Cloud transformation has been an increasingly tantalising prospect for manufacturers over the past decade.
Now, as the manufacturing industry has raced to adapt to the pressures caused by the pandemic, the flexibility and cost savings it offers are more essential than ever.
It’s therefore hardly surprising that in McKinsey’s 2021 report on the subject, nearly two-thirds (64%) of discrete manufacturers stated that they had already made and completed the leap from on-premise solutions.
While many manufacturers need to distribute their workloads across numerous solutions, public cloud environments now represent the largest and fastest-growing share of manufacturing workloads.
Below, we outline what problems this solves for manufacturers, before discussing how you can begin to transform your organisation.
Here’s what we cover:
What problems do manufacturers currently face?
Manufacturers face several hurdles in keeping up with customer expectations.
Those that haven’t yet made the leap to the cloud are set to fall even further behind, as cloud technology evolves and earlier adopters get ahead of the competition.
The past 18 months have compounded these issues, with periods of staff isolation, working from home, and reduced headcount all taking their toll on manufacturers the world over.
Those with no cloud capability were hit hardest, with on-premise processes inaccessible and limited means to work remotely.
Manufacturers who haven’t yet made the leap to cloud are subjected to:
- Reduced visibility into their operations due to a lack of real-time data
- Labour-intensive and error-prone manual processes in key areas such as financial forecasting and equipment maintenance
- Lengthy recovery processes in the event of data loss or theft
- A lack of flexibility regarding where and when employees work.
Starting your journey to cloud manufacturing not only addresses these issues but offers significant benefits, such as the following:
- Visibility: Integrated cloud solutions pull together data from all over your business with the help of artificial intelligence (AI)-enabled analytics. This gives you instant, real-time visibility into what’s happening across your organisation, with no data silos.
- Forecasting: Cloud software uses all the data you analyse to create accurate forecasts that inform long-term strategy. These can be both financial and operational (for example, forecasting how much raw material you’ll need to get you through the next busy period), and help you optimise your approach for maximum success.
- Reduction in IT costs: It’s cheaper to rent space on third-party servers than to buy, maintain and replace your own. It’s also easier and cheaper to scale your applications. All you need to do is rent more space, rather than expand or replace your own hardware.
- Reduction of manufacturing costs and more efficient cash flow: Predictive maintenance reduces downtime, while AI-driven forecasting reduces spend where it isn’t required and optimises warehouse space for the materials you need.
- Flexibility: You can access cloud software from anywhere with an internet connection, so office-based teams can work remotely much more easily. Meanwhile, Internet of Things (IoT)-enabled environment monitoring tools allow you to monitor your factory remotely too.
- Security: Third-party data centres employ top-of-the-range IT and physical security experts to make sure your data is kept safe. And that’s an investment you might not be able to match in house. Backing up your data off-site also makes it significantly quicker and easier to recover in the event of data loss or theft.
How to begin your cloud manufacturing journey
Taking the first steps to start you on your cloud journey might seem intimidating, but it doesn’t need to be.
To help you along the way, below we cover five steps to take, highlighting the need to be clear on goals and communicate with your employees before you dive in with the implementation of a new solution.
1. Identify your goals to achieve buy in
For any organisational change to be successful, it needs to be underpinned by solid objectives. Cloud migration is no exception.
It’s easy to fall back on generalities here. Avoid this trap.
Setting vague, directionless goals such as ‘improving productivity’ and ‘automating processes’ is a recipe for project overruns and lukewarm success at best.
Instead, be as granular as possible in the goals you set, and expand outwards.
For example, what does ‘productivity’ mean to you?
Perhaps you’d like to reduce the amount of equipment downtime with IoT predictive maintenance, or reduce the number of hours your shop floor employees spend on routine, low-value administrative tasks.
Identify tangible, measurable key performance indicators (KPIs) that you can use to check your progress.
These goals will help you achieve buy-in for your project from senior management.
Senior and C-level stakeholders are often numbers-focused. The more tangible your targets are, the more they’ll be able to grasp the benefits of cloud transformation.
We expect to see productivity gains” isn’t a particularly helpful statement for a C-level stakeholder.
We expect to see productivity gains of 15% with a 20% reduction in maintenance costs by implementing IoT sensors” is much more appealing.
2. Audit your existing infrastructure
You need to know how your organisation’s existing processes currently work before you start your cloud migration. This will determine how and what you transfer over when the time comes.
It often helps to divide your existing processes into four categories:
- Processes that don’t need to be migrated: These include legacy and defunct paper-based processes that are covered elsewhere, but are still embedded in your organisation due to workarounds or change resistance.
- Processes you want to migrate directly: These processes will run similarly in the cloud as they do on-premise systems with the benefit of real-time and remote access.
- Processes you want to migrate and improve: These processes will be significantly improved by the potential the cloud offers for AI-enabled analytics, automation and scalability.
- Processes you don’t have in place, but want to: Accurate forecasting and automation are difficult to achieve without cloud technology. If your legacy software makes these processes impossible, look for new cloud technology that will enable them.
As part of this step, you should also start to prioritise your cloud initiatives based on the value they offer your organisation.
Many manufacturers appreciate the IT benefits and the cost savings that cloud computing offers, but underestimate the business benefits.
For an impactful cloud migration, it’s important to consider both alongside each other as you create your list of priorities.
3. Communicate with your employees
Once you have buy-in and have outlined the scope of your project, it’s time to start letting the wider organisation know how cloud migration will impact them.
Consider this an ongoing step.
You should be communicating with your employees from the moment you know your cloud transformation project will go ahead right through until you call the project complete.
This will involve:
- Updates on progress
- Key dates (for example, go-lives and roll-outs)
- Recognition for hard work
- Training for relevant groups of employees.
It’s important to be honest here. If implementing a new application will cause some degree of disruption, let your employees know in advance. They will appreciate the warning.
Equally, don’t shy away from being positive about what you’re achieving.
Shout about recent successes and your employees’ hard work to achieve wider organisation buy-in throughout the project.
4. Trial new cloud software
There’s a significant possibility that your legacy on-premise systems won’t work optimally in the cloud. If this is the case, it’s time to start looking around for new solutions.
It’s important to find cloud software that works for your business needs.
So, before you start making a vendor shortlist, invest time in building a prioritised list of requirements for your new software. Use this as a basis to find the software you want to demo.
To get the most from software demos and trials, make sure you invite representatives from all key stakeholder groups. At the very least, you should include representatives from IT, finance, senior management and operations.
And this should expand for niche and department-specific functionality.
5. Roll-out… then repeat
Once your stakeholders agree on the best cloud software to use going forward, it’s time to present it to the wider company.
Make this as accessible as possible.
Run both online sessions for remote workers and physical lunchtime drop-ins for those on the shop floor who can’t (or don’t) work remotely. This will help generate a sense of excitement and wider buy-in for your project.
Once you have done so, you’ll need to ramp up your employee training efforts and start the roll-out process.
Software implementation requires expertise and experience. If you haven’t got this knowledge in-house you may want to consider hiring a consultant.
This will cost you more upfront but is considerably less than a poorly planned implementation in the long term.
Once you’re complete, take a deep breath. Take stock of where you are, and continue to monitor your KPIs.
Implementation is a disruptive process, so don’t be surprised if you experience some dips here. Always remember that it’s the long-term trends that count.
You’ll need to repeat steps three and four for every business area you’re shifting to the cloud. Think back to the list of priorities you made in step two, and use that as a basis for your cloud migration timetable.
Final thoughts on starting your cloud journey
For manufacturers, moving to the cloud is a case of ‘when’ not ‘if’. The visibility and granularity of insight cloud technology offers makes the switch essential for competing successfully in the current landscape.
Cloud software allows you to create products more effectively, reduce waste, increase IT security and give your workforce more flexibility in where and when they work.
When taken together, these create a major strategic advantage for manufacturers, and as technology progresses further, those stuck using legacy systems are likely to fall even further behind.
As a manufacturer, it’s sometimes difficult to know where to start with your cloud journey. By investing time in planning your project and following the steps above, you’ll maximise your chances of success and unlock a completely new world of strategic potential.
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