Rising costs, disrupted logistics, energy shortages, and bottlenecks are all putting a strain on supply chain networks. Manufacturers must figure out how to manage fluctuating demand and disruptions. COVID-19 alerts we cannot just optimize for the new normal. As per an Accenture study on supply chain and the cloud, 53% of supply chain executives stated the pandemic caused them to reconsider their entire supply chain.
The use of cloud in the manufacturing industry is predicted to reach USD 111.90 billion by 2024. Leading firms perceive the cloud as a journey rather than a destination and embrace innovative technologies such as the cloud to optimize production processes, reduce environmental impact, and meet the changing demands of the market.
In this blog, we will explore the benefits of having manufacturing operations on cloud, several use cases and much more. So, let us get started.
Cloud Making its Way into Manufacturing - Value Chain/Supply Chain Management
There are several challenges in the manufacturing sector that can impose operational and financial limits on businesses. Budget constraints, restrictions in supply chain hardware capabilities, cybersecurity concerns, integration complexities with legacy systems, and data protection considerations are just some of them.
However, the adoption of cloud presents a strategic solution. According to Accenture research, investing in the cloud is a game-changer for businesses. It's been shown that 60% of businesses investing in cloud outperform their competition of supply chain transformations. What's more, over half (53%) of them credit cloud for their improved resiliency and sustainability.
Cloud solutions right now, are serving as a critical enabler, changing manufacturing processes into highly efficient and well-optimized operations.
Let us see how and why!
Benefits of Cloud in Supply Chain Management
1. Data-driven insights
Data collection is one thing; evaluating it to drive growth is quite another.
Cloud-based tools can be used to monitor data analytics and to uncover useful insights that can drive supply chain decisions. Cloud monitors real-time data across multiple aspects of the supply chain and analyzes historical data using various logistics, inventory, and Enterprise Resource Planning technologies. With this information, decision-makers can get a forecast on demand trends, optimize inventory levels, and guarantee that proper stock levels are maintained.
For example, cloud-based data analytics solutions can assist manufacturers in tracking and analyzing key performance indicators such as production rates, inventory levels, and quality control data, allowing them to make informed decisions that improve their operations.
2. Vendor Management and Performance Tracking
Cloud can help with vendor relationship management and performance. This includes gathering and analyzing data on supplier performance indicators such as on-time delivery, quality control, and response times. Advanced analytics technologies can be used to evaluate vendor KPIs and suggest areas for improvement, allowing businesses to make better-educated decisions about which vendors to partner with, and more.
3. Cost savings
When it comes to supply chain management in manufacturing, cost savings are always a top goal. The cloud has enormous cost-cutting possibilities. Companies can avoid large upfront hardware and infrastructure expenses, replaced with a utility-like payment model that depends on the company's requirements.
Furthermore, cloud eliminates the need for costly on-premise system maintenance and upgrades. The cloud provider is responsible for hardware maintenance, software updates, and cybersecurity precautions. These cost savings can be reinvested in other areas of the organization, such as R&D or increasing the product line, supporting growth and innovation.
4. Scalability and flexibility
Because manufacturing is a dynamic field, adaptability is essential. Consider this scenario: a company receives an unexpected rise in demand. They may ensure that their mission-critical operations and business applications, such as Warehouse Management System (WMS) software or Transportation Management System (TMS), work smoothly even during a demand surge or increased traffic by hosting these apps on the cloud. The underlying architecture of the cloud enables these apps to scale up immediately, avoiding delays and operational glitches.
5. Agility in handling Operations
Cloud-enabled supply chains are critical to accomplishing business objectives that go beyond OPEX reductions. Importantly, cloud-based supply chain operations can be more resilient, adaptable, agile, and responsible. Cloud capabilities can provide a significant competitive edge in "new age" sectors with shifting operational patterns. Rather than investing in huge platforms, businesses may swiftly deploy process-level solutions that are all interconnected via open APIs.
6. Enhanced Customer Experience
Cloud solutions enable manufacturers to communicate with their customers and provide them with the products and services they require. At the same time, the cloud enables real-time access to data from warehouses, transportation networks, and distribution centers, providing a full view of customer behavior. This comprehensive approach enables a more customer-centric supply chain, which eventually leads to a better customer experience.
Customer relationship management (CRM) technologies, for example, can assist manufacturers in managing interactions with the customer and building connections, resulting in a more personalized experience.
7. Extends the manufacturing ecosystem
The pandemic has forced businesses to reconsider their traditional procurement and distribution networks, putting an emphasis on localized availability and supply chains. This entire landscape may be monitored and managed from many locations using a cloud. The cloud-based convergence of information technology (IT) and operational technology (OT) makes it easier to remotely orchestrate the manufacturing environment.
8. Improved Security
Cloud can assist manufacturing companies in maintaining a safe data environment by utilizing authentication mechanisms that are common in other industries. According to recent surveys, just 40% of firms save critical information on devices with encryption software installed due to concerns about potential hacker attempts. Because they are not tied to a single physical place, cloud solutions, including the usage of Artificial Intelligence (AI), can provide a far greater level of security than traditional IT installations. Data is replicated using virtual machines and automatically backed up over many geographical areas utilizing linked devices.
9. Data Analytics
Data is the lifeblood of modern businesses, and it’s no different when it comes to manufacturing or supply chain optimization. To get the most out of data, however, proper data management and analysis are required. The powerful data analytics capabilities of cloud enable you to delve deep into data and discover relevant insights.
Manufacturers receive a holistic insight into their operations, from manufacturing to distribution, using data analytics. They can uncover inefficiencies and places for development by analyzing historical and real-time data, this includes - optimizing production processes, lowering transportation costs, and streamlining inventory management. Moreover, analytics isn't just restricted to looking back. Predictive analytics uses historical data to predict future trends, swings in demand, and probable supply chain disruptions as well.
10. Disaster Recovery and Business Continuity
The cloud provides sophisticated disaster recovery capabilities, such as data redundancy and automated failover techniques. Data is frequently kept in geographically dispersed data centers, ensuring security in the event of hardware problems or data center outages. To ensure high availability and speedy recovery, manufacturers might set up automated backup schedules and data synchronization between several data centers.
11. Regulatory Compliance and Data Governance
Most cloud providers give a variety of compliance certifications and tools to assist manufacturers in meeting industry-specific standards and data governance needs. It is needed for regulations related to:
- Product safety and quality - which can include requirements for labeling, testing, and certification.
- Workplace health and safety - which includes requirements for training, protective equipment, and emergency procedures.
- Environmental protection - which can include requirements for waste management, emissions control, and sustainability reporting.
- Data protection and security - which can include requirements for data privacy, integrity, and availability, as well as data retention regulations, and,
- Industry-specific standards and regulations - such as the General Data Protection Regulation (GDPR) or the International Organization for Standardization (ISO) 27001, to ensure data protection and security.
Cloud providers, such as AWS for example, offer sophisticated compliance systems that cover a wide range of industry standards, such as ISO and GDPR compliances.
12. Streamlined communication and collaboration
The manufacturing industry has numerous points of contact. With multiple individuals, departments, and businesses engaged in processes, coordination can become a task. Cloud can be highly beneficial in ensuring that everyone is on the same page and has access to the most recent changes. Cloud allows to centralize data and applications, making it easier for teams to access and share information in real-time. It also integrates data streams from various partners, platforms, and devices, in this way, anyone may communicate with anybody in the supply chain - customers, clients, partners, suppliers, and coworkers - via the internet.
Collaboration is also essential in the manufacturing industry. Assume you need to coordinate with vendors across multiple time zones. Cloud-based collaboration systems save both, time and effort. Everyone, no matter where they are in the world, can be on the same page thanks to shared access to data, documents, and project management tools.
Cloud Transforming Manufacturing: Top Use Cases
To really power up activities, enhance operations, and improve the customer experience, companies need to visualize every stage of the production to end customer engagement process. Cloud allows teams to do just that, gaining complete insight into various steps from production to delivery. Here are some important ways cloud steps in:
In a bustling warehouse filled with gadgets, components, and eager workers, cloud solutions can be instrumental for improving efficiency and productivity.
Maintaining a responsive and successful supply chain necessitates a thorough understanding of logistical efficiency. While humans used to oversee every discrete element in logistics, with the heavy influx of data, shipments, and global transactions now, that is not feasible. Cloud and big data analytics have opened up numerous possibilities for streamlining or automating some of the most crucial logistical tasks in the supply chain. Here are a couple such examples:
- Managing truck and other vehicle movement and allocation.
- New orders are being sequenced and prioritized.
- To avoid delays, automatically generate or update supply or shipping routes.
- Filling out compliance documentation, invoices, receipts, and other forms automatically.
The capacity to forecast future sales allows you to change procedures and scale departments to guarantee supply matches demand. Cloud services, which are powered by data analytics and enabled by remote access capabilities, examine past sales data, market trends, and even external elements such as weather patterns. Cloud solutions collect and organize data from various sources in order to provide a better understanding of present and future scenarios. Among these sources are:
- Channels of customer service
- Online marketplaces
- Retail establishments
- Wholesale distributors
Robotic Process Automation (RPA)
The cloud facilitates RPA (Robotic Process Automation) in manufacturing by providing a scalable and adaptable infrastructure from which RPA bots can operate, access, and store data. RPA for example, can help:
- Manage Inventory - RPA bots can check inventory levels, replenish supplies automatically when they run low, and update inventory records in real time.
- Inspect Products for Quality Control - Bots with computer vision capabilities can detect faults or anomalies and initiate actions such as rejecting or re-routing products for additional examination.
- Order Processing - RPA bots can assist in automating operations such as order entry, order verification, and order status updates, hence improving order accuracy.
- Optimize Supply Chain Operations - By automating functions such as demand forecasting, vendor contacts, and logistical coordination. Bots can adjust orders in response to shifting demand or improve transit routes.
- Manage Enormous Volumes of Data - Thanks to the cloud's computational power and storage capacity, while also enabling safe, real-time access to information for remote monitoring, decision-making, and collaboration.
3D printing, aka additive manufacturing, has become popular in recent years as a crucial tool for allowing quick and cost-effective manufacturing of parts. Cloud makes it easier to store and share 3D design files, work alongside geographically dispersed teams, get remote access to 3D printers, and make use of cloud-based processing resources for complex 3D modeling and rendering tasks.
Internet of Things (IoT)
According to recent reports, there are close to 7.74 billion IoT connected devices. The cloud acts as the backbone for IoT device data collection, storage, and analysis. Manufacturers can track product placement in real time, monitor storage conditions, and respond proactively to changes in the supply chain by connecting IoT devices to the cloud. The cloud's scalable architecture enables the storage and processing of vast amounts of IoT data, which improves data analysis and forecasting.
Artificial intelligence (AI) and Machine Learning (ML)
Cloud-based AI and ML solutions provide firms with enhanced technologies that may automate supply chain activities to replace manual and repetitive tasks such as data analysis. With its processing power and storage capacity, cloud solutions can perform complicated computations ranging from procurement to sales, resulting in more data-driven and efficient decision-making.
Generative AI is one such application that has made considerable gains in manufacturing. In the design process, generative AI can be utilized to produce and optimize product designs. In the aerospace industry, for example, generative design algorithms can create creative and lightweight structures that meet demanding performance standards. This not only speeds up product development but also leads in more cost-effective and environmentally friendly designs.
Cloud-based IoT platforms can be used by manufacturers to get real-time machine data from the shop floor. These machine data help manufacturers monitor its availability at the plants, productivity, energy usage, machine maintenance, and quality production of each machine. This also helps manufacturers to plan production activities according to machine performance and availability.
Operational Data Monitoring:
Aside from data storage, cloud allows modern manufacturing organizations to have quick and remote access to critical operational parameters such as capacity utilization, inventory data, scheduling plans, task orders, overall equipment efficacy, and so on. As a result, manufacturers are able to address any operational concerns more rapidly.
Mobile Access and Field Operations:
Field personnel can access important information while on the road, thanks to mobile applications and cloud-based platforms. Mobile devices can be used by field service technicians, delivery drivers, and other remote personnel to retrieve real-time data, access inventory information, change orders, and communicate with the central system.
Inventory Optimization and Reduced Carrying Costs
Cloud-based inventory management tools play a pivotal role in the manufacturing industry. These tools, by continuously monitoring real-time demand data, supplier lead times, and historical purchase histories, can help with both - optimizing stock levels and minimizing carrying costs. Consider a manufacturing company that employs a cloud-based inventory management tool, it calculates optimal reorder points, safety stock levels, and economic order amounts using algorithms and historical data.
Or, when a retail manufacturer's demand fluctuates or peaks during the holiday season. The system identifies demand patterns and adjusts reorder points, accordingly, ensuring that the right amount of stock is on hand to meet increasing demand.
This serves two purposes. First, carrying costs are lowered because surplus inventory and storage charges are eliminated. Second, stockouts and lost sales are reduced, resulting in increased inventory turnover and customer satisfaction.
Smart manufacturing can help all aspects of manufacturing, including production management, quality control, and supply chain management. With the capabilities of cloud here, manufactures can collect machine data and store it in a centralized location, where it can be utilized to improve production processes and discover areas for improvement. The cloud also helps in the digital integration of all manufacturing machinery and processes into a single AI-powered system that provides real-time access to global data from all departments, from R&D to assembly lines.
Augmented and Virtual Reality
Cloud-hosted AR/VR systems provide workers with immersive experiences, improving procedures and productivity. For example, a corporation may utilize augmented reality to display assembly instructions on its employees' screens or to construct a virtual simulation of its production line so workers can see what the finished product would look like before they begin production.
Product Development and New Innovations
Cloud technology is critical in modern product development because it allows for the integration of software components and the management of complicated systems. Design teams can cooperate on software development via the cloud as products become increasingly software-driven, allowing for quick prototyping, version control, and real-time changes. Automobile manufacturers such as Tesla, GE, Airbus, and Danaher, for example, use cloud-based development platforms to continuously upgrade the software aspects of their vehicles.
Production and Stock Tracking
Once production begins, cloud technology can help with the manufacturing and stocking of products. Companies can use enterprise resource planning (ERP) software to match output levels to available stock and sales. Price bids, order intake, and customer requests can all be managed by the software. When adopting a standard product to track these, there are fewer errors, which reduces order cycle times.
Reconfigured Assembly Processes
Manufacturing has progressed toward standardized platforms, with specific product modification emerging later and later in the assembly process. Software in the product or in the cloud can be loaded or configured long after the device is shipped from the factory, by a field service technician, or even by the customer. New apps can be installed, and touchscreen keyboards for multiple languages can be configured.
Smart home gadgets, such as Google Nest thermostats, for example, receive cloud-delivered upgrades to improve performance and security.
Cloud-Powered Manufacturing: Real-World Success Stories
Tesla: Tesla has successfully used cloud in their innovation pipeline, particularly in the development of a fully autonomous electric vehicle (EV). When a Tesla enters autopilot mode, it sends data to a cloud server, from which Tesla learns how to improve its functionality. This knowledge is then pushed back to the vehicles via software updates. Tesla leverages cloud to provide updates to address issues, such as overheating. Tesla has also introduced a new cloud-based 'Profiles' feature that allows drivers to easily switch between several versions of the company's EVs. The feature, which will memorize car settings, is being enabled to Tesla vehicles with the newest over-the-air software update.
Coca-Cola: Coca-Cola has developed a "multi-cloud" migration plan from on-premise servers. Google Cloud Platform, Amazon Web Services, and Microsoft Azure serve as the organization's multi-cloud infrastructure. Coca-Cola İçecek (CCI), one of the Coca-Cola system's primary bottlers, is also updating its manufacturing facilities by establishing a digital plant replica—a digital twin—in the cloud. CCI will be able to bring about value through advanced analytics, artificial intelligence (AI), and real-time asset monitoring as a result of this. CCI has created a blueprint that other Coca-Cola bottlers can use to digitize manufacturing technology in their facilities.
Ador Welding Limited: This industrial manufacturing company has modernized its IT infrastructure and improved its operations by utilizing cloud technologies. Cloud4C, a provider of cloud solutions, assisted Ador Welding in migrating and modernizing its on-premises Oracle EBS workloads, legacy OS, and databases running on several platforms to Oracle Cloud Infrastructure (OCI). Cloud4C also bolstered Ador Welding's data infrastructure with best-in-class disaster recovery and security solutions, enabling the company to provide high availability managed services with in-depth security.
Patanjali Ayurved: This Patanjali, partnered with Cloud4C to automate its value chain on the cloud. Patanjali decided to use the cloud to strengthen its operational underpinnings in preparation for greater developments. Cloud4C, in collaboration with its internal technology arm, created a cloud infrastructure to support the firm’s critical business applications at maximum availability. The entire value chain was controlled digitally via a single platform hosted on a high-availability cloud.
Smart, Connected Manufacturing with Cloud4C
Cloud has emerged as a critical enabler of the '4th Industry Revolution,' in which advanced technologies like Artificial Intelligence (AI), the Internet of Things (IoT), and blockchain are blurring the line between the physical and digital worlds. Making cloud a valuable resource in the modern industrial economy. This is where Cloud4C’s solutions come into play!
Cloud4C, as a managed cloud service provider, can help manufacturing companies migrate and modernize their IT infrastructure to the cloud. Cloud4C's solutions can help manufacturers in embracing Industry 4.0, the fourth industrial revolution that uses intelligent software, robots, cloud computing technologies, AI, big data, and other advances. Our in country compliant Hybrid Cloud and Multi cloud solutions are also designed to help manufacturers leverage the benefits of both public and private clouds, providing greater flexibility and scalability, cloud security and compliance solutions to protect data and comply with industry regulations.
The future of manufacturing is in the cloud, and companies that embrace this technology will be better positioned to succeed in the years ahead. Wish to know more? Contact us today!