Embracing Industry 4.0? Don’t overlook Cloud ERP

As the number of connected devices proliferates from offices to factory floors, Industry 4.0 represents the fourth revolution in manufacturing and promises a more connected era where advanced technologies will drive greater efficiencies, innovation, and growth. Estimates from McKinsey and the World Economic Forum predict that the fourth industrial revolution may deliver up to USD $3.7 trillion in value for the global economy by 2025, through new products and services.

When thinking about how to gain a competitive advantage in this era of smart manufacturing, business leaders cannot overlook the importance of a cloud-based Software as a Service (SaaS) environment. In addition to finance capabilities, leading cloud ERP systems deliver a full suite of capabilities including HR, procurement, supply chain planning, logistics, and more.

The fourth industrial revolution requires cloud software

As the fourth industrial revolution gains steam, cloud ERP and SaaS applications will be critical to enabling more efficient workflows, particularly when compared to traditional on-premises systems. For example, leading SaaS applications allow manufacturing leaders to make quick decisions using machine-generated data and coordinate production processes with broader business goals.

On the other hand, on-premises systems that manage structured business data needed for daily operations lack the flexibility, scalability, real-time connectivity, and depth of insights needed for Industry 4.0.

Enhanced connectivity requires robust data security

In a smart factory, countless sensors collect data from machines, vehicles, and workers in the facility. The growing number of connected IoT devices, and the data flowing between them, can create a larger attack surface for cyber incidents. This poses significant risk as a single vulnerable point in production can end up exposing an entire plant or company to a potential cyberattack.  

SaaS like cloud ERP can help prevent these scenarios and support cyber resilience with automated updates to ensure organisations are running the latest software and providing insights into potential vulnerabilities. A car manufacturer, for example, may consolidate sensor data from its 20 regional factories on one cloud solution instead of in multiple systems hosted locally on-site, reducing the scale of individual cyber risk.

Cloud computing and scalability

Many smart manufacturing projects get stuck in the pilot stage, primarily because their IT systems and key data are siloed across various factories and facilities. Cloud-based enterprise software offers a clear advantage. Well-designed cloud-based SaaS can address these issues by providing organisations with a single set of data that can be used in managing manufacturing processes, the supply chain, finance, and other functions.

Leading cloud business applications can take in the data flowing from machines, robots, and other tools in various production facilities, then use it to inform and improve manufacturing processes. This type of agility is particularly valuable in the context of Industry 4.0, where the ability to quickly adapt to changing demands, integrate new technologies, and handle varying workloads is essential for staying ahead of the competition.

Real-time decision-making and workflow optimisation

By selecting a leading SaaS applications vendor that has integrated cloud ERP and supply chain management (SCM) software, manufacturers can use the insights produced by these systems to make more strategic decisions, allowing for increased visibility and improved workflow optimisation.

For example, a large global automotive manufacturer that uses cloud-based business applications for finance, warehouse management, and transportation management has visibility across the entire customer journey, from placing an order to the vehicle’s delivery. As a result, employees can make smarter decisions by easily accessing information such as carrier bookings, invoicing, and billing without even needing to log out of the software. Ultimately, the manufacturer now has the necessary data and insights to ensure excellent customer experiences and uncover areas for improvement.

Embracing the future of manufacturing

The first Industrial Revolution was powered by steam, and today the fourth is fueled by data. However, it’s cloud ERP that act as a lynchpin, connecting critical streams of data from connected devices, and turning them into real-time actionable insights for organisations. The adaptability, accessibility, and resilience of cloud-based business applications make them the natural foundation for any organisation looking to reap the benefits of Industry 4.0.

Guy Armstrong, is a senior vice presidnet responsible for applications at Oracle UK and Ireland.