If it ain’t cloud, fix it: Manufacturing Industry Leads the Way in Cloud Adoption
Being part of the manufacturing industry has never been a piece of cake, but the past few years have been particularly tough. This is mainly due to significant events that have shaken up the business landscape, such as the COVID-19 pandemic, wars, sanctions, supply chain disruptions, and shortages. The pandemic has had a profound impact on the manufacturing industry, posing new challenges to organizations across the globe. Companies had to adjust their production, specifications, and overall organizational structures to keep their operations running during a worldwide crisis.
However, these kinds of setbacks are old news for the manufacturing industry. According to a recent McKinsey survey of manufacturers in Asia, raw material shortages were already an everyday issue (reported by 45 percent of respondents), along with steep drops in demand (41 percent) and worker unavailability (30 percent) even before the pandemic hit. The pandemic has only made matters worse, expediting the digital migration of industries. To battle with industry-specific challenges and to be able to survive in a very dynamic business environment, a growing number of manufacturers implement industry 4.0 technologies in their operations, trying to get the most out of innovation.
A recent McKinsey study states that there are four foundational technologies that Industry 4.0 provided:
Connectivity, data, computational power: Sensors, Internet of Things, Cloud Tech, Blockchain
Human-Machine Interaction: Virtual & Augmented Reality, Robotics & Automation
Analytics and Intelligence: Advanced Analytics, Machine Learning, Artificial Intelligence
Advanced Engineering: Additive Manufacturing (ex: 3D Printing), Renewable Energy, Nano Particles
Manufacturers have been striving to improve production, efficiency, and inventory management for decades while minimizing costs to stay competitive in a constantly changing business environment.
Today, along with other industry 4.0 technologies, the cloud obliterates such problems with personalized tools that are perfect for the industry, offering unrivaled benefits for companies. Throughout this article, we will take a closer look into some of these benefits and the ways cloud solutions transform the world of manufacturing in years to come.
1) Supply Chain Management
Supply chain management has always been a complex challenge for manufacturers, involving multiple parties, production and logistics difficulties, changes at the last minute, disrupted delivery channels, and more. However, with the emergence of cloud systems, manufacturers can plan their supply chain effortlessly and increase organizational agility. As a result, manufacturing companies have accelerated their efforts toward cloud-based supply chain management in recent years, and there is evidence to support this.|
93% of manufacturing and supply-chain professionals pledge to focus on supply-chain resilience, and 90% plan to make investments in digitization. Source: McKinsey survey |
2) Data Management & Analytics
Managing data can be expensive, particularly when companies rely on traditional on-premise IT solutions for storage, analysis, and management. In the manufacturing industry, large amounts of data are generated throughout a product’s journey from the production line to the end customer. Because multiple parties are involved in the supply chain, data is vastly scattered, and data collection can be very challenging. Businesses require effective solutions for collecting, monitoring, and analyzing data to improve operational efficiency, reduce costs, make accurate predictions, and offer better services than competitors. Cloud solutions are designed to provide advanced data management and analysis tools, making them ideal for this purpose. With the cloud, companies can seamlessly integrate real-time data from different sources, be it from logistics firms, manufacturers, or customers. It allows manufacturers to centralize the data in a single location via data lakes and warehouses, allowing data analysts to access and assess all types of information. Real-time data enables precise interpretations and helps manufacturing companies gain a better understanding of their operations.|
A Real-life Example European car manufacturers rely on precise, up-to-date data to improve their decision-making processes, leading to quicker response times and a more competitive edge. While one company saw a 3.5% reduction in cost per unit with this approach, another luxury automobile manufacturer uses advanced data analytics to predict maintenance needs, resulting in a 25% decrease in asset downtime. Source: McKinsey Survey |
3) Quality Control
Cloud capabilities are also essential for quality assurance in the manufacturing industry. Cloud-based systems can seamlessly integrate IoT and automation tools, which helps implicitly automatize workloads to help maintain the desired quality. These tools can be used to visualize data as well, allowing manufacturers to create quality dashboards that display KPIs and critical areas of operations so that managers can take adequate measures. Quality control managers can oversee production and ensure that products comply with quality standards. Product designers and engineers can test out products digitally using cloud systems, enabling them to make improvements before production. With the real-time data collected from advanced sensors and machinery, quality control officials can monitor the production process every step of the way, identifying the areas that require more focus. AI and ML capabilities of the cloud can also be used to create quality assessments or audits for products, contributing to quality enhancement and product development efforts.
4) Operational Efficiency
Cloud systems present a wide array of benefits in terms of operational efficiency. Real-time data allows manufacturers to accurately monitor their production and adjust based on fluctuations in consumer demand. Additionally, cloud systems provide a range of tools to enhance automation in the production line, increasing production speed and efficiency while diminishing operational costs. Employees can seamlessly communicate and collaborate in real-time, regardless of location. All they need is a smartphone or a tablet and a WiFi connection to access whatever they need to work together, no matter where they are or what time it is. With several payment options like pay-as-you-go or subscriptions, the cloud helps manufacturing companies optimize their costs tremendously compared to on-premise IT solutions, demolishing infrastructure, maintenance, and other IT-related costs. This payment flexibility comes in handy for expansion, too, empowering efficient scalability options for companies when the time comes. Energy efficiency is another critical aspect of the manufacturing sector, considering the rise of energy prices, global disruptions, and current energy regulations. Cloud systems can surveil and optimize energy consumption with the help of real-time data, maximizing energy efficiency that indeed leads to cost reduction.
5) ERP & CRM
ERP systems bring together all aspects of a manufacturing organization’s operations, such as production planning, inventory management, procurement, human resources, and finance, into a single centralized system. Cloud-based ERP systems are an improvement over traditional IT solutions as they are accessible anywhere in the world. This feature makes it easier for global manufacturers to access critical information. With real-time access to business data on their mobile phones, authorized employees can make adjustments and share information quickly and efficiently. In manufacturing, delays and stoppages can happen often and result in significant expenses. However, with cloud storage, data can be stored in various locations, enabling quick backup and restoration in case of data loss or malfunction. This allows manufacturers to maintain production with minimal interruptions and costs. CRM systems, on the other hand, are quite essential for quality customer service, and cloud systems are taking these systems to the next level. CRM is mainly used for customer management, lead and sales cycle management, customer support, and engagement. Cloud-based CRM systems efficiently store, manage, and analyze customer data, providing insights into customer preferences. CRM also allows sales teams to track leads, generate new ones, and close deals with ease. Real-time sharing of critical information among sales specialists enhances control over leads and sales channels, increasing productivity. Cloud-based systems also provide data security through data encryption, multi-cloud storage, continuous security updates, and enhanced data authorization options, protecting both customer and company data.
6) Scalability
The cloud is indispensable for maintaining high flexibility and scalability, which means that manufacturing companies can adjust their production levels based on demand without incurring extra costs, as opposed to installing and maintaining costly on-premise IT solutions. With the help of VMs and container orchestration tools, companies can auto-scale to optimize production levels. Cloud technologies also enable efficient scaling of databases, allowing easier access, storage, and analysis of data sets as they grow over time. AI and ML can further enhance scalability by providing comprehensive analyses, deeper insights, and accurate predictions based on real-time data. CDNs can also contribute to scalability efforts by establishing a reliable content-sharing network. Additionally, IoT helps automate workloads, optimize resources and labor, and increase efficiency, thereby supporting scalability from multiple angles.⭐⭐⭐
For manufacturers, maintaining a robust, reliable, and cost-effective IT is essential for surviving in the sector. Your business should flourish from the outset with personalized IT solutions designed to match your unique business needs and goals in the supply chain, allowing you to focus on what truly matters. As Kartaca, we’ve assembled an unprecedented level of hands-on talent under one roof to create perfect solutions for our customers in the manufacturing industry. Our team of 30+ software, network, and data engineers makes precise touches to our customer’s pain points and offers lifelong solutions. Our team is trained on Google Cloud products, concepts, use cases, etc. Their technical skills to solve real-world IT challenges are validated regularly through certifications. Kartaca provides the tools, technologies, and consultancies you need to leverage your competitive advantage in manufacturing and helps you make the right choices in your manufacturing ecosystem. If you would like to know more about how Kartaca can add value to your manufacturing business and your daily operations, please check this page and contact us.Kartaca is a Premier Partner for Google Cloud in the Sell and Service Engagement Models with “Cloud Migration” and “Data Analytics” specializations.
TL;DR
How does the cloud benefit supply chain management in the manufacturing industry?
The cloud provides real-time visibility and control over the supply chain, enabling manufacturers to plan, monitor, and adjust their supply chain effortlessly. This enhances organizational agility, helping companies respond to changes and disruptions effectively.
How does cloud-based data management and analytics benefit the manufacturing industry?
Cloud solutions offer advanced data management and analytics tools that allow manufacturers to seamlessly integrate and analyze data from various sources. This enables them to improve operational efficiency, reduce costs, make accurate predictions, and gain a better understanding of their operations.
In what ways does the cloud support quality control in manufacturing?
Cloud-based systems integrate IoT and automation tools for quality assurance, allowing real-time monitoring of production processes. Quality control managers can oversee production, and AI and ML capabilities can be used to create quality assessments, contributing to product quality enhancement.
How does the cloud enhance operational efficiency in manufacturing?
The cloud offers real-time monitoring of production, automation tools, and efficient communication and collaboration among employees. It also provides cost optimization through flexible payment options, energy efficiency monitoring, and scalability, ultimately improving operational efficiency.
What advantages do cloud-based ERP and CRM systems bring to the manufacturing industry?
Cloud-based ERP systems offer global accessibility, quick backup, and restoration capabilities, minimizing disruptions and expenses. Cloud-based CRM systems enhance customer service, lead management, and data security, improving productivity and customer satisfaction.
Author: Cem Cetinguc
Published on: Oct 30,2023
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