Cloud computing in manufacturing: from impossible to indispensable

Most manufacturers are familiar with terms like “smart plant,” “plant of the future,” or “digital factory.” But regardless of the term used, it implies a manufacturing environment where digital technology enables more productivity, efficiency, safety, and compliance. Unfortunately, it also implies an environment that seems far away from the current state of most manufacturers. Why? Because historically, manufacturing IT projects have proven to be long, costly, and in many cases risky – especially if they required remote hosting of manufacturing applications.

However, digital adoption has accelerated in the past few years, mainly driven by three factors:

  1. High-speed and high-availability network services have been introduced by telecom providers at affordable (read: very low) prices in multiple regions.
  2. Cloud technology has evolved, bringing with it cloud-based solutions that dramatically reduce time-to-value for manufacturers.
  3. Most recently, the disruptions caused by the COVID-19 pandemic have forced manufacturers to revisit their traditional approaches.

As network and cloud services evolve, manufacturers have access to a whole new set of infrastructure options that they can use to improve the way they support shopfloor operations. These options include edge computing to address near real-time use-cases; private cloud, typically necessary for compliance reasons; and public cloud, which gives them access to scale, innovation capabilities, and flexibility. This is what we call the Cloud Continuum – a new model, in which centralised and distributed computing resources are combined to ensure new IT and business efficiencies.

The IT efficiencies associated with cloud are well known. For example, when properly designed, flexible pay-by-the-use computing capacity can lead to 20%-40% cost reduction when compared to traditional on-site underutilised on-premise infrastructure. Cloud also gives access to capabilities of leading service providers such as AWS, Azure, Google, Oracle, and others to keep the infrastructure up and running, as opposed to relying on outdated software or vulnerable legacy infrastructures. By properly utilising the cloud, organisations can reduce IT labour and operating costs.

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From the business efficiencies perspective, manufacturers can unlock value by using components such as:

  • Analytics tools for control tower and real-time supply chain integration that gives way to smarter and faster operational decisions.
  • Identifying federations to enable users from different companies to collaborate without the need to create interfaces.
  • Machine learning algorithms and digital twins that allow for the prediction of maintenance and quality events.
  • Industrial Internet of Things (IIOT) for asset monitoring that leads to increased plant uptime.
  • Data lakes for engineering and manufacturing data to be shared across organisations.
  • Computer vision for hazard detection, such as for people without personal protective equipment, or people in restricted areas, and for product inspection.
  • Natural language processing for speech-to-text applications such as logbooks.
  • Temporal databases for data exchange with feedstock providers or downstream consumers.
  • Low code/no code for rapid workflow automation and data collection.

The question remains: If the cloud brings so many benefits, why are there manufacturers still hesitant to using cloud-based solutions on the shopfloor?

From an infrastructure perspective, the risks associated with remote hosting manufacturing applications, such as performance, availability and security, are well known by most manufacturers, but ways of mitigating them, are not. New solutions like 5G and multi-access edge computing – which add a layer of security – were not available, known, or affordable at many manufacturing locations until recently.

From a software perspective, until a few years ago, the value of cloud for manufacturers was very limited. Cloud used to be seen as a virtual data centre to which moving manufacturing applications did not represent a compelling business case, as the costs did not outweigh the risks. However, as software vendors introduce new cloud-based products, we’ve witnessed a dramatic change in embrace. The adoption of cloud-based solutions has become more attractive, especially to those seeking innovative ways to solve problems that otherwise would have been considered too expensive or too complex to solve based on traditional on-premise models.

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Advancements in infrastructure, combined with the exponential growth of software offerings in the cloud, has accelerated the digitisation of the supply chains, allowing companies to operate and interact with each other in a more transparent and automated way. Companies are quickly expanding their operational intelligence, moving from single assets descriptive analytics – where manufacturers are informed of what has happened; to prescriptive analytics – where manufacturers are informed of options to respond to what’s about to happen; across multiple lines, factories, all the way to critical elements of their supply chain.

The exponential value creation cycle enabled by the Cloud Continuum does not depend on IT only. It requires organisations to have a well-defined vision, an adequate operating model, and a properly designed set of technology adoption principles. The adoption of cloud solutions without these three components usually leads to difficulty scaling and sustaining the intended benefits.

In summary, cloud adoption in manufacturing went from a concept deemed impossible, or at least not economically viable, to an indispensable way to enable companies to compete in a digital world. Understandably, too many things are new in this space, and the race to increase companies’ productivity, efficiency, safety, and compliance does not give manufacturers much time to learn from their own experiences.

Written by Thiago Martins, managing director, Industry X & manufacturing execution systems lead at Accenture

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