The Rise of Cloud Solutions for Manufacturing

The customer is king. For the top companies on the market, this is no longer just a catchphrase, but reality. Manufacturers need to adapt their processes in line with this attitude – but most legacy ERP solutions are incapable of this. Here, in part 2 of our series on smart manufacturing, we look at some of the key capabilities of cloud solutions for manufacturing.

From one-of-a-kind sneakers with a unique design, to furniture that is made to measure, customers are increasingly demanding highly personalized products. In the past, this trend was mainly seen in B2C commerce. However, these demands are now becoming more common in the B2B environment. For successful manufacturers, the question is no longer “Which products can we manufacture and sell?” It is now: “What do our customers want, and how can we give it to them?” Any company that is unable to manufacture customized products and fulfil the customers’ demands in every respect will be quickly left behind.

However, custom manufacturing is challenging to implement. Depending on the product, there could be millions of possible variants. That not only complicates warehousing and sales planning; it affects every department in company – from procurement to accounting. Furthermore, custom manufacturing requires fast, consistent data processing and servers with enormous processing power. And it is just as important to have a self-learning system that can guide the user. This is one of the reasons why many companies are turning to cloud solutions for manufacturing. For example, with SAP S/4HANA Cloud as their ERP system, manufacturers do not require their own extensive server infrastructure. Data is stored in highly secure data centers that are maintained by SAP.

Adapt to Changes with Cloud Solutions for Manufacturing

Cloud solutions can be implemented quickly, significantly reducing potential disruption to business in comparison to conventional ERP projects. But the main benefit comes from the regular updates. The solution repeatedly adapts to the changing market and automatically delivers new functionality. This reduces the resources spent on testing each year and ensures that cloud solutions for manufacturing always include the latest tools and features.

The most recent example is SAP CoPilot, a digital assistant that is integrated within SAP S/4HANA Cloud. This tool works like a chatbot and can be controlled by keyboard or voice commands. No matter what question the user has, SAP CoPilot uses machine learning to decide which transaction or app is best suited for the job. For example, imagine an employee needs to make a quote for a customer and is searching for a similar quote from the past. Instead of trawling through an endless number of folders, the employee simply tells SAP CoPilot to find a comparable quote.

An ERP System with Built-In Machine Learning

It works in a similar way for production planning: The system draws on previous experiences in its calculations, enabling more precise pricing and saving companies money. And it’s also useful for customer support. When a customer calls, the service representative quickly receives recommendations based on how other customers were helped in the same situation. The system does this by comparing historical data.

Machine learning and artificial intelligence are becoming increasingly common in sophisticated IT solutions. To avoid getting left behind, companies need to get on board with these developments. But what innovations are still to come? Technological progress has never been as rapid as it is right now.

With cloud solutions for manufacturing, you keep pace with the transformation and always have a solid, technological foundation for new developments. Because you no longer need to take care of maintenance and other routine tasks, you have the freedom to innovate. This also solves the issue of finding skilled professionals. If you need any additional applications for your specific products or services, you can simply link these to your cloud solution. In this way, you can extend or enhance the ERP core to achieve the scope of functions you require for your customers. This makes a huge difference to the “old ERP world”: You gain flexibility that benefits both your company and your customers.

In my next blog post, I go into more detail about these capabilities, describing how you can smarten up your manufacturing and become an intelligent enterprise.