Cloud-Based Technology Adoption in Manufacturing to Quadruple by 2024

In the late 1960’s the marketing slogan targeted at young professional women, to make smoking cigarettes seem appealing, was “You’ve come a long way baby.”

Imagine just ten years ago when manufacturing software solutions first introduced cloud-based software.

Now, think about just five years ago, when the market share of these solutions increased to almost 4% of the total global manufacturing technology market.

Now 2015, that percentage has doubled again, with more than one-in-twelve manufacturers running a cloud-based solution (often a derivative of ERP, enterprise resource planning).

Industry analysts’ cumulative assessment is that more than half of all Manufacturing Operations worldwide will be in a cloud-based platform by 2024.

Manufacturing.net reported the popularity of cloud software for manufacturing operations management is growing based on an LNS Manufacturing Operations Management Survey of more than 100 manufacturing executives, only 7 percent of respondents said they use cloud technology. The LNS analysts reported, “Despite this low number, more decision makers are considering switching over to Software as a Service (SaaS) for their manufacturing operations management. In the survey, 17 percent of executives indicated they were planning to use SaaS to improve their operations. Manufacturers are more likely to see more cloud-based solutions as 90 percent of companies that offer manufacturing operations management software currently have or plan to adopt cloud technology.”

A recent study titled, “Disrupt, Collapse, Transform: The Role of the Cloud in Industry Transformation,” sponsored by NetSuite and conducted by global industry analyst firm Frost & Sullivan, surveyed 1,500 senior executives across multiple industry sectors in seven countries the US, Australia, Singapore, the UK, Japan, Hong Kong, and the Philippines. Two-hundred of the surveyed participants were from the US. The study was conducted to examine the drivers for disruption across all industries and how modern businesses are responding to that disruption.

Among respondents, 81 percent of US cloud-based software users told Frost & Sullivan that the cloud has provided them with a competitive advantage over their rivals particularly with regard to entering new markets and has helped them react more quickly and effectively to change.

Global Supply Chains Driving Cloud-based Manufacturing Solutions

Developing global business metrics is commonplace among multi-national manufacturers and this trend will continue.

Having developed a “proof of concept,” manufacturers now must replicate the best-practice supply chain process; the supply chain is for the entire enterprise, not merely the four walls of a manufacturing plant. It is absolutely requisite that manufacturers extend their enterprise resource planning (ERP) technology investment to both leverage and collaborate with suppliers and customers.

Inventory reduction across all market segments drives better margins, particularly in automotive, consumer packaged goods (CPG), and medical device companies.

All the sales and marketing efforts do not matter if customers are lost due to poor performance, poor on-time delivery, or poor product quality.

The cloud-based inventory resized inventory levels based on consumer demand which improved the number of turns across finished goods, work-in-process (WIP), and raw materials. Ultimately it drives customer retention.