Throughout history, humanity has leveraged technology to improve our species’ living conditions, marking significant shifts in development during four industrial revolutions.
Most of us pretty much understand the trajectory of human development does lean on new technologies, and that our century is steeped with ideas that are currently transforming our lives, en masse. And even though some of us still like reenacting our hunter-gatherer story in various ways, the majority agree we will be better off staying on the tech wagon.
Let’s recap how this technological evolution came to pass.
The first industrial revolution introduced mechanization powered by steam and coal, revolutionizing manufacturing and transportation.
The second revolution brought electricity, the internal combustion engine, and innovations in communication, transforming industries and connectivity.
The third revolution, driven by nuclear energy, electronics, and computers, paved the way for high-level automation and space exploration.
Now, in the fourth industrial revolution, we witness the integration of digital technologies like AI, IoT, and big data, reshaping industries through unprecedented automation and connectivity.
At the same time, a large percentage of industries capitalizing on great innovations of the 20th century, like manufacturing, agriculture, and the general heavy industry seem to have fallen behind in capturing the momentum of the fourth industrial revolution (aka Industry 4.0) and its new babies.
Cloud manufacturing, as a great example of the current technological advancements, is surely helping in introducing Industry 4.0 to every manufacturer’s doorstep.
If we fast-forward with its adoption, will it be perceived as a game changer and a standard in ten years time?
In the article below we will take a closer look at the current trends within cloud manufacturing through the eyes of those who measure our industries’ development tempo.
Cloud manufacturing is exactly what its name implies - integrating cloud computing with traditional manufacturing processes. Sounds a bit obvious for those taking part in the rise of the Internet of Things, but the potential unlocked by enabling real-time data access and collaboration across global production lines is really tremendous.
According to Gartner, the integration of the physical with the digital will result in:
One of the primary advantages of cloud manufacturing is its ability to provide scalable solutions that grow with the business. No longer will we have to linger on the outdated ERPs, the mechanics of which are known to few & far too little.
Yes, no more granular vendor locks.
In that context, BCG highlights that cloud services will allow manufacturers to expand their operations seamlessly across different regions, adapting quickly to market demands and reducing time-to-market for new products (BCG Global). After all, flexibility is crucial for maintaining a competitive edge, even in heavier industries.
Those of the manufacturers who embrace cloud solutions on the production lines and beyond, can start looking to uncover global expansion potential as seamless scaling of operations across various regions will no longer be an issue. The benefits? See below.
What are the key trends that manufacturers focus on in the 2020s in the context of Cloud Manufacturing?
Sustainability is becoming a central focus for manufacturers. Cloud-based systems contribute to this goal by optimizing resource usage and reducing waste.
As noted by BCG, the shift towards cloud solutions is also driven by commitments to sustainability, with companies aiming to minimize their environmental impact while maximizing operational efficiency (BCG Global).
This “green” element is also prevalent amongst Venture Capitalists and various governmental funds, who are in constant search of tools tackling the following issues:
Truth being told, the biggest players are able to address those issues with solutions like the ones based on Business Technology Platform from SAP, but if we were to choose, we’d still opt for the major cloud providers’ offerings. In our eyes it’s just more practical and simply has broader shoulders in terms of covering future growth of customers’ businesses. Plus, once you go SAP, you never go back.
Data is at the heart of cloud manufacturing. By leveraging advanced analytics and real-time data, manufacturers can make informed decisions that enhance productivity and product quality.
BCG and the World Economic Forum emphasize the importance of data excellence in manufacturing, suggesting that companies that harness data effectively can turn their supply chains into hyper connected value networks (BCG Global).
Such journey from an ERP to data lake based solutions will help in enforcing:
Since all those benefits seem to be at hand, why the sluggish tempo of the manufacturing industry adopting cloud possibilities?
It all boils down to…
A significant barrier to cloud adoption in manufacturing is the lack of necessary skills within the workforce. Gartner reports that successful cloud infrastructure deployment requires upskilling existing teams or hiring new talent with expertise in cloud technologies (Gartner). Organizations must prioritize skill development to ensure a smooth transition to cloud-based systems.
Things to consider include:
While the benefits of cloud manufacturing should already be clear, the path to implementation is fraught with challenges. BCG's research highlights that many manufacturers struggle with insufficient technology and organizational hurdles (BCG Global). Overcoming these barriers requires a strategic approach, including investing in technological enablers and fostering a culture that embraces change.
The future of cloud manufacturing lies in the development of self-optimizing systems that can predict and respond to changes autonomously.
This evolution towards smart factories will be driven by advancements in AI and machine learning, enabling more sophisticated and efficient manufacturing processes.
Gartner predicts that by 2027, a significant portion of manufacturing workloads will be cloud-based, paving the way for these intelligent systems (Gartner).
The anticipated areas of the tech’s focus will be:
As cloud manufacturing becomes more prevalent, it will facilitate greater collaboration across global supply chains.
This interconnectedness will drive innovation, allowing companies to share insights and develop new products faster than ever before. BCG's emphasis on expanding global coverage through cloud services underscores the potential for a more unified and innovative manufacturing industry (BCG Global).
In other words, utilizing clouds will unlock the potential of:
Cloud Manufacturing is a tectonic shift in the industrial sector, offering numerous benefits from cost savings to enhanced flexibility and sustainability, not to mention the CO2 emissions reduction & further adherence to the ‘green’ (h)edges of Industry 4.0.
Realizing its full potential requires overcoming significant challenges, including skill gaps and technological barriers, like the ones existing on the lines between automation engineering and the general cloud toolbox.
Nonetheless, as industry leaders like Gartner and BCG suggest, the future of manufacturing will be shaped by those who can effectively integrate cloud technologies into their operations, driving efficiency, innovation, and growth. The industrial train is rolling & it is rapidly changing its mechanics as we speak. With Industry 5.0 behind the corner, it’s worth taking a closer look at what’s available on the table & how it can provide the competitive edge.
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