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Demand & Supply Chain Management Evolution




21 Aug 2020
How Will The Cloud Change Auto Manufacturing?

Jesse Kelber
Flexis

Business woman typing on keyboard with global system conceptCloud technologies are driving the global digital transformation. Nowhere is this impact being felt stronger than in the manufacturing sector, particularly in the automotive industry. Industry 4.0 relies on IoT (internet of things) devices, RFID (radio frequency identification) tags, and more to power the data revolution, and these things all operate at least in part in the cloud. An IDC poll reveals that a whopping 77% of manufacturers view the fourth industrial revolution as an opportunity and have made their organization’s digital transformation a top priority as we enter a new decade. The top concerns these industry leaders express revolve around three main themes: data accessibility, data security, and data analytics. Cloud tech is here to make each of these simpler and to help you achieve the insights you need to stay ahead of the game in the highly competitive auto manufacturing world. 

 

Visibility Is Crucial to Keeping up with Demand

Most industry 4.0 technology is, at its core, about increasing visibility into your supply chain. Whether it’s used to track shipments or report on equipment health and maintenance needs, this technology is built on a foundation in the cloud. At the manufacturing stage of the chain, IoT sensors and RFID tags make use of underlying cloud infrastructure to achieve the greatest possible impact on your bottom line. The industrial internet of things has come into its own in recent years, meaning that IoT sensors are becoming a ubiquitous part of many auto plants. These sensors connect to your SCM solution, relaying detailed information about production capacity and machine health in real-time so you can adjust output and schedule maintenance before the need becomes critical and causes a disruption.

Meanwhile, RFID tags are being used to monitor inventory levels of both supplies and completed orders so that your suppliers and customers can have up-to-the-minute information. RFID tags are short-range devices that send a signal to your inventory tracking system so you can know, at a glance, the precise location of everything in your warehouse. Knowing the location of every pallet, every order of raw material, and even every forklift means you can make the best possible use of available shelf space and limit production run turnover time. Both of these technologies make use of cutting-edge cloud infrastructure to return this data instantly and to maintain communications with your SCM tools. The ability of a cloud-based analytics engine to process reams of data and generate insights in real-time is a manufacturing game-changer of epic proportions.

 

Rigidity Kills Productivity

The fact that the solutions discussed briefly above are based on cloud technologies deserves a few more words. The tech that powers the cloud has reached a point of maturity where it’s becoming less and less expensive, and easier and easier to implement, meaning there are plenty of ways to put it to use in your manufacturing facilities. The data provided by these devices, stored and analyzed in a centralized cloud-based SCM solution, will broaden the scope of your operation and allow for unprecedented insights into your production line. Beyond offering accessibility, using a distributed cloud infrastructure to power your SCM brings additional benefits like flexibility, scalability, and extensibility. 

Making use of a new, temporary warehouse for backstock of an upcoming new model? As long as the facility has internet access—with 5G becoming widely available a wired connection isn’t required anymore—they can have access to the same data pool and analytics as everyone else in your supply chain. Did you recently add a new upstream partner? Using APIs and other connectivity options, their systems can be integrated into your cloud SCM solution in a matter of minutes with no impact on network latency since everything is stored off-site in a secure cloud facility. The flexibility inherent in the decentralized nature of cloud infrastructure makes it simple and fast to add capacity, adjust bandwidth, and connect to new off-site systems for the ultimate in an agile SCM solution.

The auto industry is notoriously volatile, never more so than the current moment with the world in the grip of a pandemic. This inherent volatility leads to a need for scalability in order to stay ahead of your competition. Need more bandwidth for an unexpected demand spike? Just request a bump in your pipeline for the month. Seeing a lull over the holidays? Throttle down to save money and release processing power for other operations. Adding a new plant overseas? No problem, as long as they can access the internet, you can reap the same benefits and rewards of IoT devices there as you do at your domestic plants.

Closely related, yet also quite different from the last two aspects, is extensibility. Extensibility refers to a system’s ability to expand capacity at scale. Where scalability can mean up or downward movement as discussed above, extensibility mainly deals with steady, unimpeded growth. For example, as you add further production facilities for your new markets and regions, you’ll need to be able to not only grant each location access to your cloud SCM, but also ensure everyone has the same experience using it. Increasing bandwidth, upping processing power, and adding storage capacity are some of the keys to an extensible system. With a cloud solution, all you have to do is request the needed upgrades to your account and you’re up and running in no time.

 

Analytics Power Innovation

No discussion of cloud tech would be complete without a mention of analytics. All of the data being generated by your industry 4.0 devices is for naught if you can’t parse it looking for actionable insights. And there’s where advanced analytics enter the picture. The engines that power those analytics are power-hungry and bandwidth hogs, so the appeal to locating them on someone else’s infrastructure is readily apparent. By moving these processes to the cloud, you lighten the load on your internal infrastructure while increasing the data’s availability to your partners and stakeholders up and down the value chain. We call that a win-win. 

And that doesn’t even get into the added benefit of having your analytics running on the same distributed platform that your data is stored on. As you can see, the cloud and the technology that underpins it is ready to disrupt the auto industry in the best ways possible. By adopting the cloud into your supply chain, you’re building in the resilience you need to weather coming uncertainties and set yourself up to be more agile and able to pivot as necessary at a moment’s notice to adapt to changing demands. 

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           Circular Economy     Industry 4.0     Blockchain 

     Internet of Things     Omni Channel 


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Last update 3 Nov 2020
PMI improves to highest since January 2019
   Source: Markit US Manufacturing PMI ™  -  IHS Markit
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