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June 10, 2024
Why Every Manufacturing Startup Needs to Adopt Cloud Technology
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June 10, 2024
Now and on an on-the-go basis, technology is the backbone of virtually every business, and this also goes for manufacturing startups. Cloud technology, in particular, has democratized countless tools and capabilities that were historically only affordable to larger companies.
So, let me take you through why moving on to cloud technology is not a wise decision but a mandatory step if you want to survive in a digital economy as a manufacturing startup. With cost savings to faster time-to-market of products, we will look into some of the advantages that the cloud brings in, which could be a boon for your startup to nail it right.
Today cloud technology is a must for emerging startups, specifically for manufacturing sector which changes the way different facets of business operations are carried out. This post will dive deep into why this technology is important, different doables, and how examples of these use cases help a business.
Reduced Capital Expenditure: Majority of startups run on shoe-string budgets; The reason is that cloud technology eliminates the need to pay large upfront costs related to the procurement, maintenance and update of IT hardware and software. A press office says that rather they can pick and pay for cloud services on a monthly basis, spreading costs to make them more manageable.
Use Case: Small toy manufacturer would not have to invest in expensive servers and build an IT staff to handle inventory and sales operations so their initial operational costs are much lower.
Flexible Resources: Scaling Operations quickly in order to keep up with demand, in an economic landscape that doesn't allow for the traditional Out-Of-Business model. To further benefit from the cloud, with minimum effort businesses are able to scale up the services and scale down the ones that are not needed, hence they pay only for the resources that they use at any give moment.
Use Case: Demand rises suddenly for an environmental packaging solutions startup They can scale to meet the increased load in seconds with no delays or incremental capital expenditure because of their cloud infrastructure.
Enhanced Collaboration: cloud services allow to improve work in various branches. This means that team members can access, modify, and share documents when and where they need to, in return ensuring that they always work on the latest version of the document.
Use Case: A team engineers are working on a prototype design and situated in different parts of the globe. Working with CAD on the cloud, they can collaborate simultaneously on real-time changes and immediately share them without having to meet face to face or shuttle files around.
Access to Advanced Technologies: One of the biggest advantages of cloud computing for startups is that it offers advanced enterprise technologies (eg: cloud computing, AI, Machine Learning, Big Data analytics etc) without requiring startups to buy and maintain expensive and not quite necessary hardware.
Use Case: A cloud-basedartificial intelligence server that allows startup company in the food processing industry inbuilt easy to understand templates to analyze consumer behavior and to forecast the trend of tomorrow. This provides the information they need to shift their production schedules and marketing strategies, and ultimately take the lead from the rest of the herd.
Cloud technology has major strategic benefits that can give the manufacturing startups an edge, allowing them to not only stay afloat but actually gain ground in markets they are competing in. A breakdown of the strategic benefits, with explanations and examples from the real world.
Rapid Prototyping and Deployment: Fast Prototyping and Deployment – Cloud environments speed up the time of development, leading to a faster product life cycle from concept to commercializing.
Use Case: A smart home device startup leveraging cloud services to iterate on their device designs rapidly. With cloud-based simulation tools, they can do a large number of tests in parallel, decreasing the product development cycle from months to weeks.
Leveraging Cutting-Edge Tech: Cloud platforms gives startups exposure to the latest in technology such as IoT, AI, robotics without investing heavily in IT infrastructure.
Use Case: A small fitness equipment manufacturer embeds AI and IoT in its products through cloud services. Enabling this is their integration with a cloud technology that captures and analyzes real-time data and enables them to offer personalized solutions to users for their workout based on their health information.
Real-Time Data Utilization: Using this technology we can tracking the data in real time which allows businesses to know the right customer and help them at the right time.
Use Case: heCase An automotive startup for managing its customer interactions & feedback implements cloud-based customer relationship management(CRM) system. By employing this system they provide them with better services and support, enabling them to market their wares and develop the appropriate products according to demand.
Business Continuity and Disaster Recovery: Cloud solutions usually have redundancy and backup features built in, this allows a business to continue operations even in the unlikely event of total hardware failure, natural disasters or any other major disruptions.
Use Case: A Manufacturing Startup in South Florida & a Superstorm Since this manufacturing startup based in South Florida only had a primary data center that was located just about three miles off the Gulf of Mexico, the very place where a superstorm had hit, they knew their data and disaster recovery needed a backup solution that could meet surging demand and usage if a storm did come.
But since their infrastructure is based on the cloud, they were able to quickly fall back on an alternative site so they could continue processing production and order fulfillment using a failover plan.
The advantages of working with cloud technology are extensive, but they also come with a few unique cons. This is how startups can overcome these challenges efficiently, along with multiple subtopics and case studies to show solution.
Robust Security Measures: Data Security remains the most critical aspect of the cloud to any organization considering cloud adoption. Advanced encryption, multi-factor authentication, and compliance with international security standards are some of the benefits cloud providers offer to minimize these risks for startups.
Use Case: A digital health record startup wants to make sure that health information is kept safe and secure and is under the stewardship of a HIPAA-compliant cloud service provider. They introduced end-to-end encryption and routine security evaluations to ensure data integrity.
Seamless Integration Solutions: There are various startups who are unable to integrate cloud technology with their existing IT systems then here seamless Integration Solutions come into the scenario. A strategic tactic is to make sure that cloud-based and on-premises systems have integrated middleware or data flow integration platforms as a service (iPaaS).
Use Case: This organisation made use of an iPaaS solution to unite their on-premises inventory management system with a cloud-based e-commerce platform to update inventory in real time and reducing the possibility of over-selling of items.
Cost Transparency and Management: With a variable expense model cost transparently and management cloud costs can be a challenge. Cloud cost management tools enable best practices to be established at the startup level for monitoring and control over spending.
Use Case: A Tech Startup that was experiencing escalating costs on account of consumption of cloud services with no monitoring. They then used a cloud cost management tool to identify the waste and optimise their capacity resulting in 30% Saving in their cloud costs.
Training and Development: One more challenge is the skill gap in cloud technology within the team The best way for startups to do this is by investing in training programs and working with cloud experts to get their teams up to speed, quickly.
Use Case: Manufacturing startup was finding it difficult to deploy cloud solutions and hence they took training session from one the cloud solution provider. This not only bolstered their team's cloud skills but also resulted in a smoother cloud migration.
Startups in manufacturing, however, do face a number of hurdles when adopting cloud technology. These challenges can be addressed with real-world use-cases and practical solutions.
Enhanced Security Protocols: An Introduction to a few Security Protocols: What actually worries you the most when you are told that you are going on the cloud? This can be avoided by selecting cloud providers with proven security certifications, providing encryption, regular security audits and industry-compliant solutions.
Use Case: A financial services startup wanted to safeguard its customers data. They protected the sensitive data, yet were able to comply with the regulations of the financial industry by selecting a cloud provider whose encryption mechanism was rather advanced.
Effective Integration Strategies: Integrating new cloud solutions with the old legacy systems can be a bit tricky. Middleware, or cloud integration tools can also be utilized to smooth out the data flow between old and new systems.
Use Case: An industrial equipment maker leveraged a cloud integration platform to integrate their old ERP system with a next-generation cloud CRM application delivering a unified data channel and enhancing customer service without disrupting day to day operations.
Cloud Cost Optimization: Staying on top of what you are spending on the cloud is absolutely mandatory, because the spends could easily go up in spiral. To track your spending and optimize cloud usage, startups need to leverage cloud cost management tools and best practices.
Use Case: A biotech startup saw operational costs spiral out of control because cloud resources were not utilized efficiently. With cloud cost management software, they were able to see where their money was going, cut down on the waste, and save 25% on cloud expenses.
Training and Upskilling Employees: Adoption of Cloud is Tricky, a curse in disguise if not understood properly. This gap can be filled by giving training to the resources or by hiring or getting in a consultancy of Cloud experts.
Use Case: A consumer goods startup realized that to fully benefit from the cloud, they need cloud expertise. For the initial setup and on-going management they partnered with their cloud consulting service, and began training programs for their entire staff to build internal expertise.
A successful cloud technology consists of a systematic approach. Here are some important strategies for manufacturing startups to forge their way confidently into the cloud, and with them a few examples of how these strategies have been implemented.
Using Structured Frameworks: Cloud Adoption frameworks provide a structured approach to migrate to the cloud then making sure that all the verticals for implementation is covered like Business, Technical & Security.
Use Case: Since the data and applications need to migrate, I have taken this specific use case of the startup that produces Electronic Components and have followed the AWS Cloud Adoption Framework. This allowed them to plan, migrate and way more after migration in the cloud in a structured fashion.
Effective Communication and Training: This may mean communicating the benefits of adopting cloud, what will change as well as training employees on how to use the new cloud based tools effectively.
Use Case: A textile startup moved from an traditional inventory management system to a cloud based inventory management system The workshops done for them to ensure that their staff were well trained in using the system, helped to reduce resistance and increase adoption efficiency.
Leveraging External Expertise: Working with cloud consultants or service providers can bring in the expertise and resources that startups might not have in-house.
Use Case: 3D printed prosthetics startup worked with a cloud consulting firm to build and deploy a scalable and secure cloud architecture for decades in cloud integration and got their cloud implementation faster.
Incremental Implementation: It is always a good move to implement cloud technology in smaller steps as this minimizes risks by reducing disturbances to the current ongoing processes and gives you the ability to rectify the initial steps based on the feedback.
Use Case: An automotive parts manufacturer moved non-mission-critical workloads to the cloud in a phased implementation. Example: The customers could prove their cloud setup and do some corrections if necessary before moving their business critical applications to the cloud, minimizing the risk of a complete stand-still.
Ongoing Evaluation: Continuous monitoring and optimization is the key to success with cloud your cloud infrastructure must be regularly evaluated to determine how well it is performing and to make sure it is still cost-effective, after migration.
Use Case: A beverage industry startup that employed cloud management solutions to monitor their cloud infrastructure 24/7. The information obtained, then helped them in finding and correcting the places they were having performance bottlenecks and used then resource and system effectively in turn giving a better system performance and reducing costs.
By looking at some real-world examples of manufacturing startups and how they have successfully leveraged cloud technology to great advantage, you can learn from their best practices and how this has translated into real benefits. Some finer detail case studies here:
Challenge: How to scale international operations without multiplying IT costs.
Solution: Utilized cloud-based ERP and CRM systems for scalability and real-time data access, regionally.
Outcome: This enabled the customer to operate with streamlined processes, better CRM and lower IT overhead, and went on to rapidly expand their services internationally.
Challenge: We can split this into two major challenges Need of reliable solution to manage large-scale and complex product design and simulation process Challenging part was running simulation in production phase To compare every aspect of the two solutions, we also look at the challenges
Solution: we also look at the challenges A. Solution: Solution: Moved to cloud-based CAD and simulation for rapid prototyping and iterations.
Outcome: 50% decrease in time for prototype development which means faster testing and refining of ideas faster time to market for their products.
Challenge: Supply chain disruptions are a pain-point and needed to get more visibility and control over their supply chain.
Solution:Used A Cloud-Based Supply Chain Management System To Monitor Inventories And Shipments.Tracking ShipmentSolution: A Cloud-Based Supply Chain Management System To Watch Material Deliveries & Shipments In Real Time
Outcome: Increased supply chain transparency, lowered inventory costs by stock level optimization, shortened lead times by supply chain bottlenecks resolution at early stages
Challenge: The operations had to be well optimized to avoid wastages and to improve the efficiency of the production.
Solution: Production processes were being monitored using Cloud based analytics to determine patterns of inefficiencies. Solution
Outcome: 20% improved operational efficiency, drastically decreased waste and production costs.
Challenge: Many data regulations and strict health data laws meant this data had to be secure and protected.
Solution: Migrated a managed, compliant healthcare solution with an improved security posture to the cloud.
Outcome: Zero data breach, compliant to all regulations, and won Best in Customer Confidence for keeping all sensitive information safe!
To sum it up, for manufacturing startups, cloud technology is not a passing IT trend but a tool that helps them to work smarter, scale easily and innovate faster. Startups are able to compete anywhere in the world thanks to the cloud investments through these savings on the initial IT expenditure, the ability to scale resources with demand, and have access to new collaboration and innovation tools.
It is important to be able to provide this cloud native level of service, and that may involve the clearance of obstacles such as security and integration, but that is possible as long as we use the correct approach and are partnered with the right expertise. The case studies we ran through at the beginning of the talk show some real-world impact and highlights some startups who have taken real advantage of cloud tech to make real efficiency changes in their orgs and drive significant growth.
