eyeOS - Cloud Computing! (Photo credit: Jonathas Rodrigues)
Manufacturers are turning to the cloud to extend their global reach and to develop the flexibility they need to make it work.By Travis Hessman April 9, 2012
For small and midsize manufacturers, the ability to adjust to the ever-shifting trends and demands of today's global market is essential to stay afloat. It is therefore vital that they utilize a business intelligence (BI) program that is flexible enough to adapt to these changes and robust enough to provide the real-time, actionable intelligence such an environment demands.
Increasingly for these manufacturers, this means stepping fully into the 21st century -- into cloud-based BI systems.
To Roman Bukary, general manager of manufacturing and wholesale distribution for NetSuite, the advantage of such a step is clear: manufacturers are adopting it "because it makes sense. Because it saves you money. Because it works. Because it makes you more competitive as a manufacturer."
Bukary explained that NetSuite -- a cloud-based ERP system provider in Silicon Valley -- has targeted these small and midsize companies because they stand to find the greatest profit from the services it provides.
"When we talk about manufacturing, some people think of Boeing (IW 500/15) and Caterpillar (IW 500/27)," Bukary said. "But that's not exactly who we have in mind."
Rather, he said, cloud services are aimed at midmarket companies on the rise. This includes companies across the industry, ranging from such diverse extremes as mobile audio producer, Aliph, to synthetic oil producer, Schafer Oil.
What these companies have in common, he said, is that they are "multinational in their DNA -- global in their DNA. Companies that have to respond to key market trends quickly."
In other words, he said, "21st century manufacturers."
"What we're finding is many of these manufacturers, even smaller companies that have been around for a while, have to dramatically increase their reach," said Ranga Bodla, director of manufacturing and wholesale distribution at NetSuite. The cloud allows them to do it.
With the cloud, he said, "small companies have the reach of a multibillion dollar company. They can operate in multiple countries, very quickly and easily, and work in multiple languages. It enables 21st century business."
"The cloud," added Bodla, "enables them to be much more than manufacturers. It enables multiple routes to markets." This makes them better able to leverage their technology and resources into greater global sales and distribution, he said.
These added capabilities wouldn't mean much without flexibility, however.
Success today depends of the ability to rapidly and aggressively respond to global and regional trends. However, these smaller companies don't have the resources to invest in costly upgrades for every growth or shift, said Bodla.
"No matter how smart an IT company is, the IT processes are different across the industry," he said. "So all of these companies have had to customize [their ERP] systems to fit their business processes."
For on-site, traditional ERP and BI, he said, "upgrading means rebuilding all of those systems all over again." Because of the costs involved in this, smaller companies get stuck with versions five to 10 years out of date in markets that may change month-to-month or day-to-day, he explained.
With cloud-based systems, though, "customizations seamlessly migrate with updates" across the BI platform. "This is really key," he said. This means, when production, flow or processes change to meet new demands, one online update will cover the entire system.
This flexibility is a key feature for cloud services, said Mark Bernardo, general manager of automation software at GE Intelligent Platforms
"The interesting thing with cloud... is it's imminently and infinitely scalable," he said. "So I don't need to architect this magnanimous system to deal with all of the possible data sets that I may ever need to use in my manufacturing plant."
Rather, he said, "I could take an approach to say, I'm going to key up 25% of the investment right now, understanding that at any given point and time, if we need to consume more, whoever we are subscribing to will be able to expand out to meet my needs."
With this kind of flexibility, the future seems clear, he said: "I think the cloud is certainly one of those things that, just like mobile, everyone will adopt at some level." So it's a creeping inevitability that soon all small and midsize companies (at least) will employ.
Along this course, however, there is still one major stumbling block to cross: security.
Next installment: "Business Intelligence for the 21st Century (Part Two): Cybersecurity."