How Cloud-Based Enterprise Resource Planning Helps Manufacturers

By: Larry Loeb| - Leave a comment

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Enterprise Resource Planning and the Cloud

An evolution of cloud computing for manufacturing has been a long time coming. Initially, manufacturers used the cloud to share data. But there has been a rise in industry-specific software that is changing the way these companies do business. Manufacturers found that real-time connectivity among machines, materials, people, tools and systems on the floor increases workflow efficiency and eliminates waste.

According to Area Development, IDC predicted that public cloud computing would become a $70 billion industry in 2015. The top five verticals, which include discrete and process manufacturing, were forecasted to account for almost half of the total spend.

But now, an area of business that may have been overlooked by many manufacturers in the cloud computing revolution is coming to the forefront: enterprise resource planning.

Better Use of Investments

The supply chain is changing as well: There is a substitution of information for assets and inventory for the knowledge of where certain manufacturing capabilities can be accessed. As the supply chain transforms due to the movement of information, the cloud will have an even greater importance in enterprise resource planning.

And as collaborative relationships with third parties continue to increase, the visibility needed to evaluate the supply chain’s performance can only increase if all parts of the chain feed information into the cloud. Using the cloud as a resource to disseminate that kind of information and avoid silos gives a clearer picture of the supply chain’s status. Manufacturers can establish a single cloud-based environment built around a unified data set that fully integrates all supply chain business processes regardless of where they occur.

Location Irrelevance

The cloud also introduces the concept of location irrelevance to manufacturing. According to Supply & Demand Chain Executive, a manufacturer can expect the same amount of information from suppliers, third-party partners and its own manufacturing process regardless of whether the assets live locally or at a distance.

Manufacturing performance information can be generated in real time, with information coming directly from production machines. When a machine produces a part, the information can go through the cloud to the enterprise resource planning system that raw material has been consumed. This can directly provide operational performance numbers with a much greater reliability.

All Sizes Can Benefit

Smaller manufacturing companies tend to get involved with the cloud out of economic necessity. Certain equipment may not be in their budgets, and they must therefore use other producers. But large companies, motivated by fairly sophisticated financial calculations about return on investment, also recognize the ability the cloud gives for remote management and asset allocation.

The cloud can also perform as a quality improvement tool. The best practices established in your own facility can be shared with your suppliers, giving their output the same quality as your own.

The cloud will enable a manufacturer to maximize ROI on production assets whether they sit on a factory floor or in another country. The flow of information about the process will become what is important to them, not the location of where that information is generated.

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