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Why Manufacturers are Rethinking the Cloud

 

Manufacturers have long held a reputation as slow-movers, shunning technological advancements in favour of holding on to traditional operating techniques which they’ve worn like a pair of well-loved jeans.

But increased pressures from competitors and the need to service their customers better and faster than ever before has meant that manufacturers are turning to cloud-based solutions. Not only does this allow them to remain viable, but also to gives them a competitive advantage in a hostile environment.

Where manufacturers once scoffed at the thought of overhauling their traditional on-premise ERP systems, they now realize they need to move to a more nimble cloud-based system or risk being left behind as a result of their inability to compete with leaner, more cost effective and comprehensive cloud-based solutions other manufactures have adopted.

New players in the manufacturing game have opted to avoid large up-front costs by moving to cloud-based ERP systems, such as the manufacturing-centric ERP system offered by Plex.

The shift away from the price-tag-rich initial investment in servers and the ongoing costs of maintaining that hardware means that manufacturers can accelerate their growth by investing in revenue generating activities instead of getting bogged down by costly infrastructure investment.

Thanks to the reduced Total Cost of Ownership (TCO), the cloud is smashing down the barriers to entry at a rate never before seen in the manufacturing world, and the industry has been changed forever.

Other than the high initial investment required, one of the major drawbacks of on-premise ERP systems is the sporadic nature of the costs they bring. Capital investments – usually large – in on-site ERP system maintenance and upgrading can be required at any time, ensuring that financial forecasting remains unpredictable and ultimately ties up resources which would otherwise be better placed elsewhere.

Compare that to the consistent and predictable subscription-model fee structure offered by cloud-based ERP systems, and the finance department will be jumping for joy over the decision to switch to a cloud-based ERP system.

In addition to an improved TCO, Plex’s offering as a manufacturing-focused ERP has also brought about an industry-wide shift in perspective. Whilst other non-concentrated ERP systems may not be in a position to offer the solutions a manufacturing firm may need, specialized ERP systems such as Plex provide support for production, supply chain management and quality management in addition to the non-unique business functions such as accounting, marketing and finance.

A stand-out feature of Plex’s manufacturing-focused system is the quality management tools which offer manufacturers assurances over their product, reducing the risk of warrantee issues and recalls which bring added costs to the manufacturing process.

The availability of analytics in a cloud-based ERP systems such as Plex is yet another draw card that sees manufacturers turning to the cloud.  Cross-department data is collated and made available in a dashboard configuration, leading to real-time visibility for management who are then able to make informed business decisions based on data collected across all departments.

In an environment where customer demands are forever shifting, real-time visibility is an important tool allowing manufacturers to quickly respond to a changing manufacturing landscape.

While we are still seeing some manufacturers continue to drag their feet when it comes to adopting cloud solutions, overall the industry is running towards a new age. Recent data shows that manufacturers’ plans to adopt cloud-based solutions such as Plex are accelerating to rates that exceed the average for all non-manufacturing industries.

Non-manufacturing industries have long been singing the praises of cloud-based ERP systems, and it now appears manufacturers are starting to join in the chorus.

Darren Murphy
Darren is an experienced writer who currently holds the position of Marketing Coordinator at Big Bang ERP. His broad knowledge of all things business and technology means he is well placed to communicate to others issues and solutions which directly affect their business.