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Smart Manufacturing With Cloud Computing (Part 1)

Posted on Friday, Dec 3rd 2010

By guest author Shaloo Shalini

In producing our series Thought Leaders in Cloud Computing (TLCC), which involves interviews with CIOs and top executives across industry verticals, we are finding that cloud computing is rapidly moving from early adopters to mainstream organizations. According to IDC, cloud computing adoption is growing at over six times, as compared to the rate of growth of traditional IT. It has become one of the top priorities of many CIOs in terms of strategic considerations. In an interview with Eyal Altman, director of strategy at Elkay Manufacturing Company, we shared some insights on how the manufacturing industry is rapidly evolving and reaping the benefits of cloud adoption today, moving into an era of smart manufacturing with the new agile, scalable, and efficient business practices seamlessly replacing traditional manufacturing business models.

In terms of cloud computing adoption in the manufacturing sector, key decisions revolve around the new and popular IT and business models that the cloud brings, such as pay-as-you-go, the convenience of scaling up and down per demand, and flexibility in deploying and customizing solutions. The adoption is typically centered on HR, CRM, and ERP functions with Salesforce and Model Metrics being just two popular vendors. We also noticed that not only higher education vertical – as we explored in the Westmont College TLCC interview with Dr. Reed Sheard – but the manufacturing sector too is actively using Cast Iron (acquired by IBM) for application integration requirements as part of its cloud journey.

Smart IT

There have been concerns about cloud computing adoption, especially from within the IT organization. However, from several such discussions with top executives, CIOs, and CTOs across industry as part of Thought Leaders in Cloud Computing, it appears that although the concerns are real, enterprises are actively addressing them in constructive and positive ways. Eyal Altman recalls that similar concerns showed up at Elkay Manufacturing during their initial cloud adoption phase. He says, initially IT people might have been more concerned. It was not specifically IT professionals but as with any kind of change it is usual for those involved to be concerned about how it impacts them. Elkay has one of the success stories with Salesforce adoption where they were able to take existing IT people, get them trained for the Salesforce application and have them migrate into technical administrators role. Lot of companies might feel they need to reinvent or partition and have two different types of IT support areas to deal with cloud adoption. Eyal says that in the case of Elkay manufacturing, it just became another component of the portfolio that the IT folks supported and so it went very well. Earlier, their IT support person was doing lot of manual sales organization support, which meant dealing with old systems and low level support. With a cloud-based solution such as Salesforce, an average IT person’s workload at Elkay has shifted to higher level functions, and his or her skillset and knowledge base have evolved significantly in the process.

Smart Processes

Determining the real cost benefit of adopting clouds in a typical manufacturing sector enterprise may not be a simple calculation. However, the savings obtained from the elimination of some of the functions that were essential in traditional IT are obvious and significant. Eyal says that with cloud-based solutions, several of the application customizations and tweaks that the company needed are now dealt with by IT staff within Elkay Manufacturing. He believes that it is an incredible testament to the design and foresight present in some of these cloud-based solutions, such as Salesforce. Whenever they come up with a different way of executing a process, the IT staff can make that change happen seamlessly and in less time. Eyal says that if they had to go with a traditional solution and implement, customize, or hardcode it to suit their process evolution, it would require not only more on-staff IT resources but also more ongoing contracts with outside support vendors to maintain and make such changes. With cloud-based models and solutions, Elkay Manufacturing Company can eliminate the need for all those functions.

In terms of cloud adoption for real business processes, one core process at Elkay Manufacturing is selling B2B. The company manufactures a lot of products for residential and commercial applications and then sells them to dealers, wholesalers, or retailers that either sell them to other businesses or directly to consumers. With cloud-based solutions, Elkay is able to develop better-integrated and more efficient processes whereby it can plan and implement business or customer portals that could provide it with a way to do business more efficiently.

This segment is part 1 in the series : Smart Manufacturing With Cloud Computing
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