The Risks and Rewards of Cloud-based Manufacturing

The business world is being transformed by the increasing popularity of cloud-based technology. Its advantages include enhanced data storage and security, greater flexibility, improved organizational visibility, smoother processes, more data intelligence, and increased collaboration among employees, resulting in better decision-making and cost reduction. Nevertheless, there are risks and challenges specific to manufacturing that necessitate a closer examination of this technology. This article examines both the benefits and drawbacks to assist you in making an informed decision about whether cloud-based technology is suitable for your manufacturing environment.

The Advantages of Cloud-Based Manufacturing

1. Robust Security: Cloud-based systems often use robust security measures, such as data encryption and multi-factor authentication, to protect sensitive information. Properly designed, configured, and managed cloud architectures are typically considered more secure than traditional on-premises architectures. Cloud providers typically have dedicated security teams and resources that implement various security measures, including firewalls, encryption, access controls, and monitoring, to safeguard their infrastructure and data centers.
2. Scalability & Flexibility: Cloud computing allows businesses to add or remove resources as needed, making it easy to adjust to changes in demand. This is particularly important for businesses that need to respond quickly to fluctuations in demand.
3. Accessibility: With cloud computing, manufacturers can access their data and applications from anywhere in the world with an internet connection. This enables them to collaborate with suppliers, partners, and customers more easily, even if they are located in different parts of the world.
4. Cost Savings: Cloud computing eliminates the need for expensive hardware and IT infrastructure, making it a more cost-effective solution for manufacturing businesses. With cloud computing, businesses only pay for what they use, which can result in significant cost savings. Cloud-based systems often have lower upfront costs compared to traditional on-premises systems, and they can reduce the cost of hardware, software, and IT support.
5. Improved Efficiency: Cloud computing can improve the efficiency of your manufacturing operations by automating many processes, reducing manual labor, and enabling real-time collaboration. This can result in faster turnaround times and increased productivity.
6. Automatic Updates: Cloud-based systems are often updated automatically, ensuring that manufacturers have access to the latest features and security patches. Some software updates may require downtime, while other updates can be implemented seamlessly without any noticeable interruption to the user. Generally, cloud service providers strive to minimize downtime and disruption to their customers, and they often provide advance notice and communication about any scheduled maintenance or updates.

Cloud-Based Manufacturing Challenges, Risks & Drawbacks

1. Dependence on Internet Connectivity: Cloud computing requires a stable and fast internet connection. If the internet goes down, access to data and applications is impacted, which can be a major concern for manufacturers who need to access critical information in real time. Cloud-based systems rely on a stable internet connection, which can be a challenge for manufacturers with limited or unreliable internet access. The performance of cloud-based systems can be affected by network congestion, server outages, and other factors beyond the control of the manufacturer.
2. Interoperability Issues: Some cloud computing solutions may not be compatible with existing systems and software, which can result in data and systems integration issues and make it difficult for manufacturers to extract value from their cloud investment. Integrating cloud-based systems with existing on-premises systems can be complex and time-consuming, requiring specialized skills and resources.
3. Limited Control: By relying on a cloud computing provider to manage and maintain the infrastructure, manufacturers may have limited control over their IT systems. Cloud-based systems may limit the ability of manufacturers to customize and configure the software to meet their specific needs.

Cloud-based Challenges Unique to Manufacturing

1. Heterogeneous devices and systems: Most manufacturing sites purchase technology from various vendors over time. They may have robotic systems from one company, computer numerical control (known as CNC) systems from another, and hardware from a third vendor all on the same shop floor. Not to mention, they likely also have a supervisory control and data acquisition system, an ERP system, and many other technologies they’ve been using for years. They don’t want to interrupt production to make changes.
2. Siloed Data: Siloed data is data that is segregated in distinct and independent databases or systems within a manufacturing organization and can impede the accessibility and sharing of information among teams. To resolve this, manufacturing organizations frequently adopt data integration and collection approaches that collate data from multiple devices and systems that may have exclusive technologies or protocols. Although these systems can be connected to an operational technology (OT) system, it's often a technical challenge to share data with an IT enterprise or a cloud system.
3. Scalability: In a large enterprise situation, a manufacturer can succeed in linking dissimilar devices and separated data streams and is able to transfer that secluded data to the cloud for a single site. However, it is probable that there are serious cost and resource issues to expanding this solution to other manufacturing sites. The technology used is probably exclusive, requiring significant labor and programming to function within a single factory, and scaling to additional plants would demand significant design time, resources, and expenses.

In Summary: Although there are challenges associated with cloud computing, they can be overcome, and businesses do not need to be restricted to on-premises models. Manufacturing stands to benefit from cloud computing, with the potential for significant cost savings and increased efficiency.

When considering the implementation of cloud computing, it is essential to adopt a strategic and iterative approach to arrive at the best decision. To make an informed choice about whether cloud computing is suitable for a manufacturing business, it is important to evaluate both the potential benefits and the specific challenges and limitations that apply to your industry. By carefully assessing your needs and requirements, you can determine whether cloud computing is the right choice for your manufacturing business.