Why manufacturing, intralogistics companies need to embrace the cloud

Artificial Intelligence (AI)-based software is revolutionizing how companies approach complex decision-making and business process planning. Yet, its transformative power reaches its peak only within a robust cloud infrastructure. The potential for improvement is vast, particularly in critical areas like intralogistics and production. Optimization experts at INFORM shed light on why embracing cloud transformation is not just beneficial but essential to unlocking AI's full capabilities in these sectors.

According to Infosys, cloud computing has moved up the value chain for manufacturing companies in the US. While not all capabilities have been implemented, challenges still remain with cost, security, and governance. And where companies are implementing cloud transformation, the majority are only hoping for IT improvements, according to a recent McKinsey study (Cloud-driven business transformation – IT to everywhere).

“Cloud computing ensures collaborative access to data and analytics, enabling organizations to accelerate the launch of new products or services and implement changes more efficiently. Particularly in competitive environments, cloud computing is essential for maintaining an industry-leading edge,” says Justin Newell, CEO of INFORM North America. “Partnering with a cloud expert gives access to innovators who can help support the optimization of infrastructure to build better outcomes while at the same time, minimizing risks, and managing best practices.”

However, few are using the cloud to optimize business processes such as intralogistics and production planning. Studies and experience show that around two-thirds of the potential value of the cloud comes from improving business processes. This insight takes on a whole new dimension considering that AI-based software for complex areas such as internal factory logistics and production planning requires an adequate IT infrastructure. Cloud services are essential here. Companies that wait too long risk falling behind technologically and losing their competitive edge.

INFORM outlines five reasons why manufacturing companies should move to the cloud now.

New possibilities for interoperability

The cloud enables seamless interoperability between AI-based software and other cloud services or APIs. AI-based optimization software can access ERP systems, telematics solutions, and warehouse management systems to optimize the entire supply chain and the production line in real-time – something that remains inefficient with locally hosted systems.

Predictive maintenance for machinery and vehicles

GPS tracking, sensor data, and other digitization solutions converge in the cloud and enable a predictive maintenance strategy. For example, AI-based systems analyze sensor data from devices, vehicles, or machines, and detect failures or malfunctions in real-time. They can proactively initiate maintenance work or reschedule processes that have already been planned, thus minimizing downtime or idle time.

Collaborate effectively

Cloud-based AI applications improve collaboration by providing real-time access to AI-generated data. Regardless of where they work – locally or globally - employees can view relevant information at any time and make informed decisions based on AI suggestions. For example, sales representatives could analyze customer feedback in emails or social media messages using automated text analysis. Transport dispatchers will always know the location, route, and condition of each vehicle. Engineers can use AI-based image recognition to classify product images and identify potential production errors.

Flexible adaptation to internal processes

Implementing new software does not have to be a major IT project that many companies shy away from. Thanks to cloud services, AI software can be flexibly adapted to internal processes, from small system components for data analysis to extensive functionalities for automating complex operational decisions. This reduces the barriers to adopting AI solutions and strategies.

Increased cost efficiency

AI-based software systems are becoming an indispensable technology for businesses. Cloud services offer a cost-effective alternative to local data centers. Businesses can dynamically scale the resources they need, avoiding unnecessary hardware investments. The pay-as-you-go structure significantly reduces upfront implementation costs and ongoing maintenance costs. This approach also provides much greater security and much quicker access to software updates and enhancements.

AI has the potential to fundamentally change the software landscape and therefore the economy. To take advantage of this potential, companies need to put the right IT infrastructure in place today. In addition to performance and IT security, cloud services provide the scalability and flexibility that will enable future-proof AI applications. Cloud transformation is needed to realize the full potential of AI!