A Global Perspective: Why Cloud-based ERP is a Superior Model for Modern Manufacturing

Manufacturing Insights Blog

By Jim Shepherd, Vice President of Strategy, Plex Systems

For most of the last decade, manufacturers have been struggling to make the transition from loosely-coupled “international” business structures to operating as integrated global corporations. While some of this can be attributed to a shift in prevailing management philosophy, much of the pressure is truly market-driven. Customers for manufactured goods, whether consumer or industrial products, are increasingly global and they favor or insist on global suppliers. The imperative to be competitive on price and customer service often dictates the need to be closer to sources of raw materials, lower-cost labor, critical skills or the customers themselves, while the drive for increased efficiency requires centralized visibility and control.

Today’s manufacturers must be able to operate in an environment where the basis of competition has fundamentally altered, the market is global and the “normal state” is continuous change. Monolithic, on-premise ERP systems that take years to implement and evolve at a glacial pace are simply not the right solution.

One of the problems is that these products are designed to be centralized, while modern manufacturing is highly distributed. Most manufacturers have multiple plants, multiple warehouses, dozens or hundreds of sales offices, and employees, partners, suppliers and customers that are scattered all over the world. Enabling all of these entities and individuals to connect in real time through the corporate firewall is nearly impossible to manage and support.

There is a long list of characteristics that cannot be duplicated in an on-premise system:

  • Universal access
  • Rapid deployment
  • Independence from physical location and staff availability
  • Scalability
  • Variable cost
  • Site-specific configuration
  • Continuous enhancement

Unlike traditional on-premise products, a Cloud-based ERP system is designed to allow users to access the system anywhere or anytime using a simple Internet connection. Whether you are on the plant floor in China, at a customer’s offices in Sao Paulo or stuck in an airport lounge in Frankfurt, you can log in to the full ERP system. This isn’t an extra feature or option – it is inherent to a Cloud-based design.