Cloud-enabled manufacturing operations: The next frontier of digital manufacturing

Posted on 11 Aug 2023 by The Manufacturer
Partner Content

Manufacturing traditionally hinged on on-premises Operational Technology (OT) solutions. Yet, Industry 4.0 has catalysed a shift towards cloud-based solutions to enhance agility and flexibility on the shop floor. This evolution has transformed cloud technology from being a disruptive novelty to a foundational component of future manufacturing.

According to a recent report by McKinsey, the adoption of the Industrial Internet of Things (IIoT) is rapidly gaining momentum and expanding. By 2025, digital manufacturing is expected to constitute a significant part of the entire IoT market, providing significant benefits to companies that embrace it.

This shift towards cloud-enabled manufacturing operations represents the next frontier of digital manufacturing, but it also comes with its own set of challenges.

Challenges in traditional on-premises manufacturing operations management

Current MOM (Manufacturing Operations Management) solutions deployed on-premises are designed to manage shop floor operations in a siloed manner, leading to islands of data and a lack of visibility across the enterprise.

The manufacturing industry faces several challenges that require a central manufacturing data and analytics platform to be in place. These challenges include:

  • Quality control inconsistencies, potentially leading to increased wastage or recalls.
  • Equipment maintenance issues, which might lead to unplanned downtimes.
  • Recognisable production bottlenecks that hinder optimal throughput.
  • Supply chain disruptions that can compromise delivery timelines.

To effectively address these issues, there’s a pressing need for centralised manufacturing data and analytics platform.

Key components of cloud-enabled manufacturing operations

Moving manufacturing workloads to the cloud is a key imperative for realising higher business value, minimising IT infrastructure and operations costs, and democratising digital capabilities across plants. It requires a well-defined architecture that can handle the diverse workloads and complexities of modern manufacturing environments. The key components of such an architecture are as follows:

  1. Three-tier architecture: A three-tier architecture combining edge, local site data aggregation and Cloud ensures smooth IT-OT integration. This design offers both scalability and flexibility, simplifying the creation of a site-independent solution. This ensures that the site remains operational even if there’s a disruption in Cloud connectivity.
  2. Operational Technology (OT) Security: Operational Technology (OT) security is a critical component of a cloud-enabled manufacturing operations platform. OT security refers to the protection of the plant floor assets from cyber threats. The platform should have strong authentication, authorisation, and encryption capabilities to ensure the security of the manufacturing environment. This is particularly important given the increasing number of cyber attacks on manufacturing organisations.
  3. Analytics Edge: Analytics at the edge refers to the ability to perform real-time data analytics at the manufacturing plant level. This enables manufacturing organisations to leverage real-time data for decision-making, which is critical for improving operational efficiency and productivity. Analytics at the edge also compresses the amount of data that needs to be transmitted to the cloud, which improves performance and reduces costs.

Considerations for deciding between on-premises and cloud-based solutions

One of the key aspects to consider when deciding between on-premises and cloud-based solutions is the volume of data and the faster turnaround time for insights. Additionally, plant-centric decision-making is crucial when determining the appropriate use case for each challenge.

Typically, manufacturing operations benchmarking, digital twin of the plant, and sustainability reporting and optimisation are better suited for cloud-based solutions. On the other hand, digital work instructions, inline quality inspection, and asset/process predictive maintenance are better suited for on-premises solutions.

Navigating the journey towards Cloud enabled manufacturing operations

A well-defined approach is recommended for organisations looking to navigate the journey towards cloud-enabled manufacturing operations. This approach involves defining the scope, assessing applications, defining ROI, and adopting a methodology to perform the task. It is important to choose the right migration strategy, considering factors such as existing system complexity, migration costs, and expected benefits.

There are various migration strategies, including lift and shift, implementation of additional capabilities, and phased migration. It is also important to leverage the right technology to optimise manufacturing operations, and a manufacturing domain technology mindset can be helpful in this regard.

The Hackett Group studied 600 organisations, primarily in the manufacturing industry, to evaluate the benefits of cloud migration. The global study found that migrating to the cloud helped reduce unexpected IT and manufacturing downtime, improved supplier management and sales efficiency, increased customer satisfaction, and enhanced business agility and innovation. The study also provides recommendations for industrial manufacturers to maximise the benefits of cloud adoption.


The shift towards cloud-enabled manufacturing operations is the next frontier of digital manufacturing. It can help organisations address their manufacturing challenges, realise higher business value, and democratise digital capabilities across plants.

However, it comes with a different set of challenges and considerations, and organisations need to adopt a well-defined approach to navigate this journey successfully. With the right strategy and approach, organisations can leverage cloud-based solutions to optimise their manufacturing operations and gain a competitive advantage in the market.

To read similar articles, check out our Digital Transformation channel.

About the author

Raman Kartik IyerKartik Raman Iyer, Vice President, Global Head – Industry 4.0 and Digital Supply Chain

Kartik heads the global delivery for Industry 4.0 and Digital Supply Chain Practice across industry verticals. In this role, he is responsible for delivery of Industry 4.0 transformation program for global customers. He has over 20 years of experience and has played sales, program and delivery management roles in different geographies.

His areas of expertise include product design, industrial automation, and Industry 4.0. He has helped multiple customers define and navigate their digital transformation journey by bringing in solutions on IT-OT convergence, factory visibility, condition monitoring, predictive maintenance, digital twins for process & asset, and digital thread.