Smart Factories: migrating ERPs to the cloud is the key to boosting business

Industries that do not take the first step towards modernization will be swallowed up by the market

*By Waldir Bertolino

The concept of a Smart Factory can be summarized as a physical system that uses advanced technologies, such as machine interconnection, computing, AI (Artificial Intelligence) and Machine Learning, to analyze data and drive automated processes. This process allows companies to learn over time, favoring the creation of adaptable, flexible and efficient production environments. Smart factories combine technology with human expertise and creativity, ensuring more agile and profitable processes for business.

However, in order to successfully implement the concept, it is necessary to take a step back and understand the reality of the industry. A factory can only evolve into a Smart Factory if its enterprise resource planning (ERP) is cloud-enabled. ERP is an integrated management system (software) that optimizes processes and facilitates data storage and business administration. 

The transition of this system to the cloud is the first step towards realizing a Smart Factory, especially since new technologies are not compatible with older ERPs. The reach, security and agility of a cloud ERP make it the first option for industries that want to make industrial processes more intelligent and efficient. 

According to the Global Network Trends Report, released by Cisco in May this year, among the main reasons that lead a company to opt for a cloud system, the scalability and agility of applications stand out. The survey interviewed more than 2,500 global IT leaders and professionals, and 42% pointed out the reasons above as differentiators for migrating to private and public clouds. 

According to the Annual Survey of the Center for Applied Information Technology at Fundação Getúlio Vargas (FGVcia), 42% of Brazilian companies already use cloud data processing (cloud computing). In Brazil, several industry sectors stand out in the implementation of smart factories, including food and beverages, wind energy, oil and gas, automotive manufacturing and the chemical industry. 

How to implement smart factories

Companies looking for scalability and market prominence realized the value of cloud ERP solutions and began working on integration between their factory systems. Below I list four reasons why industry leaders should speed up the process of modernizing their operations through a smart factory approach:

1. Integration between 4.0 technologies: Interoperability between systems (such as ERP, CAD, PLM, MES, CRM, among others) and technologies (such as Artificial Intelligence, Internet of Things, Machine Learning, Big Data, etc.) ensures that leaders have a 360° view of the process, helping to make more assertive decisions. This integration fills intelligence gaps that exist in new business models and puts industries one step ahead of their competitors.
2. Integrated business planning: The scope of this system allows the entire industry space to be interconnected, in addition to having the ability to plan different scenarios with the aim of maximizing profit, reducing the use of expendable resources and minimizing risks.
3. ERP Automation: A system with self-learning capabilities and great connectivity can significantly transform businesses, as it allows you to automate mechanical tasks and, thus, frees employees to perform more strategic tasks, optimizing decision making. Cloud automation offers the benefit of simultaneous monitoring of different areas, connecting processes and leveraging the business.
4. Product quality and demand forecasting: The cloud system not only connects technologies, but also the company with the market and, mainly, with customers. With a complete view of demands, ERPs and 4.0 technologies enable leaders to understand their consumers' behaviors and adapt to market interests, making them assertive when manufacturing their products.  

It is important to emphasize that Smart Factories are not the final destination of technological advances, but part of a journey. Its intelligent and automated resources must be improved and amplified according to the advancement of each company's digital maturity. The leaders who embarked on this path of innovation today enjoy the scalability of their businesses, but everything started from the first step. 

Therefore, the starting point for becoming a Smart Factory should be the migration of ERPs to the cloud. Creating an integrated platform for your industry is a competitive advantage in the short and long term. Achieving digital maturity is a laborious process, which is why it is important that industries adopt intelligent measures to pursue more prosperous and innovative paths.

*Waldir Bertolino, Country Manager at Infor

Notice: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies