Cloud Solutions in Manufacturing
An advice about how support can be accomplished through cloud solutions to the operational business processes in the manufacturing market.
MSc Thesis Management Studies
Chantal van Dijke
April 2014
Cloud Solutions in Manufacturing
An advice about how support can be accomplished through cloud solutions to the operational business processes in the manufacturing market.
MSc Thesis Management Studies
Chantal van Dijke – 910901210050
April 2014
Supervisors Dr. J. Trienekens, associate professor in chain and network management, Wageningen University Dr. D. Dentoni, associate professor in agribusiness management and strategy, Wageningen University
Commissioners R. Zondag, principal business consultant, Atos Consulting J. Thijsse, senior business consultant, Atos Consulting
The support of cloud solutions in manufacturing
List of Acronyms
B2B business-to-business
CIO Chief Information Officer
CODP customer-order-decoupling-point
CRM Customer Relationship Management
ERP Enterprise Resource Planning
GB gigabyte
IaaS Infrastructure-as-a-Service
IT information technology
JIT just-in-time
MES Manufacturing Executive System
MTO make-to-order
MTS make-to-stock
NIST National Institute of Standards and Technology
PaaS Platform-as-a-Service
PLM Product Lifecycle Management
SaaS Software-as-a-Service
SCM Supply Chain Management
2 The support of cloud solutions in manufacturing
Abstract
In this report is studied how support can be accomplished through cloud solutions to the operational business processes in the manufacturing market. The aim of this study was to create a better understanding in the developments of cloud solutions for the manufacturing market. Extensive literature research is performed about IT systems and its functions, three defined types of manufacturing markets (process, discrete and consumer goods) and cloud solutions and their characteristics. After the literature study, an empirical study is executed by conducting interviews with manufacturing companies who could be classified in the defined types. The results showed most important requirements and motives for implementing cloud solutions. The results show that the characteristics availability and flexibility of cloud solutions are indicated as important in the decision making of cloud solutions. The availability refers to the cloud solutions which are available anywhere, anytime, anyhow. The flexibility refers to the scalability of cloud solutions and the mitigation through the facilities provided by the cloud provider. The characteristics security and performance of cloud solutions are suggested as aspects which should be improved. Furthermore, the scalable model and cost savings are indicated as valuable aspects of cloud solutions also. Most companies plan to (further) implement cloud solutions. Companies in discrete manufacturing seem to be most progressive in implementing cloud solutions, while companies in consumer goods are most conservative.
Key words: cloud, cloud computing, cloud solutions, cloud characteristics, manufacturing, IT systems, operational business processes, process industry, discrete industry, consumer goods industry
3 The support of cloud solutions in manufacturing
Preface
Dear reader,
Hereby, I would like to present my Master thesis. This thesis is part of my Master Management, Economics & Consumer studies. It is conducted at the chair group Management studies and in cooperation with Atos Consulting. This thesis is the result of a six month research which has been carried out in the period from October 2013 until April 2014.
Atos Consulting, an international IT and business consultancy organization, has provided a Master thesis subject about cloud solutions in the manufacturing market. The research focused on how cloud solutions can give support to operational business processes in manufacturing markets. Both, the core IT systems and cloud solutions are researched and analyzed. The empirical research provided the possibility to research the current state of the implementation and attitude of manufacturing companies towards cloud solutions.
This research would not be possible without the guidance of several people. Hereby, I would like to thank my supervisors from Atos Consulting, R. Zondag and J. Thijsse and from Wageningen University, Dr. J. Trienekens and Dr. D. Dentoni who all supervised me. They all helped me whenever necessary. I would also like to thank H. van Gestel and F. Seele for providing information and knowledge which helped me in obtaining information to answer the research questions. I would also like to thank F. Kuitems, R. Verfuurt, J. Speek, L. Acda, J. Bremer and R. Zondag of Atos Consulting for contacting the selected manufacturing companies to request for an interview. Finally, I would like to thank all respondents who were willing to participate in this research by answering the interview questions. Without them this research would not be possible, their sharing of knowledge was of great value to my research.
Chantal van Dijke
Wageningen, April, 2014
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Executive summary
Cloud computing is seen as a current trend in the IT business. The cloud market is a developing market, through the growing business opportunities which it provides. Cloud computing changes the way industries and enterprises do their businesses. The manufacturing industry is one of the industries which is changing through smart technologies, such as cloud computing. The high rate on which IT technology changes, increases the pressure on technology service parties which have to come up with useful cloud solutions. Atos, which is an international information technology services company, is one of these service parties who are involved in developing cloud solutions. Not only service parties are changing, more and more manufacturing companies have reserved a budget assigned to cloud computing.
This research is conducted for Atos Consulting, an international business and IT consultancy. The purpose of this report is to give an advice to Atos Consulting about how support can be accomplished through cloud solutions to the operational business processes in the manufacturing market. This research aims to create a better understanding of the developments in manufacturing markets regarding the implementations and motives to choose for cloud solutions. The future perspective is also included in this research.
First, a literature study is performed about IT systems and its functions, the manufacturing market which is separated in three types (process, discrete and consumer goods manufacturing), the characteristics of cloud solutions and various cloud solutions for IT systems. Literature shows that Manufacturing Execution System (MES) and Enterprise Resource Planning (ERP) systems are crucial in businesses while the systems Supply Chain Management (SCM), Product Lifecycle Management (PLM) and Customer Relation Management (CRM) are responsible for specific components in businesses. Depending on the type of manufacturing market, the focus is on various elements of the functions of IT systems like customer support and product information exchange. Positive and negative elements of cloud solutions are defined also. Positive elements are the only- pay-for-what-you-use model, low investments and agility of cloud computing. An element of cloud computing which need to be taken into account when implementing cloud solutions is the security. Defined opportunities are the acceleration of adoption, effective use of IT technology and reduction of the carbon footprint. Most important defined risks are in privacy, security and trust.
In order to indicate the current situation and motives which are taken by manufacturing companies regarding cloud solutions, an empirical research was conducted. The empirical study consisted of interviews with nine manufacturing companies in the defined types of manufacturing markets. The interview questions were built to indicate the value, requirements, performance and reason to use cloud solutions. The empirical study is used to validate parts of the literature study like the defined characteristics, opportunities and risks, and to research how cloud solutions support operational business processes in practice.
The results show that the characteristics security, low investments which need to be done and only pay for what you use are seen as most important for the interviewees. The security is most mentioned as priority of cloud solutions also; however the performance of this aspect should be improved. Therefore, this aspect is at this moment a constraint as it negatively influence the implementation of cloud solutions. Furthermore, the lower costs are not the main driver for implementing cloud solutions but still mentioned as third most frequently mentioned requirement. The mobile availability and the scalable model of cloud solutions are seen as most valuable elements. Companies choose to implement cloud solutions of well-known and stable cloud providers to be sure that the cloud provider will not suddenly be bankrupted and able to provide real-time updates. The results also show that most companies already implemented cloud solutions and plan to implement more public and private cloud solutions in all types of IT systems, except MES, in the future.
To conclude, cloud solutions give support to the operational business processes as they possess the required functionalities for the company. Cloud solutions possess elements which IT systems do not
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possess. Manufacturing companies mainly choose to implement cloud solutions through the characteristics flexibility and availability of cloud solutions. Cloud solutions are also more cost effective than traditional IT systems. These elements create value in the business as it has a positive influence on the operational business processes in manufacturing companies. Nevertheless, the security of cloud solutions and continuity of cloud providers are indicated obstacles in the decision to implement cloud solutions which can withhold companies of the use of cloud solutions.
A conclusion that can also be drawn is, discrete manufacturing companies are most progressive in implementing cloud solutions, whereas consumer goods companies are most conservative. The results show that most support is in communication / collaboration, CRM and SCM cloud solutions at this moment as these cloud solutions are mostly implemented or mentioned to first implement in the future plans of the interviewed companies.
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Table of Contents
Introduction 10 1.1 Problem Analysis 10 1.2 Research Objective 111 1.3 Research Issues 11 Literature Review 12 2.1 Manufacturing business processes 12 2.2 Information systems 13 2.3 Relation between the systems 14 2.4 Linkage of IT systems and its business functions and manufacturing business processes 20 Manufacturing markets 23 3.1 Definition 23 3.2 Types of manufacturing markets 23 3.3 Business functions of IT systems per type of manufacturing market 26 Cloud Characteristics 31 4.1 Background 31 4.2 Service Models 31 4.3 Positive and negative characteristics of using cloud services 32 4.4 Opportunities 34 4.5 Risks 35 Cloud Solutions 37 5.1 Background 37 5.2 Communication & Collaboration cloud solutions 37 5.3 ERP cloud solutions 39 5.4 MES cloud solutions 45 5.5 PLM cloud solutions 45 5.6 SCM cloud solutions 46 5.7 CRM cloud solutions 48 5.8 Analysis IT systems and cloud solutions 50 Theoretical Framework 52 6.1 Theoretical Framework 53 Methodology 54 7.1 Data Sources 54 7.2 Method of Disclosure 54 7.3 Operationalization 56 7.4 Validity & Reliability 56 Results & Analysis 57 8.1 Implemented cloud solutions and future plans 57 8.2 Analysis implemented cloud solutions and future planning 60 8.2.1 Manufacturing markets 60 8.2.2 MES cloud solutions 62 8.2.3 Used cloud providers 62 8.2.4 Public or private implemented cloud solutions 62 8.3 Elements related to cloud solutions 63 8.4 Analysis value, reason, performance and requirements of cloud solutions 67 8.4.1 Value 67 8.4.2 Requirements – security & flexibility 67 8.4.3 Cost savings 67 8.4.4 Availability 68 8.4.5 Functionalities 68 8.4.6 Mitigation through cloud solutions 68 8.5 Characteristics of cloud solutions 69 8.6 Analysis cloud characteristics 70 8.7 Opportunities 71 8.8 Analysis opportunities 72 8.9 Risks 73 8.10 Analysis risks 73 8.11 Company IT systems 74 Conclusion 76 Discussion 83 Recommendations 83
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References 85 Appendixes 92
Overview of figures and tables
List of figures Figure 1: overview of the value chain (Porter, 1985). 13
Figure 2: overview of the relation between information systems used in this study. Based on Gorbach (2000). 14
Figure 3: overview of the business functions supported by ERP systems (Shehab, 2004). 15
Figure 4: overview of the business functions supported by PLM systems (Schuh et al., 2008). 17
Figure 5: service Models of Cloud Computing (Pearson and Yee, 2013). 31
Figure 6: plans to adopt business solutions of companies (Martens and Hamerman, 2013). 40
Figure 7: possibilities of NetSuite ERP regarding financials and the integration with other systems (NetSuite, 2011a). 41
Figure 8: overview of all supporting key areas of Business ByDesign. 43
Figure 9: overview of IFS applications (IFS, 2010). 47
Figure 10: elements involved in the decision of cloud solutions. 63
Figure 11: reasons to use cloud solutions. 65
Figure 12: overview of preferences of cloud solutions in process manufacturing. 78
Figure 13: overview of preferences of cloud solutions in discrete manufacturing. 79
Figure 14: overview of preferences of cloud solutions in consumer goods manufacturing. 80
List of tables Table 1: overview of the main business functions per information system. 19
Table 2: overview of the relation between information systems and the value chain. 21
Table 3: overview of defined types of manufacturing markets and its characteristics. 25
Table 4: overview of all focus points of information systems per type of manufacturing market. 30
Table 5: positive and negative elements of cloud computing. 34
Table 6: overview of opportunities and risks. 36
Table 7: overview of communication and collaboration cloud solutions. 39
Table 8: overview of ERP cloud solutions. 44
Table 9: overview of MES cloud solutions. 45
Table 10: overview of PLM cloud solutions. 46
Table 11: overview of SCM cloud solutions. 47
Table 12: overview of CRM cloud solutions. 49
Table 13: overview of all interviews. 55
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Table 14: overview used cloud solutions per manufacturing company. 57
Table 15: ranking security risks handling. 59
Table 16: overview of (in the future) implemented cloud solutions. 60
Table 17: ranking value of cloud solutions. 64
Table 18: ranking of mentioned requirements. 66
Table 19: rate of importance of characteristics of cloud solutions. 69
Table 20: opportunities of cloud solutions. 71
Table 21: risks of cloud solutions. 73
Table 22: differences and similarities in (future) implementation of cloud solutions per type of manufacturing market. 81
Table 23: differences and similarities in importance of characteristics, opportunities and risks of cloud solutions per type of manufacturing market. 81
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1. Introduction
In this chapter the chosen topic of study related to the problem analysis, the research objective and research questions will be described. The aim of this chapter is to introduce the research topic of this report to the reader.
1.1 Problem Analysis
Nowadays, cloud computing is seen as a trend in the IT business. The cloud market is a growing market, through the growing business opportunities which it provides (Lin and Chen, 2012). More and more businesses are embracing cloud solutions. Cloud services are seen as the dominant form of IT service delivery for the future, they have a high impact on the design of IT processes in businesses at this moment (Shano et al., 2013). A definition which is set up by the National Institute of Standards and Technology (NIST) about cloud computing is: “A model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g. networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction” (Bushhousen, 2011). Cloud computing changes the way industries and enterprises do their businesses in dynamically scalable and virtualized resources which are provided as a service through the Internet. The manufacturing industry is one of the industries which is changing through smart technologies, such as cloud computing. Cloud computing can transform the traditional business model, it can help to align product innovation with the business strategy and it can create intelligent factory networks that encourage effective collaboration (Xu, 2012).
The high rate at which information technology changes, increases the pressure on technology service companies. These service providers have to come up with useful cloud solutions. On the other hand, more and more manufacturing companies have reserved a budget assigned to cloud computing. This budget will only rise the coming years according to Veronesi et al., (2012). Manufacturing companies realize that cloud solutions create more business agility, improve the service level and information sharing with trading partners through the online delivery approaches of cloud solutions. Nevertheless, there are still concerns about the availability and security of cloud solutions (Veronesi et al., 2012). Through the developments which are described above, more and more cloud solutions from service companies are being developed to respond to the market demand.
Atos, which is an international information technology services company, is one of these service companies who are involved in developing cloud solutions (Atos, 2013a). Atos Consulting is an international business and IT consultancy organization which is an independent business department of Atos (Atos, 2013b). Atos encounters many opportunities and challenges in developing solutions which fit to the demand of the clients in the market. Nevertheless, it is still unclear what the market expects from the cloud solutions and its functionalities since this is a relatively new development. For clients on the other hand, it is not transparent which cloud solutions each service company provides and what the benefits and drawbacks of each cloud solution are. This makes it complicated for the clients to choose which solution to implement and how the solution can establish progress to operational business processes.
At this moment, there is no clear overview of cloud solutions which are supplied by technology service companies. Thereby, it is important to have insight in the requirements and priorities of the potential customers of the cloud solutions. The aim of this study is to create a better understanding in the developments of cloud solutions for the manufacturing markets. It is researched how cloud solutions can support operational business processes of manufacturing companies.
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1.2 Research Objective The research objective of this study is to investigate in which way cloud solutions give support to the operational business processes of companies in different types of manufacturing. This research area will be restricted to the manufacturing market as this is requested by the assigner Atos Consulting. Furthermore, the study will only focus on the operational level of manufacturing companies. By restricting this research there will be focused on specifically selected areas. This makes it possible to complete the research in the limited amount of time and obtain useful results and conclusions in the researched areas. A theoretical framework will be build which will demonstrate the possibilities of cloud solutions that give support to operational business processes. This will be showed through the characteristics, opportunities and risks of cloud solutions. Thereby, the possibilities of cloud solutions will be examined for various companies in different manufacturing markets. Besides the well-known cloud providers, the focus will be on niche markets when defining different cloud providers per type of IT system. Through the interpretation of the theoretical framework, the literature and empirical study an advice can be given for opportunities for cloud solutions for Atos Consulting. This practice-oriented research aims to determine which cloud solutions are used, and in relation to this, which requirements on cloud characteristics are formulated by the companies in the different types of manufacturing markets.
1.3 Research Issues The main research question and sub questions which will be answered by a literature and empirical study will be formulated in this paragraph.
Main research question:
In which way can cloud solutions give support to the operational business processes in the different types of manufacturing markets?
Sub research questions:
1. Which IT system functionalities are available that support operational business processes? 2. Which IT system functionalities are available that support operational business processes in the different types of manufacturing markets? 3. Which characteristics, opportunities and risks of cloud solutions can be determined? 4. Which cloud solutions are available for the manufacturing market? 5. What requirements on cloud solutions are defined in practice in the manufacturing market? 6. How are cloud solutions used now, and will be used in the future, in the operational business processes in the different types of manufacturing markets?
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2. Literature Review
The second chapter will answer the first sub research question ‘Which IT system functionalities are available that support operational business processes?’ The chapter will begin by showing the manufacturing business processes by Porters value chain. Furthermore, information systems that drive operational business processes will be stated. The functions of the information systems will be described also. In the end, the connection between these systems and processes will be stated. This last part will be related to the value chain of Porter.
2.1 Manufacturing business processes Manufacturing business processes will be described by means of Porters value chain, because the activities defined by Porter can be practiced in manufacturing. First, the background of the value chain will be explained. Furthermore, the primary and support activities will be described.
Porters’ value chain arises through a company’s goal to achieve competitive advantage. In order to address how competitive advantages can be possessed, cost, differentiation and scope need to be analyzed. Therefore, Porter provided a theory that provides an elemental look at what firms do. The sources of competitive advantage center on activities (Porter, 1991). Porter stated; “A value chain disaggregates a firm into its strategically relevant activities in order to understand the behavior of costs and the existing and potential sources of differentiation” (Kannegiesser, 2008). A firm’s strategy will be defined based on the configuration of activities and the interrelation of them. The term value refers to the customer value, as customers deliver potential profit for businesses (Porter, 1991). A value chain is a system of interdependent activities which are connected by linkages. The value chain of Porter consists of two types of activities, primary activities and support activities. Primary activities are those involved in the physical creation of the product, its marketing and delivery to buyers and its support and servicing after sale. The support activities provide the inputs and infrastructure that allow the primary activities to take place (Porter and Millar, 1985). Activities in the value chain raise into value for the customer, from which its profitability derives. The supporting activities involve human resources, purchased inputs and a technology for performing them. Thereby, activities use and create information (Porter, 1991).
Below, a short description of each primary and support activity will be given (Stabell and Fjeldstad, 1998; Porter, 1985):
Primary Activities: Inbound Logistics: Activities associated with receiving, storing and disseminating inputs to the product. Operations: Activities associated with transforming inputs into the final product form. Outbound Logistics: Activities associated with collecting, storing and physically distributing the product to buyers. Marketing and Sales: Activities associated with providing means by which buyers can purchase the product and inducing them to do so. Service: Activities associated with providing service to enhance or maintain the value of the product.
Support Activities: Firm Infrastructure: Activities of general management, planning, finance, accounting, legal, government affairs and quality management. Technology Development: Activities that can be broadly be grouped into efforts to improve product and process. Human Resource Management: Activities of recruiting, hiring, training, developing and compensating personnel. Procurement: Activities performed in the purchasing of inputs used in the value chain.
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Figure 1: overview of the value chain (Porter, 1985).
2.2 Information Systems In this paragraph an overview of five selected information systems will be specified. Information systems are an integrated set of components for collecting, storing and processing data and for delivering information, knowledge and digital products. Business firms and other organizations rely on information systems to carry out and manage their operations, interact with their customers and suppliers and compete in the marketplace (Encyclopædia Britannica, 2013). Information systems produce information to solve problems automatically or to support human beings in the operation, control and decision making of an organization (Kurbel, 2013). These systems are a major corporate asset. They provide benefits, but on the other hand high costs are coupled to information systems. Therefore, investments in information systems are long term investments. The principal tasks of information systems specialists involve modifying the applications for their employer’s needs and integrating the applications to create coherent systems architecture for the firm (Briffaut and Sacone, 2002). As stated in the research objective, this study will be restricted to five information systems. These systems mainly relate to the operational business processes. Operational systems transform enterprise-wide descriptions of how the enterprise should operate into more detailed, implementation dependent descriptions of how specific groups of resources should interoperate to do the activities required (Weston, 1999). The following information systems will be described in the next paragraph: Enterprise Resource Planning (ERP), Manufacturing Execution System (MES), Product Lifecycle Management (PLM), Supply Chain Management (SCM) and Customer Relationship Management (CRM).
Enterprise Resource Planning (ERP) Allows companies to manage, synchronize and integrate business functions optimizing available resources. It is a cross industrial system that supports all major business processes within a wide range of company types (Consoli, 2011).
Manufacturing Execution System (MES) MES is the software that interfaces management and production tools. This system coordinates and synchronizes production processes. It receives information from ERP and PLM on working cycle and converts it in machine commands for production sequences. (Consoli, 2011).
Product Lifecycle Management (PLM) PLM manages products and production processes from the first product idea through the entire life cycle of the products. Therefore, PLM supports all product related processes. The goal of PLM is to support all stages of the product life cycle through a unified approach (Kurbel, 2013).
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Supply Chain Management (SCM) SCM focuses on improving intercompany processes. It stresses the collaboration between partners in the supply chain. This includes intensive information exchange and harmonization of partners’ respective procurement, production and distribution plans also (Kurbel, 2013).
Customer Relationship Management (CRM) CRM is an integrated approach to identify, acquire and retain customers. The CRM system is used to plan, schedule and control the pre-sales and post-sales activities in an organization. CRM is used to improve long-term growth and profitability through a better understanding of customer behavior (Kurbel, 2013).
2.3 Relation between the systems Companies make use of many different information systems. All different systems relate to each other, this is also described in the information system paradigm; information systems do not exist on their own (Leek, 1997). The figure below shows the relation of the five different information systems to the production process. As figure 1 shows, ERP is situated in the center of business operations. It is the basis information system that supports other systems. Whereby, MES is a system which is the ‘connection’ between ERP and the more specific systems SCM, CRM and PLM. These systems have a more narrow goal and thus support a specific part in operations of enterprises. For example, SCM is responsible for the supply chain domain including aspects like coordination and traceability, while PLM is responsible for the product lifecycle domain (Gorbach, 2000). In the next paragraph the supporting functions of the information systems will be explained more extensively.
Figure 2: overview of the relation between information systems used in this study. Based on Gorbach (2000).
Business functions of ERP As stated before, the ERP system supports many different functions. ERP systems are designed to integrate transaction modules and provide a common and consistent database. It is the company’s central system (Awcett et al., 2007). Figure 2 on the next page gives an overview of all business functions including the most popular functions per department (Shehab, 2004). Each part of software is connected to each other. ERP systems have a modular structure so they can be adopted by modules. Modules can one by one be implemented through companies and (dis-)connected (Awcett et al., 2007). As both figure 1 and 2 confirm, the ERP supports CRM, SCM and PLM. ERP enables the integrated flow of information to be the core system that provides the data needed for all corporate components (Tarn et al., 2002). Traditionally, ERP systems were used in capital-intensive industries, like manufacturing and construction industries. Nowadays, these systems are expanded beyond manufacturing in other industries such as finance and retail sectors, because ERP is considered to be necessary in every company. ERP systems have led to decline in inventory in the manufacturing
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sector from 15 to 35 per cent, reductions in working capital and abundant information about consumer’s wants and needs (Shehab et al., 2004). Several functionalities of ERP can be defined; integrated material handling, human resources and financial control which lead to the integration and standardization of processes. Furthermore, a multi-site, multi-languages and multi-users systems can be used which take care of a distributed responsibility. Thereby, it facilitates easier communication also. Next functionality is the integration of data storage. This accounts for costs savings since every customer or address is added only once in the system. Finally, the ERP system is able to provide advanced reporting features for the evaluation of customers and suppliers. This leads to more control (Helo and Szekely, 2005).
Figure 3: overview of the business functions supported by ERP systems (Shehab, 2004).
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Business functions of MES MES has different functions. The functions depend on the complexity of vertical integration and the length of the cycles for production scheduling. When the cycle becomes more complex and longer, the functions of MES will also be more extensive (Günther et al., 2008). MES has to interface with the ERP system and assist many functions of product manufacturing (Zhou et al., 2005). One of the major functions are linking, evaluating, condensing and making data available in a suitable form (Kletti, 2007). The system should manage the entire production flow in plants. This includes controlling the sequence in which orders are processed, considering changes in the production plan and be able to change the plan on the shop floor. Thereby, MES should also keep track of the materials and equipment being used in products and operators (Zhou et al., 2005). Furthermore, providing up-to-date overviews to rapidly determine problem situations, monitoring production activities, is one of the functions of MES. But also the idle-time evaluations (the productivity) for machines and installations and the currently produced qualities is a duty of MES (Kletti, 2007). This includes planning and scheduling preventive maintenance (Zhou et al., 2005). Thereby, MES has the function of detailed operations scheduling. This includes planning tools to decide in which order there will be processed or to reschedule and the planning of non-productive times as short-term planning of employees (Kletti, 2007). The system should generate the most efficient mixes of operations through considering the scheduling of the activities, the aspects like colors, shapes, formulas and analog processes (Zhou et al., 2005). MES is able to manage production resources available on the manufacturing shop floor. These are resources like machines, tools, materials and equipment (Zhou et al., 2005). Other supporting activities of MES related to the operations planning and production control are multi-order analysis of production progress, process materials, planning tools and analysis and checks for machines, tools, personnel and materials (Kletti, 2007). Overall, there can be stated that important functions of MES are in process control and machine control (Günther et al., 2008).
Business functions of PLM PLM is the product information backbone of a company and its extended enterprise (Hadaya and Marchildon, 2012). The system integrates management of all product related information and processes through the entire lifecycle. This leads to elimination of existing organizational barriers and to streamline the value creation chain (Schuh et al., 2008). Figure 3, on the next page, gives an overview of the functions of PLM. The integrated management of ideas, project and product portfolio relates to the upfront planning in accordance of its project capacity and its feasibility of new ideas. Requirements management supports the product specifications. Whereby, dynamic requirements management comprehends the tracking of evolving requirements over the entire product lifecycle and the identification of impacts from changes (Shuh et al., 2008). Furthermore, integrated product design and process specification are about effectively encompassing the later maintenance, service and disposal activities and functions. The integration of product and production process development has been an issue companies try to solve for a long time. End-to-end configuration control supports the identification, control, accounting and audit of functional and physical characteristics of specified product parts (Shuh et al., 2008). The next aspect is about total lifecycle costing which enables tracking and analysing the individual costs that incur in each phase of the product lifecycle. This results in a consideration of all costs over the product lifecycle. The lifecycle environmental impact analysis deliberates the total product environmental impact. PLM supports the minimization of the environmental impact in al lifecycle phases. The last function is the service and maintenance data reuse at product development which supports advantages of field data from the product usage phase. However, it is difficult for companies to take advantages from data. The main reason for this is because it is difficult to gather this kind of data (Shuh et al., 2008). Besides above defined business functions of PLM, this system also supports the contributions and information exchange of global participants like business partners, suppliers and customers. The system increases communication, collaboration and coordination with business partners for the product development process (Consoli, 2011). The use of PLM leads to benefits like reducing the time-to-market, improving product functionality and increasing ability of customizing (Shuh et al., 2008).
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Figure 4: overview of the business functions supported by PLM systems (Schuh et al., 2008).
Business functions of SCM SCM focusses on the optimisation of future planning and scheduling activities of inter-enterprise material flow related processes (Helo and Szekely, 2005). Overall, this can be defined as the support of demand and manufacturing planning and the B2B communication (Tarn et al., 2002). Related processes are procurement, production, transport, distribution and sales. SCM systems offer flexibility and speed necessary against demand uncertainty. This system is capable of coordinating the supply chain to ensure the effective implementation of just-in-time practices. In relation to business-to-business communication, the system has the function to give timely information to share across the overall supply chain and to facitilitate the synchronization of the entire supply chain as products should be in the right place, at the right price, at the right time and the right condition (Tarn et al., 2002). Besides these functions the SCM system is able to allow organizations to integrate its business processes with those of its business partners. This means that its not only about the internal efficiency and productivity, but also about business partners. SCM established collaborative relationships within and beyond their organisation. This includes the information exchange with suppliers, vendors, manufacturers, distributors, retailers and other trading partners (Tarn et al., 2002). Other functionalities of SCM are the supply chain inventory and optimization of the lot size. This leads to the benefit of cycle-time reduction whereby procceses are faster completed. Besides, the SCM accounts for available-to-promise and capable-to-promise calculations, which leads to gains of the service level. Furthermore, an optimisation of the inventory and transportation can be made. This leads to inventory cost reductions. The fourth functionality of SCM is the reduced inventory points. This is also handled through the ERP system, as stated before. As there is an overlay between ERP and SCM, several functions are both performed by ERP and SCM. The function reduced inventory points causes for lower process costs. Finally, a material flow can be showed. This leads to lower product costs (Helo and Szekely, 2005). Overall there can be stated that the functions of SCM are in manufacturing management, inventory management, logistics management and supply chain planning (Tarn et al., 2002).
Business functions of CRM CRM is an effective tool to achieve objectives such as satisfied and loyal customers and increased market share. The purpose is building and maintaining a profit maximizing portfolio of customer relationships (Shafia et al., 2011). CRM helps companies tracking and analyzing customer behaviour and enables managers to evaluate the effect of specific sales and marketing efforts. The focus is on providing optimal value to customers through pre-sale interactions, sales processes and post sale-interactions (Awcett et al., 2007). CRM includes sales force automization, direct mail, telemarketing, marketing analysis and planning. A function of the system is to allow companies to maintain all customer records in one location that is accessible throughout the whole organization (Awcett et al., 2007). CRM coordinates the customer interface. Customers need to enter their details only once in the system. The customer interface leads to tailored, information-enhanced products offered to global niches or even markets of one (Daniel et al., 2001). Furthermore, the promotion of existing products and services and the identification of new markets or products
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support in developing strategic marketing decisions. CRM supports the market-driven segmentation and planning (Daniel et al., 2001). Segmenting customers is a business function of CRM also. It is important to identify the customers who deserve special treatment so that offerings can be tailored. It is considerable to identify profitable customers and potential profitable customers (Lambert, 2010). Thereby, customer relationships can be build. All these data and obtained knowledge can be analysed and reported by the system.
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Table 1: overview of the main business functions per information system.
System ERP MES PLM SCM CRM Overal support of other process control & integrated management of optimisation of future building and maintaining a function business systems machine control all product related planning and scheduling profit maximizing portfolio and typical functions information and processes activities of inter-enterprise of customer relationships in sales & through the lifecycle material flow related distribution, financial processes & accounting, project management, HR, quality and materials management
Specific -sales planning, -linking, evaluating, -integrated management of -timely information to -tracking & analyzing functions capacity planning condensing & making ideas, project and product share across the overall customer behaviour -sales order data available portfolio supply chain -evaluate the effect of management -manage the entire -dynamic requirements -integrate its business specific sales and -sales & shipping production flow in management processes with those of its marketing effects -integrated material plants -integrated product design business partners -maintain customer handling, HR & -keep track on the and process specification -inventory control records financial control materials and -end-to-end configuration -optimization of the lot size -coordinated customer -multi-site, multi- equipment control -available-to-promise and interface languages, multi- -providing up-to-date -total lifecycle costing capable-to-promise - promotion of existing users systems overviews of processes -lifecycle environmental calculations products and services -integration of data -idle-time evaluations impact analysis -optimisation of the -the identification of new storage -detailed operations -service and maintenance inventory and markets or products -providing advanced scheduling data reuse at product transportation -market-driven reporting features -manage production development -reduced inventory points segmentation and planning resources -communication, -overlay with ERP -segmenting customers -multi-order analysis collaboration and -overview of material flow -checks of machines, coordination with business materials, personnel partners
The support of cloud solutions in manufacturing
2.4 Linkage of IT systems and its functions and manufacturing business processes Based on the business functions of information systems described above, the primary and support activities of Porters value chain can be linked. The above described information systems support the primary activities and several support activities defined by Porter in a company. This paragraph will show the relation between the information systems and its business functions and the activities defined in the value chain of Porter. As can be viewed in the overview of the business functions of information systems, the ERP system is a basis system which supports other information systems and its functions. This is confirmed by figure 3 also, where activities like sales and distribution, human resources and materials management are supported by the ERP system. The use of information systems which allow information sharing establishes several advantages. Sharing information through ERP about, for example sales with customers gives insights in the orders of customers. The use of ERP also may lead to increased sales through better information about customers (Awcett et al., 2007). As can be concluded from the above mentioned reasons, ERP can be addressed to many activities defined by Porters value chain. There can be claimed from the former paragraphs that ERP supports all primary activities and all support activities. Furthermore, as described before, MES overall function is in process and machine control. In addition, figure 1 demonstrates that MES is in between of other information systems. It manages several flows in plants and production resources on the manufacturing shop floor. When relating this to Porters value chain, the primary activity operations and the support activity firm infrastructure can be designated to MES. Next system, PLM, is a system which relies on the whole product life cycle; it is responsible for aspects as the design, process and production of products / services. This system assists the primary activity operations. PLM exchanges information about products with customers also, therefore the activity marketing could also be assigned to this system. Nevertheless, the rate to which this system supports the activity marketing is variable. Finally, as the PLM system deliver knowledge management through product development and related aspects, the secundary activity human resource management is also supported by PLM. As the descriptions and figure 1 above shows, SCM coordinates the ‘source’ and ‘deliver’ stages which represent the supply chain. The use of SCM information sharing lead to better control over picking, shipping and receiving of orders, the inbound and outbound logistics. This also relates to lower inventory levels through better forecasts and a better coordination between manufacturing and distribution of products (Awcett et al., 2007). SCM functions are material flow related processes and inventory related functions in the supply chain. Therefore, activities like inbound and outbound logistics and procurement can be assigned to SCM. Finally, CRM relates mainly to the establishment of customer relationships. Creating a customer portfolio which is profitable and providing optimal value to customers. Activities related to the promotion and sales of products or services are also covered by CRM (table 1). Based on the CRM business functions activities like marketing, sales and service can be attached to this information system. Table 2 gives an overview of the information systems assigned to primary and supporting activities of the value chain.
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Table 2: overview of the relation between information systems and the value chain.
ERP MES PLM SCM CRM Inbound -support and -material Logistics reports of specific handling activities; -receiving and materials storing handling materials and -integration of goods data storage Operations -support and -manage the -information reports of specific entire and processes activities; production of capacity flow in plants development planning, quality -keep track on of products management the materials -configuration -integration of and control data storage equipment Outbound -support and -optimization Logistics reports of specific of the lot size activities; and distribution transporta- -integration of tion route and data storage mode -planning of distribution of products Marketing -support and -product -obtaining reports of specific information information & activities; exchange with analyzing customer customers customers, activities behavior and -integration of segmenting data storage customers -promotions of products/servi ces Sales -support and -promotion of reports of specific sales activities; sales -evaluating planning, sales sales orders -providing -integration of pre-sale data storage interactions, sales processes and post sale- interactions Service -support and -customer reports of specific interface activities; customer data -integration of data storage Infrastructure -support and -manage, reports of specific check, analyze activities; multi- materials, site, multi- machines,
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languages, multi- personnel, users systems, scheduling, finance processes -integration of data storage Human -support and -knowledge Resource reports of specific management Management activities; HR control, personnel management -integration of data storage Technology -support and -management Development reports of specific of ideas, activities; project projects, management, design, controlling of product phases project development -integration of and portfolio data storage -lifecycle costing and environmental impact Procurement -support and -inventory reports of specific control, activities; planning and materials optimization management -integration of data storage
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Manufacturing markets
The second sub research question ‘Which IT system functionalities are available that support operational business processes in the different types of manufacturing markets?’ will be answered in this part of research. This chapter will give an introduction about defined types of manufacturing markets and the aspects related per type of market. Furthermore, per type of manufacturing market a description of the applications and focus of information systems will be given.
3.1 Definition Manufacturing processes can be defined as the use of one or more physical mechanisms to transform the shape of materials and / or form and / or properties. Thereby, manufacturing involves the production and stocking of finished and semi-finished goods (Chryssolouris, 2006). The European Union mainly exports manufactured products; more than 80 per cent of the export exists of manufactured products. On the other hand, the majority (60 per cent) of imports are also manufactured products (European Commission, 2013). Manufacturing industries exist of more than forty industrial sectors (Westerkämper, 2014). In this study, the manufacturing market will be separated in three different types; discrete manufacturing, process manufacturing and consumer product goods manufacturing. These types are used by Atos Consulting and also identified by the Standard Industrial Classification (in Dutch; Standaard Bedrijfsindeling) of the Dutch Central Statistical Office (CBS, 2013) (Atos Consulting, 2013). This Standard Industrial Classification is based on divisions made by the European Union and the United Nations (CBS, 2013).
3.2 Types of manufacturing markets
Discrete Manufacturing Divisions in discrete manufacturing are high-tech and electronics, automotive, aerospace and defense and engineering and construction (Kannegiesser, 2008; Shano et al., 2013). The production of single items can be described as discrete products (Chryssolouris, 2006). In this research the focus will be on high-tech and electronics and automotive as Atos focuses on these subdivisions. First the high-tech and electronics industry will be discussed, second the automotive industry.
High-tech and electronics In the high-tech and electronics industry, the lead-time from initial requirements to product launching is shortened more and more (Son, Na and Kim, 2010). High-tech and electronics is rapidly growing due to new technologies (Shano et al., 2013). Costs of products need to be reduced to achieve competitiveness in the worldwide market (Son, Na and Kim, 2010). A collaborative process from the early product development phase and seamless design data without critical errors is important to increase the efficiency of product development processes (Son, Na and Kim, 2010). The product life- cycle of high-tech products is decreasing. This is because of consumer demand and technology push (R&D). Being first mover to the market is key in this type of manufacturing (Shano et al., 2013). The short product life-cycle is also due to the high rate of technological developments, the proliferation of high-tech products and the market demand for leading edge capability (Davies and Brush, 1997). The speed of technical innovations drives end-users to use more technical applications (Shano et al., 2013). Due to these developments, the requirement for tech-support also increased. The level, what form of support and how it will be assessed is important for customers (Davies and Brush, 1997). The description above defines the customer order decoupling point (CODP) in the high-tech and electronics industry. As described, in this industry the market is very demanding and products are continuously innovated because of the technology push. Therefore, the CODP can likely be positioned as make-to- stock (MTS). Products need to be rapidly on the market including a new technology. Products are
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already produced in the supply chain before any orders are received from customers (push). This also increases the possibility of stock which will not be sold.
Automotive The automotive industry is well known for their efforts to improve supply chains according to their demanding business environment. The focus in these supply chains is in improving cost-efficiency. Meeting the requirements through implementing concepts which streamline the supply chain processes is a focus aspect in this industry also. Companies in this industry widely use concepts like just-in-time (JIT) to create lean supply chains. There are low inventories due to close collaboration with customers and suppliers. This also increases vulnerability because turbulences can hardly be compensated without safety stocks (Thun and Hoenig, 2011). Furthermore, the focus of the automotive industry is on cost reduction, quality improvement and flexibility. When related to the product development process, efficiency and technology development are important aspects (Oh and Rhee, 2010). Automotive manufacturing is based on specific orders with specific technical requirements from applicants. The production of discrete products is because of the specific orders based on assemble-to- order (ATO). Hereby, all supply chain tasks are triggered by the receipt of a consumer order, award or contract. ATO is mostly process-focused. Therefore, the general purpose equipment and skilled workforce are intensively used (Li and Womer, 2012).
Process Manufacturing A second type of manufacturing that can be distinguished is process manufacturing. This type of market focuses on adding value by mixing, separating, forming and / or chemical reactions by either batch or continuous mode (Kannegiesser, 2008). This type of manufacturing industry is comparatively more capital-intensive than discrete manufacturing. Therefore, it aims for high capital investments. In process industry the range of products is narrower than in discrete manufacturing. Traditional there is a low product variety and low margin in process manufacturing. This means that the focus is either on continuous or batch processing, including a rigid process control (Ketokivi and Jokinen, 2006). Sub industries in process manufacturing are chemicals, oil and gas, steel and metals, consumer goods (process), utilities, pulp and paper and pharmaceuticals (Kannegiesser, 2008). In this research the focus will be on the subdivision chemicals as Atos focuses on this subdivision.
Chemicals In chemicals, products can be intermediates and finished products sold or used for other products (Kannegiesser, 2008). In the chemical industry, raw materials are normally sourced in bulk and traded extensively in many exchanges around the world. The non-discrete products are usually stored in tanks according to their characteristics. Therefore, it is impossible to link or tag each finished product to its corresponding raw material or process route (Srinivasan et al., 2006). Chemical manufacturing facilities consist of complex networks of interconnected operating units for blending, separations, reactions and packaging. The majority of finished products of chemical plants serve as raw material in other industries. The chemical industry is mainly Business-to-Business (B2B) (Srinivasan et al., 2006). The production in the chemical industry is mostly based on forecasts and therefore make-to-stock (MTS). Companies cannot wait until demands are actually received before they plan what, when and how many to produce. In this type of market, it is important to ensure the inventory level, prevent shortages through demand uncertainty and minimize the total inventory costs (Feng et al., 2011). Many developments occur in this industry like reducing operational costs and efficiencies through extended supply chains across continents (Shano et al., 2013). Effective production planning plays a key role in the production management system for this type of manufacturing market, because of problems which need to be solved under demand uncertainty, planning inadequacy and capability unbalance (Kannegiesser, 2008).
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Consumer Product Manufacturing The third defined type of manufacturing market is the market of consumer product goods. The focus will be on food and beverages as Atos focuses on companies who produce these types of products. This market can be defined as relatively inexpensive, frequently purchased and rapidly consumed items on which buyers exert only minimal purchasing effort (Leahy, 2011). The delivery times of these products tend to be short and delivery reliability needs to be consistently high. This is because of the raw materials, semi-manufactured goods and end products which are perishable. The nature and source of raw materials in this industry often implies a variable supply, quality and price due to the unstable yields from farmers. Consumer goods tend to exist of high volumes and a relatively low value also. The processes have a variable yield and processing time and the processing stages are not labor intensive (van Donk, 2000). Furthermore, the customer order decoupling point (CODP) is increasingly a combination of make-to-order (MTO) and make-to-stock (MTS) according to van Donk (2001) (Soman et al., 2004). This is because of the increase of logistical demands of consumers, the expectation of retailers and wholesalers of small deliveries within a short and dependable time window and the more erratic behavior of the consumer. This requires logistic and production systems that quickly respond to the changing consumer behavior (Soman et al., 2004). According to Shano (2013) manufacturers of consumer product goods should focus on fulfilling rapidly changing local market requirements, put more effort in consumer insights and developing new products as a way to differentiate from competitors (Shano et al., 2013).
Table 3: overview of defined types of manufacturing markets and its characteristics.
Discrete Manufacturing Process Manufacturing Consumer Product Goods Manufacturing High-tech & Electronics Chemicals Food & Beverages
-Single items -Capital-intensive -Relatively inexpensive -Short lead-time -High capital investments -Frequently purchased -Reduced costs -Low product variety -Rapidly consumed products -Efficient product -Bulk -Low value products development processes -Short product life-cycle -Extensively traded -High volumes -Technology push -Mainly raw materials for -High delivery reliability other industries -Increased tech-support -B2B -Short delivery times -MTS -Effective production planning -Differentiate from competitors -MTS -Minimal purchasing effort -Fulfilling rapidly changing local market requirements -Invest in consumer insights -Combination of MTO & MTS Automotive -Single items -Reduced costs -Quality improvement -Flexibility -Efficient product development processes -Technology development -Specific orders from customers -ATO
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3.3 Business functions of IT systems per type of manufacturing market Former paragraphs demonstrated the business functions per information system included in this research. In the following paragraphs this will be done for the defined manufacturing markets. Per market different information systems can be important for the business. The following paragraphs will mainly highlight the focus which will likely be used in the market.
ERP & MES As the former paragraphs described, the ERP system is a central, cross industrial system in the company which supports many functions and other information systems. ERP has standard functions which are useful for companies. The needs for ERP systems can vary per company and per industry. Nevertheless, no specific significant focus of ERP business functions per defined type of manufacturing market can be formulated in this stage of the research. The same accounts for MES, since MES is a system that interfaces management and production tools. The system also interfaces with ERP (Zhou et al., 2005). In a later stage of the research there will be refered to these systems and how they can add value and support the management.
Business focus - discrete manufacturing As described above, the discrete manufacturing market can be divided in several sub divisions. The focus will be on the divisions of the discrete manufacturing market of Atos which are high-tech and electronics and automotive. When necessary, the differences between these divisions will be pointed out.
PLM In discrete manufacturing product innovation is a key concept. Both in high-tech and electronics and automotive this concept plays an important role (SAP High Tech, 2013; SAP Automotive, 2013). As described before, in the sub division high-tech it is very important to be first mover to the market. This is because of the rapid technology developments in this market (Shano et al., 2013). Through developments of the consumer demand and technology push, more and more high-tech products are developed. This results in a shorter product lifecycle at the same time. There is a constant need for technological innovations and applications to serve the market. Products should be functional (more storage capacity, bandwidth and more power), user friendly and intuitive. PLM should therefore focus on product development by providing engineering-oriented tools to ensure faster innovation, quality improvement and lower costs. These tools should lead to a faster time to market and make it able to deal with increasing product complexity (SAP High Tech, 2013; Shano et al., 2013). The protection of products, to prevent copying, by intellectual property rights is another important aspect in this market (Shano et al., 2013). Continuous product or service innovation also plays an important role in the sub division automotive. Delivering continuous value and meet specific requirements from customers can be established through innovations. (SAP Automotive, 2013). Both, in high-tech and automotive product compliance is an important focus aspect. PLM should focus on product compliance to meet the requirements, legislation, industry regulations, standards or the terms of a contract. By detecting potential problems in the early manufacturing phases, product recalls and costly product design corrections are avoided (SAP High Tech, 2013; SAP Automotive, 2013).
SCM As described in the paragraph about the discrete manufacturing market, the CODP of high-tech manufacturing is MTS. There is a continuous technology push in a very demanding market. Products need to be rapidly on the market including new technologies. Products are already produced in the supply chain before any orders are received from customers (push). Since these are innovative products, a responsive supply chain can be indicated (Fisher, 1997). In these type of supply chains, the primary purpose is to respond quickly to the unpredictable demand in order to minimize stock
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outs, forced markdowns and obsolete inventory (Fisher, 1997). Companies need to manage these issues by first accepting the uncertainty of demand of innovative products. Second, these issues can be managed by reducing the uncertainty, this can be done by obtaining sources of new data which can account as indicators. Having different products that share some components enables companies to predict the demand for these common components more easily. Third, companies can manage these issues by being flexible and avoid the uncertainty by cutting lead times. Finally, the remaining uncertainty can be controlled by buffers of inventory or excess capacity (Fisher, 1997).
In automotive, demand is mostly specified in customer orders (Li and Womer, 2012). Fisher (1997) argues that the type of products in automotive can both be innovative and functional products. It depends on the focus the company has taken. Most of the time the focus is on creating innovative automotive products, the supply chain will be a responsive supply chain. This focus can be chosen due to customers unique and rapidly changing needs require a responsive supply chain (SAP Automotive, 2013). In automotive it can be important to create an effective and responsive supply chain by developing cost effective solutions and be highly flexible and responsive to the changing customer requirements. Organizations need to be agile (Gunasekaran et al., 2008). If companies focus on delivering functional products, an efficient supply matches best. In this case, companies will focus on efficiency, minimizing costs and maximize performance. The lead time will be shortened as long as it does not increase costs, when focusing on a responsive supply chain there will be heavily invested in ways to reduce the lead time (Fisher, 1997).
CRM In high-tech and electronics and automotive manufacturing the focus of CRM should be on customer service and customer support (SAP High Tech, 2013; SAP Automotive, 2013). Customer loyalty and brand equity are important for maintaining margins and market share. Brand equity should retain customers looking for the newest innovative products. The shorter lifecycle of products makes support more difficult for service engineers in the high-tech industry. As described before, an increased focus should be on tech-support through the rapidly new technology innovations. Manuals of products should also be available digital, so consumers can find support online. This is considerable because of the increasing complexity of products (Shano et al., 2013). In high-tech, optimal field services and field repair is a focus for CRM also. It is important to delight customers and deliver an exceptional service to differentiate from competitors and create customer loyalty (SAP High Tech, 2013). Available online communication, for example social media, with consumers is another important aspect to improve customer loyalty (Shano et al., 2013). As described in the beginning of this paragraph, customer service and customer support is also important in the automotive industry. Products in automotive manufacturing are highly customized, because of specific orders. Consumers who relate to a MTO CODP setting, are often cost and time sensitive (Li and Womer, 2012). Orders should be delivered in time and requirements of the contract should be fulfilled. Besides customer service and customer support, warranty management is also important in the automotive industry. Companies should carefully handle complaints, returns and depot repairs to keep satisfying their customers (SAP Automotive, 2013).
Business focus - process manufacturing When determining focus points per information system in the process manufacturing the focus will be on chemicals, as on this subdivision is focused in this research.
PLM Several developments occur in the chemicals industry, like the development of biotechnology, nanotechnology and energy technologies which will be used in new applications and substituting former products (Kannegiesser, 2008). The development of new technologies and improving processes
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is important in this type of manufacturing market. The focus is mainly on process innovation which leads to new, innovative products. This accounts for a capital intensive type of market. Thereby, this is because of the low product variety in this type of manufacturing market. Besides innovation, product safety and stewardship is also a focus aspect in PLM (SAP Chemicals, 2013). It is important to perform safety controls throughout the product lifecycle. This is because of the hazardous nature and the large volumes of the products (Srinivasan et al., 2006). All large volumes need to be guaranteed to be safe as these large volumes will be transformed to products to many different consumers. If these volumes would not be safe, many consumers can be affected.
SCM In chemical manufacturing the CODP is MTS (push). This is because in this type of market it is important to ensure the inventory level, prevent shortages because of demand uncertainty and minimize the total inventory costs (Feng et al., 2011). Huge inventories secure the continuity and profitability. The storage facilities require complex and expensive cleaning procedures and maintenance because of the nature of the products (Srinivasan et al., 2006). Products in this type of manufacturing can be categorized as functional products as they do not change much over time, there is a low product variety and they have a predictable demand. For this type of products an efficient supply chain fits best (Fisher, 1997). The complexity in this supply chain poses a challenge to efficiently manage the chain. Manufacturing plants designed for specific modes are expensive to build and maintain, this make them not dynamic (Srinivasan et al., 2006). Therefore, the challenge of SCM is in organizing efficiency throughout the supply chain. In chemical industries, supply networks governance is increasingly important. Through supply network relations companies are better able to respond to new technological developments. This also accounts for firms to deal with uncertainty because it enables flexibility (Verwaal and Hesselmans, 2004). The focus of SCM is therefore also on establishing and maintaining supply networks governance. Another focus point is on logistics fulfillment (SAP Chemicals, 2013). The transportation process is very slow, because of the large inventory and complex transportation process through different transport modes. A safety stock is needed because of the variability of transport times (Srinivasan et al., 2006).
CRM Most chemical companies are facing increasingly demanding consumers. They are demanding lower prices, better quality, shorter lead times on deliveries and increased reliability over time. In order to respond as quickly as possible to this demand, intensive contact with supply chain partners is increasingly important (Verwaal and Hesselmans, 2004). Not only relationships with suppliers are important, also with consumers. Close relationships with customers and suppliers are important since chemical companies tend to survive by producing exact specifications of their customers. Companies in this industry try to respond on the demands of consumers. As the number of customers of chemical companies can vary, the importance of market uncertainty differs per company (Verwaal and Hesselmans, 2004).
Business focus - consumer goods manufacturing When determining focus points per information system in the process manufacturing the focus will be on food and beverages, as on this subdivision is focused in this research.
PLM As described above, it is important to fulfill the rapidly changing market requirements in this type of market. Therefore, when related to PLM, it is important to have a consumer-driven innovation in this market (SAP Consumer Products, 2013). The PLM helps to continuous product and service innovation to fulfill the market requirements. For example, in 1995 16.000 new consumer packed goods were introduced in the UK, this was an eight-fold increase since 1975 (Hofstetter, 2005). Galizzi and
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Venturini (1996) describe the developments in the market as; “In recent years food manufacturers have accelerated the development of new products by using new ingredients, processing and packaging techniques. Thus, food markets are increasingly characterized by competitive environments where relevant flows of innovative products, quality improvements and new technologies provide new consumption trends, food habits, market opportunities and firms' strategies" (Hofstetter, 2005). This applies to all consumer goods (Hofstetter, 2005). As described above, it is also important to differentiate from competitors in the consumer goods market. An accelerated product development can also improve to fulfill consumers’ wants and needs in the rapidly changing local markets (SAP Consumer Products, 2013).
SCM As described above the CODP is increasingly a combination of make-to-order (MTO) and make-to- stock (MTS) according to van Donk (2001) (Soman et al., 2004), because of the increase of logistical demands of consumers, the expectation of retailers and wholesalers of small deliveries within a short and dependable time window and the more erratic behavior of the consumer. These developments require logistic and production systems that quickly respond to the changing consumer behavior (Soman et al., 2004). Therefore, an important focus for SCM is in logistics and order fulfillment excellence (SAP Consumer Products, 2013). Fisher (1997) describes consumer goods as functional products; they fulfill basic needs and do not change much over time. Thereby, the product lifecycle is short. An efficient supply chain matches to these products. The purpose is to supply the predictable demand efficiently at the lowest possible cost. Thereby, a high average of utilization rate is maintained. Nevertheless, also in this type of manufacturing some products, like special types of coffee, could also be defined as not only functional but also innovative products. If a company sees its products more as innovative, a responsive supply chain would fit better. Nevertheless, most companies would fit an efficient supply chain in this type of manufacturing market. The inventory management and optimization of the lot size results in the benefit of cycle-time reduction. Thereby, the use of information exchange with business partners is also valuable for the management of the supply chain. This is an important aspect of SCM, because of the perisable products where manufacturers need to deal with in this market. Furthermore, another focus of SCM in this type of market will be on integrated operations planning and analytics. It is important to align supply, demand and inventory to improve profitability (SAP Consumer Products, 2013). Functions of SCM like manfucturing planning and coordination of the supply chain enable this focus point in the consumer product goods market. Finally, analytics can be used to research how supply chain processes perform and if improvements are or can be made.
CRM CRM is an important system when relating this to the consumer goods market. As table 2 already shows, it is meaningful to invest in consumer insights. Many developments last years, like on-line communications technologies, established possibilities for companies to create personal relationships with consumers and obtain more and more information about their consumers (Leahy, 2011). Relationships with the mass consumer market could be developed. This also created possibilities to deliver significant competitive advantage. As stated also in the paragraph of PLM, it is important to differentiate from competitors. Through the use of relationships with consumers competitive advantage can be reached by satisfying consumers and fulfilling their requirements (Leahy, 2011). The use of one-to-one marketing, where consumers’ needs are satisfied at an individual level is also very important for CRM. CRM provides the ability to monitor, remind and reward consumers about goods and services (Leahy, 2011). Therefore, CRM can be named as an important information system in the consumer goods market.
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Table 4: overview of all focus points of information systems per type of manufacturing market.
Discrete Manufacturing High-tech & Electronics PLM SCM CRM Continuous product/service Responsive supply chain Customer service innovation Product compliance Customer support Product development by Customer loyalty & brand providing engineering-oriented equity tools Protection of products Optimal field services and field repair Automotive PLM SCM CRM Continuous product/service Responsive supply chain Customer service innovation Product compliance Efficient supply chain Customer support Warranty management Process Manufacturing Chemicals PLM SCM CRM Process innovation Efficient supply chain Close customer relationship Product safety & stewardship Supply networks governance Customer specifications Logistics fulfillment Consumer Goods Manufacturing Food & Beverages PLM SCM CRM Consumer-driven innovation Efficient supply chain Invest in consumer insights Accelerated product (Responsive supply chain) Customer relationship development Logistics & order fulfillment excellence Information exchange with business partners
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Cloud Characteristics
This chapter will first give an introduction about the cloud, service models and elements related to the cloud. The third sub research question “Which cloud characteristics can be defined?” will be answered in this part of research. The opportunities and threats will be defined and an analysis of the risks will be given. Finally, an overview of the characteristics of the cloud will be showed based on the literature.
4.1 Background At this moment cloud computing can be seen as trend. According to Gartner, 50 per cent of the Global 1000 enterprises will rely on external cloud services for at least one of their top generating processes by 2015 (Kandpal, 2013). This will also lead to an increasing competition of cloud solution providers. Each provider is trying to differentiate from its competitor by adding features of capabilities which are not provided by the competitor. These features can be on the provision of infrastructure, platforms or software-related cloud services. Thereby, providers can differentiate by focusing on different target groups like consumers or enterprises (Kandpal, 2013). Many companies and industries find it hard to transform their classical enterprise IT models to cloud- based computing. This might be the reason that cloud computing has a relatively weak business exploitation, adaptation and participation (Mohammed et al., 2009).
4.2 Service Models Cloud computing exist of different service models. The figure below gives an overview of all services. In this study the focus will be on Software-as-a-Service (SaaS). SaaS focusses on the application level where the client can control parameters by himself to configure specific aspects (Hill et al., 2013). It refers to providing on-demand applications over the Internet (Zhang et al., 2010). The architecture of cloud services is more modular, each layer is loosely coupled with the layers above and below. Below SaaS is the level Platform-as-a-Service (PaaS). This platform provides layer resources. It consists of operating systems and application frameworks. Furthermore, the level Infrastructure-as-a- Service (IaaS), creates a pool of storage and computing resources (Zhang et al., 2010). When the cloud is available for the general public in a pay-as-you-go manner, it is called a public cloud. When it is not available for the public, it is called a private cloud (Armbust et al., 2009). Private clouds are designed for exclusive use of a single organization (Zhang et al., 2010). The cloud solutions which will be discussed further on in this research will both relate to the private and public cloud.
Figure 5: service models of cloud computing (Pearson and Yee, 2013).
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4.3 Positive and negative characteristics of using cloud services
Cloud computing possess several favorable elements. These elements will be stated below.
Pricing
The pricing of cloud services is one of the main characteristics which make the use of cloud attractive. If a company likes to make use of a cloud service for hundred or thousand employees, than this is both possible. Cloud computing makes use of a pay-as-you-go model. This implies that the user only pays for what is used. The pricing can be an advantage both for service providers and consumers as a well-defined pricing strategy can influence consumer’s buying behavior and for providers it can determine their competitive position. Consumers can easily compare the prices of cloud services. The pricing strategy is important since many parties are developing services in the cloud (Herzwurm and Margaria, 2013). This triggers service providers to differentiate from their competitor by developing new, superior ideas to create an outstanding service.
Investments
No high investments in hardware are needed to make use of services for consumers as the applications can be adapted via the Internet. Nevertheless, if a company is growing, it is likely that the number of users will also grow. Therefore using cloud computing might be less cost-effective. This has to do with the rising charges per number of users of an application (Microsoft, 2012).
On the other hand, the absence of high investments also increases the possibilities to enter the market because of lower costs. Not only large companies can use computer-intensive business services but also smaller firms can obtain these services now (Marston et al., 2010). Furthermore, the absence of upfront capital investments also leads to a faster time to market in businesses and lower upfront costs.
Furthermore, fewer datacenters need to be build or provisioned for cloud services, because cloud services can be added on top of the existing infrastructure. As the definition of SaaS also shows, the applications are provided over the Internet instead of the current information systems which are operating from datacenters. This leads to low incremental costs and helps to amortize the investments of datacenters (Armbrust et al., 2009).
Agility
Related to pricing is the possibility of on-demand-self-service. When requesting for a service, the actual availability is way faster with cloud computing than when hardware or software need to be purchased. Cloud computing is agile and autonomic (Hill et al, 2013). End-users always have the availability to use the service at any place where there is network access. It is easy for them to share data. End-users benefit from greatly simplified software installation and maintenance and centralized control over versioning (Armbrust et al., 2009). This leads to agile updating; the system should always be up-to-date (Yang, 2012).
Broad network access
Related to agility is having access to a broad network. Through networks (Internet) cloud computing is possible by using established mechanisms and standard protocols. This results in a flexible use of cloud computing. These aspects also provide possibilities for smart mobility. The goal of smart mobility is to bring solutions in mobility problems, because of the growing pressure on our mobility system (TNO, 2013).
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The former mentioned cloud aspects can deliver a contribution in solving these problems. An example of this can be managing growing mobile traffic volumes more efficiently by using cloud applications which can collect real-time data (Cloud Times, 2013).
Scaling of services
Another favorable characteristic for enterprises is the fact that cloud computing makes it more easily to realize the scaling of services. This is because of the use of software, where new requirements can be deployed quite fast (Marston et al., 2010). Users of services can easily enter or turn off a module statistics in a CRM solution for example. When using the usual IT system, large capacity of datacenters need to be used where it is more difficult to generate space. Therefore, via the use of Internet for cloud services it is way easier and faster to insert services as less capacity of datacenters is needed. These advantages of cloud computing on the end-user side are promising, since there is an increasing need for cost cuts and more agile and effective business processes. Cloud computing is a promising computing model through its utility-based, on-demand infrastructure for anyone, anytime, anywhere (Mohammed et al., 2009).
Resource pooling
The virtualized layer ensures the pooling into one large virtual resource. Different resources will stay on the network. All these different resources will be as ‘one’ in a pooled resource. This enables large scale efficiencies and the appearance of homogeneous resources to the consumer without a physical location or granularity (Hill et al., 2013).
Customer relationships
A final advantage for service providers are the service offerings which can also help to build customer relationships. Service providers help customers to follow an anxiety-free migration path (Armbrust et al., 2009). Since it is new for the end-user to use cloud services, it is important that the end-user is supported. Thereby the customer relationship can also be built through fulfilling customers’ wants and needs by providing a ‘personalized’ cloud service.
Experienced possible negative elements of cloud computing will be stated below.
Latency- and bandwidth- related issues
Cloud services are often remote, whereby it is possible that response suffers from latency- and bandwidth- related issues. These issues occur in situations where time is an important aspect, like in stock trading where microsecond precision is required. The cloud will be inappropriate for this (Armbrust et al, 2009). The Internet is important as primary channel for running applications and data transferring. Nevertheless, research about the Internet speed showed that The Netherlands is on the sixth place of all nations (Yang, 2012). These issues can occur in countries where the Internet speed may be lower and where there are interferences. In these cases, the sales of cloud solutions may be lower as customers might not be always convinced that cloud solutions are the best option for the company.
Use of the same piece of hardware
It is possible that end-users will share the same piece of hardware. This can lead to issues. An example of an issue which can arise is the use of applications of other users that share the system. So if one user’s application compromises the system, it can also compromise applications of other users that share the same system.
33 The support of cloud solutions in manufacturing
Security, compliance and regulatory issues
Having data accessible to third parties can present security, compliance and regulatory issues (Grossman, 2009). These last issues mainly arise when the services are in the public cloud. Organizations justifiably wary for the loss of physical control of data in the cloud (Marston et al., 2010). There will be further elaborated on this element in the paragraph about risks.
Lack of standards
The lack of standards of cloud computing can also be allocated as negative aspect. The promotion and development of open, non-proprietary specifications for web technologies is important to proactively promote the creation of standards (Marston et al, 2010). Furthermore, through the lack of offered tools, standards and procedures, it can be difficult for end- users to migrate data or to move from one provider to another (Jamil and Zaki, 2011). The tables below will give an overview of all positive and negative elements.
Table 5: positive and negative elements of cloud computing.
Element Service provider side End-user side Positive Pricing Differentiate from competitors Only pay for what you use Investments Low Low Agility On demand & up-to-date Broad network access Flexible Scaling of services Easier and faster insert services Resource pooling Scale efficiencies Able to build customer Fulfilling wants and needs relationships through cloud service Negative Latency- and bandwidth- Can have an impact on sales Users can be hindered in using related issues the service Use of the same piece of Sharing the same hardware hardware Security, compliance and Mainly in public cloud, loss of regulatory issues physical control
4.4 Opportunities Several opportunities of cloud computing can be identified:
Accelerating adoption
One of the main opportunities of cloud computing is accelerating adoption and creating more value. The top management of companies and the government need to understand how investments are useful and how value is added by cloud services without going into deep technical details. It is therefore important to have a clear value structure and to correspond primary and support activities in the cloud value chain (Mohammed, 2009). Also for developing countries cloud computing is an opportunity since companies in these type of countries do not have to perform high upfront investments.
34 The support of cloud solutions in manufacturing
Effective use of information technology
Secondly, governments and companies can benefit from the effective use of information technology (Marston et al., 2010). Cloud computing gives the opportunity to analyze, store and communicate ‘Big Data’. Big Data is referred to as volume, velocity and variety. It is data which is too big to process with the current tools; it arrives too fast for optimal storage and communication (Suciu, 2013). The forecast is that the amount of created information will highly increase, while the available storage for information will increase less (Carme et al., 2011). Therefore, it is important to provide a solution for this. Cloud computing offers an opportunity for Big Data, because all data is scalable and can be moved into and out of the cloud (Pandey and Nepal, 2013).
Reducing carbon footprint
Another opportunity of cloud computing is reducing the carbon footprint. Through the use of cloud computing companies will reduce their IT infrastructure and establish a smarter use of energy. This is because it is cheaper to transport computing services by the use of Internet than energy from IT systems and datacenters (Marston et al., 2010).
4.5 Risks This paragraph will state the risks of cloud solutions. Various risks can overlap with the mentioned negative elements of cloud solutions. This paragraph will explain the elements from a view of risks.
Risks of cloud computing are one of the most spoken aspects. Many enterprises fear for cloud computing, because of their feeling of risks which it possesses. Nevertheless, people should also think about the opportunities cloud computing offers and the business value it entails. The security of data and information is one of the most vulnerable properties of doing business in the cloud. Through the increasing use of cloud computing the resources and data will present a more attractive target to attackers. Also, through the increasing distribution of enterprises, the share of data with partners and the storage in the cloud it becomes increasingly difficult to assess and control the risks. The overall risk of a cloud service can only be assessed if all components and the relationship between the components of the service are understood (Gartner, 2013). Service providers can offer a higher level of service and security for private clouds than companies can themselves. Private clouds are more complex than traditional computing but their expansion is relatively low. Through this low expansion of private clouds, it makes these type of clouds more easily assessable compared to public clouds. In public clouds, there is a lack of transparency and this type of cloud is highly complex. This makes them most challenging for a risk assessment (Gartner, 2013). According to Gartner (2013) it is important that the segregation, integrity and availability of data are reliably maintained, so that everyone has access to its own data but not that of others. Many enterprises wary for the risks, but are these risks really the most important issues.
The following risks are defined:
Privacy, security and trust
One of the main threats of cloud computing is about privacy, security and trust. The data which is processed is not physically controllable since it can be anywhere in the cloud; therefore there is a threat of theft, misuse or unauthorized resale (Pearson and Yee, 2013). The confidentially of data, like customer data, has to deal with unauthorized access. Failures of the security in service providers and attacks by hackers are other types of threats (Jamil and Zaki, 2011). Enterprises do not have physical control over their data through the use of Internet. Therefore it is important to build up trust for the end-users to use cloud services. Both, privacy laws and adequate security protection of applications are important for the adoption of cloud services. The challenge is to create sufficient protection for the acceptance of cloud services (Pearson and Yee, 2013). The data is physically located in a particular
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country, therefore local rules and regulations are applicable. Most cloud computing vendors give end- users little control over where the data is stored. Thereby, in the US the government is allowed to demand access to data (Abadi, 2009). Regulations at local, national and international level are important to stimulate the adoption of cloud services. Transparency, remediation and assurance are important aspects for end-users to create trust and improve the brand image. Trust will lead to a greater willingness to start with using cloud services. This is especially the case when confidential or sensitive information is involved (Pearson and Yee, 2013). To create trust, it is important to regularly monitor services (Jamil and Zaki, 2011).
Possibility of backlash from entrenched incumbents
Another threat of cloud computing is the possibility of backlash from entrenched incumbents. Many forward-looking businesses will see cloud computing as an opportunity to migrate to better computing practices, while other business might see cloud computing as a risk to the security of their corporate activities. Thereby, smaller companies are quicker in adapting cloud services, while large companies have many concerns about handing over their operations to another company. (Marston et al., 2010).
Table 6: overview of opportunities and risks.
Opportunities Risks
Accelerating adoption Privacy, security and trust - Creating more value in businesses Possibility of backlash from entrenched Effective use of information technology incumbents - Scaling Big Data Reducing carbon footprint
36 The support of cloud solutions in manufacturing
Cloud Solutions
This chapter will answer the fourth sub research question “Which cloud solutions are available for the manufacturing market?” Companies that focus on the manufacturing market in cloud solutions (focused on SaaS) will be defined. After this, the available cloud solutions of these companies will be described. Besides describing well-known service providers, the focus will also be on service providers which focus on niche markets. These service providers can provide opportunities in for example collaboration with Atos. Therefore, it is preferred by Atos Consulting to also focus on niche markets.
5.1 Background Cloud accelerates among manufacturers; over 44 per cent uses cloud applications like collaboration and communication services in their production nowadays (Knickle and Little, 2013). The greatest investments for manufacturers related to SaaS are in collaboration tools, with the preference lying in private clouds instead of public clouds. 45 per cent is planning to use private cloud applications. According to Knickle and Little (2013) manufacturers will show a further interest in cloud solutions in the phase of building, testing or deploying services and developing a cloud strategy or projects in the future. Research of Knickle and Little (2013) described that most referenced vendors for manufacturers of SaaS solutions are Cisco, Google, Microsoft and SAP. First the SaaS solutions, referred to communication and collaboration, of these service providers will be described, except the solutions of SAP. These solutions will be described later in this chapter when referring to ERP cloud solutions.
5.2 Communication & Collaboration cloud solutions Since communication and collaboration are important in every business, these solutions are also included. These solutions do not directly refer to a specific information system, therefore they are separately mentioned.
Cisco – WebEx Cisco is strongly positioned as a leader in both system architecture and solution development for cloud based collaboration. The company offers highly scalable services in combination with the ‘only pay for what you use’ model. This enables to quickly respond to changes in business needs (Chilton, 2012). Cisco developed the SaaS solution WebEx. This solution enables people to collaborate in companies by online meetings and sharing files, information and expertise. Therefore, this solution can increase productivity and keeps people connected (Cisco WebEx, 2013a). WebEx provides solutions for meetings, sales, training, webinars and remote support (Cisco WebEx, 2013b). Solutions for meetings include tools as scheduling meetings, upload files, chatting and sharing the agenda, notes and recordings. WebEx meeting spaces are delivered through the Cisco WebEx cloud which ensures security and program scalability so that people all over the world can use the solution and participate in meetings and trainings (Cisco WebEx, 2013c). Online training can be given via WebEx. Real time presentations and applications can be shared among applicants of trainings, which can also be recorded (Cisco WebEx, 2013d). An example of the application of WebEx is that of Kohn Pederson Fox Associates. This is an architecture company. The company searched for a solution to collaborate with geographically dispersed teams in a more cost-effective way. WebEx created a more efficient and cost-efficient communication between the international offices and their clients. The availability of tools and features in WebEx during meetings, like data sharing and the use of video provided the solution for the problem. Models can be presented in 3D or other forms to demonstrate to colleagues or clients. Thereby, the cloud solution can also be used on tablets or mobiles e.g. and everywhere Internet connection is available. The use of WebEx increased the productivity of this company due to this global collaboration strategy (Cisco, 2011).
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Google Google provides many SaaS solutions for businesses. These are solutions like Gmail, Google Agenda, Google Drive, Documents, Hangouts, Google Sites and Google Vault Apps. All these solutions can be used online, no installation is necessary. Thereby, all solutions are also for free (Google, 2013). Gmail is designed to improve productivity. An amount of 30GB data can be saved, to keep all (important) e-mails. Gmail also has the opportunity of online video- text or voice chat (Google, 2013). Google Agenda gives an overview of all meetings, including reminders, and is coupled with Gmail. Third is Google Drive, this solution provides the ability to upload documents online to work anywhere, anytime and share documents with selected colleagues. Changes in documents are directly saved online. Furthermore, Hangouts provide the possibility to send messages and have video- or audio conversations. Multiple people can be involved in the chat or conversation. Hangouts are also coupled to the Google Agenda and Gmail. Google Sites enables to share workspaces for teams online. People can select who can use the site and who cannot. (Team-) sites can be built to organize documents. Google Vault provides functionalities whereby selected e-mails have legal data retention. Rapports can also be made to provide insights of the user activity and searches (Google, 2013). As can be concluded from all descriptions above, the solutions of Google mainly focus on collaboration and the easiness to share information.
Microsoft – Office 365 Office 365 is a SaaS solution developed by Microsoft. This solution provides the most popular productivity- and cooperation- office programs, including updates. A monthly fee is required for using this solution. Office 365 can be used on computers, mobile devices or online (Microsoft, 2013a). Office 365 consists of two varieties; small businesses and enterprise. Both solutions offer the same basics, but differences are in terms of licensing and configurability. The Enterprise solution provides more advanced features for integrating into the existing on premise network solution (Collins and Mayberry, 2012). The programs are cloud-versions of Exchange Online, Sharepoint Online, Lync Online and Office Professional Plus. Office Professional Plus consists of applications like Word, Excel, Outlook, Powerpoint and Access. The cloud applications can be used via the web browser. Nevertheless, the cloud applications do not consist of all possible functionalities which other office programs have (Microsoft, 2013b). A cloud application of the Exchange Server can be matched to Outlook. Thereby, Office 365 offers access to e-mail, documents, contact persons and agenda’s. The mailbox is standard equipped with a storage availability of 25 GB. Exchange online is also automatically protected against spam and viruses by Microsoft Forefront Online Protection for Exchange (Microsoft, 2013c). Sharepoint online provides the ability to build sites to share documents and other information. Documents can be saved and online collaboration in teams is possible via team sites. The admission of people in team sites can also be managed (Microsoft, 2013b). Lync Online enables online communication and interaction via instant messaging, audio- or video- conversation and online meetings. Also an online whiteboard exists of one of the possibilities of Lync Online (Microsoft, 2013c). Through all different online solutions, Microsoft extends the power of exchange and meeting the needs of companies, due to real-time communication possibilities value is given to businesses (Collins and Mayberry, 2012).
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Table 7: overview of communication and collaboration cloud solutions.
Communication and Collaboration Cloud Solutions Cloud Solution Cisco WebEx Google Microsoft Office 365 Functions -online meetings Gmail; increase -productivity- and -sharing files, information, productivity, 30 GB, cooperation- office expertise, online voice-, video-, programs text- chat -coupled to Outlook Solution for; sales, meetings, trainings, webminars, remote Google Agenda; Outlook; 25 GB, e-mail, support meeting overview, agenda, contact persons, reminders, coupled with documents Tools; scheduling meetings, Gmail uploading files, chatting, Google Drive & Sharepoint ; share sharing, recording, meeting Documents; upload and information and spaces share documents documents, use of team sites Hangouts; send messages, video-, Lync; online audio- conversations communication and with multiple people, interaction, instant coupled with Gmail and messaging, audio-, Google Agenda video- conversation, online meetings, use of Google Vault Apps; e- whiteboard mails which have legal data retention, reports
5.3 ERP cloud solutions Nowadays, CIOs experience a continuous pressure to adopt an ERP cloud solution. Due to the growing demands of global businesses, the increasing need for industry-specific functionality and the expanding use of newer technologies, like SaaS, are key forces to reshape the ERP market (Martens and Hamerman, 2013). Businesses should develop an ERP cloud strategy to make appropriate strategic decisions regarding ERP. The strategy should not be only based on the functionalities of the cloud solutions at the moment, but also in future perspective for the company (Guay, 2013). Research of Nucleus (2012) concluded that small- and medium sized companies find it important to have an ERP solution which focuses on managing growth and costs. Nevertheless, there will never be a perfect match between the functions provided and a company’s specific needs. This is due to changes in organizations whereby business processes also change. Businesses need flexible software (Martens and Hamerman, 2013). The figure below is adapted from a survey of Forrester among 826 companies, where the plans of adopting business solutions are showed (Martens and Hamerman, 2013). These business solutions refer to applications. As this overview shows, companies give various answers; no clear similarities can be distracted. Nevertheless, finance and accounting software, ERP software, CRM software and software that support a specific business process are mostly planned to implement or expand. Businesses are enticed to the apparent low cost, streamlined implementation timelines and advanced technology of ERP cloud solutions. An opportunity can also be to implement parts of cloud ERP, like CRM, in business. Thereby, businesses should also consider the type of cloud they would like to use, e.g. public or private cloud (Guay, 2013). Forrester (2013) distinguishes several ERP vendors who provide SaaS solutions for the manufacturing market; Epicor, Infor, Microsoft, NetSuite, Oracle, Plex Systems and SAP (Martens and Hamerman, 2013). Epicor and NetSuite are listed in the top five best discrete manufacturing ERP solutions by Business-Software.com as these solutions are robust and proven in this industry (Chang, 2013).
39 The support of cloud solutions in manufacturing
Figure 6: plans to adopt business solutions of companies (Martens and Hamerman, 2013).
Epicor Epicor Express is a comprehensive SaaS solution developed for small and mid-size manufacturers. The solution provides the ability to manage customers and contacts, opportunities and orders, products and production, shipping and receiving and accounting and payroll. Epicor Express is an on-demand ERP solution. The solution supports various manufacturing processes and types in small and mid-size businesses. The benefits of Epicor Express are in the functionality and the affordable price it provides. Also, the solution minimizes complexity. All applications are provided in one integrated system. Data is shared across the applications and new information and changes are immediately propagated through the system (Epicor, 2013).
Infor Infor SyteLine provides tools for sales and relation management, production, supply chain, inventory, financial applications, service management and quality. Sales and relation management refers inter alia, to the possibility of finding possible clients and the order placement. Infor SyteLine is able to integrate sales and customer service processes. The module advanced planning and scheduling takes care of the materials and processing of orders. This solution should be able to monitor the inventory and material management. Users are also able to choose their own preferences. This cloud solution is applicable in all types of manufacturing, but mainly focused on discrete manufacturing as it is developed through specialists in this field. Infor SyteLine is developed for the purpose of extensibility. The system can be adapted on the business processes of the company (Infor, 2013).
Microsoft – Microsoft Dynamics ERP The solutions of Microsoft Dynamics (AX & NAV) can be used on-premise or via the cloud. Microsoft Dynamics can be applied by small- and medium sized companies, but also by global companies. Microsoft Dynamics AX and Microsoft Dynamics NAV are both ERP solutions. Both offer industry- specific functionalities and are able to manage complex supply chains and inventory. Overall, Microsoft Dynamics NAV is designed for small- and medium sized companies, while Microsoft Dynamics AX is designed for large, international companies. NAV has the ability to scale and easy customization, although AX is better equipped to address the specific size and scale challenges of organizations (Pyden, 2011). Microsoft NAV focuses on functions as finance and accounting, HRM, production, SCM, project management and CRM. Beneficial developments of Microsoft in this type of
40 The support of cloud solutions in manufacturing
solution are possibilities of using analysis, collaboration and communication tools. Also, investments in usability as a more intuitive interface and investments in implementation resources are beneficial developments of Microsoft for small- and medium sized companies (Nucleus, 2012). An example of a company who experienced the advantages of an ERP cloud solution of Microsoft is the company Mays Mission. This company provides services and employment for handicapped people. Implementing a Microsoft Dynamics solution in the cloud resulted in more flexibility and productivity as employees have the ability to work everywhere. Also through saving and managing data in the cloud, no back-ups need to be made which used to be locally stored on a DVD. Therefore, also the data security improved. Furthermore, improved controllability through digital information and lower costs because of using the cloud are other improvements through the cloud solution of Microsoft (Nucleus, 2012). Like Microsoft Dynamics NAV, Microsoft Dynamics AX provides applications as finance, human resource management, production etc. Dynamics AX has possibilities to streamline global operations and meet local regulatory requirements. Microsoft also focuses on the interaction of business and productivity applications and communications solutions. Microsoft Dynamics AX has specific benefits for the manufacturing industry; the solution enables companies to drive innovation and meet consumer needs, enables speed and agility and empowers people through operational intelligence (Microsoft, 2013d).
NetSuite – NetSuite ERP NetSuite ERP and NetSuite OneWorld are two available ERP SaaS solutions (Martens and Hamerman, 2013). NetSuite ERP is a solution where in one system accounting, several business operations as financial management, CRM, inventory and e-commerce are included. This solution is able to automate all back-office processes across financial management, revenue management, fixed assets, order management, billing and inventory management. The solution can easily be integrated with other systems (NetSuite, 2011a). Netsuite ERP provides industry specific editions for manufacturing or wholesale distributors to meet industry specific needs. The focus of this solution is in efficiency and cost reductions. Also, financials possibilities are highlighted, the solutions is able to manage a large part of the order-to-cash process. This includes providing financial reports, analytics, revenue calculations and monitoring and converting sales orders and routes (NetSuite, 2011a).
Figure 7: possibilities of NetSuite ERP regarding financials and the integration with other systems (NetSuite, 2011a).
NetSuite – NetSuite OneWorld NetSuite OneWorld is a cloud ERP solution for global businesses. This solution delivers global business management and financial consolidation to mid-sized companies and divisions of enterprises that manage multinational and multi-subsidiary business. NetSuite OneWorld enables companies to easily manage subsidiaries and business units from a single cloud-based system. All aspects of the business are real-time visible, e.g. through the use of reports. NetSuite OneWorld comprises ERP, CRM, ecommerce and professional services and aligns operations across finance, sales and service (NetSuite, 2011b). Professional services take care of managing global resources more efficiently, improve on-time delivery and drive overall services profitability. NetSuite OneWorld also possesses several tools to accelerate financial processes. With these tools businesses can adjust for currency, taxation and legal compliance differences at the local level. Other tools relate to the multi-currency
41 The support of cloud solutions in manufacturing
business consolidation, accounts receivable and payable, billing and invoicing. This extends from local to global operations (NetSuite, 2011b). As the solution is a cloud solution, it is also less costly and attainable everywhere Internet is available. Furthermore, the solution has, like NetSuite ERP, the ability to meet and adapt specific industry requirements (NetSuite, 2011b).
Oracle - Oracle ERP Cloud Service Oracle ERP Cloud Service is the Saas model of Oracle for ERP. This solution includes financials, planning and budgeting, risk and controls management, procurement and sourcing, inventory and cost management, product master data management, and project portfolio management. This service is developed for global enterprises with multi-currency, multi-language, and multi-subsidiary capabilities. Oracle describes benefits of the Oracle ERP Cloud Service as having less upfront costs, less investment risks and more informed and data-driven business decisions of their ERP Cloud Service (Oracle, 2013a). Oracle states that an ERP Cloud Service should be flexible to create agility, insightful decision making, greater productivity, lower costs and improved ability to innovate (Oracle, 2013b). Specific ERP applications can be deployed depending on the business. The SaaS solution can be built on the platform of Oracle for cloud solutions (Oracle, 2013b).
Plex Systems – Manufacturing Cloud Plex Manufacturing Cloud is the cloud solutions of Plex System related to ERP. This solution helps companies control the shop floor and inform on the top floor. Plex Manufacturing Cloud has a comprehensive and integrated set of solutions. Plex Manufacturing Cloud focuses on data security and the agility of the cloud solution. The solution also focuses on different needs per type of manufacturing industry. As continuous innovation is important in the high-tech industry, the Plex Manufacturing Cloud focuses on the product lifecycle and the improvement of the quality through electronic control plans for example. While the focus in consumer goods inter alia is in tracking and tracking, quality management and batch production due to the fact that consumer goods are perishable goods (Plex Systems, 2013a) (Plex Systems, 2013b).
SAP – Business ByDesign SAP created the Business ByDesign cloud based solution, which is an on demand business management solution that can run your whole enterprise and study the data in analytics. This solution is especially designed for SMEs and subsidiaries of multinationals that want to grow profitably (SAP, 2013a). ByDesign helps to streamline and optimize every key area of the business as figure 8 shows. Therefore, ByDesign can be assigned as an ERP cloud solution. It provides transparency and control. ByDesign is a single, comprehensive solution which provides an end-to-end integration for all business areas. A key element of ByDesign is the ability of pulling related business activities together to provide the possibility of focus on a set of tasks that belong together. SAP manages the software of this SaaS solution. The solution is designed to meet individual user roles and needs, the solution empowers employees. This is due to the 360 degree view of the business. It enables companies to identify areas for improvement, innovation and differentiation (SAP Business ByDesign, 2008). Agility of the solution is another aspect SAP points out. As the solution easily can implement requirements and individuals can communicate with each other by dynamically linking communication channels, it enables companies to operate in a dynamic environment. SAP argues that their solution is efficient and enables productivity and co-innovation through collaboration and communication inside and outside the business. It also simplifies IT and facilitates compliance with shifting in regulations and optimizes business processes. The software runs automated checks to defect problems and updates (SAP Business ByDesign, 2008).
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Figure 8: overview of all supporting key areas of Business ByDesign.
SAP – Financials on Demand Another ERP cloud solution of SAP is Financials on Demand (Martens and Hamerman, 2013). This solution is developed for finance agility to improve efficiency and strengthening financial controls. Financial reporting standards can be used for local and global requirements. Efficiency can be improved by streamlining accounting processes. Financial data can be used for strategic insight in the business, like the cash-flow and liquidity. Costs can be controlled and compliance can be improved with corporate policies (SAP Financials on Demand, 2013). Financials on Demand can account for better visibility into spending trends and reducing travel costs and complexity (CFO, 2013). As can be concluded, this solution focusses on one part of the functions of ERP, financials.
43 The support of cloud solutions in manufacturing
Table 8: overview of ERP cloud solutions.
ERP Cloud Solutions Cloud Epicor Infor Microsoft AX & NetSuite ERP NetSuite Oracle ERP Plex Systems SAP Business SAP Financials solu- NAV OneWorld Manufactur- ByDesign on Demand tion ing cloud -manage -manage AX & NAV -automate all -comprises -manage - focusses on -360 degree -focus on customers & sales & -manage back-office ERP, CRM, financials, data security view finance agility contracts, relation finance & processes ecommerce planning and and agility to improve opportunities manage- accounting, across and budgeting, -focus on efficiency and & orders, ment, HRM, financial profession- risk and -focus on creating strengthening production & production, production, management, nal controls different improvement, financial products, supply SCM, project revenue services management, needs per innovation and controls shipping & chain, management, management, and aligns procurement type of differentiation receiving, inventory, CRM fixed assets, operations and sourcing, manufacturing -better visibility accounting & financial order across inventory and industry -agility into spending pay roll application Microsoft AX management, finance, cost trends and s, service -streamline billing, sales and management, -one -efficient and reducing travel -functional manage- global inventory service product integrated enables costs and ment & operations - management master data system productivity complexity
-affordable quality meet local -global management, and co-
regulatory -industry business and project -comprehen- innovation -minimizes -mainly requirement specific manage- portfolio sive solution complexity focused on -drive editions ment and management -one
Functions discrete innovation financial integrated -one manufactur -meet -efficiency & consolida- -multi- system integrated -ing consumer cost tion to currency, system needs reductions mid-sized multi- -comprehen- -purpose of -enable speed companies language, and sive solution extensi- and agility -manage a and multi- bility large part of divisions subsidiary Microsoft order-to-cash capabilities -one NAV process -industry integrated -analysis, specific -industry system communi- -one editions specific cation and integrated editions collaboration system -focus on potential investments
44
5.4 MES cloud solutions Compared with the other types of cloud solutions, MES solutions are not very extensively supplied by cloud providers. Nevertheless, two MES solutions will be described below. The first solution mainly focuses on discrete manufacturing, while the second solution focuses on all types of manufacturing. iTAC iTAC was the first company who provided a MES solution in the cloud (BusinessWire, 2011). This solution can be adapted by all sizes of companies, especially by dynamic companies. When looking at the manufacturing markets, the MES solution of iTAC mainly focuses on the discrete manufacturing. The solution is available in the public cloud so that small and medium enterprises can benefit from the advantages of using MES. Nevertheless, the solution is also available in the private cloud (for larger sized companies). The solution can be customized according to the preferences of the buying company (iTAC, 2013). Unfortunately, no specific functions of the MES solution are mentioned by iTAC.
Lighthouse systems – Shopfloor-Online MES This company provides a modular Shopfloor-Online MES solution which provides a complete and real-time view of all aspects of Manufacturing Operations Management. Thus, this solution focuses specifically on the manufacturing industry, mainly aerospace, automotive, medical devices and packaging. Shopfloor-Online MES is targeted at the Plant Operations layer and able to interact with the ERP system and other plant systems. Shopfloor-Online MES has specific functionality modules in production operations, inventory operations, quality operations and maintenance operations (Lighthouse Systems, 2012a). In the automotive industry for example, Shopfloor-Online MES can collect and check data from all sources and measure and monitor the performance. Thereby, the Shopfloor-Online MES solution relies also on providing better process management, track process capability and provide data to support cost reductions and design (Lighthouse Systems, 2012b).
Table 9: overview of MES cloud solutions.
MES Cloud Solutions Cloud Solution iTAC Lighthouse systems – Shopfloor-Online MES Functions -focus on discrete -manufacturing manufacturing operations management
-public and private -modules in production cloud operations, inventory operations, quality -customizable operations and maintenance operations
5.5 PLM cloud solutions Below, two different PLM solutions will be described which are defined on the basis of the overview of cloud solutions business-software.com provides of the top PLM of software vendors (business- software.com, 2013). Two SaaS solutions are defined in this top 10, Windchill Flex PLM and ProductCenter PLM of SofTech.
PTC - Windchill Flex PLM The Windchill Flex PLM cloud solution focuses on consumer products, retail, footwear and apparel industries. The solution provides PLM specifications like line planning, specification management and merchandizing to manage the assortment of products. Flex PLM enables global project teams to work more efficiently and productively. The solution provides a centralized product repository to share and control all product information throughout the value chain. Integration with other systems is also possible, like tools to design new products. The integration will increase the
The support of cloud solutions in manufacturing
efficiency and reduce the cycle time as product data is everywhere and easily available. This increases also the speed of decisions which need to be made, as everybody is easy informed (PTC, 2013).
SofTech – ProductCenter PLM SofTech concentrates on PLM. According to Business-Software.com (2013) it is one of the best PLM solutions. The PLM SaaS solution of SofTech focuses on all types of product manufacturers. SofTech provides six PLM components; document management, design integration, configuration management, process management, product collaboration and enterprise integration (SofTech, 2014). The document management SaaS component provides accessibility, visibility and control to manage information. Thereby, this component also connects all forms of product information. Design integration interfaces with CAD and supports applications like Microsoft Office which results in a wider adoption of PLM. The component configuration management maintains an integrated bill of information which consolidates and links information to design, produce and the support of products. The component process management standardizes and automates product development and processes in combination with controlling regulatory requirements. One of the last components, product collaboration connects employees, customers and suppliers online to obtain creative input and facilitate solutions for products. Lastly, enterprise integration enables exchange of product data with other IT systems (SofTech, 2014).
Table 10: overview of PLM cloud solutions.
PLM Cloud Solutions Cloud Solution PTC – Windchill Flex SofTech – PLM ProductCenter PLM Functions -focus on consumer -focus on all types of products, retail, product manufacturers footwear and apparel industries -focus on six PLM components; document -manage line planning, management, design specification integration, management and configuration merchandizing to management, process manage the assortment management, product of products collaboration and enterprise integration -centralized product repository
-integration with systems
5.6 SCM cloud solutions SAP, Oracle and JDA accounted for 48.5 per cent of the supply chain software market in 2011 according to the analysis of Gartner. (Trebilcock, 2013). These are the most chosen and well- known cloud providers. Below, an overview of selected SCM cloud solutions specifically focused on a part of SCM of a type of industry will be given. These providers are more focused on SCM cloud solutions.
IFS supply chain A cloud solution which need to be considered is IFS (Business-Software.com, 2012). IFS supply chain cloud solution provides the possibility to select the broad and deep industry-specific functionality which is needed to create a matching supply chain management solution. The solution has the ability to choose if the supply chain needs to be demand-driven or driven by forecasts. Thereby, sourcing options can be implemented based on the sourcing strategy. An up- and downstream integration is also possible. Through the visibility, there can be quickly and efficiently
46 The support of cloud solutions in manufacturing
responded (IFS, 2010). Furthermore, the solution has tools for production and procurement planning, a mixed-mode manufacturing of for example MTO and MTS and functionalities to control costs and have the environmental performance. Below, an overview is given of a wide-range of (inter alia SCM) IFS possible applications in the cloud solution (figure 9) (IFS, 2010).
Figure 9: overview of IFS applications (IFS, 2010).
InfinityQS – ProFicient on Demand The solution of InfinityQS focuses on supplier quality management. Through the use of ProFicient on Demand real-time supplier quality data can be seen and analyzed from the shop floor. This enables companies to proactively manage quality issues at the source, before the product is distributed. Furthermore, the solution provides transparency by providing real-time statistical analysis and visibility of quality data while products are still at the suppliers’ facility (InfinityQS, 2013a). One of the companies who implemented this solution is Ben & Jerry’s to streamline the quality control procedures. Through the function of Manufacturing Intelligence by tracking variability across each production line quality can be monitored. This resulted in improving the run capability and raw material usage (InfinityQS, 2013b).
Table 11: overview of SCM cloud solutions.
SCM Cloud Solutions Cloud Solution IFS supply chain InfinityQS – ProFicient on Demand Functions -focus on process manufacturing -focus on supplier quality management -tools for production and procurement planning, a mixed-mode manufacturing of for -proactively manage quality example MTO and MTS and functionalities to issues at the source control costs and have the environmental performance -real-time statistical analysis and visibility of quality data -choose if the supply chain needs to be demand-driven or driven by forecasts
-sourcing options through sourcing strategy
-up- and downstream integration
47 The support of cloud solutions in manufacturing
5.7 CRM cloud solutions A large number of CRM cloud solutions are presented by many cloud providers. Most solutions focus on marketing, sales and customer services which are suitable for many different types of manufacturing companies. First, the solutions of two large cloud providers, who also supply CRM solutions, will be described. Furthermore, other specifically focused CRM solutions will be stated.
Microsoft – Microsoft Dynamics CRM Microsoft focuses in its solution on three aspects, sales, marketing and customer service (Microsoft, 2013d). Sales encourage keeping sales teams connected. Internal and external communities are possible which can share information about sales and obtain real-time information about customers (Microsoft, 2013e). In customer services the focus is on efficiency. Cases need to be sold cost effective and easy. Customer complaints and issues can be tracked and managed by correspondence, documents, contracts, conversations and follow-ups. The solution consists of workflows which enable business process automation. This will streamline processes. Another tool related to customer service is the contact center which enables direct contact with customers (Microsoft, 2013f). Furthermore, engagement channels by means of telephone conversations, self-services on the web where customers can solve for answers to solve their problem, chatting with the customer and communities where customers can help each other are all tools which are included in dynamics CRM (Microsoft, 2013g). This solution also provides marketing insight through marketing analytics where customers can be targeted and segmented. Thereby, tools are provided which can help planning, creating, managing, executing campaigns, guarantying digital assets are correct and up to date and ensuring the right people are working on a specific task (Microsoft, 2013h).
SAP SAP offers various solutions for CRM like a sales solution, service solution and precision marketing in the cloud. The sales solution of SAP provides and enables people to manage information about customers. A sales automation and collaboration tool is also available (SAP, 2013b). SAP cloud for service gives customers options for multiple sales channels, including agents to interact and provide help to customers. Social media channels are also available to provide services. A self-service support portal gives customers full control from a self-service support portal. Thereby, this and the sales solution can also be integrated with SAP ERP (SAP, 2013c). SAP precision marketing informs customers and influences their shopping behavior. Also, personalized offers across multiple channels can be given (SAP, 2013d).
Pipedrive One of the niche players related to CRM cloud solutions is Pipedrive (Reuters, 2013). The CRM solution of Pipedrive exists of different tools. It mainly focuses on CRM sales. At first the solution shows the sales pipeline, different sales stages are displayed to see on which stage the focus need to be. It is also possible to see the pipeline of individuals, specific products and timelines. Secondly, the solution also includes a time line view. This shows the (potential) results of the company in the past, present and future. Thereby this tools also gives an indication in which stage the potential deal is and if the deal is a ‘win’ or a ‘lose’. Finally, reporting of sales is also possible in the Pipedrive solution (Pipedrive, 2013). Other tools of Pipedrive are the ability to integrate with Google Apps, Google Drive and Google Maps. For example, an event can both be displayed in Pipedrive and Google Calendar. E-mails can also appear in Pipedrive. Furthermore, Pipedrive exists of a multi-language and multi-currency and the ability to use this solution also on your mobile. Finally, each company’s data is stored in a separate database to minimize leaks into other company’s databases (Pipedrive, 2013).
Zendesk The CRM solution of Zendesk provides tools for community collaborations and discussions and a customer portal where the support history of customers can be showed. Conversations can be held internally among employees and externally with customers. Customer communication can be taken from anywhere to one profile by Zendesk so that the support team can see everything in one place.
48 The support of cloud solutions in manufacturing
The customer uses the communication channel they prefer (Zendesk, 2013). A ticketing system is also included to filter conversations which are important. Customer profiles can be seen and a help center can be used (Zendesk, 2013). The customer satisfaction and the performance can also be measured by analytics. Custom reports can be created which provide insights. Research showed that 89 per cent of manufacturing and computer hardware companies are satisfied with the solution of Zendesk (Zendesk Benchmark, 2013).
Update The CRM solution of Update is available in several industry-specific solutions. Update has opted for a multi-instance approach for the SaaS model. In this model each consumer has their own application, which will protect the consumer as the application is not shared with other consumers and therefore data cannot be mixed (Strayhammer and Jobstmann, 2013). The solution of Update consists of sales, marketing and service processes. All customer data can be viewed and will be updated in the solution. Related to marketing processes, multi-level campaigns can be planned, executed and measured through the lead and campaign management feature. Sales tools like opportunity management and sales forecast analysis are also available. Customer inquiries can also be managed through the overview which is generated in the Update CRM solution (Update, 2013).
Table 12: overview of CRM cloud solutions.
CRM Cloud Solutions Cloud Microsoft SAP Pipedrive Zendesk Update Solution Dynamics CRM Functions -focus on sales, -solutions in; -focus on -tools for -solutions in; marketing and sales, service CRM sales community sales, customer and precision collaborations marketing service marketing -shows the and discussions and service sales pipeline processes -internal and -manage & different -internal and external information sales stages external -managing communities about communications customer data customers -time line & inquiries -customer view of -ticketing complaints and -multiple results system -managing of issues can be sales multi-level tracked and channels -sales -measuring campaigns managed by reporting customer correspondence, -self-service satisfaction and -opportunity documents, support -integration performance by management, contracts, portal with other analytics sales forecast conversations applications analysis and follow-ups -integration -custom reports with SAP ERP -multi- -separate -contact center language and application -precision multi- -engagement marketing currency channels -separate -marketing database analytics
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5.8 Analysis IT systems and cloud solutions On the basis of the researched IT systems in this report and the described cloud solutions an analysis will be made between the studied IT systems and cloud solutions.
As can be determined when analyzing the functions of IT systems and cloud solutions, the focus is narrower in cloud solutions. Cloud solutions are most of the time more focused on a specific manufacturing market and/or small- and midsized companies or larger companies. The focus on small- and midsized companies or larger companies accounts mainly for ERP cloud solutions, while the focus on a specific manufacturing market account for all types of cloud solutions. For example, some providers of ERP cloud solutions indicate that they focus on small- and midsized companies or larger companies. the MES cloud provider iTAC focuses for example on discrete manufacturing and also the solution of PTC focuses on consumer products, retail, footwear and apparel industries. Furthermore, agility is only mentioned in cloud solutions and not in IT systems. This is because cloud solutions can easily and fast be up- and downscaled and modules can be added to the cloud solution, while this is not the case in IT systems. Thereby, as cloud solutions are available everywhere Internet is available; the agility is much higher than in IT systems.
When analyzing the defined functions of ERP systems and the ERP cloud solutions several gaps and similarities can be defined. Most functions can both be identified in ERP systems and ERP cloud solutions like, sales, financial & accounting, planning, quality management and HR functionalities. When comparing the MES IT system and cloud solutions of MES, it is difficult to compare the functions as the cloud solutions are not extensively described. Similarities between both types are the functionalities in operations. Unfortunately, the other functions cannot be analyzed. Various defined functionalities of the PLM IT system and PLM cloud solution correspond to each other like the management of projects, products and processes, configuration management and design integration. Functionalities of the PLM cloud solutions like document management and product collaboration are not unilaterally formulated in the PLM IT system. Functionalities like total lifecycle costing, lifecycle environmental impact analysis and service and maintenance data reuse at product development are specified in PLM IT systems also, but not in PLM cloud solutions. When comparing, it seems like PLM IT systems have more functionalities than the cloud solutions of PLM. This element might be applicable for all cloud solutions as they are relatively new. Cloud providers are still further developing the cloud functionalities. Both the SCM IT system and cloud solutions provide functionalities related on processes to the flow of materials. Both, IT systems and cloud solutions appear to focuses on the optimization of activities and providing information related to the material and transportation flows in companies. SCM cloud solutions appear to focus on specific SCM processes for which specific functionalities are designed like the production and procurement planning. Finally, as can be distracted from the defined functionalities of the CRM IT system, this system focuses on functionalities in sales, marketing and services while this varies among the cloud solutions. Some cloud solutions also focus on all these three aspects, while other cloud solutions only focus on specific functionalities of one of two of these aspects. In short, advantages of cloud solutions are in the overall characteristics. The functionalities can be less extensive as they are in IT systems as the functionalities of cloud solutions are still developed. Nevertheless, IT systems remain in defects in their agility, scalability and availability.
Conclusion Overall, many cloud providers do exist who most of the time focus on more than one specific type of cloud solution. The supply of cloud solutions is very extensive and it can be hard to differentiate the functionalities of the solutions. Therefore, it might be difficult for potential users of cloud solutions to decide which solution fits best for their type of company. This might also explain why the research of Knickle and Little (2013) showed that most referenced vendors for manufacturers of SaaS solutions are Cisco, Google, Microsoft and SAP, as this are well-known IT companies. Mainly all cloud providers claim that their solution will lead to more efficiency and a higher productivity in business activities, especially in cloud solutions related to communication and collaboration and ERP. It seems like PLM solutions frequently focus on consumer products in retail,
50 The support of cloud solutions in manufacturing
footwear and the apparel industry. PLM cloud solutions might be appropriate for these type of industries were frequently products are designed. CRM solutions are solutions where the focus is principally on sales, marketing and customer service. This type of cloud solutions tries to integrate many different functions related to these activities. No specific distinction can be made between large and smaller cloud providers in the provided functions of CRM solutions.
51 The support of cloud solutions in manufacturing
Theoretical Framework
Process Functions Cloud Characteristics of
Manufacturing; Solutions Cloud Solutions -chemicals -inbound -communication -pricing logistics (B) -investments & collaboration (D) Discrete -operations -ERP -agility Manufacturing; (A) -outbound -MES -network access -high-tech & logistics -PLM -scalability electronics -marketing & -SCM -latency- and -automotive sales -CRM bandwidth related -service issues -firm -use of the same Consumer Goods infrastructure hardware Manufacturing; -technology Company IT -security, compliance -food & beverages development systems and regulatory issues -HRM (C) -standards -procurement -ERP -MES Opportunities; -PLM -adoption
-SCM -creating value in -CRM businesses -effective use of information technology -carbon footprint Risks; -privacy, security and trust -possibility of backlash from entrenched incumbents
52 The support of cloud solutions in manufacturing
6.1 Theoretical Framework The theoretical framework is designed on the basis of the literature study. The aim is to explain the relations of the different parts in the theoretical framework. The framework is used to formulate the interview questions for the empirical study to test the assumed linkages and elements.
Relation A: The functions which cloud solutions and IT systems possess vary according to the manufacturing types, process, discrete and consumer goods manufacturing.
IT systems of a manufacturing company and the possible used cloud solution(s) have various functions that can be defined. A MES system will have functions in operations and infrastructure while a CRM system can have functions in marketing, sales and service. Specific functions of a CRM system in marketing can be collecting information about customers’ behavior and segmenting customers. Depending on what is important for the manufacturing company, different IT systems and/or cloud solution(s) will be used which have functions necessary for performing the business activities.
Relation B: Each cloud solution has different and specific functions which give specific support to the operational business processes in the defined types of manufacturing markets, process, discrete and consumer goods manufacturing.
Relation C: All IT systems have different and specific functions which give specific support to the operational business processes in the defined types of manufacturing markets, process, discrete and consumer goods manufacturing.
As described in the literature study, cloud solutions exist of several characteristics, opportunities and risks. The literature study describes both positive and negative characteristics for service providers and end-users. These characteristics and possible opportunities and risks can influence the choice of manufacturing companies to decide if they are going to use cloud solutions and for what kind of IT system. For example, the security, compliance and regulatory issues are very important if sensitive data will be set in the cloud. Therefore, an ERP system might be less attractive to put in the cloud as it contains the core, and hence sensitive, data of businesses central activities compared to a cloud solution which supports communication and collaboration.
Relation D: Cloud solutions possess various cloud characteristics, opportunities and risks in which the importance vary per type of cloud solutions and type of manufacturing market.
53 The support of cloud solutions in manufacturing
Methodology
This chapter will provide an overview of the methodology for the empirical part of the research. The research strategy regarding the interviews will be stated to explain how the appropriate data is obtained. First, the data sources will be described. Further on, details about the interviews which are conducted will be given. The validity and reliability will also be described.
7.1 Data sources Interviews were conducted to obtain qualitative data. The aim of the interviews was to create insights in the designed elements of the theoretical framework. These questions related to elements like the functions of IT systems and cloud solutions, the used IT systems and cloud solutions and the characteristics, opportunities and risks of cloud solutions. These questions resulted in information about the defined requirements of cloud solutions, and the choices of cloud solutions. Companies in three different types of manufacturing markets were interviewed. This resulted in various outcomes per company and also per type of manufacturing market (process, discrete, consumer goods). Finally, the interviews were also used to validate the findings in the literature study.
As this research focuses on the manufacturing market, manufacturing companies were interviewed. The companies that were interviewed are key accounts in the manufacturing market of Atos Consulting. As Atos Consulting already has relationships in the selected manufacturing companies it was more likely that the companies accepted the interview. Manufacturing companies from all different types of manufacturing markets which are defined in this research were interviewed to get an overview of the opinions of various companies in different types of manufacturing companies (table 13). This led also in interesting results where different outcomes are seen in the different types of manufacturing markets.
7.2 Method of disclosure This paragraph will state the method of disclosure. The sampling and interview design will also be described.
The method of disclosure was qualitative interviews, if possible face-to-face interviews. Thereby, the interviews were also flexible; it was possible to deviate from the interview protocol by changing the questions order or asking additional questions that result from the respondent’s answers. The use of qualitative interviews aimed for detailed and rich answers. The opinions of the interviewees have been of great interest in qualitative interviews. Nevertheless, these made it also more difficult to code and quickly analyze the results (Bryman and Bell, 2011). The interviews were semi-structured. Topics were defined, to ask several questions per topic. Most important topics were about; which information systems are used and which functions they have, the decision making process of cloud solutions, the reason for using cloud solutions, requirements, characteristics, opportunities and risks of cloud solutions and the future perspective. All questions were asked during the interview, although it was possible that extra questions were asked to deepen in a subject or to explain the question in a different way if the respondent did not understand the question. These extra questions were directly asked during the interview, but it was also possible to ask additional questions by phone or e-mail after the interview. This depended on the answers of the respondent. It made the interviews more flexible. The wordings per interview could also differ; this is one of the characteristics of qualitative interviews (Bryman and Bell, 2011).
As stated before, a list of key account companies in the manufacturing market was provided by Atos Consulting. Since these companies were a limited selection of all available manufacturing companies, this reduced the degree of representativeness of the population. In each type of manufacturing, at least two interviews were held. Via the contact persons of Atos Consulting, each company was approached to inform the companies and plan a meeting for the interview. The contact persons of Atos Consulting were personally or via telephone contacted. An
54 The support of cloud solutions in manufacturing
e-mail was also sent to remind and request them to contact the manufacturing company for the interview. The contact persons of Atos Consulting were asked to inform companies if it is possible to conduct an interview with the company in question. If possible, the contact details of the person that could be interviewed were exchanged.
On the basis of the explanation of the research, the contact person of Atos came up with different persons to interview. As the infrastructure and functions differ between organizations, no specific job function could be assigned to be interviewed. Conditions for the person(s) that were interviewed are, the person has an overview of the processes in the company, corporate wide view and knowledge about the cloud and solutions in the cloud. In two cases, more than one person of a company was interviewed to obtain different perspectives. For example, one person from the IT department and another person from the operations department was interviewed.
The interviews consisted of an introduction about the research, the duration of the interview and the aim of the study. All interviews are also confidential. Each interview took about one hour. If there was permission, the interviews were also recorded to have the ability to type transcripts and analyze each interview. As stated before, the interviews were preferably held face-to-face. If this was not possible, an interview by phone was also an option. The interviews consisted of open questions, follow-up questions, closed questions and statements for the interviewee. Open questions aim for more detailed and specific answers to obtain the opinion of the interviewee (Bryman and Bell, 2011). The Likert scale was also used to be able to compare statements and the importance of different aspects. Below, the interview schedule (table 13) shows the planning of the interviews and the companies which were interviewed.
Table 13: overview of all interviews.
Number Type of market Date Type Duration M1 Process 19th of Telephone 0.41.59 March M2 Process 15th of Face-to- 0.45.33 January face M3 Discrete 16th of Face-to- 0.49.51 January face M4 Discrete 3th of Face-to- 0.43.12 February face M5 Discrete 27th of Face-to- 0.48.34 January face M6* Discrete 22th of Face-to- 0.39.14 January face M6* Discrete 31th of Face-to- 0.43.56 January face M7 Consumer Goods 24th of Face-to- 0.32.36 January face M8 Consumer Goods 11th of Telephone 0.44.50 February M9** Consumer Goods 16th of Face-to- 1.08.16 January face *Two separate interviews were conducted in company M6. **One interview with three different interviewees was conducted in company M9.
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7.3 Operationalization This paragraph will describe the formulation of the interview questions based on the literature, theoretical framework and research questions. During this phase the concepts and variables, based on the literature study and the framework, that need to be investigated to answer the research questions are analyzed and used to formulate questions (Bryman and Bell, 2011). Appendix 1 will give an overview of the part of the theoretical framework, theory, concepts, variables, questions and the measurement. The complete interviews, which are in Dutch, can be found in appendix 2 and 3.
7.4 Validity & Reliability First the validity and secondly the reliability will be discussed in this section.
Validity The internal validity will first be discussed. After the internal validity, the external validity will be discussed.
Internal validity concerns the research logic and quality of the research process (Hart & Boeije, 2009). The internal validity could be higher in this study. On the one hand, extensive literature research has been conducted and relations were found that already were formulated in the theoretical framework. Through the interviews more details and the degree of the relations between the concepts in the framework were investigated (Bryman and Bell, 2011). All defined questions could be asked to the interviewed companies. Most respondents wanted to answer all questions. Therefore, most defined questions are directly or indirectly covered in the interview. Most of the time only one person per organization is interviewed. In only two cases more people of the same company were interviewed. Not all relations in the theoretical framework could be tested. The defined functions in literature could not be tested in the interviews as it would bring too much work or it was too hard for the interviewees to give an answer on certain questions.
External validity elaborates on the question whether the results of a study can be generalized beyond this particular research (Bryman and Bell, 2003). As only a few interviews could be performed per type of manufacturing market, the results and conclusions are only indicative. More extensive research need to be done to be able to generalize the results.
Reliability Reliability refers to the level of which the current study can be replicated. General, the replication of qualitative studies is more difficult than of quantitative studies due to the more natural than created environment in which the studies are conducted (Bryman and Bell, 2011). Through the use of qualitative interviews there is the flexibility of the researcher of asking additional questions which are not in the interview protocol. This makes it more difficult to replicate the empirical study. Nevertheless, the researcher tried to hold on to the interview protocol as much as possible during the interviews. Furthermore, only a relatively small number of manufacturing clients of Atos Consulting were interviewed through the limitation of time. Interviewing more companies, also in different types of markets, could lead to different results.
56 The support of cloud solutions in manufacturing
Results & Analysis
The results and analysis of the empirical research will be discussed in this part of the report. The results consist of answers of the interviewees related to cloud solutions. When mentioning cloud solutions, SaaS solutions are intended. This chapter will answer the sub research questions ‘What requirements on cloud solutions are defined in practice in the manufacturing market?’ and ‘How are cloud solutions used now and will be used in the future in the operational business processes in the different types of manufacturing markets?’ The theoretical framework which has been conducted through the literature study will be used to analyze the empirical results. The interviews made several relations clear which will be described in this analysis. Several sections of results will be described and subsequently an analysis of these sections will be given.
8.1 Implemented cloud solutions and future plans
Used cloud solutions by manufacturing companies The table below gives an overview of all interviewed manufacturing companies and their implemented cloud solutions per type of IT system at this moment. It is also indicated per cloud solution if it is used private or public.
Table 14: overview used cloud solutions per manufacturing company.
Collaboration/ ERP MES PLM SCM CRM Communication
M1 No PLM present in the company
M2 Microsoft SAP ERP SAP SCM SAP CRM
Exchange
private private private public Process M3 Transporeon
public
M4 Partly; Service Partly; ConCur, Partly; Ariba No CRM present Now Transporex, in the company HR4U, Integration Point private private private
M5 Partly; HP-PLM Salesforce.com Sharepoint private private private
M6 Microsoft 365, Salesforce.com, Collabnet Apptus
public public Discrete
57 The support of cloud solutions in manufacturing
M7 No PLM * present in the company
M8 Microsoft 365 Salesforce.com
public public
M9 No PLM ** present in the
company Consumer goods Consumer * only SaaS applications which are around the IT systems ** only IAAS solutions with virtual machines
As the table shows, 5 out of 9 interviewed companies, 3 in discrete, 1 in process and 1 in consumer goods manufacturing, use a SaaS solution to collaborate and communicate. The term partly refers to SaaS solutions in which the cloud solution only has a few functions of the complete IT system. Most used SaaS solution in collaboration / communication is the solution Microsoft Office 365. Also, 4 out of 9 interviewed companies, 2 in discrete and 1 in process and 1 in consumer goods manufacturing, use a SaaS solution for CRM instead of a traditional CRM IT system. The interviewed companies use Salesforce.com most frequently. Most interviewed companies do have more SaaS solutions in various types of cloud solutions. Other used SaaS solutions are based ‘around’ the IT systems, like project management, plant maintenance, time writing and talent management. M1 and M9 do not have any cloud solutions, they are planning to implement cloud solutions. M7 does have cloud solutions, but not for the researched IT systems in this report. As can be seen in the table, each company chooses for private or public cloud solutions most of the time. Per type of IT system, it can be seen that ERP, PLM and SCM solutions are used mainly in the private cloud, and CRM solutions are used in the public cloud. Remarkable results are the differences between the companies in the process industry. M1 did not implement any cloud solutions yet, while M2 implemented four types of cloud solutions. This is the case in consumer goods also, where M8 did implement two types of cloud solutions while M7 and M9 did not implement any cloud solutions for the researched IT systems. The paragraph about the analysis of implemented cloud solutions and future planning will describe possible explanations of these results.
The interviewees gave two main reasons why they have chosen for a specific cloud provider. The first reason is because the cloud provider is also a software partner of the company. The second main reason why a specific cloud provider is chosen is because the cloud provider is mostly chosen in the market and therefore seen as best cloud provider. These cloud providers offer adequate functionalities, a good price / quality ratio, and are able to deliver updates frequently. While frequent updates need high investments, this also relates to the fact that the cloud provider needs to be stable and a relatively big player in the market to be able to finance all these investments.
When observing the results of M2, it is clear that this company focuses on cloud solutions provided by SAP. The interviewee of M2 mentioned several reasons for this. The first reason is because of the integration as this company already uses various applications of this provider. This facilitates the integration of the cloud solutions with the existing systems. Further on, M2 stated that SAP offers various functionalities in their cloud solutions. M3 mentioned the same reason for the use of Transporeon as cloud solution. Many other collaborating parties already used this cloud solution; therefore it has simplified their decision to start using this solution as the integration was relatively easy.
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Security risks handling The interviewed companies have different security risks protocols with regard to cloud solutions. Below, the table shows a ranking of most frequently answered elements regarding security risks handling. There is equally referred to some of the elements.
Table 15: ranking security risks handling.
Process Discrete Consumer goods
M1 M2 M3 M4 M5 M6 M7 M8 M9
Security assessments
Strict policy/ guidelines
Risks mapping
Classification of data
Using a protected environment when adapting cloud solutions
First element regarding security risks handling refers to security assessments like corporate security assessments and IT security assessments. These assessments are used to find out if the cloud solution is suitable for the company. Second, most mentioned element by the interviewees is the security policy and guidelines which are always used when deciding upon using a cloud solution. Related to the security policy are the third and fourth element; the use of mapping risks and classification of data to decide what kind of data can be put into the cloud and which is not suitable to be put in the cloud. Thereby, the decision between the public and private cloud is also covered. Per type of data, all alternatives are balanced (this includes also on-premise solutions). Finally, two companies mentioned the use of a protected environment when putting their data in the cloud. Several interviewees, M1, M3, M5, M6 and M8 also mentioned that they have a security department or security team with specialists who judge if the cloud solution serves the guidelines.
Future perspective 8 out of 9 companies have a positive attitude towards implementing more cloud solutions in the future. All companies, except M2 who could not give an answer to these questions indicated that they have a positive attitude towards implementing more cloud solutions. When asking which kind of IT systems they expect to transfer to the cloud, the interviewees gave different answers.
A ranking of most frequently mentioned IT systems that are already transferred (partly and in total) or will be transferred to the cloud (partly and in total) is stated;
1. collaboration & communication
2. CRM
3. SCM
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The table below gives an overview per company which types of IT systems are already implemented in the cloud and which types will be implemented in the future in the cloud.
Table 16: overview of planned (in the future) implemented cloud solutions.
collaboration/ ERP MES PLM SCM CRM communication
M1 future future future future
M2 implemented implemented implemented implemented Process M3 future implemented/ future
M4 implemented implemented implemented
M5 implemented implemented implemented
iscrete M6 implemented future future future implemented D M7 future future future
M8 implemented implemented
nsumer nsumer M9 future
Co goods
Public or Private in the future When asking the interviewees of the manufacturing companies if they would choose for a private or public cloud solution in the future, various answers were given. 3 interviewees who use private cloud solutions would also stick to private cloud solutions in the future. 2 interviewed companies who use public cloud solutions would stick to public cloud solutions. 2 companies expect to transfer in the future from private cloud solutions to public cloud solutions. One of these companies emphasized that this would not be the case for ERP or MES solutions in the cloud. These types of IT systems would stay in the private cloud. Two companies, who do not use SaaS solutions yet, expect to start using private SaaS solutions in the future.
8.2 Analysis implemented cloud solutions and future planning When analyzing the rate of implemented cloud solutions and which types of IT systems are implemented several elements can be analyzed. As table 15 shows, where an overview of all implemented cloud solutions is given, in discrete manufacturing more cloud solutions are implemented than in consumer goods manufacturing. In consumer goods manufacturing, M8 implemented two cloud solutions only while the other companies in this type did not implement any cloud solution for a certain type of IT system. A possible explanation for these results will be explained in the next paragraph per type of manufacturing market.
8.2.1 Manufacturing markets
Implemented cloud solutions consumer goods manufacturing Company M7 in consumer goods stated that their core business will not be transferred to the cloud. Only non-sensitive business information will be transferred to the cloud. Thereby, the data will be put in the private cloud. These elements are important as food products are involved. It should be clear, without the opportunity to switch, from which region their products come from and which label they have. The interviewee of M7 stated that it causes high risks for the company if this kind of information will be changed through the use of cloud computing.
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M8 declared other explanations for the implementation of collaboration/ communication and CRM systems in the cloud. The interviewee of M8 stated that there are only opportunities seen in these two IT systems in the cloud. Therefore, they do not plan to implement any other types of IT systems in the cloud. M8 does not have central systems for a specific region or a category of products. Therefore, the interviewee of M8 stated that the implementation of other systems than collaboration / communication and CRM is not useful as no access to the same information will be possible without central systems. M8 sees opportunities of cloud solutions in worldwide reporting and sharing of information, about for example the market share, through cloud solutions. Furthermore, opportunities are also seen in the automation of workplaces. Finally, M9 did not implement any SaaS solutions yet. This might be because they focus on implementing IaaS solutions. This company focuses on this type of cloud solutions instead of SaaS solutions as they indicated more opportunities of this type of cloud solution.
Implemented cloud solutions process manufacturing When analyzing the results of process manufacturing, large differences can be seen between company M1 and M2. M2 already implemented cloud solutions in four types of IT systems while M1 did not. Nevertheless, M1 is planning to implement cloud solutions in the future for most IT systems. A reason for this difference can be in the nature of the company. As both companies are active in chemicals, they are used to identify and handle risks. Both companies mentioned that they first analyze(d) all related risks of cloud computing. This might explain the situation of both companies. M1 stated that they are identifying all risks of cloud computing currently and therefore did not implement any cloud solutions. Whereby, M2 passed already that stage. The mentioned choice for SAP facilitates an easier integration with the existing systems. They might have chosen for SAP also as this party is stable and trusted and therefore perceived to have lower risks than an unknown provider.
Implemented cloud solutions discrete manufacturing A possibility that can explain why companies in discrete manufacturing who produce high-tech products are ahead of the other researched manufacturing markets is, as described in the literature study, because discrete manufacturing is a dynamic market. New products are developed continuously in an efficient way to serve consumers. These type of products have a short life-cycle. These characteristics of the discrete manufacturing market can explain why the companies of this type are also developing the possibilities of the IT systems and thus are ahead in implementing cloud solutions. Nevertheless, company M3, who is in discrete manufacturing, but produces in automotive is not extremely ahead the other markets. That is because automotive is more a traditional market, where changes are more difficult to realize. This also explains the difference between the companies in discrete manufacturing.
The opportunity ‘accelerating adoption of cloud solutions if the management understands how added value can be achieved through cloud solutions’ also relates to the implemented cloud solutions. This opportunity might have an influence on the amount and choice of implemented cloud solutions. The possibility exist that companies ascertain how far their competitors in the industry are with implementing cloud solutions. This might have an influence on the implementation of cloud solutions in the industry. There is the possibility, like the results indicate, that in the consumer goods manufacturing market many companies have implemented only few cloud solutions. The same can be said for the discrete manufacturing market where many companies might have implemented various cloud solutions for specific IT systems.
A striking result is the fact that M4 mainly implemented cloud solutions in collaboration / communication, ERP, SCM and CRM that partly fulfill the functionalities of the systems. A possible reason for this might be because of the fear of transferring the whole IT system into cloud. If the core functionalities are still used via on-premise systems, this might give a safer feeling. The company could decide on gradually transferring the whole system into the cloud. Another possible reason could be, because the company could decide on using cloud solutions which have specific
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functionalities that have a good performance for this specific part of the system.
8.2.2 MES cloud solutions Most companies implemented a collaboration / communication, SCM or CRM cloud solution. Nevertheless, there are no companies who implemented a MES cloud solution. The reason for this might be because of the uncertainty which MES cloud solutions can cause. MES systems are one of the most important systems in the company which are not allowed to stop, as the whole manufacturing process will stop running. When organizing MES in the cloud, the company is dependent of the services of the cloud provider. The interviewees mentioned that the risks of transferring the MES system into the cloud would be too high. Besides, MES systems contain very sensitive data of the company. Putting the MES in the cloud also entails the risk of the core data which can be leaked out. Also, when asking the interviewees if they expect to implement MES in the cloud in the future, none of the interviewees answered to expect to transfer MES to the cloud in the future. These results might indicate that MES cloud providers should not focus on larger manufacturing companies at this moment as these companies do not plan to implement MES solutions. Companies might implement cloud solutions of collaboration/communication, SCM and CRM most frequently, because these systems are not considered to be the backbone of the company. Thereby, the functions of these systems are also in communication with other parties. Cloud solutions might have a good fit as they facilitate the ability to easy external and internal communicate anywhere, anytime, anyhow.
8.2.3 Used cloud providers Noticeable in the results are the used cloud providers. In collaboration / communication cloud solutions Microsoft is mainly chosen by the interviewed companies. The same counts for the CRM cloud solution where Salesforce.com is mainly chosen. A possible explanation for this might be the name and size of these companies. As mentioned in the results, the interviewees indicated to choose for cloud providers who are financially stable, well-known and provide the required functionalities. Both Microsoft and Salesforce.com meet these criteria. Another aspect that probably plays a part in this is the possibility of comparison of their own company to other companies in their industry. If they ascertain that most companies implement solutions of Microsoft and Salesforce, they could be more inclined to choose for these cloud providers as well. The cloud provider could then be seen as the best in the market. When further analyzing the results for the future implementation of cloud solutions, the companies in discrete manufacturing plan to implement more cloud solutions for IT systems compared to the companies in consumer goods manufacturing and process manufacturing. Therefore, it seems like companies in discrete manufacturing are more progressive and the companies in consumer goods manufacturing are more conservative.
8.2.4 Public or private implemented cloud solutions Another remarkable aspect is that the results show that all interviewed companies use only private or only public solutions except company M2. A possible reason for this might be because of the pursued policy of the company. The IT departments will probably also play a part in this decision when analyzing the pro and cons of the options to use public or private cloud solutions. Most favorable option will be chosen. Further on, the results also show that only 2 companies plan to switch from private to public cloud in the further. One of the companies intends not to do this for ERP and MES solutions. Nevertheless, several companies already implemented public cloud solutions. Therefore, when adding the companies who already use public cloud and who will use the public cloud in future, more companies will probably use public instead of private cloud solutions.
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8.3 Elements related to cloud solutions
Aspects to decide to make use of cloud solutions When asking the interviewees how is decided to make use of cloud solutions, various answers and decision criteria were given. First, the interviewees mentioned how decisions are made to implement cloud solutions. As M6 stated, “It is the responsibility of the IT department, the enterprise architects and the solution managers to decide on the best and suitable cloud solutions.” There are companies who perceive their overview of all used information systems (IT landscape) as indicator for the decision to implement cloud solutions. The landscape gives an overview of their IT processes and which of these processes could be mutated into cloud solutions. Other companies use decision trees and workflows also to decide if cloud solutions can be implemented and if they are the best solution. Companies use their own strategy and policy to decide if cloud solutions are suitable. M6 mentioned that cloud solutions are just one of the alternatives, while M5 appointed that it is their policy to implement more and more cloud solutions in the business. In the analysis about the value, reason, requirements and performance of cloud solutions a possible declaration will be given for this difference. The interviewees mentioned various elements which are important. As M6 stated, “I expect from each application a certain service level that will be delivered.” The security of cloud solutions is mentioned by M2, M3, M4, M5, M6 and M7 as an important element which should be covered in the decision of implementing cloud solutions. Below, an overview of all indicated decision tools and elements is shown:
Decision tools:
On the basis of the overview of all used information systems (IT landscape) By using decision trees and workflows By using their strategy and relying on the policy
The decision tools are used to indicate which existing IT systems are used in the company and to decide on new / replacing IT systems or cloud solutions in line with the strategy and policy of the company. Proliferation has to be avoided as much as possible to keep the overview of all implemented systems and applications in the company. When asking the interviewees how is decided on implementing cloud solutions, there was elaborated on various elements. These are elements of cloud solutions which are taken into account in the decision on implementing cloud solutions. These elements are shown below in figure 10.
Elements of cloud solutions which play a part in the decision on cloud solutions:
Flexibility Availability
Scalability Performance
Costs Upgradability
Decision Security on cloud Agility solutions
Figure 10: elements of cloud solutions influencing the decision of implementing cloud solutions based on the answers of the interview questions.
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Value of cloud solutions Several elements were mentioned by the interviewees on how cloud solutions can deliver value to the operational business processes. Below, the table shows a ranking of most frequently mentioned elements stated by the interviewees.
Table 17: ranking value of cloud solutions.
Process Discrete Consumer goods
M1 M2 M3 M4 M5 M6 M7 M8 M9
Availability
Scalable model
Costs savings
Standard solution
The availability of the cloud solution is mostly mentioned as valuable element. As M7 stated; “The solution is available anytime, anywhere, anyhow.” The scalable model of cloud solutions is also frequently mentioned by the interviewees. The ability to quickly upscale is seen as valuable element. Companies have the ability to start with a low number of users of a cloud solution and are able to quickly upscale if necessary. Third mostly mentioned valuable element of cloud solutions are the costs savings. The maintenance costs should be lower when using cloud solutions. No whole IT support organization needs to be established. M6 and M8 also state that the investments and thus the costs of entry of cloud solutions are substantial lower than IT systems. The monthly costs for the companies (end-users) are also clear. As a company, you know exactly how much to pay each month for the use of the cloud solution. Nevertheless, M3 stated that the costs of cloud solutions are not as favorable as expected. It is outstanding that the costs savings is the only element mentioned by the interviewees in process manufacturing. In the analysis a possible explanation for this result will be given. The next valuable element is the fact that cloud solutions are standard solutions. The cloud solution possesses the required functionalities as standard and is therefore attractive to buy and use instead of building a solution by the company itself. Finally, table 17 shows that most valuable elements were mentioned by the companies in discrete manufacturing, especially by company M5. In the analysis below, there will be elaborated on this result.
Reasons to use cloud solutions When asking the interviewees about their reasons to use cloud solutions, several elements, of which availability and costs savings were also mentioned in the value of cloud solutions, were stated. The figure below gives an overview of most frequently mentioned reasons to use cloud solutions.
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Availability
reasons to use cloud solutions Costs savings Mitigation
Figure 11: reasons to use cloud solutions.
Performance of cloud solutions Overall, the interviewees answered that they are positive about the performance of their implemented cloud solutions. Most frequently mentioned positive and negative performance aspects are stated below;
Positive
Availability
The availability is, like in the value and reasons to use cloud solutions, most frequently mentioned as positive aspect. M5 stated: “The threshold to start using cloud solutions is low as they are directly available.” Other mentioned positive aspects are; the functionalities, fast implementation, real-time updates and the relieving of maintenance through cloud solutions.
Negative
Business who buys cloud solutions without intervention of IT department
The most mentioned negative aspect, the business who buys cloud solutions without the intervention of the IT department, relates to examples where cloud solutions were bought which were not aligned with the IT roadmap. As M2 mentioned, through the purchase of a certain cloud solution the integration costs became very high and therefore the overall costs became too high. This has led to a decision of not integrating the cloud solution. Other mentioned negative aspects are; the security of cloud solutions, performance and functionalities. Furthermore, several interviewees also mentioned their own inexperience and having just a few insights as the cause of disappointments in cloud solutions. For example, through inexperience of companies the bought cloud solutions might not fit to the existing information systems or the performance might not be as good as expected.
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Requirements The interviewees mentioned several requirements which cloud solutions should meet. The table shows a ranking of most frequently mentioned requirements is given. The flexibility and price have the same score. Also, the last three requirements have the same score of two.
Table 18: ranking of mentioned requirements.
Process Discrete Consumer goods
M1 M2 M3 M4 M5 M6 M7 M8 M9
Security
Flexibility
Price, more cost effective than current IT system
Integration with current IT systems
Performance
Reliable provider
Most interviewees mentioned security as very important requirement of cloud solutions. Companies need to be sure that the solution is safe to use and no data will be leak out. Therefore, most interviewees have chosen for cloud providers where the data is situated in Europe instead of other parts of the world, like the United States where other policies regarding privacy and security are maintained. The second most frequently mentioned requirement is the flexibility of the cloud solution. The provider of the cloud solution facilitates various services, like the maintenance and updates of the solution. It is possible for the company to up- or downscale the number of users and the available tools. As M6 states; “Up scaling the number of users is always possible, downscaling is only possible when the contract ends after a few years. The contract can be adjusted after the term of the current contract.” The third requirement, the price, is mentioned in relation to the current IT system. Cloud providers give a clear overview of the monthly price which needs to be paid for the cloud solution. The monthly price depends on the amount of users and the ability to use the solution. No direct high investments need to be done anymore as it used to be for the purchase of an IT system. Cloud solutions use the idea of ‘renting’ by doing each month a monthly payment. The quality of the cloud solution should also be in good relation to the price which needs to be paid. Further on, cloud solutions should be properly integrating with the current IT systems to easily communicate data between IT systems and the cloud solution. The performance of the cloud solution is also indicated as an important requirement. The solution should be easy to use and most important / required tools should be available in the cloud solution. Finally, the interviewees mentioned the requirement of a reliable cloud provider. The cloud provider has to be financially stable and a large company so that the provider will not suddenly be bankrupted. The companies need to be sure that they are using cloud solutions which they can use for a long time.
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8.4 Analysis value, reason, performance and requirements of cloud solutions When analyzing the results of the interviewees stated in the paragraphs above (value, reason, performance and requirements) the results show relative constant answers. Below, each paragraph will discuss remarkable points.
8.4.1 Value As stated before in the results, M5 mentioned that it is their policy to implement more and more cloud solutions in their business, while M6 appointed that cloud solutions are just one of the alternatives. When analyzing the stated elements that give value to cloud solutions, M5 appointed all four mostly mentioned elements of cloud solutions which give value to the business (table 17). M5 implemented a relatively large amount of cloud solutions compared to the other interviewed companies. Therefore, M5 might see many elements of value of cloud solutions and has a positive opinion. This might also relate to their policy of implementing more and more cloud solutions. Furthermore, this could explain the fact that the interviewees in process and consumer goods manufacturing identified less elements of value as less or no cloud solutions are implemented yet in these companies. M6 might not focus completely on cloud solutions, they might see cloud solutions just as one of the alternatives. When relying to their implemented cloud solutions, they implemented a communication/ collaboration and CRM cloud solution. These two types are most of the time the first chosen cloud solutions to implement in the business. Nevertheless, they stated that they plan to implement more cloud solutions; this is probably the case if the cloud solution is the best alternative for a certain IT system.
8.4.2 Requirements – security & flexibility When analyzing the results in table 18 of most mentioned requirements of cloud solutions it is clear that in all interviewed types of manufacturing the security is identified as requirement. This is also in line with the high values (only a value of 6 or 7 were given) given by all the interviewees of the identified risk in literature ‘privacy, security and trust’. The overview of the results (and the given values from 1-7) of the risks is stated below in table 21.
There exists a contradiction also in the results of the element security. Security is most frequently mentioned as important requirement. Nevertheless, when comparing this to the negative performance of cloud solutions, the security of cloud solutions is indicated as negative performance. This suggests that it is important for cloud providers to keep improving the security of cloud solutions and turn this negative performance into a positive performance. This might help in the improvement of the sales of cloud solutions.
The flexibility of cloud solutions is indicated as requirement by M4 until M8. These interviewees are in discrete manufacturing and consumer goods. A possible explanation for this requirement of cloud solutions in these types might be because in both manufacturing markets changing conditions play a role where continuously is anticipated on the consumer demands. This requires flexible operations in which cloud solutions can be an advantage as it is possible to up- (or down-) scale the amount of users of the SaaS solution. Furthermore, the flexibility of cloud solutions also intends the provided real-time updates and the ability to add tools to the cloud solution. Therefore, the flexibility of cloud solutions might be mentioned as requirement by these two types.
8.4.3 Costs savings When comparing the requirements to the values cloud solutions deliver and the reason to use cloud solutions, the costs of cloud solutions for the companies are ranked on the third place. In every type of manufacturing the lower costs are mentioned as requirement of cloud solutions. The price of cloud solutions is lower than IT systems, thus are the cost of entry also lower. The costs savings are perceived as one of the valuable elements in the ranking. The lower costs are also indicated as one of the requirements for the interviewees to use cloud solutions. This element can be considered as important but not as main driver for companies to decide to use cloud solutions or not.
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8.4.4 Availability When analyzing the results of the value of cloud solutions and the reason to use cloud solutions, the availability of cloud solutions is most frequently mentioned in the answers. This is an indication that it is seen as important element for the interviewees of the manufacturing companies. Thereby, the availability is also most frequently mentioned by several interviewees in the performance of cloud solutions. That is why the element availability is not only important but also estimated a positive element (as can be seen above in the paragraph performance) of cloud solutions. A possible explanation for the highly ranked element availability through M3 until M8 might be because these companies are international represented, therefore the availability of cloud solutions might be seen as a huge advantage as the cloud solution can be assessed by all departments and locations of the company. It is difficult to give an explanation why M1 and M2 did not indicate the availability as valuable element of cloud solutions. A possible explanation could be that the locations of these companies over the world operate more independently and thus rely less on fact that a cloud solution is available everywhere. Nevertheless, the table of value of cloud solutions shows that M1 and M2 stated only one element that was also more frequently mentioned by the other interviewees. M1 could only state one of these elements as the company did not implement any cloud solutions yet and thus has no experience yet with cloud solutions. M2 indicated that a cloud solution provides value if it meets their requirements and if there are no risks present. This answer might refer to the fact that process manufacturing companies have to deal with many risks and thus assess value (to cloud solutions) if no risks are presents.
8.4.5 Functionalities Striking points in the results of the performance of cloud solutions are the functionalities. This element is both mentioned as positive and negative by the interviewees. As the ranking shows, more interviewees mentioned that they are positive about the functionalities offered by cloud solutions compared to the interviewees who indicated a negative performance to the functionalities of cloud solutions. This indicates that there is no consensus about the available functionalities of cloud solutions. This might be because all interviewed companies do not use the same cloud solutions. A possible explanation for the positive and negative attitude towards the functionalities of cloud solutions can be because cloud solutions can possess less functionality, but they do possess the required functionalities. Thereby, an additional advantage is the cost savings of cloud solutions compared to the investments of an IT system. Therefore, companies might perspective the functionalities as positive; the required functionalities are present for a lower price. And on the other side negative as less additional functionalities might be present in the cloud solution.
8.4.6 Mitigation through cloud solutions One of the other aspects that show the conformity of the results is in the mitigating through the use of cloud solutions. One of the most frequently mentioned reasons by the interviewees to use cloud solutions is the mitigating of the IT processes through cloud solutions. This element is also mentioned in the performance of cloud solutions as a positive aspect.
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8.5 Characteristics of cloud solutions The table below gives an overview of the various characteristics of cloud solutions indicated in the literature study. The numbers 1 to 7 state the range from not important to very important. The interviewees answered the designed propositions of the literature study from their perspective on the cloud solutions which are used in their company or in general.
Table 19: the rate of importance of defined characteristics (in the literature study) of cloud solutions.
Process Discrete Consumer goods M1 M2 M3 M4 M5 M6 M7 M8 M9 Only pay for what you use 6 6 6 4 7 7 6 5 6 3 6
Low investments for the use of cloud 6 4 6 6 5 7 5 5 6 7 6 solutions
Cloud solution is always up-to-date 4 6 6 6 5 6 6 2 4 6 3 through real time updates
Accessible where there is Internet 5 6 6 3 7 7 6 7 3 3 7
Easily adapting modules 3 4 2 5 5 6 4 4 4 5 5
The ability to quickly load the 3 6 2 6 3 4 6 4 6 1 4 software
The possibility to use the same 4 6 2 1 1 2 7 3 4 1 3 hardware as other users
The rate in which the cloud solution is 7 7 6 7 7 7 7 6 7 6 6 secured
The rate of clear standards 5 7 2 6 5 4 3 1 6 7 5
The table illustrates that security is indicated by all interviewees as very important aspect of cloud solutions; all interviewees gave a value of 6 or 7. As already mentioned, security is identified as very important as data of each company is concerned in cloud solutions. Several interviewees also related the importance of strategic data like customer data to the security of cloud solutions. Another aspect which is suggested as important are the low investments which need to be made. The interviewees gave a neutral value of 4 or a higher value of 5, 6 or 7. As already stated, low up- front costs and intern costs are implied when using a cloud solution. Further on, most interviewees, except one of the interviewees of M9 who gave a value of 3, gave a high value to the proposition only pay for what you use. A possible explanation for this low value will be given in the analysis below, in the paragraph about consumer goods manufacturing. The interviewees suggested that cloud solutions give a clear view on the monthly price which needs to be paid per user, therefore the overall monthly price per cloud solution is easy to calculate. Several interviewees also indicate this characteristic as one of the advantages of the use of cloud solutions. The use of cloud solutions is ultimately cheaper than the use of on premise IT systems as M5 stated. Nevertheless, there are also interviewees, like M3, who mentioned that although it is clear to only pay for the numbers of usage, the costs can become high as some cloud solutions are used by many people in the company.
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8.6 Analysis cloud characteristics Various positive and negative cloud characteristics were distracted from the literature study. The interviews showed that the characteristics ‘the rate in which the cloud solution is secured’, ‘low investments for the use of cloud solutions’ and ‘only pay for what you use’ are most highly valued characteristics and thus highly important, by the interviewees. Especially when relating to the characteristic ‘the rate in which the cloud solution is secured’, all interviewees mentioned the importance of it and most of them also frequently referred to this characteristic during the interview. Striking results are in the characteristics ‘accessible where there is Internet’ and ‘the ability to quickly load the software’ in which both high values and relatively low values are given by the interviewees. These results might be explained through the fact that these characteristics are related to each other. If the Internet is fast, the software will also quickly load and vice versa. Nevertheless, M1, M3, M4, M5, one of the interviewees of company M6, M7, M8 and M9 gave a high value to ‘accessible where there is Internet’ and a low value to ‘the ability to quickly load the software’ or a low value to ‘accessible where there is Internet’ and a high value to ‘the ability to quickly load the software’. Therefore, they probably do not relate these two characteristics to each other. Another possible explanation for the relatively low or high value to the characteristic ‘accessible where there is Internet’ might be in the interpretation of the statement. Some interviewees might give a high value as Internet is key in the use of cloud solutions, while other interviewees might value this characteristic low as it can be seen as logic that there is Internet available at every location everywhere in the world of the company. To sum up, first three mentioned characteristics have a large impact in the choices for cloud solutions.
Process Manufacturing – Characteristics Two companies were interviewed in process manufacturing, M1 and M2. Overall, the given scores of these companies to the characteristics match quite well to each other as both gave a high or a low value to a certain characteristic. Both companies find the characteristics ‘the rate in which the cloud solution is secured’ and ‘only pay for what you use’ most important by giving a value of 6 or 7 to these characteristics. The largest difference can be found in the given values to the characteristic ‘the ability to quickly load the software’ as M1 gave a value of 3 and M2 a value of 6. This difference might be explained through the fact that company M1 did not implement any cloud solutions yet and thus have no experience with cloud solutions, while M2 implemented already for almost all IT systems a cloud solution. Therefore, their attitude towards the ability to quickly load the software may vary.
Discrete Manufacturing – Characteristics M3, M4, M5 and M6 are companies which are allocated in discrete manufacturing. As can be seen in table 17 where the value of importance per characteristic is displayed, M 3, 4, 5 and 6 gave a high value to the characteristics ‘only pay for what you use’, ‘low investments for the use of cloud solutions’, ‘cloud solution is always up-to-date through real time updates’ and ‘the rate in which the cloud solutions is secured’. All of these characteristics besides ‘cloud solution is always up-to-date through real time updates’ were already mentioned in the overall highly valued characteristics. As only high values are given to the characteristic ‘cloud solution is always up-to-date through real time updates’ by the interviewees in the type discrete manufacturing, this characteristic especially accounts for the companies in this type. A striking result in this type of manufacturing is the contradiction between the two interviewees of M6 in the characteristic ‘the possibility to use the same hardware as other users’. All interviewees in discrete manufacturing gave a low value except one interviewee of M6. This contradiction exist because of the fact that one interviewee of company M6 is in the IT department and the other interviewee in the business department. Therefore, they might have a different opinion about this characteristic. A possible explanation for the given value of 7 might be because this company uses only public cloud solutions. This element might be seen as important as the possibility exist of using the same hardware as other users which is important to keep controlling. On the other side,
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as this company has chosen for public cloud solutions, it is also possible to explain the low value given by the other interviewee of M6. If a company decides to use the public cloud it balanced the possibility of using the same hardware as other users. The other interviewee therefore might argue this element as not important as it just ‘belongs’ to the public cloud.
Consumer Goods Manufacturing – Characteristics M7, M8 and M9 are assigned to the type consumer goods manufacturing. When analyzing the results related to the characteristics of cloud solutions the elements ‘low investments for the use of cloud solutions’ and ‘the rate in which the cloud solution is secured’ are most highly valued as a score of 5, 6 of 7 was given. Striking results specifically for this type is in the characteristic ‘the rate of clear standards’. All interviewees gave a relatively high value except M7 who gave a value of 1 which is the total opposite of the other interviewees. The values 5, 6 and 7 are given by the other interviewees to this characteristic. Therefore, this indicates that the interviewees have no corresponding opinion. Nevertheless, the results might suggest, as only one interviewee gave a low value, that the interviewees in consumer goods find it important that there are standards available. A possible reason for this might be because in consumer goods companies are continuously involved in controlling and handling the standards of food safety for consumers. Therefore, they also might highly value the rate in which standards are available for cloud solutions. Further on, when comparing the results of both interviewees of company M9 a striking result can be observed. In the characteristic ‘accessible where there is Internet’ one of the interviewees of M9 gave a value of 3 while the other interviewee gave a 7. It is difficult to assign a reason to this difference as both interviewees of company M9 are from the IT department. Nevertheless, the differences in the assigned value to this element might be in perception of accessibility of Internet. As stated before, some interviewees might find it obvious that there is Internet at every moment at every place in the world, while others might not.
8.7 Opportunities The interviewees were asked to fill in the opportunities and risks not specifically for a cloud solution but in general. There was again the possibility to give a value from 1 until 7 which indicated the rate of not important to very important.
Table 20: opportunities of cloud solutions.
Process Discrete Consumer goods M1 M2 M3 M4 M5 M6 M7 M8 M9 Accelerating adoption 5 6 6 6 6 4 6 4 6 - 5 of cloud solutions if the management understands how value can be added through cloud solutions Effective use of 5 6 6 3 6 5 6 6 4 - 7 information technology Reducing the carbon 3 5 4 4 6 4 2 7 3 5 5 footprint
As the results in the table show, most interviewees indicate ‘accelerating adoption of cloud solutions if the management understands how value can be added through cloud solutions’ as most important opportunity of cloud solutions, the interviewees gave a value of 4, 5 or 6 in which 4 is neutral and 5 and 6 are important. This is also the case with the second statement ‘effective use of information technology’; all interviewees gave a high value except M4. The third proposition is most of the time suggested as ‘neutral’ or ‘a bit important’ as most interviewees gave a value of 4 or 5. Only M7 gave a value of 7, and finds reducing the carbon footprint thus very important. Some interviewees also added other opportunities. M3 indicated as opportunity; implementing cloud solutions when it is not about strategic systems. Standard cloud solutions can be implemented in
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which is not differentiated from competitors and no added value is obtained. A value of 6 was given by this interviewee. M7 suggested as opportunity, the ability to try several different applications as cloud solutions can easily be adapted and eliminated. A value of 6 was given to this opportunity by M7. Finally, M5 indicated the opportunity common processes as several processes do not significantly differ from each other between companies. The knowledge, experience and improvements in cloud solutions from different companies can be used. The knowledge of other people and companies can be used. A value of 6 was given to this opportunity. M5 also indicated the convenience of interfaces of cloud solutions with on-premise systems as an opportunity. A value of 6 was given to this given opportunity.
8.8 Analysis Opportunities Various opportunities were defined from the literature study. As the results show the elements ‘accelerating adoption of cloud solutions if the management understands how value can be added through cloud solutions’ and ‘effective use of information technology’ were most highly valued from the defined opportunities of the literature study. As was also described in the results, the interviewees also mentioned several opportunities themselves. M5 indicated the convenience of interfaces of cloud solutions with on-premise systems as an opportunity. This is a striking result as M2 and M3 mentioned in the interview that the integration of cloud solutions with the existing IT systems in the company can be difficult and lead to high costs and renounce the cloud solution. Therefore there can be doubted how big this opportunity of cloud solutions is. Nevertheless, the other defined opportunities like the ability to try several cloud solutions, the use of cloud solutions for common processes and standard cloud solutions seem to be practical opportunities as no results against these opportunities were obtained.
Process Manufacturing – Opportunities Both interviewees valued the first two opportunities high by giving a score of 5 or 6 to the opportunities ‘accelerating adoption of cloud solutions if the management understands how value can be added through cloud solutions’ and ‘effective use of information technology’. ‘Reducing the carbon footprint’ is valued as not important by M1 and more important by M2, therefore no consensus can be seen about this value between these companies in process manufacturing.
Discrete Manufacturing – Opportunities The interviewees of the discrete manufacturing companies gave a high value to the opportunities ‘accelerating adoption of cloud solutions if the management understands how value can be added through cloud solutions’ and ‘effective use of information technology’ which is also mentioned in the paragraph analysis opportunities. Only M4 gave a value of 3 to the second opportunity, therefore no general similarity related to this element can be given. A possible explanation for this low value of M4 might be because of the opinion of this interviewee that on-premise IT systems are also effective or cloud solutions might not be more effective than IT systems according to this interviewee.
Consumer Goods Manufacturing – Opportunities As one of the interviewees of M9 could not give a value to two defined opportunities of cloud solutions no complete analysis can be made regarding these opportunities. Nevertheless similarities exist in the opportunities ‘accelerating adoption of cloud solutions if the management understands how value can be added through cloud solutions’ and ‘effective use of information technology’ as all interviewees in consumer goods manufacturing gave a relatively high value. Therefore, both in discrete manufacturing and consumer goods manufacturing the same opportunities are defined as important.A striking result might be the fact that one of the interviewee of M9 gave relatively high values to the first two opportunities and thus finds it important, while the other interviewee could not give a value to these two opportunities. This might be because they work on different locations and on a different level, corporate and local. Therefore, there might not be always alignment in the answers of these two interviewees.
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8.9 Risks Below, an overview of the given values by the interviewees to the possible risks of cloud solutions are stated.
Table 21: risks of cloud solutions.
Process Discrete Consumer goods M1 M2 M3 M4 M5 M6 M7 M8 M9 Privacy, security and trust 7 7 7 7 7 6 7 7 6 6 7 Possibility of backlash 4 4 7 5 5 4 1 6 5 6 2 from entrenched incumbents
All interviewees indicate the ‘privacy, security and trust’ as a very important risk of cloud solutions. A value of 6 or 7 was given by all interviewees. Other identified risks by the interviewees are; the continuity, cloud providers can suddenly be bankrupted. M2 gave a value of 6 to this risk. M4 identified the risk of the business that can buy cloud solutions which are not aligned with the IT roadmap. A value of 7 was given to this risk. Other identified risks are the lock in of the company by the cloud providers. If the cloud provider increases the prices for example, this makes it difficult for the company to bring all the data to an alternative, for example another cloud provider. A value of 6 was given by M6 to this risk. Finally, the last identified risk is not having the solution in own control (own management). Therefore, this can have an influence on the quality of the solution/tools. This risk was identified by M5 and a value of 6 was given to this risk.
8.10 Analysis Risks The risks ‘privacy, security and trust’ and ‘possibility of backlash form entrenched incumbents’ were distracted from the literature study. As the results show, the risk ‘privacy, security and trust’ is identified as a high risk in the use of cloud solutions. There are not only risks related to the cloud solution. Another risk which is identified by the interviewees is related to the cloud provider. The interviewees identified risks as not having the control of the solution themselves, the possibility that the cloud provider will be bankrupted and the lock in of the company by the cloud providers. This suggests that it is important for the companies to be sure to choose for the right cloud solution and cloud provider. The company has to make appointments about for example the privacy and security and the company needs to be sure to do businesses with a reliable cloud provider.
Process Manufacturing - Risks As have been seen before, also in valuing the risks of cloud solutions, M1 and M2 gave the same values. The risks related to the privacy, security and trust are identified as important and the second risk is valued as neutral. As both M1 and M2 are in the same type of industry it is positive that the same values are assigned to the risks. Thereby, in process manufacturing high risks are involved through the use of chemicals in production. Therefore companies in process manufacturing can be identified as risk handlers. This might also count for the decision on cloud solutions in weighing the involved risks.
Discrete Manufacturing – Risks All interviewees in discrete manufacturing gave a high value to the risk ‘privacy, security and trust’. Therefore, this can be regarded as an important risk for this type of companies. When analyzing the results of the ratings of the second risk, noticeable is the value of one of the interviewees of M6. As can be seen, all interviewees in discrete manufacturing gave a value of at least 4 except one of the interviewees of M6 who gave the lowest possible value. A possible explanation for this result is the fact that this interviewee works mainly in the supply chain department of the company and thus is less involved in cloud solutions. However, when comparing the values of both interviewees of M6, this can also indicate that both do not find the risk ‘possibility of backlash form entrenched incumbents’ very important as the other interviewee of M6 gave a value of 4 which is
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‘neutral’ in the 7 point Likert scale. This could also suggest that the second risk is just overall not very important in this company. Further on, almost all the interviewees of the companies in this type of manufacturing stated other risks which should be taken into account in the judgment of cloud solutions. This could be because the companies in this type of manufacturing already implemented several cloud solutions in their company. Therefore, they might have experienced more risks than the companies who implemented less cloud solutions. Nevertheless, it is also possible that these interviewees prepared better for the interview or taught already more extensively about the risks of cloud solutions. The results could also depend on the mood of the interviewee and interest of the subject of the interview questions.
Consumer Goods Manufacturing – Risks When analyzing the results of the risks of the interviewees of the consumer goods companies, the same analysis can be allocated as in the type of discrete manufacturing. Thus, ‘privacy, security and trust’ are highly valued and therefore considered as high risk. When comparing the results of the second identified risk, this shows that one interviewee of M9 does not value this risk very high while the other interviewee did gave a high value. As mentioned before, an explanation for this can be because the interviewees work at different locations and at a different level in the company. It is also possible that the values vary because of their own individual perception. Overall, no clear consensus can be showed towards the risk ‘possibility of backlash form entrenched incumbents’ in this type of manufacturing as too little respondents were involved.
8.11 Company IT systems Most interviewed companies make use of all five IT systems (ERP, MES, PLM, SCM, CRM). These are the same systems described in the literature study. Three companies, manufacturing company M1, M7 and M9, do not make use of the PLM system and manufacturing company M4 does not use the CRM system in its business operations. When asking which IT system is most important, all interviewees answered that all IT systems are important and have different functionalities. Each system has its own responsibilities in businesses. MES and ERP are identified as most important systems which are basis systems as described in the literature study. Nevertheless, the other systems are on the long term also needed to survive as M5 stated. Detailed information on which IT systems are used and which functions are most important could not be identified. They were asked to identify which functions could be transferred to the cloud. The interviewees were not able to identify this as it took too much time for them, because they do not use the classification of Porters value chain and the interviewed companies do have many (more than 200) IT systems. However, as stated before they could answer which IT systems they use and the importance of the systems. Also, all other asked questions related to cloud solutions could be answered.
Functions As stated above, few questions could not be answered by the interviewees as it would take too much time and would be too complicated for them. Therefore relation A: ‘The functions which cloud solutions and IT systems possess vary according to the manufacturing types, process, discrete and consumer goods manufacturing.’ could only be conducted from the literature study and not specifically be tested in the interviews. Nevertheless, as described in the results the interviewees suggested that in general both IT systems and cloud solutions give support to the business activities in their manufacturing company. The same accounts for proposition B: ‘All IT systems have different and specific functions which give specific support to the operational business processes in the defined types of manufacturing markets, process, discrete and consumer goods manufacturing.’ Nevertheless, the answers of the interviewees suggest that in consumer goods PLM systems are not always present as M7 and M9 (companies in consumer goods manufacturing) stated that there is no PLM system present in their company. A reason for this might be because of the nature of the products in this market. As described in the literature study, the products itself do not change that much, but the focus is on the innovation and changes in the packaging of these products. M1 stated that they do not have a PLM system present in their company, because in discrete manufacturing mainly bulk goods are
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produced and therefore the focus is not on product development. M4 stated that they do not have CRM as they outsource many departments; this company mainly focuses on the research and development of their products.
75 The support of cloud solutions in manufacturing
Conclusion
In this paragraph the main question will be answered: In which way can cloud solutions give support to the operational business processes in different types of manufacturing markets?
The three models on the next pages (figure 12, 13 and 14) will give an overview of how cloud solutions can give support in each researched type of manufacturing market. The models link to the theoretical framework which is based on the literature study. By means of the empirical study, the theoretical framework could be implemented for each type of manufacturing market. Each model shows the (future) implemented cloud solutions and their highly valued characteristics, opportunities and risks for the three types of manufacturing markets. If a certain IT system is written between brackets in the following figures, this system is not present in all researched companies per type of manufacturing. An explanation of the conclusions which can be drawn from the research and which is shown in the three models will be stated below.
It can be concluded from the research that cloud solutions can give support to the operational business processes in various ways. First, the research shows that most interviewed clients of Atos Consulting already implemented cloud solutions which support the operational business processes. Table 22 on page 81 shows that there is a clear distinction between process and discrete manufacturing and consumer goods manufacturing. Companies in discrete manufacturing are more progressive in the implementation of solutions than consumer goods companies as they already implemented more cloud solutions and are planning to further implement cloud solutions. This difference exist because discrete manufacturing is a more dynamic market which is constantly changing and need to be responsive on changes in the market demand. Whereas, process manufacturing also sees value in cloud solutions, but these companies are more focused on risks handling through the nature of their market (chemicals). This might lead to a slower implementation of cloud solutions as all risks should be indicated and eliminated. Consumer goods manufacturing companies suggest only opportunities in collaboration / communication and CRM cloud solutions, because the other systems consist of too sensitive data or would not create benefits when they would be transferred in the cloud. The literature shows that cloud solutions are more focused on specific markets compared to IT systems. Therefore, cloud solutions might provide more particular support; various modules might be useful for particular markets as cloud providers can develop modules useful for companies in a specific market. Furthermore, the results indicated that at this moment most support of cloud solutions is given in collaboration / communication, SCM and CRM. Possibilities are in ERP and PLM also, but companies seem to be more reluctant to transfer these IT systems to the cloud. MES systems will at this moment not be put in the cloud as none of the interviewees stated that they plan to implement a MES cloud solution.
Secondly, cloud solutions can give support to the operational business processes as they possess several elements which IT systems do not possess. Table 23 gives an overview of all differences and similarities in importance of cloud solutions valued by the interviewees in the different types of manufacturing markets. Characteristics which cloud solutions specifically possess are; the availability of cloud solutions anywhere, anytime, anyhow and the flexibility, the use of cloud solutions mitigates. All manufacturing markets value the availability as important (table 23, page 81). Discrete and consumer goods manufacturing highly value the flexibility. This is because these are unique characteristics of cloud solutions which create an advantage compared to traditional IT systems. The availability of cloud solutions enables companies to use the cloud solutions at any location in the world. As all interviewed companies have various locations all over the world, this will be useful for them. The flexibility ensures that companies do not have to take care of the IT facilities and maintenance themselves. The cloud providers arranges everything to use their cloud solution. The company does not have to arrange its own IT facilities, the cloud provider will take care of this for the company. On the other side, the interviewed companies in process and discrete manufacturing indicated that it can also be a risk that the cloud solutions is not in own control. The
76 The support of cloud solutions in manufacturing
cloud provider should be reliable and stable to be sure that the cloud provider will not be bankrupted.
Table 23 and figure 12, 13 and 14 also show that the lower prices and investment costs and the pay-as-you-go model (cost savings) are mentioned as favorable characteristics through all types of manufacturing markets also, although not all individual interviewees agreed upon this. Nevertheless, overall the costs will primarily always be lower than if using on-premise solutions. The security and performance of cloud solutions and the integration with IT systems are elements which can be improved to increase the support of cloud solutions in companies.
A third indicator of the support of cloud solutions is the fact that cloud solutions are always up-to- date if the cloud provider is financially stable and thus able to invest in updates. This is possible through the updates which the cloud providers deliver. The companies in process and discrete manufacturing gave relative high values to this characteristic. Through real time updates, the cloud solution will have the latest updates with the latest developed features to support the operational business process in companies.
77 The support of cloud solutions in manufacturing
Process Manufacturing
Functions (Future) Important Implemented Characteristics of Cloud Cloud Solutions -inbound logistics, Solutions -pricing cost outbound -communication -investments savings Process logistics & & collaboration -cloud solution is up-to- Manufacturing; procurement; -ERP date -chemicals efficient supply -SCM -availability chain, supply -CRM -possibility of using the networks same hardware governance & -security logistics -clear standards fulfillment Company IT -integration with current
systems IT systems -operations & -reliable cloud provider technology -ERP development; -MES Opportunities; process -(PLM) -accelerating adoption
innovation & -SCM of cloud solutions if the product safety -CRM management & stewardship understands how value can be added through -marketing & cloud solutions sales & service; -creating value in close customer businesses relationship & -effective use of customer information technology specifications Risks; -firm -privacy, security and infrastructure trust -HRM -continuity of cloud
providers
Figure 12: overview of preferences of cloud solutions in process manufacturing.
78 The support of cloud solutions in manufacturing
Discrete Manufacturing
Functions (Future) Important Implemented Characteristics of Cloud Cloud Solutions -inbound logistics, Solutions -pricing cost Discrete outbound -communication -investments savings Manufacturing; logistics & & collaboration -cloud solution is up-to- -high-tech & procurement; -ERP date electronics responsive -PLM -availability -automotive supply chain -SCM -security
-CRM -flexibility -operations & -performance technology -scalability development; Company IT -standard solution continuous systems product/service Opportunities; innovation, -ERP -accelerating adoption product -MES of cloud solutions if the compliance -PLM management
-SCM understands how value -marketing & -(CRM) can be added through sales & service; cloud solutions customer -creating value in service, businesses customer -effective use of support, information technology customer -implementing cloud loyalty & brand solutions when it is not equity about strategic systems -common processes optimal field -convenience of services and interfaces field repair (in high-tech) Risks;
-privacy, security and -firm trust infrastructure -continuity of cloud -HRM providers -business can buy cloud
solutions not aligned with IT roadmap -lock in of the company -not having the solutions in own control
Figure 13: overview of preferences of cloud solutions in discrete manufacturing.
79 The support of cloud solutions in manufacturing
Consumer Goods Manufacturing
Functions (Future) Important Implemented Characteristics of Cloud Cloud Solutions -inbound Solutions logistics, -pricing cost
outbound -communication -investments savings Consumer Goods logistics & & collaboration -flexibility Manufacturing; procurement; -CRM -scalability -food & beverages efficient supply -security chain, logistics -clear standards & order -availability fulfillment -integration with current excellence, IT systems information Company IT exchange with systems Opportunities ; business -accelerating adoption partners -ERP of cloud solutions if the -MES management -operations & -(PLM) understands how value technology -SCM can be added through development; -CRM cloud solutions customer- -creating value in driven businesses innovation, -effective use of accelerated information technology product -the ability to try development several applications
Risks; -marketing & -privacy, security and sales & service; trust invest in -continuity of cloud consumer providers
insights, customer
relationship
-firm infrastructure -HRM
Figure 14: overview of preferences of cloud solutions in consumer goods manufacturing.
80 The support of cloud solutions in manufacturing
Table 22: differences and similarities in (future) implementation of cloud solutions per type of manufacturing market.
Types of Process Discrete manufacturing Consumer goods manufacturing (future) markets manufacturing manufacturing implemented cloud solutions
Collaboration / communication
ERP
MES
PLM -* -*
SCM
CRM
-*
*The symbol – implicates that this IT system is not available in every interviewed company in the type of manufacturing market. If the IT system is not available, it cannot be replaced by a cloud solution. The other symbol implicates that there are cloud solutions implemented for the IT system by the companies in the certain type of manufacturing market.
Table 23: differences and similarities in importance of characteristics, opportunities and risks of cloud solutions per type of manufacturing market.
Process Discrete Consumer goods manufacturing manufacturing manufacturing
Characteristics
Cost savings
Cloud solution is up- to-date
Availability
Possibility of using the same hardware
Security
Clear standards
Integration with current IT systems
Reliable cloud provider
Flexibility
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Performance
Scalability
Standard solution
Opportunities
Accelerating adoption of cloud solutions if the management understands how value can be added through cloud solutions
Creating value in businesses
Effective use of information technology
Implementing cloud solutions when it is not about strategic systems
Common processes
Convenience of interfaces
The ability to try several applications
Risks
Privacy, security and trust
Continuity of cloud providers
Business can buy cloud solutions not aligned with IT roadmap
Lock in of the company
Not having the solutions in own control
82 The support of cloud solutions in manufacturing
Discussion
As in every research, several limitations can be assigned to this research. In this section the quality and limitations of the research will be discussed. The validity and reliability were already described in the chapter Methodology.
The first limitation of this research is the fact that only few companies per type of manufacturing market are interviewed due to the limited amount of time available for this research. Nevertheless, to increase the representativeness several employees of one company were interviewed from different relevant disciplines if possible. To improve the quality of the interviews, some questions were sent subsequently to acquire all required information from all interviewees of the manufacturing companies. When recognizing that these questions were too extensive to answer for the interviewees, the interview questions were adjusted. Unfortunately, this made it sometimes not possible to obtain all appropriate information. Furthermore, as the 7 point Likert scale is used in this research this may have had an impact on the results as a small number of interviews is conducted. The values given by the interviewees might be influenced by their attitude. If the interviewee was interested in the subject for example, the questions might be answered more positively than in the actual situation. Another aspect which may have had an influence on the rating of the statements related to the 7 point Likert scale is the fact that the interviewees thought about the implemented cloud solutions in their company. Therefore, each interviewee might have thought about different cloud solutions, because not all interviewed companies implemented the same cloud solutions. The rating of the statements might depend on their feeling about the implemented cloud solutions in their company. For example, if an interviewee thought about Salesforce.com and had a positive opinion about this cloud solution, than the statements might be valued more positively and vice versa. Nevertheless, the 7 point Likert scale was included in the questions to make it possible to compare characteristics, opportunities and risks.
Recommendations
This paragraph will give an overview of the recommendations for Atos Consulting and suggestions for further research.
Recommendations for Atos Consulting Based on this research several recommendations for Atos Consulting can be given. First, the results of this research show that most interviewed clients of Atos Consulting already implemented SaaS solutions. The interviewees also mentioned that they expect to further implement SaaS solutions. Therefore, it is important for Atos Consulting to keep investigating how far their interviewed clients are evolved in this process. Atos Consulting could investigate also how far their other clients in the manufacturing market, but also in other types of markets, are in implementing SaaS / cloud solutions. Second, Atos Consulting would like to focus on cloud solutions for niche markets, this is in contradiction with the results. All manufacturing companies who implemented cloud solutions mostly implemented cloud solutions from well-known cloud providers. These cloud providers offer solutions for the mass market with various functionalities. For example, Microsoft Office 365 offers functionalities to create inter alia, powerpoints, calculating (excel) and processing words (word). A recommendation for Atos Consulting on this point will be to consider if focusing on niche markets would be the best thing to do. Focusing on mass markets might have higher opportunities. Nevertheless, as Atos is a relatively large party it can be beneficial if they would collaborate with a smaller party that has a potential valuable cloud solution for end-users. As the results showed, manufacturing companies are using cloud solutions from parties which are financially stable and well-known. Atos will meet these requirements. Therefore, there might be opportunities in collaborating with smaller cloud providers if they have a unique and valuable cloud solution which the clients of Atos would like to implement.
83 The support of cloud solutions in manufacturing
The third recommendation refers to the implementation of cloud solutions in the future. As the results of the empirical study shows, no interviewed company has the intention to implement a MES cloud solution in the future. Therefore, the third recommendation for Atos Consulting is not to focus on MES cloud solutions. The fourth recommendation is related to the costs which seems to be not the main driver for companies to decide to implement a cloud solution or not. Therefore, Atos Consulting should focus on most valued elements and requirements of cloud solutions like the availability, security and flexibility.
Recommendations for further research Due to the relative few interviewees per type of manufacturing company it is recommended to continue researching and conduct more interviews in each type of manufacturing company as this study obtained indicative results. In further research, there should be chosen to focus on a specific type of manufacturing market to focus more narrow and obtain more validated results. The use of a survey for manufacturing companies in further research could also help to validate the results of the qualitative study. When using a survey, there will be a larger sample which can be used in the research. The findings of this study can be validated which would result in a higher representativeness. In further research, more extensive interviews with selected manufacturing companies could be performed to test the relations between the functions of IT systems and cloud solutions not only by means of a literature study but also through an empirical study. The defined questions in this research related this were too extensive and complicated to answer. Finally, in further research cloud providers and more expects should be interviewed to obtain results from different perspectives as in this research only inside information of Atos is obtained. Cloud providers can explain their motives to choose for certain functionalities in cloud solutions and certain types of cloud solutions. Experts can provide a neutral view on developments and support of operational business processes through cloud solutions in manufacturing.
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Appendixes
Appendix 1 Interview questions
Graag wil ik u vragen de twee onderstaande tabellen voorafgaand aan het interview in te vullen.
Kunt u aangeven welke IT systemen (soort systeem en/of naam van het systeem) uw bedrijf gebruikt per aangegeven activiteit (linker kolom)?
ERP MES PLM SCM CRM
Inbound Logistics
Operations
Outbound Logistics
Marketing
Sales
Service
Infrastructure
Human Resource Management
Technology Development
Procurement
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Kunt u aangeven wat de belangrijkste functies zijn van het systeem per activiteit naar aanleiding van de hiervoor ingevulde systemen per activiteit?
Voorbeeld:
ERP MES PLM SCM CRM
Outbound -optimalisatie van de Logistics partijgrootte, het transport, route en modus
ERP MES PLM SCM CRM
Inbound Logistics
Operations
Outbound Logistics
Marketing
Sales
Service
Infrastruc- ture
Human Resource Manage- ment
Technology Develop- ment
Procure- ment
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Interview Naam bedrijf: ...... Contactpersoon: ...... Type manufacturing bedrijf: ...... Locatie: ......
Geïnterviewde: ...... Functie: ...... Datum: ......
Introductie Kunt u een korte inleiding geven over de activiteiten en doelstellingen van uw bedrijf?
Informatiesystemen Worden ERP, MES, PLM, SCM en CRM allen in uw bedrijf toegepast? Kunt u naar aanleiding van de vooraf door u ingevulde tabel aangeven wat de belangrijkste functies zijn die op dit moment naar de cloud kunnen worden gebracht? +toelichting (top 5) Kunt u naar aanleiding van de vooraf door u ingevulde tabel aangeven wat de belangrijkste functies zijn die in de toekomst naar de cloud kunnen worden gebracht?+toelichting (top 5) Is er een specifiek systeem wat u belangrijker vindt van deze vijf systemen?
Cloud oplossingen Hoe wordt bepaald of wel of geen gebruik wordt gemaakt van cloud oplossing(en) in uw bedrijf? Hoe kan volgens u een cloud oplossing zo veel mogelijk waarde (gaan) opleveren voor uw bedrijf? Maakt uw bedrijf al gebruik van cloud oplossingen voor de ondersteuning van operationele bedrijfsprocessen?
JA: Wat is het doel voor uw bedrijf om gebruik te maken van cloud oplossing(en)? Figuur 1: Voor welke informatiesystemen maakt uw bedrijf gebruik van cloud oplossing(en)? o Welke cloud oplossing(en)? o Waarom juist dit type cloud oplossing(en)/cloud aanbieder? o Waarom public of private oplossing(en)?
Hoe gaat uw bedrijf om met de veiligheidsrisico’s in het gebruik van een cloud oplossing(en)? Hoe bevalt het gebruik van cloud oplossingen? – Hoe geven deze oplossingen support aan uw operationele bedrijfsprocessen in vergelijking met IT systemen?
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NEE: Mag ik vragen waarom u (nog) geen cloud oplossingen heeft geïmplementeerd?
Toekomst perspectief Hoe staat u ertegenover om (meer) cloud oplossingen te gaan gebruiken ter ondersteuning van de bedrijfsprocessen? Zo ja, waarom wel en voor welke informatiesystemen? Zo nee, waarom niet?
Cloud karakteristieken Aan welke prioriteiten (voorwaarden) moet een cloud oplossing voor u voldoen? + toelichting Prioriteiten
Figuur 3: Welke karakteristieken vindt u wel of niet belangrijk in een cloud oplossing ?
Figuur 4 in laten vullen Welke andere kansen ziet u in cloud oplossingen? Figuur 5 in laten vullen Welke andere risico’s ziet u in cloud oplossingen?
Off the record Welke mogelijkheden van cloud oplossingen liggen er volgens u voor manufacturing bedrijven? Wilt u nog iets toevoegen? Afsluiting (mogelijk om eventueel later nog contact op te nemen?)
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In te vullen door geïnterviewde Naam bedrijf: ...... Type manufacturing bedrijf: ...... Locatie: ......
Functie: ......
Figuur 1 Cloud oplossingen
Ja/Nee Naam oplossing Public/Private In toekomst? Collaboration/ communication ERP MES PLM SCM CRM
Figuur 3 Karakteristieken cloud oplossing
Cloud oplossing: ………………………….
Niet belangrijk Erg belangrijk Alleen betalen voor wat u gebruikt (aantal gebruikers en modules) 1 2 3 4 5 6 7
Lage investeringen voor het gebruik van een cloud oplossing (geen hoge investeringen in hardware nodig) 1 2 3 4 5 6 7
De cloud oplossing is altijd up-to-date door het gebruik van real –time updates 1 2 3 4 5 6 7
De cloud oplossing is overal toegankelijk waar internet is 1 2 3 4 5 6 7
Het eenvoudig kunnen toevoegen van modules 1 2 3 4 5 6 7
Het snel kunnen laden van de software 1 2 3 4 5 6 7
Het bestaan van de mogelijkheid van het gebruik van dezelfde hardware als andere gebruikers 1 2 3 4 5 6 7
De mate waarin de cloud oplossing is beveiligd 1 2 3 4 5 6 7
Het gebrek aan duidelijke standaarden 1 2 3 4 5 6 7
Anders: …………………………………………………………………. 1 2 3 4 5 6 7 …………………………………………………………………. 1 2 3 4 5 6 7 …………………………………………………………………. 1 2 3 4 5 6 7
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Figuur 4 Opportunities
Niet belangrijk Erg belangrijk Het versnellen van de implementatie van cloud oplossingen wanneer door het management begrepen wordt hoe waarde kan worden gecreëerd d.m.v. cloud oplossingen 1 2 3 4 5 6 7
Het effectiever gebruik maken van IT 1 2 3 4 5 6 7
Het verminderen van de carbon footprint 1 2 3 4 5 6 7
Anders: …………………………………………………………………. 1 2 3 4 5 6 7 …………………………………………………………………. 1 2 3 4 5 6 7 …………………………………………………………………. 1 2 3 4 5 6 7
Figuur 5 Risico’s Niet belangrijk Erg belangrijk De mate van privacy en veiligheid 1 2 3 4 5 6 7
Het mogelijk verzet van bedrijven door bezorgdheid over het gebruik van cloud oplossingen 1 2 3 4 5 6 7
Anders: …………………………………………………………………. 1 2 3 4 5 6 7 …………………………………………………………………. 1 2 3 4 5 6 7 …………………………………………………………………. 1 2 3 4 5 6 7
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Appendix 2 Operationalization
Part of TF Theory Concept for Variables for this Indicators: Interview questions Scale / Aim/ this category category Measure- Explanation ment per of the question questions Functions Porters value Company IT -Inbound logistics 1.Do you use ERP, MES, PLM, SCM and CRM Open -Aim of all chain functions -Operations in your business? questions; to -Outbound logistics get insights -Marketing 2.Can you show which IT system is used in Table (to in which IT -Sales the company per primary and support be filled in systems are -Service activity? before- used and -Infrastructure hand) most -HRM important -Technology 3.Which functions of the IT systems are most Table (to functions. Development important per primary and support activity? be filled in Also, to -Procurement before- obtain Company IT IT systems IT systems -ERP hand) insights in systems -MES the -PLM 4.Which identified most important functions Open, importance -SCM can be transferred to the cloud at this top 5 of IT -CRM moment? systems for manufactur- 5.Which identified most important functions Open, ing can be transferred to the cloud in the future? top 5 companies.
6.Which of these IT systems related to their Open functions do you find most important?
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Cloud Cloud Optional cloud -Requirements 7.How can be determined if cloud solutions Open -Question 6 solutions solutions solutions for will be used or not? until 16 will different IT give insights systems 8.How can cloud solutions yield as much Open in the use of value as possible for your company? cloud solutions and 9.Does your company already use cloud Open the reasons solutions to support operational business for (not) processes? using them. -The value of 10.What is the goal of your company to make Open cloud use of cloud solutions? solutions will be 11.Which (type of) cloud solutions and service Figure determined providers are used? per manufacturin 12.How is your company dealing with security Open g company. reasons in the use of cloud solutions? -Further on, the used 13.How do the used cloud solutions give Open cloud support to the operational business processes solutions in of your company? practice can be validated 14.Can I ask why your company does not use Open with the any cloud solutions yet? described cloud 15.What is your opinion in using (more) cloud Open solutions in solutions in the future? literature.
16.If yes, why would you like to use more Open cloud solutions and for which IT systems?
17.If no, why do you not want to use (more) Open cloud solutions?
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Cloud Cloud Positive and -Pricing 18.Which requirements does a cloud solution Open -The aim of characteristics characteristics negative -Investments need to meet? And why? these elements -Agility questions is -Network access 19.Which characteristics are important in a 7 point to get data -Scalability cloud solution? Likert to answer -Latency- and scale the fifth sub bandwidth- related research issues 20.Which opportunities do you see in cloud 7 point question -Use of the same solutions? Likert where the piece of hardware scale reqiurement -Security, Open s of cloud compliance and solutions will regulatory issues 21.Which risks do you see in cloud solutions? 7 point be -Lack of standards Likert answered. scale -The Opportunities -Adoption Open characteristi -Creating value in cs, risks and businesses opportunities -Effective use of will be information validated technology with the scaling Big Data literature. -Carbon footprint
Risks -Privacy, security and trust -Possibility of backlash from entrenched incumbents
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Support of Types of Process -Chemicals 22.Which possibilities of cloud solutions are Open -Question 21 operational manufacturing manufacturing there according to you for manufacturing will give business companies companies? estimate the processes Discrete -High-tech & overall view manufacturing electronics 23.Would you like to add anything? Open in which Process, -Automotive cloud Discrete, Consumer solutions can Consumer Goods -Food & beverages give support Goods manufacturing to manufacturing operational processes of manufacturin g companies.
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