The manufacturing sector faces a slew of challenges due to the pandemic. A survey by the US National Association of Manufacturers found that nearly four out of five manufacturing companies expect a financial hit from COVID-19. More than half (53.1%) anticipate a change in operations primarily due to the injection of new technologies and reimagined business processes.
Writing for Forbes magazine, Anna-Katrina Shedletsky, CEO of Instrumental, said: “Between solutions that leverage the power of the cloud for visibility and automation that optimizes work, necessity will drive invention: manufacturers will do five years of innovation in the next 18 months.”
Indeed, the cloud will be a staple for every manufacturer’s technology stack in these challenging times. Even before the pandemic, the cloud was poised to bring undeniable benefits for manufacturers. It includes a 22% rise in profitability and a 23% decrease in operational costs on an average. And spurred by the pandemic, manufacturers are likely to ramp up their investments in the cloud. In IDC’s wave 3 of the COVID-19 Impact on IT Spending Survey, analysts predicted "a significant increase in demand for cloud software."
There are five clear drivers for this trend.
Across industries, the demand for cloud infrastructure has seen a sharp uptick, growing a record 34% YOY in Q1 of 2020. This surge is because the cloud dramatically shrinks our dependence on physical, on-premise infrastructure – and consequently, physical proximity. This facet has immediate benefits for companies that are following social distancing measures.
In the long-term, the cloud could unlock better connectivity and more seamless supply chains, overcoming supply chain disruptions arising from COVID-19, as expected by 35.5% of companies in the US survey we cited.
These benefits span short, near, and long-term impact areas for manufacturers:
In the short-term, the cloud enables business continuity.
Several of the critical activities on the manufacturing value chain, from product design to marketing and customer service, rely on in-person contact. The cloud eliminates this dependence by providing an “anytime, anywhere” platform for communication. This has immense implications for new product development (NPD) – companies no longer need to press pause on innovation. Still, they can stick to their planned go-to-market (GTM) strategies by leveraging the cloud. Similarly, on the operational side, the cloud can help maintain business continuity across people processes, production, and even marketing/sales via online platforms.
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