Estimated reading time: 2 minutes, 40 seconds

Cloud computing is transforming all industries and the more traditional manufacturing sector is not excluded from this transformation. Manufacturers face steep competition from legacy competitors along with niche startups. Many US manufacturing industries beyond technology have seen a decline in employment over the last 20 years. However, US manufacturing output has seen double digit growth over the same time period. The economics of manufacturing in the US and elsewhere in the world is a very complex set of topics that is best left to economists, but some discussion related to technology is relevant here.

Beyond the overall manufacturing statistics, it’s important to note that much of the increased production is concentrated among technology firms, such as semiconductors and electronic manufacturing. Not all manufacturing companies fall under the same level of IT investment and cloud adoption. The manufacturing firms who have readily adopted technology have seen greater productivity and this should come as no surprise. Technology and automation are often cited as job killers in the media, but a real killer in manufacturing industries is lagging behind in applying information technology. A disparity in information technology spending accounts for much of the discrepancy between production across manufacturing firms and subsectors.

Cloud based computing is transforming manufacturing by collecting and using useful data at every point along the manufacturing process. Cloud services can be applied to all product development stages from acquisition of raw materials to full production. According to manufacturing.net, the manufacturing industry spent over $5 billion on various cloud computing platforms in 2019. Meanwhile, global spending on cloud enterprise resource planning (ERP) increased to almost $30 billion. The cloud adoption rate has gained significant momentum. Data from marketing research firm IDC stated the biggest spender on the public cloud in 2019 was discrete manufacturing at over $25 billion. Process manufacturing also spent a significant amount at over $15 billion and these numbers are only expected to grow.

Cloud computing applications can extend to impacting the manufacturing enterprise and applications that focus on the manufactured product. Enterprise applications allow manufacturers to manage virtually every aspect of their operations at as many locations as needed. One example would be using business intelligence for manufacturers to improve their operations and tailor their products to the specific needs of customers. Another cloud enterprise application use case is human resources. Human resource departments can use cloud applications to offer realistic, real-time training to employees. Cloud HR applications are able to deliver training that covers real world simulations and review and test employees with little to no involvement from a teacher.

Another use of cloud applications in the manufacturing environment is the design and development of products. The rate of growth in the area of CAD based product development tools that speed up the product is staggering. Cloud computing provides a vast capacity for processing that allows for digital based design. Bringing all product data to the cloud centralizes it for employees to have access across multiple devices and platforms. Cloud computing is transforming all areas of manufacturing across multiple industries and will only continue to grow more over time. Cloud systems and services allow manufacturers to efficiently streamline their core areas of business and free up resources to be invested in marketing and growth opportunities.

Last modified on Monday, 10 August 2020
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Craig Gehrig

Craig Gehrig is a systems administrator with Rainbow Resource Center, an online retailer of educational materials in Peoria, IL. He is also the founder of Vanova IT, a security research and IT solutions provider. In his spare time, he can be found on the golf course and spending time with his wife Vanessa and their two children- Sasha and Craig.

Website: https://twitter.com/CraigGehrig

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