The Uberization of Manufacturing

The business world has undergone rapid digitization over the course of the last 20 years. When tech boomed during the 90’s, manufacturing was among the first industries to embrace widespread networking. But shop floors evolved, some found themselves on the bleeding edge of the digital trend. Leading manufacturers rolled out massive MRP (manufacturing resource planning) systems, paralleling the ERPs that were becoming popular in business. Ultimately, these large integrated systems failed. Manufacturers with deep resources were able to dig themselves out, but small and midsize businesses that invested in the hopes of gaining an edge buckled. The relationship between technology innovators and manufacturers never really recovered. Technology continued to evolve rapidly elsewhere, but the pace of transition slowed on the shop floor. Due to tight margins and high costs, the bottom line reigned supreme.

Not so fast…
If this summary already sounds dated, I get it. You probably thought, “If you think manufacturing is lagging behind in technology, you’re out of the loop.” Let me explain. Rapid evolutions in technology tend to tackle the lowest hanging fruit first. Connecting people with drivers isn’t terribly difficult (Uber). Connecting people with places to stay (AirBnB) is also relatively easy. All people need to do is download an app for free, and they are on board from then on. There’s not been any comparable technology evolution for manufacturers, and there’s a good chance there won’t be, but that doesn’t mean shop technology isn’t evolving.

Upgrading machinery to share terabytes of data with every other machine all while providing real-time reporting and ease of use is extraordinarily difficult problem to solve. There’s no single cookie cutter model. Each shop is on their own customizing internal technological systems that work for them, which is like making your own Facebook or Uber and having it all work with everyone else’s systems. The problem with slow technology adoption in manufacturing has less to do with manufacturers and more to do technology provider’s subpar manufacturing solutions. Luckily, that’s changing.

The business case for cloud manufacturing solutions
IT departments have to grow in order to keep up growth in on-premise hardware and software, which means that as manufacturers adopt new technology many costs increase. Common economic sense tells us that as the costs of something increases, less people will buy it. At some point, manufacturers hit a point of diminishing returns where increases in technology adoption only result in permanently slimmer margins.

Balance is the key to successful technology adoption, and that’s why manufacturing cloud technologies tip the scales in favor of increased technology adoption among manufacturers. As the overall cost of new technology decreases through cloud-based solutions, manufacturers can afford to adopt more technologies. Affordable manufacturing technology will accelerate adoption across the industry. And as technology innovators tailor new cloud solutions to manufacturers, successful cases compound and the industry evolves. Technology vendors were behind, but as the internet reaches further into the plant floor, new sources of untapped demand become apparent.

The cloud beats existing solutions
On the web, you never have to hit update. Every button pressed will bring up the latest information available in a database. And when databases are in the cloud, available to users and vendors alike, they are more likely to be updated because that’s what users expect. Finally, centralization of a solution in the cloud means that anyone who uses it can interface with anyone else, or anything else that connects to the platform. Add-ons, integrations and collaborators are always just a click away.

There’s a reason cloud adoption in business has been so swift. In most cases, the benefits of cloud apps will dwarf the benefits of ownership. At MachiningCloud, we are proud to be part of, and leading, a major evolution in manufacturing. We aren’t Uber or AirBnB, but we are helping manufacturers accelerate their evolution towards a fully digitized plant floor.

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