Cloud Computing in Manufacturing: Benefits and Use Cases

Cloud computing is revolutionizing the manufacturing industry. Find out how to use it for efficiency gains, cost savings, and driving innovation.

Read the article to learn:

• What is cloud computing in manufacturing?
• How do manufacturers use cloud computing?
• What are the benefits of implementing cloud computing for a manufacturing company?
• Real-life applications of cloud computing in manufacturing
• How is cloud computing shaping the future of Industry 4.0?

With more and more enterprises relying on cloud technology, has cloud computing become essential for the manufacturing industry? From supply chain optimization to advanced IoT platforms that can turn a simple organization into a smart-like factory, cloud computing in manufacturing is definitely a force to be reckoned with. 

Facts

According to Forbes, 87% of manufacturers use cloud solutions in their business strategies.

• When used right, cloud computing in manufacturing streamlines production & business processes. 
• Though they don’t shy away from using it, many manufacturers still don’t really know how to tap into the full potential of cloud computing.

In a word, cloud-based solutions have basically become a necessity in the manufacturing world – but that doesn’t mean their true capabilities are being recognized.

Want to avoid that mistake?

Let’s dive into the what, the why, and the how of cloud computing in the manufacturing industry. 

What is Cloud Computing in Manufacturing?

Cloud computing in manufacturing refers to using web-based services to store, manage, and access data and applications related to production processes. It allows manufacturers to access computing resources like storage and software over the Internet instead of relying solely on on-site infrastructure.

Cloud services find applications in many areas of manufacturing, such as supply chain management, product lifecycle management, and predictive maintenance. By leveraging technologies like Artificial Intelligence or Machine Learning, these cloud-based solutions help manufacturers improve their operational efficiency, reduce costs, accelerate time-to-market, and gain valuable insights.

The Rise of Cloud Computing in Manufacturing

By 2026, the cloud computing market is forecast to be worth almost $950 B. Cloud solutions are changing the business world as we know it, so it shouldn’t be surprising that manufacturing companies don’t want to stay behind. Cloud technologies play an increasingly important role in their development and day-to-day operations. 

Used for – among others – Enterprise Resource Planning (ERP), Product Lifecycle Management (PLM) systems, or specifically dedicated for manufacturers Warehouse Management Systems (WMS) (more on those later), cloud computing is pivotal for streamlining everyday work, mitigating human errors, and driving innovation for manufacturers in many different industries, such as automotive, consumer electronics, or even pharmaceuticals.

Cloud tech is deployed by manufacturers for many functions, such as data analytics, predictive models, process optimization, and quality checks. Yet, their range of capabilities is stretching way further, and new trends, like mixing public and private cloud solutions for enhanced security or enabling real-time data processing for IoT devices, robotics, AI, and smart factory applications, keep proving that cloud technology in manufacturing is just getting started. 

Different Types of Cloud Computing for Manufacturing

• Software as a Service (SaaS) – SaaS is a cloud computing model in which applications are hosted by a third-party provider. It’s particularly beneficial for manufacturing firms needing specific software for their operations. SaaS allows manufacturers to use software on demand and pay based on usage, thus avoiding the substantial upfront costs associated with purchasing software licenses.
• Public Cloud – a form of cloud computing in which a third-party provider offers storage, computing, and networking resources to the public. This model is highly flexible and cost-efficient, which is why it’s a great option for manufacturers that need extra computing power or storage during busy times. 
• Private Cloud – a model that delivers dedicated infrastructure and resources to a single organization. This setup is perfect for manufacturing companies that need total control over their infrastructure and data. The benefits of a private cloud include enhanced security, customization, consistent performance, and regulatory compliance. 
• Hybrid Cloud – a model combining both public and private cloud elements. Its biggest advantage is flexibility, so it’s recommended for manufacturing firms in need of a versatile infrastructure. With a hybrid cloud, manufacturers can maintain critical data and applications on-site while taking advantage of the scalability and cost benefits of public cloud services.

Applications of Cloud Technology in Manufacturing Companies

What are the cloud-based solutions for manufacturing? Here are the most important cloud applications – with use cases.

Supply Chain Management (SCM)

• Solution overview: Cloud computing optimizes supply chain functions by furnishing real-time insights and analytical capabilities. It facilitates effective inventory management, predictive demand analysis, and efficient logistics planning.
• Use case: General Electric Company (GE) uses cloud manufacturing to optimize its supply chain management and fulfill its “Operational Excellence” program.

Enterprise Resource Planning (ERP)

• Solution overview: Cloud-centric ERP systems integrate diverse business operations, from financial to HR-related, into a unified platform. They deliver real-time data and analytical insights, enhancing decision-making and operational efficacy.
• Use case: Victorinox, a leading Swiss knife manufacturer, uses Comarch’s ERP platform for enhanced production process control.

Product Lifecycle Management (PLM)

• Solution overview: Cloud-driven PLM systems enable companies to efficiently manage a product's entire lifecycle, from design to end result. This helps reduce costs and speed up the production process.
• Use case: Adidas uses PLM to boost product customization. By collaborating with cloud suppliers, Adidas improved its demand forecasting and accelerated time to market.

Quality Management

• Solution overview: Cloud-centric Quality Management is a system for verifying the quality of manufactured products or services. It typically includes features such as document control, corrective and preventive action (CAPA) management, audit management, reporting, and analytics. 
• Use case: Flex Ltd., a multinational electronics manufacturing services company, uses cloud-based QM systems to centralize quality-related data, standardize processes, and enhance collaboration.

6 Benefits of Cloud Computing in Manufacturing

Scalability and flexibility

Cloud computing allows manufacturers to scale computing resources up or down based on whatever their production demands may be. Whether it's expanding cloud storage capacity or adding power for data analytics, the scalability of cloud infrastructure allows for a very quick adaptation to changing business requirements – unlike the limiting constraints of physical hardware. It’s one of the top benefits of using cloud computing – 62% of executives claim they migrate to the cloud for its flexibility.

Cost reduction and operational efficiency

Cloud tech eliminates the need for upfront capital investment in hardware and infrastructure, allowing manufacturers to pay for only the resources they use. In fact, implementing cloud-based solutions can lead to a 20% boost in profits, depending on the scale of your business. This cost-effective model also reduces IT maintenance costs and energy consumption, which is a great way to free up your resources and put them to use somewhere else. 

Real-time data access and monitoring

By harnessing the power of big data and analytics, cloud computing gives you invaluable insights into what’s going on behind the curtains, e.g., operations, processes, and supply chain dynamics. This allows you to analyze large volumes of data in real-time, identify trends, detect anomalies, and make data-driven decisions to optimize production efficiency and minimize downtime.

Data security and compliance 

Cloud service providers invest heavily in robust security measures and compliance certifications to protect data privacy and ensure regulatory compliance. By outsourcing data storage and management to trusted cloud providers (such as Comarch), manufacturers can mitigate security risks, safeguard intellectual property, and adhere to industry regulations without the need for extensive in-house IT security.

Supply chain management

Cloud computing enhances supply chain efficiency – from procurement and material planning to product delivery. Cloud manufacturing software offers manufacturers real-time visibility into inventory levels, production schedules, and shipment statuses, which supports better decision-making and helps prevent supply chain disruption. This, in turn, equates to a much faster product launch, as evidenced by 65% of IBM survey respondents who claim that cloud computing reduced their time to market.

Enhanced collaboration and data sharing

Cloud-based collaboration tools facilitate seamless communication and information sharing among geographically dispersed teams, suppliers, and partners. If you centralize data and applications in the cloud, you can improve collaboration on product development. Results? More fruitful (and perhaps also numerous) partnerships and better control of teamwork.

What Are the Challenges of Cloud Computing in Manufacturing Industry?

Though implementing cloud computing tools in manufacturing does bring plenty of benefits, it’s not without risks. Here are the most common and significant challenges of using cloud-based technology in manufacturing operations – with tips on how to solve them.

1. Data security. Counter by: implementing robust security measures such as encryption, access controls, and regular audits to protect sensitive manufacturing data stored in the cloud. 
2. Integration with legacy systems. Counter by: investing in cloud-native or hybrid solutions that offer seamless integration with existing on-premises systems and legacy applications. 
3. Reliability and uptime. Counter by: selecting cloud service providers with a proven track record of reliability and disaster recovery capabilities. 
4. Data governance and compliance. Counter by: developing comprehensive policies and compliance frameworks to ensure data integrity and regulatory compliance in the cloud. Alternatively (or additionally), go for data encryption and access controls.
5. Vendor lock-in. Counter by: adopting multi-cloud or hybrid cloud strategies that leverage multiple cloud providers and interoperable technologies. 
6. Performance and latency. Counter by: optimizing network architecture, adopting edge computing solutions, or leveraging content delivery networks (CDNs).

Smart Manufacturing – Cloud Computing and Industry 4.0

Cloud computing has introduced us to the era of Smart Manufacturing, in which the production process is enhanced by AI, ML, and IoT technologies. Sometimes referred to as the Industry 4.0., it’s a new approach to manufacturing that integrates advanced technologies and combines them with cloud computing. This takes automation to a whole new level, where physical and digital systems converge and turn into “smart factories,” revolutionizing the manufacturing processes as we know them. For every Internet of Things device, there can be a cloud-based IoT platform. For every augmented reality solution, there can be a cloud-supported AR app. For every additive manufacturing machine, there can be a cloud-based 3D printing service. Cloud computing offers the resources and flexibility necessary to set new tech “free,” which is why its potential to elevate technology is huge – and probably a must if we want to make Industry 4.0 our new normal rather than an innovation.

Embracing the Cloud Technology in Manufacturing

Key takeaways:

• Implementing cloud-based solutions in manufacturing is still optional – but soon, it may be a necessity if you want to stay afloat and ahead of the competition. 
• Cloud computing is used in manufacturing for Supply Chain Management, Enterprise Resource Planning, Product Lifecycle Management, and Quality Management. 
• Cloud computing is usually implemented in one of these three models: IaaS, PaaS, or SaaS.
• Cloud computing in manufacturing offers multiple benefits, such as process streamlining, enhanced scalability, and cost reduction.
• More and more renowned companies, such as Adidas, VTS, or GE, are tapping into the potential of cloud computing.

Don’t stay behind – embark on your own journey to cloud technology. Find out how Comarch can help you HERE.