The Key Benefits of Hybrid Cloud for Manufacturers
Executive Summary
Manufacturers have a history of producing revolutionary innovations. From Henry Ford’s assembly line cars to Andrew Carnegie’s steel factories, manufacturing has shaped economic structure around the world. However, many traditional manufacturers still operate with rigid systems that can’t evolve to meet today’s business needs. Digital industrial transformation involving disruptive technologies, such as edge computing, Internet of Things (IoT) and machine learning on cloud can help transform what’s possible in manufacturing. These cloud enabled innovations impact logistics, warehousing, production, and maintenance. They can be the key differentiators for staying competitive and breathing new life into a long-standing manufacturing legacy.
Companies have continued to struggle with scale purgatory
Forrester report in Dec 2020 reveals that 87% of decision-makers in manufacturing sector believe it’s important to scale applications across all factory sites, however, 67% reports struggling with scaling due to local IT and OT systems. Furthermore, only 16% of all proof of concept (PoC) initiatives have been rolled out enterprise-wide over the past two years.
Many organizations are stuck in pilot purgatory, never breaking through this initial PoC stage to provide production level impact. For those initiatives that do reach production are often stuck with scale purgatory. Manufacturers struggle to replicate the success model at one site to additional sites due to lack of standardization and custom-made infrastructure environments at a particular site.
Most organizations have high ambitions for their digital industrial transformations journey but only 12% of manufacturing decision-makers say they have achieved enterprise-wide scale with more than a couple of projects. 57% of manufacturers are in a limited implementation phase while the rest are in a piloting or planning stage. Manufacturing firms will need to clear pilot and scale purgatory to deliver transformational impact that can be repeated across sites.
Forrester Report Dec 2020
Key factors contributing to scale purgatory
Lack of repeatability and standardization across manufacturing sites are key contributing factors resulting in scale purgatory. The slow development time associated with DIY approach significantly increases time to value, which therefore makes executive support difficult to ascertain. In addition, DIY approaches are mostly tailor-made for testing specific functions and miss certain aspects like scalability, standardization, integration with existing software and data architectures. Variable data and application environments across manufacturing sites means each implementation must start from scratch with limited repeatability making scaling across sites lengthy, complicated, and expensive. The net result is that companies are unable to deliver transformative impact in an agile manner, fail to show value from the overall transformation initiative, and lose momentum on digital industrial transformation.
Barry Lynch, Senior Vice President of Field Services at PTC
Manufacturing organizations struggle due to poorly integrated, patchwork technology ecosystems with the inability to scale and innovate quickly. Most organizations have overly complex legacy systems that suffer from the slow evolution of the technology solutions available This is because most firms still operate with patchwork technology rather than purposefully selecting best-of-breed solutions or opting for a single integrated platform. 57% of decision-makers say they have adopted various individual point solutions over time to solve the immediate problems and have gathered multiple IT, OT and custom developed solutions. These manufacturers have had substantially greater challenges when it comes to speed and scale.
Organizations need to invest in standardization including naming conventions, software, infrastructure, data architectures and reporting to realize benefits like quicker deployment, better governance, and poor-quality avoidance. Also, deployment process becomes repeatable, and a standardized system is much easier to maintain. When your system is standardized, you make a modification once and it applies to other processes. It provides enterprise-wide visibility that gives you complete picture across sites to identify top performing sites and best practices.