Hesitant No More: Why Manufacturing Leaders Are Moving To The Cloud

Robert Merlo

Manufacturing, like all industries, is closely watching a series of dynamic and global changes that could shift the market in new and unexpected ways. From the emergence of cross-industry competitors to technology-related, political, economic, or social disruption, any effort to meet highly variable customer demands for next-generation service experiences and individualized products has become a high-stakes endeavor.

Despite facing such upheaval, most manufacturers are setting themselves up to be left behind. For years, discrete and process-oriented manufacturing companies have hesitated to migrate core and operational applications to the cloud. Unfortunately, this also means that they’re missing out on the visibility, flexibility, and automation needed to overcome the operational realities of their physical plants, IT systems, and business processes.

According to research from Technology Business Research (TBR), recent advancements in cloud technology delivery and capabilities may soon change the mind of cautious manufacturers. Its report, “Cloud Finally Addresses Manufacturers’ Most-Pressing Business Challenges,” indicates that historic barriers – such as security, integration, disaster recovery, and business performance continuity – have all but eroded.

Cloud delivery and innovation: A crossroad of opportunity for manufacturers

Expansion into new markets and strategic acquisitions are driving growth for many manufacturing companies. But, their legacy systems of on-premises applications are not designed to integrate or scale as businesses and operations evolve and are brought together.

Now, manufacturers are demanding a more agile approach to system innovation and process support – and the cloud is in a prime position to deliver it. Specifically, the advantages of cloud technology are directly aligned with visibility and flexibility, which are the most sought-after benefits of digital manufacturing and supply chain solutions to meet customer demand.

TBR states: “With many of the security, performance, and integration barriers greatly diminished over the last five years, the stage is set for the next phase of change to occur within manufacturing, driven by cloud solutions that align quite well with the biggest challenges facing these practitioners.”

For example, visibility lowers operational costs by opening the door to real-time insight into inventory volume, production capacity, and demand signals throughout the production process. With flexibility, decision-makers can proactively shift inventory, reallocate manufacturing resources, and customize products – leading to revenue-generating outcomes at profitable levels.

New cloud capabilities rooted in business value

Once manufacturers are ready to champion the advantages of the cloud, one of the most difficult challenges they encounter is knowing how to get started. Most production processes are supported by on-premises solutions that are heavily ingrained and integrated.

To adopt cloud-driven capabilities, manufacturers should incrementally target processes with new or existing solutions and with a focus on resource optimization. Such an approach creates a hybrid of cloud and on-premises environments that enable the manufacturing function to evolve and scale operations as needed. More importantly, it opens the door to seamlessly unified use of intelligent technologies such as next-generation ERP, the Internet of Things, blockchain, machine learning, digital twins, and mixed reality.

But no matter the path chosen, the dynamics of the latest cloud technology are difficult for manufacturers to ignore. It not only addresses manufacturers’ most-pressing business needs, but also provides the cohesiveness, visibility, and flexibility necessary to break through a highly disruptive and competitive marketplace.

Learn how cloud-driven innovation is changing the manufacturing function to face disruptive challenges with success. Read the TBR report “Cloud Finally Addresses Manufacturers’ Most-Pressing Business Challenges.”


Robert Merlo

About Robert Merlo

Robert Merlo is Vice President of SAP Solution Marketing, responsible for Strategic Positioning of the Digital Supply Chain and Manufacturing Portfolio of SAP Solutions. Specifically focused on R&D and Manufacturing.