As new hi-tech products enter the marketplace such as Low Earth Orbit (LEO) satellites, industrial drones, or AI-driven vision devices, the pioneering startups driving this phenomenon must move quickly to capture market attention while managing customer expectations. This delicate balancing act can be taxing on resources, capital, and the overall organization of emergent manufacturers. In these instances, a Cloud-based Manufacturing Execution System (MES) delivered as a managed service can be a win-win proposition that should be seriously considered.
For many startups, their business systems are often spreadsheet-based. Similarly, production systems are often based on paper or spreadsheets. As these companies grow, they turn to small business solutions for financial and sales management but struggle to find adequate production management tools that can deliver the functionality they need.
Many of the affordable PC-based MES solutions either lack critical functionality for regulated industries, such as A&D and Medical Device, or can not scale fast enough as the business expands. These on-premises MES solutions also require system administration that can draw critical resources away from running the business, a considerable challenge to an organization experiencing exponential growth.
3 Reasons to Look to the Cloud
Cloud solutions are now gaining traction in the manufacturing industry for many reasons. Manufacturers have already made Cloud ERP their de facto choice today with many ERP vendors reporting more than 70% of new sales as Cloud-based. Operational solutions such as EH&S, Maintenance, Quality, and MES are all moving in this same direction with anywhere from 30% to 60% of new deployments being Cloud-based, depending on application category.
Here are three compelling reasons that help explain why businesses are moving MES to the Cloud:
- Faster Deployment – Cloud-based solutions can be deployed much quicker than their on-premises counterparts, with a difference of up to 6-12 months between these two options. This difference can result in both substantial cost savings to deploy and a faster time-to-value.
- Improved Security – Software-as-a-Service (SaaS) solutions hosted on major platforms such as those offered by Microsoft or Amazon provide a high level of security that is already built-in. While there remains a need for operational security, platform-level security is a given since the Cloud providers base much of their competitive positioning on how secure they are. Some even offer DoD IL5 security as an option.
- Remote Support – Since this type of solution resides in the Cloud, support capabilities are provided remotely. With global Cloud availability and many SaaS solution providers leveraging this capability to operate globally, 24/7 remote support has become the norm. Usually, on-premises solutions either don’t have this capability or charge a premium to provide it.
3 Reasons Why Cloud MES Makes Sense for Hi-Tech Emergent Manufacturers
For manufacturers operating in fast-growing, highly regulated industries such as satellite internet companies, industrial drones, or autonomous vehicles, Cloud-based MES makes even more sense.
Here are three compelling reasons these types of manufacturers should consider a Cloud MES:
- Access to Specialized Functionality – Many industries have MES solutions specifically tailored to their manufacturing needs and regulatory environment. These high-capability MES solutions typically cost more than generic MES solutions that are designed to serve a less demanding and much larger market. By taking a Cloud-based delivery approach, an emergent manufacturer using a SaaS-based delivery model can more closely associate the cost paid for these higher capabilities to the value received.
- Matching Growth – When a business is growing exponentially, its software needs will also grow exponentially. With an on-premises solution, the unlocking of additional capacity typically comes in steps. This means you can either be limited in accessing needed capacity or will have to pay for more capacity sooner than you need it. Once a SaaS solution has been established, when based on a microservices architecture, often all that is needed to unlock greater scalability or new features is to “flip a switch.”
- Convert CapEx to OpEx Spending – Manufacturers experiencing exponential growth are often venture-funded so must spend capital wisely. It makes far more sense to spend capital on R&D and production capacity than software. Adopting a Cloud MES avoids considerable upfront spending that can be better utilized elsewhere.
If you are an emerging manufacturer in an industry such as micro/LEO satellites, industrial drones, or are building other hi-tech products that support other high growth industries, it just makes a lot of sense to consider what Cloud options exist for all of your business software needs, including ERP, MES and the rest. You get access to Tier One capability at an affordable cost that can scale at the same pace as your business expands.
Dan Miklovic is the founder and principal analyst at Lean Manufacturing Research, LLC. He has a wealth of experience as an end-user, software vendor, consultant, and market research analyst. He led a plant applications development and implementation team at Weyerhaeuser, was a process system engineer at Scott Paper, led the network design team at a large engineering firm serving the pulp & paper and mining industries. His industry analyst experience includes roles at Gartner, Sustainable Collaborations Group, and LNS Research. He is currently a member of The Analyst Syndicate. He has authored dozens of articles, contributed to several engineering handbooks, authored a text on industrial networking, and was a co-host of World Business Review, a TV program seen on public television, CNBC, and other outlets.
You may contact Dan at [email protected].