Why Today’s Product Manufacturers Should Embrace Cloud-Native Solutions

It’s getting harder for product manufacturers to compete successfully in today’s global economy.

According to research, approximately 40% of developed products do not meet their commercialization targets ¹,². And only 55% of product launches take place on schedule³. These statistics are not surprising as more and more companies grapple with part and labor shortages, ever-changing regulatory requirements, and increasing product complexity.

Despite these obstacles, some companies manage to avoid product failures and rise to the top.

You might perceive the “secret sauce” of these top performers to be a smart product design or a creative marketing campaign. However, the real key to their success is the application of new digital technologies that help accelerate innovation. Even through times of economic uncertainty, companies are starting to rethink traditional new product development (NPD) practices and invest in a digital transformation to enhance business performance. Here, we discuss how the adoption of cloud-native product lifecycle management (PLM) and quality management system (QMS) solutions helps manufacturers establish more efficient, connected, and agile processes to deliver high-quality products to market faster.

GETTING OUT OF THE PRODUCT DEVELOPMENT RUT

Whether it’s due to insufficient budgets, lack of resources, or limited performance metrics—some organizations surrender to the old way of doing things. However, accepting the status quo is no longer feasible with the shift to remote work practices and more design and production steps being outsourced to contract manufacturers and sub-tier suppliers. Reliance on disconnected systems such as file-based CAD tools, chat apps, emails, spreadsheets, and paper creates information flow issues and other inefficiencies—prohibiting companies from delivering high-quality products ahead of the competition.

Some of the common pitfalls of traditional product development practices include:

Lack of visibility

Because siloed, disconnected systems do not support frequent, real-time collaboration between internal teams and external supply chain partners, there is limited visibility into design errors, part shortages, and other operational issues which may impact production. Consequently, teams are unable to respond quickly and implement appropriate countermeasures.

Manual, time-consuming processes

Getting distributed product team members to review, revise, approve, and implement product changes can be a cumbersome task, since there’s no way to complete reviews in parallel. Paper-based and even file-based engineering change orders (ECOs) must be routed and reviewed one person at a time. This serial review process leads to confusion and errors. It also creates bottlenecks and prolongs the ECO cycle time.

Managing and tracking product requirements can also be arduous when they are documented in multiple spreadsheets or Microsoft Word files and stored in different locations. Because requirements are not linked to the larger product record or quality processes, it is difficult for teams to prioritize changes and quickly address design issues or customer needs throughout the product lifecycle.

Design for manufacturability (DFM) issues

The use of file-based CAD software (e.g., mCAD and eCAD) prevents downstream product team members and external partners from contributing their input during the early design phase. Since these systems are restricted to engineering workgroups, the extended product team cannot address DFM issues far in advance of volume production. This results in product delays due to costly scrap and rework.

Product noncompliance

Keeping product and quality information in sync is problematic with manual, disconnected systems. The inability to automatically link quality processes directly to the product record prevents teams from having full traceability and visibility into product nonconformities. In addition, teams are unable to identify and resolve issues quickly and implement the necessary corrective and preventive actions (CAPAs). This creates compliance risks for highly regulated companies.

With all these setbacks, companies are unable to stay on course and effectively manage the many moving parts that come with getting products to market on time. Ultimately their profitability and brand reputation are put at risk.

A MORE MODERN APPROACH WITH CLOUD-NATIVE PLM AND QMS

“If you want something new, you have to stop doing something old.” -Peter F. Drucker

To better navigate today’s complexities and innovate faster, companies must move away from traditional product development methods and embrace a more modern approach. Cloud-native PLM and QMS solutions provide a connected, efficient, and agile way for globally dispersed teams to conduct product work and successfully cross the finish line.

By aggregating product and quality information into a single source of truth that can be accessed anytime and anywhere, internal teams and external supply chain partners can collaborate in real time and efficiently execute engineering change orders, sourcing, regulatory audits, and other critical tasks. Because the product bill of materials (BOM) is centralized and linked to designs, requirements, CAPAs, supplier information, and other essential records—teams maintain full traceability and visibility to make quick, informed decisions and move the NPD process along. In addition, automated change processes and revision controls are applied to BOMs, documents, and parts, eliminating the time wasted on making manual updates, routing information, or trying to locate the most current files.

Team productivity and efficiency is further enhanced with a seamless connection between cloud-native PLM and CAD solutions. Engineering teams can quickly disseminate design information to downstream team members and external partners without having to access multiple systems. This facilitates earlier DFM reviews to ensure that companies deliver high-quality products and reduce cost of goods sold (COGS).

Cloud-native PLM and QMS solutions also support agile product development methodologies through the open exchange of information. Cross-functional teams can freely share design ideas and implement changes within rapid iterative cycles, enabling organizations to be nimbler in addressing customers’ ever-changing needs.

WHY CLOUD NATIVE IS BETTER

Typically, we associate all cloud systems as being low-maintenance and inexpensive; however, that’s not always the case.

The terms “cloud native” and “cloud enabled” are sometimes used interchangeably when referring to enterprise applications. It is important to understand the distinction between these cloud technologies when evaluating different Cloud PLM or Cloud QMS solutions for your business.

Cloud-enabled vs. Cloud-native Solutions

	Cloud-enabled Solutions	Cloud-native Solutions
Built in the Cloud
Hosted in the Cloud
Multi-tenant architecture
Fast deployment
Maintenance-free; minimal costs
Routine software enhancements from vendor without downtime
Highly scalable

Cloud-enabled solutions are designed with the same client-server architecture that is commonly used for traditional on-premises software. Although they are hosted in the Cloud, a separate instance of these systems must be maintained at each individual site. Thus, clients often accumulate more expenses due to lengthy maintenance that is performed by the vendor. Keeping the software updated to the latest version is also cumbersome, since more custom coding is involved in upgrading the software to meet user requirements.

Cloud-native applications, on the other hand, are hosted and built in the Cloud. Their multi-tenant architecture requires only a single instance of the software to be managed by the vendor. This allows software to be quickly deployed without the investment of costly IT resources and infrastructure. It also provides customers maximum scalability, enabling new users and functionality to be quickly added as business needs evolve. More frequent software enhancements are also delivered to customers without any downtime.

A NEW ERA OF PRODUCT DEVELOPMENT

With the flexibility and scalability of cloud-native solutions at their disposal, more and more companies are digging themselves out of the product development rut and gaining greater efficiencies not realized with traditional approaches.

Learn how Arena can help you embrace this new era of product development and achieve commercialization success. Read our ebook.

References

1. McKinsey & Company. How to Make Sure Your Next Product or Service Launch Drives Growth. 2017
2. Castellion G., Markham S. Journal of Product Innovation & Management. Perspective: New Product Failure Rates: Influence of Argumentum ad Populum and Self-Interest. 2013
3. Gartner. 2019 Product Manager Survey