In this first of a multi-part feature, we look at how cloud computing has led to changes within the manufacturing industry, the added benefits, and why now is the time to adopt cloud technology in your business.
When it comes to making improvements in business – of any size and across just about every sector – embracing new technology and the benefits it can offer to both you and your customers is a logical first-step.
Cloud computing is the perfect example and cloud usage has risen dramatically in the last few years, even in the most change-resistant sectors, with an increase of around 90% of businesses in the UK using cloud-based services since 2010 (source. Vanson Bourne).
Whilst the number of businesses switching to cloud computing is impressive, the real success is the significant impact it has showed, not just for individual companies using this technology but across entire sectors, changing the way industry-specific tasks are managed for the better.
In other words, cloud technology is beginning to reshape multiple industries in ways that are advantageous to your business, the businesses you collaborate with, and your customers. One such industry is Manufacturing.
How the cloud is improving the manufacturing industry – 5 reasons to adopt cloud computing
The best manufacturers are those who make themselves as easy as possible to work with from a supply chain, distribution and services standpoint. As a result, many have begun to implement cloud-based applications including Enterprise Resource Planning (ERP) to streamline key areas of their business and improve the quality of their customer service.
But where exactly are these improvements being made, how do they translate to real, substantial benefits to businesses, and why should you implement cloud computing in your manufacturing business? Here’s 5 top points to consider.
Increased accuracy in quality control
Manufacturing is a highly regulated industry, with compliance along every aspect of the production process – from planning to shipping – and is open to any number of discrepancies unless reporting is accurate and tasks are properly managed. Knowing the performance of manufacturing processes, programs and product lines in real-time can make all the difference when catching product quality errors before they turn into a costly mistake.
Cloud-based manufacturing systems that capture manufacturing data are delivering this level of real-time insight across all aspects of the production process, enabling staff to make responsive and proactive decisions when needed. 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.
Fewer time-to-market constraints
One of the biggest challenges facing manufacturers is being able to meet time-to-market goals set by industry trends and customer demand. If manufacturers are unable to get products to market within the allocated timeframe, then it can be very costly.
For example, the manufacture of high-tech products such as hardware and software is especially time-sensitive and requires greater collaboration earlier in design cycles. Likewise, failure to comply with quality control standards (see above) can lead to delays in getting a product to market. The collaborative nature and improved accuracy of cloud-based ERP accelerates product development and sales strategies.
Better relationships with suppliers
The typical manufacturer relies on outside suppliers for 70% or more of the assemblies, components and parts used in their products (source. Forbes), making supplier collaboration essential for growth.
Scaling manufacturing operations to support increasingly complex, intricate and often compliance-driven supply chains is a leading catalyst driving cloud computing adoption throughout manufacturing today. It’s not just a means of improving the way processes are carried out, it’s also a way of strengthening manufacturer-supplier relationships, ensuring effortless collaboration that will benefit both parties in the long run.
Information storage and organisation
The requirement for businesses to manage and track raw materials, routing, run rates, productivity and finished goods gives rise to a mass of digital data to analyse. That data is most valuable when it’s easily accessed, which requires organisation and sufficient storage.
On-site systems, especially ones predating the implementation of new data-gathering technologies, are unlikely to offer such functionality because of hardware limitations. Cloud-based systems, however, can be used to store and organise data more efficiently, and share that data across key business areas (or even with partners outside of the organisation) in order make open collaboration more possible. Cloud servers are scalable, so you’re not going to come up against the same limitations that you might come across with on-premise servers.
Management of multiple sites or global operations
Manufacturers – especially larger, perhaps even global chains – operate multiple sites at any given time, each with different infrastructures and task-management requirements. On-site ERP systems cannot be easily scaled up and down to cater to each site accordingly, at least not without intensive programming and costly hardware customisation.
Cloud-based ERP systems allow manufacturers to rely on a single ERP vendor to dominate their entire operations, regardless of size and location, and reduce logistics and maintenance efforts across all regions. More manufactures are embracing cloud computing for this very reason to eliminate costs and achieve a greater level of accuracy.
Can you think of any other ways that the cloud is helping today’s manufacturers? Let us know in the comments below.
Read about NetSuite for manufacturing companies here.