Manufacturing And Cloud Reluctance: What We Learned

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Manufacturing and cloud reluctance is not a recent issue. It’s been around ever since the cloud came into existence. Today, reports still show that security is one of the primary concerns when it comes to whether or not a business will consider using the cloud.

Recently, our company has generated some reports of internal data and surveyed a collection of companies to better get an idea of trends in the manufacturing industry. One report dealt with the buying trends of companies in the market for MRP Software, while the other surveyed 154 manufacturers who shared their thoughts on their active use of technology.

What We Learned

One of the more interesting pieces of data discovered was that “manufacturers are less likely to use cloud software than other industries. 51% do not use or plan to use cloud-based manufacturing software. In fact, manufacturers are 5% less likely to even consider using cloud-based systems (compared to all other industries).” So what’s the hold up in manufacturing?

As stated before, security has been a top concern overall. But for manufacturers, it may be more of a desire to control legacy equipment, or that MES systems are just better suited for on-premise servers. Manufacturers will look to future technology that offers enhanced performance, along with the usual cloud benefits of flexibility and more accessible IT support.

When it comes to MRP Software, buyers are 45% less likely to have a preference for hosted systems compared to all other business systems. However, we were seeing a trend in companies who had “no preference” when it came to deployment methods, which may suggest companies are beginning to warm up to the idea of a cloud-based solution. In fact, we saw that from 2015 to 2017, in all industries besides manufacturing, the willingness to review cloud systems went from 76% to 84%. In manufacturing? 74% to 79%. This would tell us that manufacturers are more reluctant than other industries to consider the cloud, or are adopting a cloud mentality at a much slower pace.

The Trends that Will Forever Shape Manufacturing in 2018 & Beyond

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Dave Lechleitner, Director of Solutions and Product Marketing for KeyedIn Manufacturing, spoke with us about the findings:

“For most manufacturers, once they understand the unique value of a cloud solution – access anywhere, no overhead or equipment costs, and no messy upgrades – they embrace the concept quickly; but clearly more advocacy is needed.”

One company we spoke with, a chemical manufacturer for the healthcare industry, told us that their company only desired on-premise software because they felt they couldn’t rely on the internet connection at their facilities.

The Future Of The Cloud: Mobile Apps & More

Our findings also helped us realize that overall, manufacturers overwhelmingly do not rely on mobile applications. 2/3rds of manufacturers said that they “never” or “seldom” use mobile apps to run their business. Is this having an effect on their cloud software preferences? By comparison, 2/3rds of distribution companies said in 2013 that mobile devices were in the mix to assist with their inventory management. It’s very possible that that number has gone up since then.

If you speak to most cloud-based ERP providers, the ability to integrate with mobile technologies is a big selling point. These mobiles devices can connect quickly with info from other devices on the job site or directly to the back-office system. Not only that, but you have the ability to have project updates in real time. For example, your inventory levels can be updated and alert the shop floor that the missing part they needed to complete a job has arrived.

A recent study on IoT from TATA’s TCS Global found that manufacturers who started utilizing cloud-based options in 2013-2014 were seeing a 28.5% average increase in revenue.

In addition, many companies foresee themselves adding new technologies down the road. The top technologies people seemed to be looking at adding to their manufacturing business were MES (manufacturing execution systems), robotics, and 3D Printing. In fact, a similar report from Deloitte found that robotics and automation adoption will reach 74% by 2027.

While these sort of tools may seem overkill for a small to a mid-level manufacturer, the desire to invest in new technology is still on the rise, which is something to look forward to in the manufacturing industry as the 2020s roll around.

In January 2020, Cerasis was acquired by GlobalTranz, a leading technology and multimodal 3PL solutions provider. To learn more, please read the press release. If you are a current or prospective Cerasis customer, we invite you to reach out to us to learn how our combined capabilities can deliver new services, solutions and enhanced value to your supply chain. To learn more about GlobalTranz, please visit www.globaltranz.com.

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