If the hype is true, the supply chain is on the brink of a revolution, with cloud computing improving everything from product design to vendor management inventory — and now manufacturing, too.
A recent Forbes article lists 10 ways the cloud will shake up the manufacturing part of the chain. Here's a hat tip to the cloud-based ideas that hold promise, if manufacturers truly embrace them.
- More rapid migration to collaboration portals : With cloud tools, companies can quickly pilot, assess, and launch supplier-manufacturer-customer collaboration platforms and quality management dashboards. They can also implement better inventory management applications.
- Raising the competitive bar with improved design-in services : In the low-margin manufacturing business, companies that can better manage product revisions, launch a product generation, or add embedded services could win competitive advantages. Cloud integration may be a more cost-effective way to ramp up those value-added design-in services.
- Accelerated product development and introduction strategies : Manufacturers are under constant time-to-market pressure, and they may find that cloud-based platforms encourage more cross-partner collaboration earlier in the design cycle.
The cloud's promise may be real, but it's hard to imagine that it's delivering on that promise right now on a broad scale — especially in the manufacturing sector. Manufacturers often use sophisticated technologies to build chips, parts, and devices, and this part of the supply chain requires constant data exchange with customers waiting on shipments. However, it's always struck me as the supply chain segment where management thinking and practices have lagged behind.
Undoubtedly, there are companies that have rushed to adopt these technologies, and they will be viewed as better supply chain partners as a result. But I'm reticent to believe adoption will come quickly throughout the industry.
As much as the cloud can facilitate communication between manufacturing partners (specifically EMS partners) and OEMs, there are many hurdles to overcome. A key issue is the fine line of visibility — figuring out how external partners can access critical internal manufacturing operational data. Manufacturers will want to ensure that cloud-based privacy and security firewalls are top-notch and bulletproof before they invest heavily in this kind of swap-and-share information channel.
Harder than pie
Also, this stuff is still pretty confusing. As with ERP, various IT architectures have to be in place to make all these systems talk to one another. And those IT components have to work like a well-oiled machine for the data connections (and analysis) to happen.
Of course, the underlying processes have to be in tip-top shape, as well. If the data going in is junk, then the data coming out will be junk, regardless of whether the data pipeline is a proprietary system, the web, email, Excel, or the cloud.
Don't get me wrong. The cloud is where most of us now work on a personal and professional basis. Our comfort level with the technology is steadily growing. It follows that we would want to migrate the rest of our workflow there. However, the cloud-based supply chain revolution is only getting started, and it may be wise to look before you leap. It's one thing to be revolutionary. It's another thing to be rash. The trick is determining which one is which.