Why Cloud Manufacturing Software Adoption Rates Are Rising [DATA]

Imagine having manufacturing software features like automatic updates, unlimited capacity upgrades, built-in disaster recovery, and universal remote access capabilities, among others. Sound too good to be true? It’s not. Cloud platforms are already bringing this level of functionality to manufacturing businesses, and without the capital expenditures and lifecycle maintenance costs that come with implementing on-premise solutions. As time and technology advance, we believe that improvements to cloud manufacturing software will eventually render most on-premise solutions obsolete.

Although these features have universal appeal, in our discussions with executives there has been a notable hesitancy in the manufacturing operations management (MOM) space to migrate systems to the cloud, and it’s not for lack of information or interest. In this post, we’ll examine some of the reasons why some MOM executives are resistant to change, some interesting new data points from both manufacturing executives and software vendors, as well as what MOM software vendors are doing to address the areas of concern.

Manufacturing Cloud Software Consciousness

Despite the slow-to-adopt nature of cloud applications in manufacturing, from speaking with industry executives it seems that awareness of and attention directed toward the topic have been growing for quite some time. An analysis of Google Trends does this hypothesis justice, showing the relative popularity of the search term “cloud manufacturing” for the past eight years. As you can see, prior to 2009, the search term had little to no search volume, but shot up and reached the height of its popularity in March of 2012.

Again, I want to point out that this chart shows simply the relative popularity of the search term, however, if nothing more it’s indicative of the curiosity and chatter that’s been surfacing in recent years. Many manufacturing software vendors are starting to use cloud in their up-front messaging, and software users are definitely taking interest in understanding how they can take advantage of the cloud on the manufacturing shop floor. As the understanding and offerings in this space evolve, we can expect this chart to change dramatically in the coming years.

Why Manufacturing Executives Have Been Hesitant to Embrace the Cloud

So why is there more inertia within the MOM space to adopt a technology that has already proven value in other business operations like CRM, and increasingly, ERP? Well, for one thing, manufacturing is steeped in tradition and culturally conservative to change. But there are other, more practical reasons as well.

MOM systems operate closer to the shop-floor than, say, an ERP system. And unlike ERP, MOM systems don’t have the luxury of not being available for even a few minutes. With full cloud capabilities dependent on Internet connectivity and cloud service providers, continuity of service has been a legitimate concern for manufacturing executives. One way vendors have been addressing this concern today has been to offer redundant networks to add robustness and network availability to solutions.

Advancements in Cloud Security

Decision makers are also still highly concerned about the safety of their IP on a public cloud, which, given the stakes of a security breach, is understandable. However, we have seen recent security capabilities within MOM cloud solutions evolving at a faster rate than manufacturing executives’ confidence in them.  

In the case of security, the physical location (i.e. country) of the cloud servers is often one of the biggest issues at hand. And vendors have been reassuring customers by guaranteeing a physical server location and clearly explaining the management policies that are used in data storage. Moreover, many smaller software vendors are partnering with larger and more experienced cloud infrastructure providers to professionally manage data on their behalf, and boost customer confidence in their ability to keep up with the best possible cloud solutions.

Increasing Confidence in Cloud Manufacturing Technology

We believe that advancements in cloud technology and end-user attitudes have now shifted to a point where adoption rates of MOM cloud technologies are poised to increase significantly, and the data is beginning to reflect this.

Launched just a couple of months ago, the LNS Manufacturing Operations Management Survey has already revealed some interesting data trends. We asked over 100 manufacturing executives a wide range of questions about their goals and challenges within manufacturing. As seen in the graph below, we find that just 7% of respondents currently leverage cloud technology. However, 17% of respondents replied that they are planning to use cloud/SaaS (Software as a Service) based solutions for MOM applications in the future. This shows that manufacturing executives are beginning to overcome some of their bigger confidence hurdles and see the significant benefits that come with cloud technology adoptions. Additionally, our vendor research indicates that 90% of manufacturing operations software vendors either have cloud offerings or are turning their attention to the cloud in their future developments.

As with other technologies in the past, capabilities slowly advance to the point where the cost/benefit ratio becomes too high to ignore, and technologies become increasingly adopted until they are accepted as the norm. We believe this point is not too far down the road for cloud-based MOM solutions, and companies that are seriously exploring cloud platforms at the present time will be well positioned to remain competitive in the future.

To learn more about this and other manufacturing industry trends, click below for access to the MOM Research Library.