Cloud has a lot to offer manufacturing companies, including migrating from legacy and outdated information technology. With 45% of manufacturers planning or acting on lift-and-shift to the cloud, there exists proven benefits appealing to IT and business leaders alike. The real question is where do the largest benefits for cloud adoption lie and how do we unlock that to maximize returns, lower total cost of ownership, and aid business in its growth strategy?
Where Does the Benefit Exist?
First, it’s important for IT to take the first steps towards cloud to lay the foundation for connecting the enterprise. Without a solid foundation, organizations will struggle to take full advantage of what cloud services were truly built for: next generation capabilities, flexibility, and scale.
Second, the business needs to assess its business strategy and what it values. Take a serious look at top and bottom-line objectives, and where productivity is constrained due to legacy process and technology. 74% of chief financial officers’ view cloud solutions as the #1 contributor to business impact with the Internet of Things (IoT) as #2. The reason executive teams are looking long and hard at cloud is for its contribution towards radically transforming how an organization operates, most notably people, process, and tools. Locked inside of legacy organizations are massive waste built up over years; it’s this aspect of a business that best illustrates where the most significant benefits are located.
The total cost of ownership for cloud isn’t the pure cost of cloud itself; it’s the impact that cloud will have on IT and future business operations in relation to process, toolsets, and collaboration across the entire value stream.
How Does This Translate into Manufacturing People and Process?
Let’s explore a few areas where manufacturing is adopting cloud solutions to accelerate business outcomes.
Supply Chain
The supply chain continues to be a focus of many organizations. In fact, 55% of manufacturers are adopting and transitioning to cloud solutions. Perhaps more than any other department, the supply chain must interact with third-party suppliers and partners creating a demand for improved collaboration, integration, and data sharing—as well as a need to optimize the flow of materials and services to streamline production and distribution.
Manufacturing Execution and Quality Management
This fact I found surprising: 46% of manufacturers are planning or already adopting cloud for their manufacturing execution system (MES) and 59% for quality control and analysis. After overcoming my personal bias for on-premises production-critical systems and digesting the reasons behind the shift, it became clear to me that manufacturers are seeking rapid continuous improvement. It also empowers production and quality engineers to quickly integrate the diversity of data within the environment to automate, inform, and optimize production facilities. With access to the latest capabilities, modern processes, and the ability to get actionable insight from anywhere, engineers can shorten cycles and accelerate their continuous improvement efforts, yielding impactful business results.
Internet of Things
58% of executives are looking to the IoT to improve operations and expect both efficiency and revenue gains of 12% on average. IoT isn’t new. What is new and impactful for manufacturing is the diversity of offerings, ways they natively integrate with business applications and cloud platforms, the massive volume of them in adoption, and the value they’re generating. Cloud services are built to integrate with sensors, edge compute, and integrate the massive volume of data produced with business systems, business intelligence, and dashboards. For those more digitally-mature organizations, advanced solutions like artificial intelligence and machine learning are tapping into this data to augment and transform how employees work. Organizations are quickly realizing they can better manage this data in the cloud, while also integrating it with MES, QMS, CMMS, and other systems to automate and optimize processes at scale. This is the true goal of industry 4.0.
Whatever the department and use case, digital manufacturing is the real benefit impacting productivity, quality, and even sustainability. Cloud solutions help businesses realize their end state sooner.
How Does Business and IT Come Together? Adding Even More Value!
Let’s also not forget the other aspect of digital transformation, like the actual act of upgrading and deploying a new platform and addressing performance issues. Consider a first-ever implementation of MES. The business change and digital transformation is significant, never mind the complexity of standing up infrastructure to support development, test, training, and production. We often forget about the challenges of procuring physical infrastructure, addressing distribution across geographies, and mitigating performance and scale issues as we lead up to go-live, and post go-live optimization.
Now imagine your organization had adopted cloud infrastructure. Not only could your IT organization rapidly stand up new instances to support the initiative, but it could also distribute, scale, and optimize in minutes to ensure that traditional IT challenges don’t slow progress and impact how employees adopt and use cloud, and remain productive.
It’s also worth noting that many software vendors are now releasing their latest capabilities with a cloud-first model. They’re also integrating with cloud services to optimize how their platform intersects with other business systems, business intelligence, IoT, and middleware—making it easier than ever to streamline how data is exchanged and utilized across the enterprise.
Wherever your organization is with adopting cloud, one thing is clear: Cloud is agile, scalable, and delivers quick time to value. Those manufacturers already adopting cloud are determined to modernize and empower employees, eliminating waste and setting themselves up for the next wave of differentiation. The time has come to jettison your legacy and consider the cloud.
To learn more about the benefits, a roadmap for manufacturers, and how Connection can support you in your cloud adoption journey, be sure to read our Azure Readiness Checklist.
Ryan Spurr
Ryan Spurr is the Director of Manufacturing Strategy at Connection with 20+ years of experience in manufacturing, information technology, and portfolio leadership. He leads the Connection Manufacturing Practice, go-to-market strategy, client engagement, and advisory services focusing on operational technology (OT) and information technology that make manufacturers more digitally excellent.
