Cloud computing has become ubiquitous over the past number of years within a wide variety of industries. Yet, adoption within manufacturing operations remains at about 3 percent, based on a recent Gartner report. How can this be?

At its core, cloud computing is the practice of using a network of remote servers hosted on the Internet to store, manage and process data, instead of the more traditional method of storing and executing these processes locally on a personal computer or server.

Though its popularity within the enterprise has certainly gained momentum and awareness in recent years, the concept behind the Cloud has been with us for quite some time. Third party email services such as those offered by Yahoo! and Hotmail are cloud-based services that have been with us for well over a decade.

Those that have been in the industry for more than a decade will remember Software-as-a-Service (SaaS), which existed back in the 1990s. SaaS looked a lot like the same concept as the Cloud, just by another name. It just lacked ubiquitous access to store data on remote storage devices, primarily due to cost constraints.

According to a recent Gartner Hype Cycle, Cloud computing is currently passing through what the research firm calls the ‘Trough of Disillusionment.” This is the period that follows the initial wave of excitement after a new technology emerges, when expectations are recalibrated in line with the realities of what is achievable, rather than what vendors (or science fiction fans) might have us believe. While the Trough of Disillusionment may sound like a bad place for the Cloud to be, in reality it simply demonstrates that the technology is approaching maturity and is ready to become a part of the everyday enterprise.

The Cloud by Another Name?

Given the importance of maintaining uptime and production performance, it should come as no surprise that the manufacturing operations management industry doesn’t have a history of being the first to try new technologies. It is simply too risky, given the extreme cost of a production going down because of a software glitch or other technological issue.

Could it be possible a pattern can be identified to reveal when Cloud computing will go “mainstream” within manufacturing operations? If so, that would indicate that the Cloud might start making a broader appearance at plants by the end of this decade.

One such example might be the growing usage of a Center of Excellence (COE). Follow this line of thinking … what is a COE? It can be defined as follows:

1. A “sandbox” or testing environment where new manufacturing operations processes can be tested and evaluated
2. A mechanism to then distribute best practices to all locations, across the enterprise
3. A “single source of the truth” where processes can be standardized to help maintain and govern process improvement
4. A place where process improvement suggestions can be collected from the field for evaluation at a centralized location as a possible future improvement
5. A remove location managed by a team comprising subject matter experts; data is stored, managed and distributed by this team

When looked at in this way, the IT architecture of a COE and the Cloud start looking structurally similar. In fact, if you were to put diagrams of the two systems side by side, the two networks would look remarkably alike. Some would argue that the difference lies in who is managing the systems, claiming that if it is a third party vendor, it must be a cloud system rather than a COE. But, this is further complicated by the fact that third party vendors also mange COEs. In the end, it could be claimed that the two concepts are in fact practically identical, with the difference lying only in semantics.

Regardless what you call it, Gartner sees the Cloud as being a key driver of MES deployment over the coming years. Their latest survey anticipates a five-fold increase in cloud-based MES from 2014-2017. Some of the factors contributing to this forecast are accelerated deployment and quick value creation that improve flexibility and reduce costs. Furthermore, migration toward the cloud could help alleviate some of the reported talent and skills obstacles to MES. In the meantime, the majority of revenue captured by vendors in this market looks set to be dominated by on-premise, as cloud continues on its journey to maturity.

If you liked this article, here are others you might also find interesting:

• Doing More with Less: Now is the Time for a Center of Excellence
• How a Center of Excellence Can Become an Engine for Continuous Improvement
• Leverage People, Processes & Technology to Achieve Operational Excellence