Manufacturers re-envision operations, embrace the cloud
THE MANUFACTURING industry has traditionally been known as highly conservative and slow to embrace technology and change.
However, manufacturers today have begun to rethink their entire businesses as they endeavor to keep pace with new technologies which threaten to shake their industry to the core. Having the ability to adapt to new developments, such as the emergence of the Internet of Things (IoT) and 3D printing, is vital for all manufacturers.
While some manufacturers are still hesitant in their approach to these emerging technologies, this new way of doing things could well be the key to the manufacturing industry’s forecasted worldwide growth over the coming years. In the Philippines alone, manufacturing is seen to be one of the fastest growing sectors of the local economy until 2030.
According to a projection made by Oxford Economics and Deloitte, the Philippine manufacturing industry is expected to grow 5.5 percent annually for the next 20 years.
This growth rate also means that manufacturing will outpace what is currently the fastest growing sector in the country—business process outsourcing.
A recent IDC report also indicated that this year marks the start of a four-year period of investment by significant numbers of manufacturers to upgrade to the latest technologies.
Those who believe that the Philippine manufacturing industry is capable of growing by leaps and bounds as forecasted in different studies worldwide are our country’s visionary manufacturers.
These are individuals from the local manufacturing industry who are open to keeping up with today’s technologies in order to be at par with international organizations. They are those who let go of tried-and-tested yet outdated business methods in order to increase productivity and improve customer service.
As visionary manufacturers become more open to change in order to reach the manufacturing industry’s forecasted growth, they now see doing business in the cloud as a way to improve their traditional way of doing things.
Heading for the Cloud
Visionary manufacturers are embracing cloud computing so they can focus solely on their strengths as manufacturers instead of having to divert valuable resources to maintain and upgrade costly and inflexible on-premise software and hardware.
At the same time, the advent of technologies like IoT and 3D printers means manufacturers will likely enter new business areas, such as creating services businesses that utilize the data provided by intelligent sensors embedded in their products.
Cloud computing helps manufacturing companies realize a wide variety of business benefits including:
“The cloud’s instant scalability makes it possible for manufacturing companies to bring remote facilities and new supply chain partners into the fold much more quickly and efficiently than an on-premise systems allow.
“Cloud computing also allows manufacturing companies to keep up with dramatic shifts in today’s fast paced world of e-commerce.
“Shifting to the cloud enables manufacturers to outsource the tedious task of maintaining software, hardware and associated technology to their cloud provider who can provide greater uptime at a lower cost given the economies of scale involved in managing services for thousands of customers all at once.
Visionary manufacturers are also no longer operating just within the four walls of one plant or office, but across multiple locations, suppliers, distributors, vendors and customers requiring them to be more connected than ever before.
They are sharing information with all of those communities and so need real-time access to the rich amount of data held within their organization, which is possible when running a unified cloud-based business suite, but almost impossible when running on a disparate set of poorly connected applications.
Modern solutions that actually work
In the Philippines, a visionary manufacturer who attests to the benefits of moving to the cloud is publicly listed sugar production giant Roxas Holdings Inc. Founded in 1927, the company once embraced age-old methods of doing business.
The manufacturer’s openness to adapt to new technologies, such as implementing NetSuite OneWorld, proved to be worth the learning curve and investment as migrating to the cloud has bought about dramatic improvements in the financial and operational efficiency and visibility across Roxas Holdings.
The cloud solution is also expected to help Roxas Holdings prepare for the challenges in line with the upcoming tariff reduction on sugar under the Asean Free Trade Agreement Common Effective Preferential Treatment (AFTA-CEPT).
(The author is NetSuite’s SVP for Worldwide Support and GM of the Philippines)