Manufacturing in Transition: How UCaaS Leaders RingCentral and 8x8 Are Taking On the Challenges of ‘Industry 4.0’
North American manufacturers face many challenges. According to Deloitte, the skills gap resulting from an aging workforce and a shortage of skilled labor may leave an estimated 2.4 million U.S. manufacturing jobs unfilled between 2018 and 2028, with a potential economic impact of $2.5 trillion.
American manufacturers must also battle global competitors, many of whom have lower capital costs, labor expenses, and fewer regulatory hurdles. And today’s customers are highly-informed — they can locate, evaluate, and source competing products from anywhere, often leading to rapid price commoditization.
Perhaps the biggest challenge, however, also represents the greatest opportunity for North American manufacturers, as they come face to face with ‘the fourth industrial revolution,’ also known as Industry 4.0. This transition is characterized by the use of advanced IT — including automation, AI, robotics and analytics — to streamline operations, lower costs and expedite time to market.
Central to Industry 4.0 is the cloud. With its ability to capture and manage data and scale quickly with predictable costs, cloud offers many benefits to manufacturers:
- Improved operations. Consolidating multiple applications in the cloud provides greater visibility while simplifying management and lowering administrative overhead.
- Better analytics. Data captured throughout the manufacturing process can be consolidated and stored in the cloud to facilitate advanced reporting, analytics, and real-time insights.
- Stable and predictable IT costs. Many manufacturers don’t see IT capital spending as a critical priority. Cloud migration allows them the opportunity to move away from capital-intensive legacy IT systems in favor of OPEX-based cloud solutions that can scale on an ‘as required’ basis.
- Improved productivity and business agility. ERP and manufacturing applications can be developed, tested, and deployed much faster in cloud environments than in traditional, premise-based systems. This helps manufacturers expedite product development and speed time to market.
A Challenge For UCaaS Providers
These dramatic shifts in the manufacturing environment are also creating challenges for technology providers. Those who can integrate the capabilities and deliver the benefits associated with Industry 4.0 stand to reap the rewards from their manufacturing customers, while those that can’t make the transition face an uncertain future.
UCaaS providers RingCentral and 8x8 have both invested heavily in developing the platforms to support these future-ready manufacturing environments. By marrying traditional voice technology with mobility, integrated communications and the benefits of the cloud, they’re providing tools and solutions to help manufacturers drive productivity and meet the demands of Industry 4.0.
As manufacturing embraces big data and analytics, the amount of data that needs to be collected, analyzed and shared has grown exponentially. This information needs to be shared in a variety of forms — voice, text, and video — and not just across the factory floor. Plants in different locations, integrated supply chains, and remote suppliers mean that communications need to be global, and take place seamlessly in all forms.
Both RingCentral and 8x8 deliver these capabilities. The RingCentral Mobile App gives users the ability to conduct all communications from their tablet or smartphone — voice and conference calls, texts, faxes, file sharing, and web meetings.
8x8 Virtual Office Editions offer similar functionality, bringing full enterprise-class communications capabilities, including seamless call routing, four-digit dialing, and iPhone integration, with no expensive premises equipment required.
Successful manufacturing also requires rapid, informed decision-making, and smartphones and tablets have taken the place of notepads and walkie-talkies on the production floor. By integrating voice, text, and video on a single, mobile device, and one simple user interface, both 8x8 and RingCentral are helping transform collaboration in the manufacturing workplace.
One result of this enriched collaboration is a ‘snowball effect’ of improved productivity. Faster decision-making helps optimize operations and also gives workers more time back to perform other tasks.
Cloud-based communications drive productivity gains in other areas of the business as well. Both 8x8 and RingCentral offer simple-to-use management platforms and 24x7 support to minimize customers’ administrative burdens. Combined with outsourced cloud infrastructure, these capabilities eliminate critical administrative cycles for IT, freeing up resources to engage in more strategic, forward-looking projects.
Lower, More Predictable Communications Costs
Most manufacturing is capital-intensive, and many manufacturers prioritize investments in production facilities over IT and communications. Premise-based communications systems typically require significant capital investment, and hardware replacement and maintenance costs can be excessive, especially for aging legacy platforms.
Moving to the cloud allows manufacturers to replace capital and maintenance spending with a subscription-based model that scales on an ‘as-required’ basis. More predictable and with minimal upfront investment required, the UCaaS model allows manufacturers to preserve their capital for more mission-critical requirements.
Cloud may also be less expensive. According to 8x8 and Telzio Inc., businesses that switch to the cloud save an average of 30-75% in both direct and indirect costs. 8x8 and The Economist Intelligence Unit also found that 92% of manufacturers think the cloud will be a moderate to major business factor by 2021, in part due to potential cost savings.
RingCentral also positions UCaaS as a less-expensive alternative to premise-based communications platforms.
One of the most exciting opportunities for UCaaS providers in the manufacturing arena is the potential to integrate leading-edge IoT and analytics applications into their communications platforms.
Both RingCentral and 8x8 have invested heavily to integrate traditional productivity, CRM and sales apps. 8x8 supports leading applications such as NetSuite, SAP, and Salesforce, and allows users to easily consolidate contact information from various apps (e.g., Gmail, Lync, Outlook and Office 365) into the 8x8 Virtual Desktop.
Not to be outdone, RingCentral supports hundreds of business applications (e.g., Salesforce, Oracle Cloud and Microsoft Dynamics) and provides an open platform and a range of developer tools to support the integration of third-party apps.
The next challenge for both providers is to adapt to new requirements — manufacturing facilities are essentially ‘deskless,’ with highly mobile workers running new IoT and analytics applications from a tablet or smartphone. These new applications are addressing long-standing manufacturing challenges, such as downtime and inventory management.
Downtime represents one of the most significant risks for many manufacturers. In 2016, research firm Aberdeen pegged the average cost of an hour of downtime across all businesses at $260,000 and found that cost was rising almost 60% year over year.
Manufacturers are fighting back with emerging applications such as predictive maintenance, which uses mobile devices to capture sensor-based information from production machines to direct maintenance work before an equipment failure takes place.
In the event a failure does occur, a floor worker can use information captured on their device to expedite troubleshooting and collaboration with remote subject matter experts to solve the problem.
Inventory and Asset Management
Tracking and managing inventory is also mission-critical for manufacturers. A smartphone or tablet equipped with a QR (quick response) code reader can scan inventory and equipment to validate location, and determine manufacture date, warranty status, maintenance history, and other vital information.
RingCentral and 8x8 Positioned To Lead In Manufacturing Vertical
Developing and promoting the communications solutions needed to support Industry 4.0 and help transform manufacturing will require significant leadership and investment. RingCentral and 8x8, however, appear to be well-positioned to do it. Both are deemed leaders in the 2018 Gartner Magic Quadrant for UCaaS, both have made significant, long-term investments in R&D and both are committed to driving innovation and creating communications solutions for their manufacturing customers.