The adoption of the cloud in UK manufacturing firms has traditionally been slow, but that trend is now changing. It is widely expected that cloud penetration in manufacturing will increase substantially over the next 5 years, owing to a range of forces disrupting the manufacturing industry. There are many advantages (and a few disadvantages) to this cloud adoption, but there is no question that it is changing the entire industry.
A cost-effective alternative
Traditional IT requires a huge investment to acquire and maintain, and the setup can be cumbersome. Getting onto the cloud is far more affordable and simpler to set up. Moving to a cloud model, and thereby removing licensing and hardware costs, is helping companies cut costs significantly. And the scope for scalability solves the issues associated with provisioning new computing resources, servers and applications. Not to mention the crucial time businesses save that can instead be devoted to innovation projects. If the approach/idea is viable, the cloud offers an easy option to scale up capacity whenever you need at a very low cost.
Scalability is extremely important when you go for a merger or acquisition. The task of integrating IT infrastructure can be immense, but with the help of the cloud, it is as simple as changing your contract and leaving the rest up to the cloud hosting service. Without having to take on more and more IT assets and functions, companies also reduce your business energy consumption and overall carbon footprint.
Getting a competitive edge
Cloud solutions also provide numerous avenues for driving a competitive advantage in manufacturing. Many companies create new business models by bundling their existing products with cloud-based services. The resulting new-age services include things like cloud-based precision farming services that harness farm data to build real-time, actionable information. There are even smart aircraft cabins that use sensors to monitor the temperature, fatigue levels and hydration of passengers to ensure the cabin environment is optimised at all times. Any organisation that embraces cloud computing early on has the power to stay ahead of the competition in terms of taking up business opportunities, helping to strengthen customer relationships and keep navigating towards growth.
Reaping benefits throughout the value chain
Manufacturing companies can appreciate how cloud solutions hold vast potential across the full spectrum of the manufacturing value chain. Let’s explore that in more detail:
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<li><strong>Product development</strong> – A manufacturing company with a large global operation can leverage cloud computing to enable greater online collaboration. With access to the same data anywhere-anytime through cloud-based collaborative solutions, companies can realise seamless product development to ensure a shorter time to market.</li>
<li><strong>Manufacturing</strong> – Data is essential, and cloud technology is enabling the collection of key operational metrics like capacity utilisation, OEE, etc. on the shop floor. This gives an accurate, up-to-date picture of the performance of machines in real-time through cloud-enabled Internet of Things (IoT) platforms. This enables strong decision making, and the use of cloud-based ERP systems for detailed data that can keep things running at an optimal rate.</li>
<li><strong>Supply chain management</strong> – The supply chain is extremely volatile, and manufacturing companies need a real-time view of it whenever possible. The only way to consistently engage with suppliers, vendors and customers in real-time is through cloud technology, and the scope for scalability helps mitigate the unexpected changes brought on by volatility.</li>
<li><strong>Customer experience</strong> – A manufacturer can’t grow without providing an enhanced customer experience. By aggregating customer data from various channels into a unified profile, you can provide the best experience for every single customer, and this can be done extremely efficiently by leveraging the power of the cloud. With cloud-based CSS portals and CRMs, companies can engage more quickly and effectively than ever before with customers in real-time, boosting the customer experience and increasing customer retention.</li>
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The challenges of the cloud for manufacturers
Despite the undeniable power of the cloud in transforming the manufacturing industry from a purely product-oriented one to a more service-oriented environment, it would be irresponsible to ignore the caveats in the implementation. Threats to data security and privacy are an ongoing concern to manufacturers, while regulatory compliance responsibilities can also pose an obstacle to the adoption of cloud-based solutions.
There is no doubt that cloud computing is transforming manufacturing in 2019, and there is nothing but potential for growth in the foreseeable future. Manufacturers will have to embrace it sooner or later to ensure the digital transformation is successful. There needs to be more work done to mitigate security issues and maturity in the cloud, but this is sure to come in and galvanise the transition, helping manufacturers to reimagine and enhance their operations. Cloud computing holds undeniable value for the manufacturing industry, so the only questions manufacturers should be asking are ‘When?’ and ‘How?’
