Is Cloud Manufacturing the Future of the Industry?

Cloud Manufacturing is the next great advance in lean production. In many of the same ways that cloud computing enabled software companies to be more agile, with lower fixed costs, and greater elasticity than ever before. Cloud Manufacturing will enable hardware OEMs to respond to changing market conditions faster, and with lower total costs than traditional contract manufacturing.

Cloud Computing, put simply, is the ability to provision compute, storage, and networking services on-demand. Cloud Manufacturing builds on these concepts and translates them to the physical world of contract manufacturing to enable companies to manage their portfolio of products using the same tools and capabilities software companies have been leveraging for years.

Through Cloud Manufacturing, companies can leverage the capacity of dozens, if not hundreds, of contract manufacturing facilities in parallel and manage an entire catalog of products through a single control channel. Short-term regional outages due to weather, events, and even geopolitical landscape changes can seamlessly be routed around, and changing build conditions such as reduced capacity and changes in quality outcomes can be monitored in real-time and these manufacturing issues can be compensated for by easily switching to higher-capacity or quality factories.

In short, Cloud Manufacturing enables hardware manufacturers to be more agile than ever before. Unlike traditional contract manufacturing agreements where two parties agree to a specific set of production capacity and pricing and significant changes in demand can result in the need to source new manufacturers, Cloud Computing enables true elasticity of production. The right-fit factory for a million production units of a product, and the right-fit factory for a dozen prototypes can be wildly different, but with a true Cloud Manufacturing platform, orders can be routed to the best factory in real-time without additional negotiation or time wasted on repeating NPI processes or creating friction between Contract Manufacturer and Customer. The end result is that you can respond quickly to changing market conditions without risking your relationship with your existing manufacturers.

By taking advantage of available capacity at hundreds of factories across multiple regions, Cloud Manufacturing enables jobs to be quickly routed to the best available factory for the specific product and quantity in real-time. To make this work, it builds on three core concepts:

Each factory is unique, both from an equipment and team skills perspective. Likewise, each factory has different business and scheduling constraints. Through Virtualization, each factory is modeled based on its capabilities, its past performance, its present trending performance, and the available capacity slots are modeled. The ideal factory for any given product, at any given volume, is then conceptualized and routed to the highest performing factory meeting that ideal profile with an available capacity slot in the Company’s demand window.

To enable seamless switching between factories, work instructions, tooling, and materials must all be standardized to be readily consumed by the given factory. While data transfer formats like IPC-2581 enable efficient standardization of PCB assembly information, Cloud Manufacturing requires going a step further and handling secondary work instructions, tooling standardization, and more to enable quick uptake with minimal issues. All products change throughout their lifecycle, so process changes, material changes, and more are added to the standard data package to ensure no information gets trapped in a well of tribal knowledge.

Materials and tooling have to be sourced from multiple vendors, individual product elements can be built in parallel before final assembly, and goods may be routed to multiple different warehouses for end-user fulfillment. Cloud Manufacturing is enabled by an intelligent digital orchestration layer that manages every aspect of logistics and constantly learns new and more effective strategies for the acquisition and deployment of tasks, from everyday purchasing to shipping, and into the manufacturing process its self.

Are you struggling with managing multiple manufacturers, ever-changing customer demands, and the challenges of traditional manufacturing? Would you like to learn more about how MacroFab’s Cloud Manufacturing model can make your company more agile? If so, contact us to learn more.