Cloud manufacturing is becoming the swiss-knife of disruptive hardware manufacturers.

05 Jan, 2022

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Credit: Estes

Credit: Estes

This emerging industrial paradigm is enabling hardware to fulfill a sustainable and flexible future beyond the title of “the new software”.

In previous articles, we explored the concept of Cloud Manufacturing, elaborating on the benefits this industrial paradigm has to offer for the future of hardware development.  In this article, we showcase how Cloud Manufacturing provides optimal hardware manufacturing services that ensure lower environmental impacts while accomplishing resource efficiency across supply chains. We will learn that “hardware is the new software” by accomplishing resource efficiency across the supply chain in the development of products with the support of virtual services. And finally,  why Cloud Manufacturing holds the key to a waste-free, collaborative, and flexible industrial paradigm that is taking advantage of smart technologies.

The Basics

Manufacturing is advancing towards Industry 4.0. In this transition supported by the Internet of Things (IoT), new paradigms are surging as a response to move manufacturing operations from product-oriented processes to customer and service-oriented alternatives. Such is the case of Cloud Manufacturing.

In general, Cloud Manufacturing is an extension of cloud computing principles designed to provide on-demand manufacturing services to several actors in supply chains in a service-oriented business model. Using the power of cloud platforms in a virtual setup, Cloud Manufacturing is allowing sharing manufacturing resources (e.g., machines and their software systems), products (e.g., recipes, client requirements), orders (e.g. producing methods, times, standards) in an on-demand network that is operated with high-performance computing.

With resource virtualization, Cloud Manufacturing is helping businesses to minimize management (e.g., in-house activities, services to various end-users,shop-floor devices)  as well as to proliferate solutions for collaborative services, support the creation of flexible and powerful user interfaces (UI), make customer experience convenient and interactive, create customized products and open global supply and demand mechanisms that are readily adapted to increasing sustainability criteria.

In a competitive future where sustainability is the status-quo, Cloud Manufacturing is ensuring intensification of resource efficiency by ensuring that human, material, and financial capital are managed with reliable data cloud management systems.

The Effects Of Digitalization On Manufacturing

In advanced stages of implementation (e.g., big manufacturers and start-ups) or early phases (e.g., late adopters), digitalization provides the means to increase adaptation, product diversity, connectivity, productive capacity, or even sending big amounts of data with minimal energy inputs. With digital transformation technologies like AI, blockchain, big data analytics, automation technologies, and among others, the proficiency of businesses to manage product development is becoming highly accurate and flexible. For example, the digitization of processes has resulted in the integration of systems, decentralization of production, or the autonomy of processes. This has been particularly advantageous to connect equipment in a unique system landscape to generate automatic responses of machinery to complete manufacturing tasks with limited human interaction.  

Figure 1: Digital technologies and their capabilities in logistics and supply chain management (1)

With digitalization, new opportunities have emerged, allowing businesses in all industries to use the IoT to prevent competitive stagnation. Three important aspects can be highlighted from Cloud Manufacturing  as a digital service-oriented technology: 

  1. It makes use of software to model manufacturing and control processes as services and combines them in an upgraded version of product-making services.
  2. With AI and data integration in the cloud, processing, analytics, and storage capacity increases. In the same manner,  the possibility to analyze big data increases. Hence, allowing intelligent decision-making to provide mirroring and auto-configuring control based on robust data (2). 
  3. Business and production layers can be tightly controlled resulting in better-connected systems that improve communication between supply and demand as well as internal and external stakeholders of a company.

With the so-called resource virtualization, shop-floor devices such as machines, production equipment, tools, and computers are brought together within one digitally managed system. Hence, the capacity to balance local computing abilities grows, allowing hardware manufacturers not only to make accurate decisions of in-house processes but also to use data to shrink the use of manufacturing resources or create their cloud manufacturing infrastructure.

Consequently, manufacturing is benefiting from digital solutions while providing worldwide access to resources, dynamic work between stakeholders, and immediate feedback that is turned into continuous improvement to produce better, less resource-intensive hardware products.

Cloud Manufacturing As A Catalyst For Sustainable Supply Chains

Cloud Manufacturing makes use of virtual spaces to help achieve sustainability while building resilience and transparency in the manufacturing supply chains (3). 

On the one hand, scalability and flexibility in production are achieved with temporary production lines that are reconfigurable and modular(4). This means that batch and small production is possible without being constrained by complex and fixed production setups. The users of manufacturing resources are peered to the closest and more convenient manufacturing resource provider according to their needs. This benefits businesses that have extra productive capability and those businesses that provide manufacturing but do not own big or centralized production facilities. Any extra production capability can be sold through the manufacturing cloud.

Figure 2: Social and cloud manufacturing (6)

On the other hand,  as conventional hardware manufacturers are focused on economic profitability, external drivers such as demands for eco-efficient products, emerging environmental regulation, lack of quantitative environmental impact information, or shortages of environmentally aware employees are pushing companies to adopt sustainable development strategies (people, profit, planet). In this sense, Cloud Manufacturing can bring knowledge and data into one platform, store it and share it so the entire supply chain can learn and spread best sustainability practices. Such capabilities have led to fusion concepts such as “Social Manufacturing” with Cloud Manufacturing allowing crowdsourcing information that is stimulating innovative, eco-based product design among those who are sharing the data. 

Another aspect of Cloud Manufacturing is that it helps to involve customers in product development processes. In this way, value creation is being decentralized, transport is reduced and the need for storage or warehouses is brought to a minimum. This results in significant contributions to the improvement of social, environmental, and economic aspects. Lower energy consumption, fewer fossils used in transportation, and more opportunities centered where supply and demand are some of the positive effects.

Figure 3: Cloud manufacturing system architecture with integrated supply chain management (8).

Cloud Manufacturing uses real-time AI-aided autonomous algorithms to provide and measure customer attention. But measuring is not limited to user satisfaction. Sustainability metrics like social added value, energy intensity, material intensity, raw material costs are a few examples of the variables that can be constantly tracked and analyzed at different stages of the supply chain.

In a virtual interconnected scheme, equipment, machinery, know-how, logistics, engineering, hardware, and software can all be integrated and managed as a service into the cloud (4). Hence, from centralized, difficult to manage, and mostly disconnected manufacturing systems with inefficient supply chains, Cloud Manufacturing allows the use pools to transit to unconstrained, autonomous, and automated decentralized production units (5). Decentralization makes sustainability more feasible and possible to manage because decision making won't hang upon the initiatives for better practices of one particular actor, instead autonomy to improve sustainability is given to those adopting Cloud Manufacturing as a tool for better resource management.

The Future Of Green Innovation Is On The Clouds

Cloud Manufacturing is leading the industry towards holistic operation frameworks in which the capabilities of smart technologies, knowledge sharing, and resource efficiency practices are allowing hardware manufacturers to offer greener products made with advanced and/or bio-based materials, non-polluting machines, and environmentally friendly processes. In addition, five important aspects are worth highlighting in terms of Cloud Manufacturing  eco-efficiency:

  1. Waste Reduction: optimal manufacturing routes with advanced planning and scheduling allow waste minimization by allocating the amount and type of material resources needed for in-demand customized products. With process streamlining waste reduction can be expected as companies and supply chains can manage outputs from production processes.
  2. Material valorization: production trends are shifting to circular manufacturing practices where waste and by-product streams are becoming more important. Cloud Manufacturing makes use of machine learning approaches to analyze waste types and quantities and characterize them to select the best valorization routes. With databases that provide information regarding possible uses of discarded materials in production, Cloud Manufacturing designates the best material allocation with AI algorithms. Residual heat and energy recovery are also managed to reduce operational costs.
  3. Energy Efficiency: Cloud Manufacturing can make use of closed-loop optimization to improve processes online. Energy consumption can be continuously readjusted and cut where it is not needed (6). With tight process control, manufacturing plants can be managed digitally to operate in steady conditions adjusting automatically machines with smart energy systems.
  4.  Product life-cycle assessment: metrics are indispensable to ensure the sustainability of products and often existing sustainability metrics are difficult to maintain and measure. Cloud Manufacturing allows real-time collection and measurement of sustainability metrics operated from a cloud system (3). Material intensity, energy intensity, value-added, material tracking, waste quantities, water consumption, GHG emissions are a few among the many metrics that can be part of a Cloud Manufacturing network. 
  5.  Safer environments for employees and consumers: by substituting toxic materials, replacing polluting equipment, improving data access (here safety data issues need to be considered), and allowing knowledge to be spread among employees, people will be exposed to cleaner and safer environments where risks of working with toxic substances and materials are reduced or eliminated (8). These changes are powered by Cloud Manufacturing systems that are built upon sustainability criteria. One option is that hardware manufacturers have the chance to increase criteria to select suppliers based on their sustainability performance and evaluate such performance with AI algorithms in real-time through the cloud. 

Looking ahead: Trends in cloud manufacturing

Hardware manufacturers that adopt Cloud Manufacturing will forge new combinations of new and more efficient processes that improve data integration across the entire enterprise.  Simultaneously, creating optimum processes to ensure factory and business decisions with higher connectivity and clearer communication.

The front runners will establish the aperture for a greater growing ecosystem of cloud-based manufacturing services. Consequently, manufacturing SMEs will concentrate on improving core competencies and innovation to respond to special market requirements using virtual-physical systems. (7). This trend is central because Cloud Manufacturing needs interconnectivity and more participants mean diversity of opportunities in the online market ecosystems.

Figure 4: Additive manufacturing continues to rapidly innovate. 

Looking into the future, Cloud Manufacturing is upgrading the efficiency of data acquisition, improving communication, increasing information storage capacity, responding to rapid queries, and offering precise analysis of field-level manufacturing equipment (5).

Factors such as material traceability, complying with environmental standards, improving working conditions, building purpose-driven businesses are world trends signaling the need for sustainable products. As we have learned, Cloud Manufacturing responds to these trends and offers a new era of greener design, resilient engineering, practical innovation, and agile digitized hardware manufacturing that is accurately arranged to perform with precision in cloud ecosystems.


Custom-made, service-oriented, virtualized, and quickly adaptable. Cloud Manufacturing enhances sustainability through the product life cycle creating high value-added markets online. As a result, a wave of eco-efficient hardware developers is rising, making the best of material, technological and human resources in an era where environmental concerns are pushing industries towards greener manufacturing. Through a virtual network where all actors of the supply chain can cooperate, the risks and uncertainties common on supply chains linked to changing economic, production, and management can be minimized or even eliminated.

This article was created with significant input from Nicolas Sarimento Sierra.


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