The “Cloud Buzz” has already been there around for a few years now and the technology, which was earlier targeted towards SMBs, has now gained gradual acceptance even among the larger manufacturing firms owing to cost concerns and tightened IT spending budgets in the post recession era.
But a common query that many cloud experts today face from the manufacturers is, “Do these cloud applications merely focus on service-oriented firms or are there any targeted solutions for manufacturers, too?”
It is true that most of the cloud applications have been initially designed with the requirements of a service firm in mind. That’s because service firms generally have less complicated functional requirements (since, they do not need design engineering, product costing, and other industry specific solutions) and don’t need to support as many disciplines (e.g., process manufacturing, JIT, make-to-order, make-to-stock, etc.) Hence, it is easier and quicker for cloud vendors to get a product line to market, if they focus on the service buyers first.
At a time when the industry experts and analysts are betting big on cloud services, manufacturers just cannot choose to ignore “The Cloud”, even though they may not be able to put the entire pie of IT applications and services on cloud. Gradually, manufacturers are realizing that cloud applications can be leveraged in the collaboration space, since managing relationships with several internal and external stakeholders within the supply chain is extremely critical for this industry.
However, there remain some big questions to be answered.
- If a manufacturer has already invested an amount on hardware and software, how is the adoption of cloud going to help? Will it salvage the money invested in them or will the cloud service provider maintain them?
- Can applications like ERP be put on the cloud or only the messaging system to start with?
- Can the software running on the cloud be tailor-made? And, this is important since the current ERP system can be customized to manufacturers’ requirements. Hence, if the cloud provider offers standard ERP software, will it suit the manufacturer’s requirements to make changes when needed?
Currently, manufacturers looking for full-suite, multi-tenant cloud based solutions have limited options. Plex Systems ‘s Plex is a cloud-based, multi-tenant solution with a fairly full discrete ERP solution set. SAP, too, has come up with a robust cloud-based product line marketed under Business ByDesign. There’s also NetSuite’s NetSuite Manufacturing Edition, which intends to provide manufacturers cheaper SaaS alternative to the “old school” solutions in use, currently. Rootstock’s manufacturing software enables mid-sized manufacturers to quickly and easily implement cloud-based manufacturing solutions like Material Requirements Planning, Scheduling and Capacity Planning, Manufacturing Inventory Control, PLM Integration, etc. At the recently concluded Dreamforce 2011, Kenandy introduced Kenandy manufacturing application built for the cloud on Force.com. The application combines core manufacturing functions like inventory management, engineering, purchasing, production, and requirements planning with the mobile, social and open features of Force.com.
Many HR, financial and horizontal cloud solutions work equally well in service or manufacturing environments. As a matter of fact, for any manufacturing firm which is at the pilot phase of moving to the cloud, it is probably a good idea to look at horizontal applications like Salesforce.com (CRM), NetSuite, FinancialForce, Taleo, etc. And experiment with the industry or vertical cloud applications at a later stage.
While considering cloud applications, manufacturers must take into account factors like total cost of ownership (TCO), financial health of software and cloud service providers, and variations, such as private cloud computing and hybrid approaches.
Over the past decade, manufacturers have done quite well in terms of optimizing and automating their supply chains. By leveraging the cloud, they can reach the next stage of end-to-end integration, fostering collaboration between R&D, engineering, operations and functions.