The manufacturing industry has continually started to realize the value of manufacturing software solutions. To attain more flexibility and accuracy in their business operations, even small manufacturers have begun to install the latest technological advancements in their production houses.
Most of the operations in any sized-manufacturing company can get managed by either Enterprise Resource Planning (ERP) or Manufacturing Resource Planning (MRP).
But small and mid-sized enterprises are confused about whether to embrace the ever-evolving cloud-based systems or to stick to costly on-premise systems that usually break-even investment upon scaling operations.
Despite a massive manufacturing software market, most manufacturers believe that on-premise manufacturing software programs are becoming an outdated trend. No one wants the hassle of manually installing the updates and upgrading the hardware.
More and more manufacturers are choosing IoT implementations according to the recent trends that embrace AI technology and machine learning.
However, while choosing the right cloud-based manufacturing software, some pros and cons need to be considered to match the correct systems with your operational requirements.
Advantages of using cloud-based manufacturing software
All mass-producing corporations are looking to run their businesses faster, for a lesser cost. They want their machines to run more efficiently and produce a higher output. Cloud-based manufacturing software provides all of these benefits and more like:
1. Fast implementation: Cloud-based software uses the web to transfer data that does away with the labor costs, slow implementation time, and investment of on-premise based software.
2. Cost-Effectiveness: One of the main reasons that people go for cloud-based manufacturing software is because of its cost-effectiveness. The following are the expenses you won’t have if you choose cloud software.
- Licensing fees
- Management fees
- Upgrade fees
- Expenses for support
- Annual maintenance fees
- Costs for updates
- Data storage
- No physical servers
- Miscellaneous fees (additionally) per device
If the company does not find an on-premise solution useful after an upgrade in the system, then the hardware and installation costs would render to wastage.
With a cloud-based solution, there is no hardware, licensing, or registration, and you pay as you use. There are usually monthly subscription plans that are cancellable anytime.
Also, you no longer have to worry about running out of space for your data. Plus, there are no servers needed to maintain the data storage costs.
3. Security: Security had always been a concern, especially for ERP buyers. A lot of sensitive information like customer names, addresses, credit card numbers, etc. are stored in the ERP system.
But with off-site servers, all the data is stored with high levels of security and redundancy with cloud-based manufacturing ERP systems.
Cloud-based solutions have eliminated risks from disasters, theft, accidents, etc. Most vendors of cloud software have stringent security measures for their software, usually in-built.
If you are planning to purchase cloud-based manufacturing software, consider opting for a third-party security audit.
4. Accessibility: Much cloud-based manufacturing software programs come with a mobile version that is accessible anywhere. Some come as native apps, while others are offered as mobile-web services.
There is just one small concern with this – who would be accessing what information on which device. You wouldn’t want your employees to access your customer’s card info on their personal phone, would you?
5. Enhancement and Data Integration: As cloud-based systems use the internet, they are very flexible – data accuracy and integration is very smooth. And software updates are automatically done, enabling the system to be enhanced frequently and continuously improve its functionality.
Disadvantages of cloud-based manufacturing software
One drawback that cloud-based systems have is that there is an ongoing monthly subscription cost. Updates, security features, and patches could be provided as add-ons depending upon your software vendor, which means it would cost more money to be even 1% more efficient than before.
However, compared to the upfront cost of hardware-based manufacturing software, this cost is considered negligible and a widely popular option.
Another disadvantage is that no cloud-based software is 100% secure despite heavy encryption and security features. However, all vendors make sure that any security breach is detectable in real-time. Steps are taken to secure the system again and prevent such an attack.
So, how does one decide between cloud-based and on-premise software?
Once you have weighed the pros and cons, and have a few trials of such cloud-based systems from various vendors, you will probably have more clarity.
Cloud-based manufacturing resource planning software may be the answer for SMEs that do not want extreme upfront costs and want an easy-to-access system that is stable, reliable, and has an automatic update.
For huge corporations, a one-time investment would be better if they need to store vast amounts of data and do not want to share it with any third-party vendor. They should also add the licensing, registration, maintenance costs in the annual budgets when opting for on-premise manufacturing resource planning software.