Cloud is making its way into manufacturing industry. I’ve been watching this process for the last 5-7 years and I can clearly say that position of manufacturing companies is changing. From “there is no way we trust cloud applications”, manufacturing companies are moving into a reality of using cloud services for different purposes – finance, CRM, sales, marketing. You can ask what about engineering software? CAD and PLM vendors are in a full swing of cloud marketing, but cloud PLM adoption is far from what vendors are demanding. At least you can make such conclusion from the research announcements made by CIMdata. Navigate here () to read more. According to Mr. Stan Przybylinski, CIMdata’s Vice President of Research:
“Cloud-based solutions are a fact of life in many other enterprise software domains, but adoption in the PLM market has been spotty. Helping to better understand why is one of the main goals for this research. This will also be the first step in documenting how industrial companies are moving their core product and process development work to cloud-based solutions.”
Earlier today I read the Industry Week article – Manufacturers Must Move to the Cloud to Stay Competitive by By Leyla Seka EVP, Salesforce AppExchange. Article is speaking about few software outfits developing manufacturing (ERP) software based on Salesforce.com AppExchange platform such as Rootstock and Kenandy. The PLM software mentioned in the article is PropelPLM. You probably had a chance to read about PropelPLM earlier on my blog. Check this link.
Here is an interesting passage I captured:
Last year, Salesforce sent out a survey (in partnership with Propel, Rootstock, ICIX, and Tavant Technologies) at the Salesforce Manufacturing Summit in Chicago, and I was blown away by some of the results. For instance, only 25% of respondents said that their engineering departments were currently using enterprise cloud apps. But that number is expected to expand to 70% this year.
And it’s clear that moving toward cloud-based apps improves a host of business processes. In the survey, 69% of respondents mentioned process automation as a benefit derived from moving to the cloud. Other benefits mentioned by a majority of respondents include data visibility, lower IT costs, and increased productivity.
One of the main points of the article is how cloud-based applications can make information experience seamless for manufacturing companies and change the nature of product development processes. According to Chuck Berger, CEO of Kenandy:
“If you’re a manufacturer, you want to be able to drill down to specific details at any given time. If there is a failure in the field, you can quickly find the serial number and determine what caused the failure, and go seamlessly through an end-to-end application to understand who provided all of the components, what their costs were, and where the actual product is today”
Ray Hein, CEO at Propel echos with a very similar message:
“Manufacturing companies are now dealing with the participation economy, a shift where customers are much more engaged with businesses and participating in every aspect of the product lifecycle – from the early definition of the product all the way through its launch into the market,” he said. “Cloud-based PLM is reducing time to market because customers can now work in parallel with engineers, operations, and partners to get products done right the first time.”
It is hard to disagree. These benefits are obvious and no doubt can potentially improve processes in manufacturing companies. This is clearly the dream. But the reality of manufacturing companies is a complex set of desktop design applications, local databases, legacy data and piles of spreadsheets. The situation might be slightly different in ERP and CRM applications, but when it comes to product development, engineering and manufacturing planning, the reality is islands of disconnected data and tons of existing software (including desktop engineering applications). This software cannot be replaced without significant investment of time and resources. Some of these applications cannot be replaced because of uniqueness of development and processes these applications are supporting.
What is my conclusion? Engineering and design applications are representing is giant silo of very important information. Manufacturing companies are going trough the process of transformation. Cloud applications can bring lot of benefits, but all these cloud applications will be incomplete without connecting to piles of engineering data and applications. This connection can be a foundation manufacturing companies will use to build an intelligence of data driven applications connecting design with engineering, manufacturing and rest of value chain data. Engineering connectivity might be a missing link to improve cloud adoption in manufacturing. Just my thoughts…
Best, Oleg
Want to learn more about PLM? Check out my new PLM Book website.
Disclaimer: I’m co-founder and CEO of openBoM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain. My opinion can be unintentionally biased
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