August 6, 2019 by Siobhan Climer
Manufacturers are in the midst of an industry-wide digital transformation. Technology is changing the way manufacturers and distributors facilitate innovation, improve processes, and drive productivity.
Cloud computing is a key driver in this evolution. In 2018, IDC found that 75% of manufacturers transformed their operations with digitally connected processes. Along with telecommunications and high-tech organizations, manufacturing is one of the sectors facing the greatest pressure by executives to move to a 100% cloud-based model.
Why these industries specifically? What about the cloud benefits manufacturing and distribution?
How Manufacturers And Distributors Benefit From The Cloud
The cloud offers benefits to everyone: it’s simpler, more agile, and enables process optimization. However, manufacturers and distributors are some of the first to benefit from these improved functionalities.
In traditional IT operating models, IT worked with operations to forecast business needs for the next 5-10 years. Infrastructure investments need to meet anticipated demands and supply-chain adjustments of today, tomorrow, and – hopefully – ten years from now.
It’s easy to imagine how challenging that could be, and the outcomes if the forecasts were wrong.
This also applies to software; in the past, manufacturers and distributors were forced to purchase expensive licenses for enterprise resource planning (ERP), customer relationship management (CRM), and product-design software. The cloud enables a flex-licensing approach purchased on-demand.
Cloud is changing manufacturing by giving the industry the flexibility to adapt to changing market needs. With the regularity of recessions and increased instability in the marketplace, this agility is more important than ever.
Cloud computing means manufacturers and distributors can scale up or down and adjust storage and capacity as needed. Agility means survival in today’s market.
The cloud is changing manufacturing in other ways, too. By integrating supply chains and data streaming from IoT-enabled production, the cloud enables the shifting of data and information within well-networked cloud environments.
At the heart of integration is accessibility. Teams now have the ability to access data at any point in the supply-chain, given appropriate governance and set-up. The disjointed nature of the supply chain means the cloud has an opportunity to optimize the feedback between different elements of the supply chain (i.e. product manufacturing, distribution, service delivery, etc.) to ensure efficient processes are in place.
In terms of software, this means that disparate applications can integrate data into single dashboards, giving operations a single pane with which to view – and optimize – process.
At every point in the supply chain, the cloud is changing manufacturing production, design, quality control, research and development, testing, inventory management, employee management, financial management, vendor relationships, e-commerce platforms, sales, and marketing.
The cloud is changing everything, especially how manufacturers and distributors optimize for efficiency.
By “providing visibility of consumption of raw materials, time-stamping what products have been completed, and either shipping products direct to customers or transferring them here for direct sales”, the cloud is helping manufacturers and distributors optimize and manage the entirety of their operations.
Optimization is also improved at the analytics-level. Big data in the cloud can be used to efficiently drive insights and enable decision-making at both the business and operations levels. Cloud computing provides near-real-time analytics at scale to identify patterns and relationships.
Cloud Is Changing Manufacturing – Are You Using It Effectively?
Over 90% of businesses have at least one application in the cloud, and the increase in cloud technology investment is only increasing ($111 billion in 2016, $216 billion in 2020, according to Gartner).
But using the cloud effectively, to garner the benefits above – and others not mentioned here – requires a strategic shift from traditional IT models to cloud computing models. While the cloud is changing manufacturing broadly, whether businesses – especially SMBs and mid-market manufacturers and distributors – will be able to capitalize on the benefits to compete with large competitors remains to be seen.
Our cloud computing experts are invested in the manufacturing and distribution sector and our relationships with Midwest-based manufacturers gives us unique insights into the specific technology-related challenges the industry faces when migrating to the cloud.
Give our expertise a try with our weekly whiteboard sessions, a chance to talk one-on-one with our cloud experts and discuss the specific challenges or questions you have with either a current or potential cloud deployment.
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Contact us today to discuss how the cloud is changing manufacturing.
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About The Authors
Siobhan Climer, Science and Technology Writer for Mindsight, writes about technology trends in education, healthcare, and business. She writes extensively about cybersecurity, disaster recovery, cloud services, backups, data storage, network infrastructure, and the contact center. When she’s not writing tech, she’s reading and writing fantasy, gardening, and exploring the world with her twin daughters. Find her on twitter @techtalksio.
Mike Czerniak is the Cloud Practice Manager at Mindsight, an IT Services and Consulting firm located in the Chicago area. With 20 years of experience in information technology and the cloud, Mike has helped hundreds of organizations with architecting, implementing, and deploying cloud solutions. For the last 5 years, Mike has focused on providing Mindsight’s customers with guidance in approaching – and managing – the cloud. Mike is AWS, Microsoft Azure, VMware certified, and remains deeply invested in providing an agnostic, consultative voice for organizations on their cloud journey. In his free time, Mike enjoys biking with his 9-year old son, recently completing a 50-mile bike ride!