Thiago Martins, Managing Director, Industry X and Manufacturing Execution Systems Leader at Accenture, explores how cloud computing has become indispensable to the manufacturing sector.
Many cloud use cases have emerged within the manufacturing space.
Most manufacturers are familiar with terms like “smart plant”, “plant of the future”, or “digital factory”. But regardless of the term used, it implies a manufacturing environment where digital technology enables increased productivity, efficiency, safety, and compliance. Unfortunately, it also involves an environment that seems far removed from the current state of most manufacturers. Why? Because historically, manufacturing IT projects have proven to be time-consuming, expensive and, in many cases, risky, especially if they required remote hosting of manufacturing applications.
However, digital adoption has accelerated in recent years, mainly driven by three factors:
- Telecom providers have introduced high-speed, highly available network services at affordable (read: very low) prices in various regions.
- Cloud technology has evolved, bringing with it cloud-based solutions that dramatically reduce time to value for manufacturers.
- More recently, the disruptions caused by the COVID-19 pandemic have forced manufacturers to review their traditional approaches.
As cloud and network services evolve, manufacturers have access to a whole new set of infrastructure options that they can use to improve how they support plant operations. These options include edge computing to address near real-time use cases; private cloud, typically required for compliance reasons; and the public cloud, which gives them access to scale, innovation capabilities, and flexibility. This is what we call the Cloud Continuum: a new model where centralized and distributed computing resources are combined to ensure new business and IT efficiencies.
The IT efficiencies associated with the cloud are well known. For example, when designed correctly, flexible pay-as-you-go computing capacity can lead to a 20% to 40% cost reduction compared to traditional underutilized local on-site infrastructure. The cloud also provides access to the capabilities of leading service providers, such as aws, Azure, Google, Oracle, and others to keep infrastructure running, rather than relying on outdated software or vulnerable legacy infrastructure. By using the cloud correctly, organizations can reduce IT labor and operational costs.
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From a business efficiency perspective, manufacturers can create value through the use of components such as:
- Analytics tools for control tower and real-time supply chain integration that enable smarter, faster operational decisions.
- Identify federations to allow users from different companies to collaborate without the need to create interfaces.
- Machine learning algorithms and digital twins that allow the prediction of maintenance and quality events.
- industrial internet of thingsIIOT) for asset monitoring leading to increased plant uptime.
- Data lakes for engineering and manufacturing data to be shared across organizations.
- Computer vision for hazard detection, such as for people without personal protective equipment, or people in restricted areas, and for product inspection.
- Natural language processing for speech-to-text applications such as log books.
- Temporary databases for the exchange of data with suppliers of raw materials or intermediate consumers.
- Low code/no code for fast workflow automation and data collection.
The question remains: if the cloud brings so many benefits, why are manufacturers still hesitant to use cloud-based solutions on the shop floor?
From an infrastructure perspective, most manufacturers are well aware of the risks associated with remotely hosted manufacturing applications, such as performance, availability, and security, but not ways to mitigate them. New solutions like 5G and multi-access edge computing, which add a layer of security, weren’t available, known or affordable in many manufacturing locations until recently.
From a software perspective, until a few years ago, the cloud’s value to manufacturers was very limited. The cloud used to be seen as a virtual data center where moving manufacturing applications did not make a compelling business case, as the costs did not outweigh the risks. However, as software providers introduce new cloud-based products, we have witnessed a drastic change in acceptance. The adoption of cloud-based solutions has become more attractive, especially for those looking for innovative ways to solve problems that would otherwise have been considered too costly or complex to solve based on traditional on-premises models.
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Advances in infrastructure, combined with the exponential growth of cloud software offerings, have accelerated the digitization of supply chains, allowing businesses to operate and interact with each other in a more seamless and automated way. Companies are rapidly expanding their operational intelligence, moving from descriptive analysis of single assets, where manufacturers are informed of what has happened; to prescriptive analysis, where manufacturers are informed about options to respond to what is about to happen; across multiple lines, factories, to critical elements of your supply chain.
The exponential cycle of value creation enabled by the Cloud Continuum doesn’t depend on IT alone. It requires organizations to have a well-defined vision, an appropriate operating model, and a properly designed set of technology adoption principles. Adopting cloud solutions without these three components often makes it difficult to scale and maintain the intended benefits.
In short, cloud adoption in manufacturing has gone from a concept considered impossible, or at least not economically feasible, to an indispensable way to enable companies to compete in a digital world. Understandably, too much is new in this space, and the race to increase business productivity, efficiency, security, and compliance doesn’t give manufacturers much time to learn from their own experiences.