The Impact Of Cloud Computing In Manufacturing

22 May 2018

Cloud computing is driving change and innovation in manufacturing. The rapidly evolving business environment and the need to keep up with the demands of an increasingly diverse consumer base present both challenges and opportunities for manufacturers. For these reasons, many are turning to cloud computing as a means of monitoring and managing their processes.

Cloud computing has become the key driver of what has been termed the ‘4th industrial revolution’, or 4IR, in which technologies such as Internet of Things (IoT), artificial intelligence (AI), blockchain, and virtual reality are blurring the lines between the physical and digital world. The ability to connect and transfer data at lightning speed between devices is making it possible for manufacturers, retailers and logistics companies to collaborate and co-create solutions to the most pressing business problems. Indeed, according to Forrester, the cloud computing market will be worth over $400 billion by 2020, and the global manufacturing industry will be a key contributor of this vast sum.

Cloud computing could affect every aspect of manufacturing. From acquisition of raw materials to production and inventory management to delivery, cloud computing is playing an increasingly critical role. Unlike traditional storage and processing methods where data movement is cumbersome, cloud computing offers manufacturers the flexibility to access data from any location while also increasing security.

Manufacturers, who have already moved to cloud-based systems, find it financially rewarding because the costs of maintaining in-house software and IT infrastructure are all but eliminated. In today’s economic climate, many manufacturers cannot afford to keep in-house IT staff or the cost of building modern IT infrastructure. But with cloud computing, manufacturers can save significantly on storage and server costs, resulting in greater performance and cost efficiencies. For example, in the automotive industry, designers and engineers are leveraging the power of cloud computing to quickly analyse, identify, and develop new design concepts making it possible to access projects across multiple platforms and devices quickly and efficiently. This, in turn, allows designers and engineers to tie their workflows together and share them with collaborators and stakeholders for comments.

Indeed, cloud computing is already making a difference to how we make, develop and produce products and a number of examples as such are set out below:


Enterprise Operation and Management


Increasingly, manufacturers are utilising the cloud to manage the day-to-day operations of their businesses. Manufacturers with multiple facilities use the cloud to centralise and integrate fragmented departments into a cohesive unit tracking efficiency, cost management and resourcing. Whether is tracking raw material usage or time-stamping finished products, cloud computing is helping manufacturers gain an insightful view of their processes and to get a complete picture of what is creating value. The managed services associated with the cloud allows patches, upgrades, backup, recovery, and trouble tickets all tasks that traditionally require an employee to manage.

Indeed, companies such as Oracel are now offering clouds that collaboratively and securely manage product data, documents and AMLs. They also secure IP with extended control across globally outsourced design and manufacturing organisations, suppliers and partners whilst synchronising the product change process to improve time to market and reduce rework and scrap. These features can help a company maintain or accelerate the pace of innovation by proactively reusing existing parts and designs.


Supply Chain


The adoption of cloud computing to supply chain management has dramatically increased in the past few years. In fact, Gartner predicted that SaaS deployments will account for over 34 per cent of total SCM (Supply Chain Management) spending this year. It also forecasts that the sales of on-premise systems will decline to just 20 percent of total SCM spending. Testament to how important cloud computing has become.

Cloud-based supply management can significantly cut ‘lost products’ by locating a shipment during any stage of transport. It enables quick decisions and effective communication. Therefore, for manufacturers and vendors vying for shares in foreign markets, cloud computing can drive critical time-to-market.

Cloud-based supply chain platforms manage facilities, equipment, raw materials, and services, which enable manufacturers to scale global operations and impact their bottom line. For example, businesses needs change and IT systems must evolve to provide the resources required to meet those needs. Cloud services scalability the need to overhaul the entire system as a cloud provider has the off-site computing power to make these changes. Indeed, while it can take months to implement new software within existing IT systems, cloud supply chain management software providers can get a new service up and running in weeks.

Further, cloud-based information management relieves internal resource, allowing employees to shift away from system management to research and product development leading to faster product innovations and improvements without the need to hire more resource.

Cloud-based services connect entire the supply chain, providing a more strategic approach for inventory deployment. With geoanalytics, cloud computing can enable you to monitor delivery networks and prioritize slow-moving shipments. You can also automate tasks and more easily combine moves. According to Anthony Clervi, vice president of growth at UNA Purchasing Solutions, 46 per cent of surveyed supply chain management professionals said greater collaboration led to problems being solved twice as quickly. This can help optimize product development, market expansion and delivery times, while reducing overall costs by improving the agility of your operating model.


Product Development


Increasingly, product development no longer involves the invention within R&D departments. Product design and development used to involve manually building prototypes, testing, and experimenting. This expensive and time-consuming process is diminishing in favour of engineers and designers are using cloud-based platforms and 3D printing to produce prototypes and production parts, which speed up innovation cycles and accelerate time to market. Today, product development is more likely to be achieved by networks of geographically dispersed teams drawing on the necessary skills to maximise a product’s competitive advantage and speed it’s time to market. Medical device manufacturers, for example, are rethinking traditional approaches to innovation in favour of collaborative forms of product development through cloud computing.

Applying AI to cloud computing capability enables the technology to conceive solutions by comparing and analysing vast data sets in order to develop a design. The speed at which this can be done by a networked machine drastically reduces the time it would have taken a team of designers to develop. Indeed, increasingly, the designs that these programmes develop are truly innovative due to their approach their programmes take, differing vastly to that which a human would take.

Indeed, product lifecycle management (PLM) in cloud share applications provide infrastructure that coordinates all aspects of a product from initial concept throughout its lifecycle. This technology allows designers to spend time on creative aspects of design, as opposed to repetitive or time consuming tasks, increasing their efficiency.

Tony Christian, director at Cambashi, a global industry analyst and market research consulting firm recently said, “the cloud has the potential to cause a step change in the PLM applications business. In addition to the cost, scalability and availability benefits that accrue as with other major applications, provided that data security and communications reliability concerns can be addressed, cloud-based PLM deployments are likely to offer a compelling solution to the problems of reach and accessibility for participants of all sizes and levels of use in global product development networks and supply chains.”

Product Consumption


Cloud computing is changing how products and services are consumed. Cloud-based apps and analytics can track customer preference, which is helpful in tailoring products and services to individual consumers.

PwC principal technology leader Tom Degarmo believes “cloud computing accelerates innovation, improves time-to-market successes, and offers added flexibility within life cycle management applications.” He goes to not say that; “overall it can improve connections across a company’s network of suppliers, time zones and cultures. It enables an extendable enterprise.”

In the automotive industry for example, manufacturers are harnessing the power of the cloud to deliver a variety of services including over-the-air updates for car infotainment, navigation, and communication systems. These updates are seamless, in the background with no input from consumers.

There’s no doubt that businesses that adopt the cloud are more efficient and productive. There has been a significant increase in investment and adoption of cloud computing over the past five years, but many others remain hesitant to migrate to cloud-based platforms due to perceived security risks. In fact, security is the biggest single inhibitor to cloud adoption.

Cloud providers are acutely aware of this perception and as such, have stringent safeguards, firewalls, programmes and platforms to protect their technology against cyber threats. But, whilst the perception of security threat exists, caution will remain, until its benefits are well-enough understood that the risks are deemed worth the investment.

In essence, cloud computing will shape the future of manufacturing in a vast number of ways, and its impact will be profound.

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