Manufacturing and the Cloud – Is it a Perfect Match?

July 6, 2012
By guest blogger - Lee House

In an increasingly competitive environment, the benefits of cloud computing are no secret: lower costs, frequent updates and reliable technical support offered on a monthly subscription basis. Most industries are jumping on the bandwagon; while concerns over data security and uptime still exist, the advantages of cloud computing outweigh the setbacks of updating or replacing on-premises enterprise solutions. But when we single out the manufacturing industry, how does a cloud solution really fit into operations?

Cloud Manufacturing

Manufacturers face incredible competition from the global market, and cloud solutions offer a means of differentiation. As this article in SoftwareThinkTank.com shows, a cloud ERP solution can stand as the backbone of a manufacturing organization, providing companies with a way to share the efficiencies inherent in an up-to-date ERP system across all functional areas.

While manufacturers have faced stringent economic pressures over the last few years, they are not afraid to move towards what is sure to be a cost saving resolution in the end. According to research from IDC Manufacturing Insights, nearly a quarter of all manufacturing firms are already implementing a cloud solution, while another 20% are currently evaluating a cloud deployment.

Business Intelligence within SaaS ERP

A major benefit of ERP is that of increased visibility. In the manufacturing industry, being able to access key intelligence from across the organization and value chain is crucial in providing management with the information needed to make business decisions. Operational excellence on the floor is essential, but the flexibility and ease of use of a cloud ERP solution enables organizations to track information from suppliers as well. This can boost a manufacturer’s competitive advantage, allowing a stronger position when competing with Asian manufacturing facilities.

Modern Applications

While traditional on-premises solutions certainly serve their purpose, as manufacturers become more technologically savvy and consumer demands change the need for updated cloud software systems will only continue to grow. Combining the precision of on-premises ERP with the flexibility, real-time data availability and comprehensive reporting of cloud ERP solutions allows organizations to optimize all of the information available to them. Business applications can be shared with trading partners, deployment is easier, and warehouse and factory automation can be implemented to enhance efficiency.

With a lower up-front price tag, manufacturers moving to a cloud ERP can elect to go with either a private or public cloud. Private clouds, while more costly, provide some organizations with additional peace of mind; but it’s important to note that the privacy precautions put into place in public clouds are incredibly strong. If a data breach happens on the public cloud the service provider is responsible, so it’s in their best interest to protect your information and keep it readily available to you 24/7.

The Tipping Point for SaaS ERP

Along with the benefits of traditional on-premises ERP, a cloud ERP solution can bring added flexibility, fast connection speeds with mobile systems and social technologies, increased business visibility, and the potential for more integrated supply chain collaboration. With knowledge comes potential – the more data and reporting you can garner through your cloud ERP, the better decision-making your organization can make.

Lee House is the Vice President at I.B.I.S., Inc. His background in ERP and CRM has helped companies find their feet in both their start-up and growth phases. A graduate of Georgia Tech, Lee currently works with I.B.I.S., Advanced Manufacturing Software, and Advanced Distribution Software, lending his sales, marketing and strategic planning skills to foster business growth.

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