By Patrick Waurzyniak
If your manufacturing operation isn’t on the cloud, chances are pretty good that it may be in the future. Cloud computing is taking off with many manufacturing operations opting to outsource the enterprise resource planning (ERP) software that manages their business and factory functions.
Today’s ERP software developers are starting to embrace cloud computing, where most IT functions are based off-site at either public or private cloud operations in data centers on the Internet, often at substantial cost savings ERP providers also are moving toward wider use of the Software-as-a-Service (SaaS) model, where customers essentially rent software instead of buying and installing it in a more typical "on-premises" scenario.
A majority of manufacturers have considered, evaluated or already implemented cloud-based systems, according to market researcher IDC (Framingham, MA). In its "Cloud Computing in Manufacturing" IDC Manufacturing Insights report, IDC found that 44.3% of manufacturing companies either have implemented or were evaluating cloud deployments, while 22% already have installed cloud-based systems.
Other research cautions companies considering cloud computing, including Gartner Inc. (Stamford, CT), which last month released its report, "Five Cloud Computing Trends That Will Affect Your Cloud Strategy Through 2015," that contends continual monitoring and updating of cloud strategies is essential to success. The report is available on Gartner’s website at http://www.gartner.com/resId=1920517.
"Cloud computing is a major technology trend that has permeated the market over the last two years. It sets the stage for a new approach to IT that enables individuals and businesses to choose how they’ll acquire or deliver IT services, with reduced emphasis on the constraints of traditional software and hardware licensing models," says David Cearley, vice president and Gartner Fellow. "Cloud computing has a significant potential impact on every aspect of IT and how users access applications, information and business services."
Moving Manufacturing to the Cloud
ERP software developer Plex Systems Inc. (Auburn Hills, MI) has offered cloud-based systems exclusively for the last 11 years, notes Patrick Fetterman, Plex Systems vice president, marketing. The 17-year-old company specializes in offering Plex Online, a SaaS/cloud-based ERP system, to small to mid-sized manufacturers in a wide range of industries including automotive, aerospace/defense builders, food and beverage, medical device manufacturers and metalforming operations.
"The term ‘in the cloud’ means a lot of different things to different people," notes Fetterman. "The first, and the easiest, step into cloud computing is what we call IAAS, or Infrastructure-as-a-Service. In this case, you still own the applications, but the hardware infrastructure is owned by somebody else."
Other models include Platform-as-a-Service (PaaS), Fetterman notes, that also offers users an application development environment. "The third level and the one in where my company’s involved is Software-as-a-Service [SaaS]. This means we own everything up into the data in those accounts," Fetterman says. "We own the software, and our customers simply access the software, they pay for access to it. They own their own data, they own control of the user accounts, etc., and everything else is controlled by the software as a service provider. So those are three different variations on the cloud that we hear about."
Several key technology and market forces coalesced to create an environment conducive for cloud computing, observes Fetterman. These factors include Moore’s Law, the phenomenon of computing power doubling every 18 months; virtualization, the ability to build large network infrastructures that become virtual servers on the same hardware; and the rise of data centers that have become attractive to companies looking to cut costs by outsourcing IT operations.
"All those things have put in place the structure to deliver cloud services," Fetterman says, "and it just happened to take place at the time there were a bunch of market forces pushing it all in the same direction. We all know that IT budgets have been cut dramatically and resources have been cut dramatically—no IT department is the same size it was even three or four years ago."
The Plex Online system originally evolved from a manufacturing-execution system (MES) core that tracked everything starting at the loading dock or the shop floor, Fetterman notes. "It was all based on a pretty simple philosophy, which is you track everything at its point and time of origin, on the factory floor, on the loading dock, wherever it’s taking place," he recalls. "Tracking it and controlling it at the point and time of origin, tracking all that data on the factory floor, the founder believed that that’s about 90% of the value that’s created within manufacturing is those transactions. Once you have that data, you can measure where things go right, where they go wrong, and you can introduce improvement processes.
Today, Plex Online includes triple-redundant systems, including a hot-standby-fail data center in Asheville, NC, to deal with any potential network outages, Fetterman says. "Most of our customers, because it is a mission-critical system to them—our system goes down, they stop manufacturing in the plants—will engineer a second redundant Internet connection between us and their factories. That kind of activity has gotten so inexpensive, you can put in a T1 for a few hundred dollars a month.
"If our system is down, factories close. Even in the power outage that hit the East Coast in 2003, our data center was up and running, and if our customers had power, they could get access to the Internet and use the system."
While data security still is a concern to many customers, Fetterman says most are satisfied after they view the scope of Plex’s data center operation at its Auburn Hills headquarters, where it maintains leased hardware that operates Plex Online for ERP customers. "Our biggest servers have 32 quad-core processors," Fetterman says, "and we’re up to about 44–45 TB of data that we’re storing and something like 25 or 30 million SQL transactions on a daily basis.
"There are certainly some circumstances, where for government-regulated privacy issues, you can only do it on-premises or in your own private data center," he adds. "But we have people that are building power systems for an advanced defense fighter, and for people who are building the batteries for the space shuttle still in operation. We have people using our system in DoD and government-related manufacturing."
Demand for cloud-based systems is growing, concurs Chad Meyer, director of product marketing, of Epicor Software Corp. (Dublin, CA), a developer of ERP systems using the SaaS model. Just a few years ago, people dismissed the cloud, he notes. "Now, it’s a constant flow of prospects asking, ‘Do you have cloud-based ERP?’ I like to call it SaaS/ERP. At the highest level, there are general concerns about security of data. In manufacturing, it’s even tougher. There are not a lot of options."
Epicor’s software is positioned similarly to Plex’s, he adds, and is focused on factory workflow. "The core of our manufacturing is built from the shop-floor costing area, then it moves into financials," Meyer says. The software includes a manufacturing execution systems (MES) module that is tightly integrated with other modules for scheduling, costing, and quoting functions. Epicor currently has about 150 customers in manufacturing implementing these types of systems, Meyer says, ranging from very small installations to companies with about $50 million in annual sales.
Epicor, acquired in 2011 by Apax Partners, last month announced it had acquired Internet AutoParts (IAP), a provider of business-to-business (B2B) e-commerce software solutions for automotive replacement parts distributors, jobbers and vehicle repair businesses. IAP-managed and hosted eStores are integrated with Epicor’s PartExpert database that contains more than 8000 manufacturer product lines.
Installing Manufacturing Best Practices
Serving discrete manufacturing operations, Global Shop Solutions’ (The Woodlands, TX) One-System ERP Solutions offers global forecasting and shop management capabilities for small to larger manufacturers in the automotive, aerospace, heavy equipment, oil and gas, and medical device industries.
"Our goal, number one, is to implement best practices," says Dusty Alexander, Global Shop Solutions president. "Next, get rid of all their manual spreadsheets. It’s bad in the US, but it’s worse outside the US. People want American technology. Last is to go paperless in the office and the shop."
Since the BP oil spill, manufacturers have placed an increased emphasis on scanning material certification data for the automotive and oil industries. "Now you’ve got to track everything with raw material certifications," Alexander says.
"When you go to ship your parts, it eliminates a lot of paperwork," adds Mike Melzer, Global Shop’s VP of operations. "Our software lets you do this electronically on the network. With paper, the accuracy’s not 100%." Barcode scanners enable workers to scan in the data quickly and accurately.
Global Shop Solutions’ customers mostly are using the company’s ERP with the on-premises model instead of relying on a cloud, notes Alexander. "We’ll do whatever the customer wants," Alexander says. "If they want to host the server off-site, we do that. I’d say about 90% of our customers are on-premises."
The company’s most popular ERP software modules are scheduling, data collection on the shop floor, and more lately document collection for certification, he adds. "EDI [Electronic Data Interchange] is definitely picking up," Alexander notes. "What it does is basically both systems are connected through a third party, through a trusted link. A customer like John Deere will pay off with a shipment, send an EDI ASN, Advanced Shipment Notice, and instead of me having a guy send P.O.s once a week or once a day, they’ll pull their EDI. If you ship 25 things a day to somebody, it eliminates a person on both sides—and the savings are huge."
Gesture-Based Systems Coming
With its new Dynamics AX ERP system introduced last year, Microsoft Corp. (Redmond, WA) has incorporated new touch-screen capabilities into its ERP package which is used in discrete, process and mixed-mode manufacturing, according to Rakesh Kumar, global industry product director of manufacturing for Microsoft Dynamics ERP.
"We have introduced touch-screen inputs onto AX 2012, so people can use touchscreens to manage their business with a lot more ease," Kumar says. "This is also fueling innovations that can go into the shop-floor control. One other area, though somewhat futuristic, where Microsoft is investing, is technologies relating to gesture-based input. While it is not available today on Microsoft Dynamics AX 2012, we see a lot of promise for the future." Future use of gestures might include touchless commands to control equipment on an automotive assembly line or in other factory settings.
When the Windows 8 operating system debuts late this year, such natural user interface (NUI) input capabilities could hold potential for future use with tablet computers used in factory-floor settings, similar to the way Microsoft’s Kinect uses touchless gestures today for videogame systems. "In the years to come, there will be a significant transformation in the way the shop floor is managed from a software perspective, which is very exciting," Kumar adds. "The key point is that in Microsoft AX 2012 we changed a lot of commands from the traditional viewscreens and mouse to instead use touch.
"Essentially the way the data is being entered will change significantly in the time to come," Kumar adds. "In AX 2012, we have introduced touchscreens, and that is a major, major investment from us to move from the mouse-based to the touch- and gesture-based capabilities." Such gesture-based equipment could soon be installed on the shop floor, and independent software developers also are working on gesture-based interfaces to provide touchless commands that could be installed on assembly lines and in other harsh factory or cold-room environments. ME
This article was first published in the June 2012 edition of Manufacturing Engineering magazine. Click here for PDF.