scaled up or down to manage shifting project workloads, an especially important requirement for manufacturing firms. Moreover, cloud computing gives manufacturers the ability to leverage infinitely scalable computational resources on an on-demand, pay-as-you-go basis, so that manufacturers can readily access the computational resources they require without having to purchase expensive IT equipment up-front, when they may need it only intermittently. 

In the past, manufacturers of all sizes have had to purchase expensive enterprise-wide licenses for enterprise resource planning software, CRM software, and product-design software, among other applications. But now that same CRM, ERP, or design software can be flexibly consumed as an on-demand, as-needed service, enterprise agility is abetted by having access to best-of-breed software.

Manufacturers are also using two-tier ERP strategies to gain greater independence from a single ERP vendor that could otherwise dominate their entire operations. As one example, it’s been shown anecdotally that large, monolithic ERP systems cannot, without lengthy programming and customization, scale down to the smaller operational needs of distributed geographic regions. That’s where the two-tier ERP systems of cloud providers come into play.  

Accuracy

Cloud-based systems enable higher supply chain performance. Achieving real-time views of inventory levels throughout supply chains makes inventory planning and management more efficient for each production center. Cloud-based inventory management system (IMSs) and ERP systems generate data sets that tend to show not only inventory levels but inventory patterns, making it possible to anticipate shifts in demand. This insight contributes to greater forecast accuracy and a path to optimizing manufacturing schedules and production planning across all warehouse locations. 

Accuracy in real time reduces order cycle times and rework. Product quality problems often begin when an incorrect or incomplete order is created. Errors in pricing, quoting, product configuration, or delivery instructions all introduce errors, slow down orders, and drive down product quality. That’s where automating pricing, quoting and customer approval workflows using a cloud-based application is a tremendous asset; it reduces order cycle times and improves quality.

Perfect “order performance” can now be tracked across multiple production centers. Order performance measures how effective a manufacturer is at delivering complete, accurate, orders to customers on time. The more complex the product lines and configuration options – including build-to-order, configure-to-order and engineer-to-order workflows – the more challenging it is to attain a high, perfect order level. However, the greater analytics-based insights gained from real-time integration of cloud-based ERP solutions allow manufacturers to perfect order levels over time.  Plus, real-time tracking and traceability are hallmarks of cloud ERP, whether within a single supplier’s operations or across multiple supplier operations. Cloud-based applications that manage tracking and traceability can scale across supplier networks and handle tracking and traceability.

To learn more about OVHcloud’s services for manufacturing companies, visit https://us.ovhcloud.com.