Wednesday, September 19, 2018

Why Companies of All Sizes Should Consider Cloud Computing for Smart Manufacturing

This blog is MESA Peer Reviewed

By Srivats Ramaswami, Member of MESA’s Smart Manufacturing Working Group and a Member of MESA’s International Board

Download the supplemental White Paper: Smart Manufacturing and Cloud Computing

Does the size of the company matter when using Cloud Computing for Smart Manufacturing? The short answer is no. A cloud-based Smart Manufacturing strategy is very much going to be driven by business needs and technology adoption appetite. With that said, Cloud Computing offers some significant benefits for Smart Manufacturing. The following are elements of Cloud Computing to be considered whether you are a small, medium or large company.
A cloud solution allows you to start small and expand. For example, if you are a manufacturer wanting to deploy work instructions on a manufacturing line that is running a legacy of plant systems sans instructions, you could deploy work instructions from a cloud-based MES solution, start small and build on that success as you further rollout MES. 

With cloud, you do not need to boil the ocean for a specific business opportunity. If you are evaluating migrating from your on-premise CRM solution to the cloud, you can start with leads and opportunities management in the cloud, keep the quoting and approvals on premise and upon successful implementation of the leads and opportunities, expand your reach into quoting and order management. 


If you are looking into channel partners, you can run a storefront in the cloud while maintaining other order management systems on-premise. The cloud storefront allows the organization to immediately increase revenue through channel sales. While the hybrid cloud solutions create an easier transition path to a full cloud-based system of systems -- if these are desired end goals for the organization. 

Hybrid solutions can help companies adopt MES. Why is MES important? Analysts from LNS Research have quoted that only 20% of the manufacturers who should be using MES are actually using MES. [1]  How significant is that? This quote implies that 80% of the organizations that can benefit from MES do not actually use MES. If you are a large manufacturer with hundreds of factories, you can develop a hybrid strategy of cloud-based and on-premise manufacturing systems. There are plenty of opportunities to take advantage of the cloud in a hybrid environment. 

When considering deploying an MES in one of the manufacturing lines. You can start with basic data collection, then expand to work instructions, further expand to additional capabilities like statistical process control and other expanded capabilities. Big MES procurement cycles can push the organization into wanting to immediately implement the bigger footprint to get the bigger returns. Cloud solutions might offer a gentler rollout process for investment and time to achieve return on that investment. These gentler adoption paths might also be less obtrusive to production schedules. 

With cloud solutions, you can focus on the low hanging fruit, pay for what you use and realize benefits in as little as 8-12 weeks. Under these circumstances, it is important to ensure that the cloud solution provider has open architecture through APIs so that you can easily integrate point solutions like SPC from any solution provider with your cloud-based manufacturing.

Other benefits include:

  • Cloud delivers a "mutual fund" strategy for you. Let us say that you have a set of opportunities to migrate the cloud. Traditional on-premise solutions would require you to procure software, procure hardware, install, configure, customize and fully implement the entire solution before you can see the first value. Since in the cloud, you can start small and expand, you will see the first value much faster. You can re-invest the savings back into the manufacturing systems and gain more value by continuing to improve productivity.

  • Cloud solutions help reduce the cost of mitigating system failures across multiple factories. With an on-premise solution you will need to perform risk assessment and mitigation for each of the environments whereas with a multi-tenant cloud, the SaaS solution provider can guarantee service levels with their built-in redundancy and failover methods. 

  • Security controls can be improved. For example, cloud providers are running all sorts of defense related programs and the FDA conducts clinical trial processing in the cloud. However, security considerations should not be completely delegated. The organizations must ensure that practices around these systems apply proper security principles and periodic audits are conducted.
In summary, the size of the company does not matter. There is a place in cloud for all sizes of companies for a wide range of opportunities. Different appetites for change can also be accommodated through transitions that adopt the cloud incrementally. Each manufacturer will draw the line differently between on-premise and on-cloud services depending on their immediate and long-term needs. 

For more information on Cloud Computing and Smart Manufacturing, see the recently released white paper from MESA: Smart Manufacturing and Cloud Computing  
[1] Start with Manufacturing Transformation to Achieve Smart Manufacturing, A. Hughes, LNS Research, 2016 

Srivats Ramaswami, CTO, 42Q
Srivats Ramaswami has worked at both OEM’s and contract manufacturers for many years, most recently as vice president of I.T.Operations. His expertise includes the architecture and implementation of innovative I.T. solutions for large OEM’s, making their global supply chains visible and more efficient. Srivats is now responsible for providing leadership in customer acquisition and engagement, technology development and deployment for 42Q.

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