Accelerate your digitalization journey with help from the cloud

Accelerate your digitalization journey with help from the cloud

May 27, 2022

Cloud-based production solutions for manufacturers

Cloud technology is revolutionizing industry. It offers a wide range of advantages for manufacturers – from its ability to store enormous amounts of data with enhanced cybersecurity to its enabling of autonomous systems and robots. Yet, many businesses have a hard time introducing cloud-based solutions in their production environment, struggling with technological and other challenges. We examine the potential of cloud-based production, and suggest three steps that can help businesses speed up their journey to digitalization.

"We often see companies spending too much energy trying to avoid potential errors. Instead, we recommend a bold, "fail fast" approach, with close cooperation between experts from different domains."
Portrait of Bernhard Langefeld
Senior Partner
Frankfurt Office, Central Europe

Implementation challenges

Why do many companies still struggle to implement digitalization use cases in their production environment? Besides the inherent technological and organizational challenges, they often simply lack the necessary information and skills. Developing an artificial intelligence (AI) use case requires an understanding of, on the one hand, the manufacturing process, and on the other, AI methods. Often, a single expert, department or even company will lack knowledge of either one or the other element. Close cooperation between experts from different domains is needed. Applying a "fail fast" approach can also be advantageous – trying things out, gathering feedback, and then making adaptations where necessary.

Another reason digitalization has been slow to get off the ground in the manufacturing industry is the prevalence of legacy systems. This situation isn't helped by the fact that a historical separation exists between production systems and the business IT. These factors make implementing new data analytics use cases inherently difficult – especially where they are not supported by the supplier of the automation solution.

Benefits of the cloud

The rise of the cloud-based Industrial Internet of Things ( IIoT ) and the increasing convergence of IT and OT (operational technology) means that companies can now connect their assets across all levels of the automation pyramid. New functionalities are easy to implement by means of apps located on cloud platforms. Cloud solutions also potentially revolutionize value and supply chains, delivering both efficiency improvements and cost savings.

Based on the potential use cases, we differentiate three cloud "archetypes" – factory/company clouds, product lifecycle management clouds and supply chain clouds. The diagram below summarizes what each has to offer.

In many areas of manufacturing, the cloud is already making significant inroads. Companies in the steel industry, for example, are now using AI solutions to monitor the complete rotation chain in electric motors. The solutions analyze current and voltages readings from within the motor and are so able to predict failures up to seven months in advance. This type of predictive maintenance – known as "electrical signature analysis" – can often be implemented within two months and is offered by suppliers on an as-a-service basis.

A three-step approach

To help manufacturers overcome the challenges of cloud technology, we recommend a three-step approach:

  1. Set up a dedicated team whose task is to drive digital production use cases. The team should be cross-functional, bringing together traditional IT skills, data analytics expertise and production knowhow. We recommend starting with a small group of people and focusing on use cases with a limited scope, allowing the team to gradually build up competencies.
  2. Once you have initial experience implementing use cases, create a dedicated organizational unit to speed up the digitalization process. This unit's task is to identify further use cases, implement them, and then roll them out to the rest of the organization in a structured fashion.
  3. After reaching some maturity in implementing cloud-based digitalization use cases, define a target IT/OT landscape and implementation roadmap that provides guidance with regard to investments in new technologies and systems. Critically, ask yourself what your future system landscape should look like, where you will store data, which cloud providers you should work with, and how you should manage the transition to the new system.

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Accelerate your digitalization journey with help from the cloud


Many manufacturers have difficulty implementing cloud-based solutions in their production environment. But for those that do, the benefits are far-reaching.

Published May 2022. Available in
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