Cloud as a Foundation for Digital Readiness in Manufacturing
April 20, 2018Manufacturers are bombarded daily with promises of a digital revolution and system-wide reimagining. The potential is astounding. IT consulting firm, Capgemini, even predicts in a recent report that smart factories could add $500 billion to $1.5 trillion in value-added service offerings to the global economy in five years.
Such impressive numbers and the technologies on offer, like Augmented Reality and Artificial Intelligence, are capturing the imagination of visionaries. But, pragmatic and results driven manufacturers will be looking for the proven tactics that will bring definable process results and quickly offer a measurable Return on Investment while setting firm foundations for their digital strategy.
Manufacturers know they must first go beyond the hype and examine core, foundational issues. These may be process pains that have been a nuisance for years, but didn’t make it to the top of the priority list as personnel devised work-arounds and “made do” with the inefficiencies.
For many manufacturers fixing these fundamentals requires updating their ERP solution, the heart of the enterprise, and transitioning to cloud deployment. Cloud deployment provides the enterprise-wide process improvement manufacturers need today. Cloud deployment’s elasticity, and fast implementation are also critical elements of being digital-ready.
Why is cloud deployment the logical starting point for a short-term transformation, and long-term digital journey?
- Keeping pace with fast changing pressures and rapid change
Manufacturers face escalating market pressures with endlessly changing trends and evolving customer demands. To respond, manufacturers may need to put in place regional divisions, leverage mergers and acquisitions, form partnerships, add distribution hubs, or build new facilities. These tactics require setting up new systems, hardware and software.
With the traditional on-premises approach the IT department is burdened with procuring and managing the hardware, servers, security, and back-up systems. Software solutions can be time-consuming to implement, especially if the ERP is a generic one-size-fits-all which needs to be highly modified to suit an industry. These “old-school” processes are no longer practical. Cloud deployment, in contrast, leaves the system set-up to the cloud provider, meaning the system is ready to go within weeks.
- Storing vast amounts of data
Legacy solutions deployed on premises seldom offer the storage capacity needed for digital technologies, such as the Internet of Things (IoT). IoT applications involve sensors embedded in products or equipment to capture and communicate a continuous flow of data about location and conditions. This requires the virtually unlimited storage capacity of the cloud. Trying to manage the massive amounts of sensor-generated data within your own on premises system would require substantial investment in hardware—and people to manage the systems.
- Visibility and flexibility
Digital manufacturing is all about data, visibility, and access to data. It involves connecting to other systems, solutions, and even other devices, like shipping containers and material handling equipment. In order to be digital-ready the organisation must have a core ERP that is flexible. That means getting rid of the cumbersome modifications that make updates and upgrades difficult. You need a system which can easily integrate and connect with other systems. In the past, ERP providers were concerned about keeping data within the organisation, not in sharing. Today, visibility must extend beyond the four walls of the plant to the supply chain network, colleagues, co-manufacturers, and partners. Turning to a modern ERP solution in the cloud makes this level of enterprise-wide connectivity easier.
- Fully modern today, fully modern tomorrow
A manufacturer with an outdated ERP solution is likely experiencing multiple pain points which are draining profits or making it difficult to keep up with the competition. Some may try to fix these issues, one at a time with add-on solutions. Trying to adapt a digital framework one edge app at a time is slow and inefficient, whilst it may have had its place when early adopters were needing to prove digital concepts with pilot programs, digital concepts are now proven and beyond requiring protected boundaries to limit risk.
Now, it makes more sense to deploy system-wide improvements at once, starting with the ERP solution. No other tactic will be so far-reaching and offer the ability to resolve multiple operational roadblocks all at once. Perhaps one of the most substantial benefits of cloud deployment is that manufacturers won’t have to worry about upgrades and keeping the software modern. Cloud solutions are updated on a continual basis so that the software always contains the latest functionality.
- Consistent customer-centricity
An enterprise-wide approach is also the most practical way to improve multiple customer touchpoints, addressing the entire customer journey, not just order entry or field service dispatch. Customers engage with manufacturers at multiple levels, at many different intersection points in the buying cycle, from early product inquiries to aftermarket service and repeat sales or upgrades. The customer expects a consistent experience throughout the process, not a highly attentive pre-purchase phase that suddenly drops off the moment the status switches from prospect to customer. With a new, advanced ERP solution in place, the customer experience will be consistently modern.
Manufacturers today are enticed by the exciting dazzle of disruptive technologies which promise big benefits. Also, the pragmatic manufacturer often is concerned about ROI, achieving early wins, and proven methods for solving day-to-day operational pains. Deploying a modern ERP solution in the cloud takes care of both aspects. The cloud deployment offers the starting point for digital activities that are visionary and high impact, like IoT. The enterprise-wide advanced functionality of a modern ERP solution also brings the very practical applications that the manufacturer needs now in order to be competitive and please customers.
Want to find out more about this topic?
Join Infor's thought Leadership session: Cloud as a Foundation for Digital Transformation at the CIO Summit Europe in Paris on the 14th of May, 12:05 pm - 12:30 pm