Manufacturing firms turning to the cloud to increase their business agility

European manufacturing firms are embracing cloud-based technologies and services to accelerate their go-to-market plans and improve digital marketing efforts, according to an Information Services Group (ISG) report.

The report finds manufacturers on the continent also looking to the cloud to enable direct-to-consumer business models.

“Manufacturers in Europe are turning to the cloud to increase their business agility,” said Christian Decker, EMEA partner, ISG Smart Manufacturing. “And they are turning to manufacturing services providers to help them create new reference architectures and bring resiliency to their operations.”

In addition, manufacturing firms want service providers to help them establish robust configuration management databases and leverage automated testing, including shift-left techniques, the report says.

Looking for more transparency into their supply chains

The report also sees the manufacturing industry in Europe looking to revamp its supply chain infrastructure by using predictive models. Manufacturers are looking for more transparency into their supply chains following shortages caused by the COVID-19 pandemic. In some cases, companies are using AI for client or customer forecasts.

A chip shortage across all industries, meanwhile, is a challenge for the European automotive industry, which uses older chip designs, the report says. Fabrication facilities (fabs) are available for 3 and 5nm nodes, which are applicable for servers and mobile and laptop processors, but there’s a shortage of 28, 40 and 65nm fabs to make chips used by automakers.

Most of the new fab investments are directed towards new nodes and there is an ever-increasing demand from medical, industrial, and automotive verticals. The automotive industry may face chip shortages until 2023, when it may begin using more high-performance parts.

Automobile manufacturers working to scale up their EV infrastructure

Another trend among automakers in Europe is a focus making more electric vehicles, the report says. Automobile manufacturers are working to scale up their electric vehicle infrastructure, which is now taking precedence over autonomous driving technologies. Many auto manufacturers in Europe have announced plans to end sales of gas-powered vehicles, but they face several challenges before realizing these ambitions.

Manufacturers of industrial and off-highway vehicles, meanwhile, are looking for ways to optimize their outputs, the report says. Many of these companies are focused on integrating their manufacturing shopfloors across agriculture, construction and heavy vehicles. They are also integrating many layers of automation.

The report also sees many European manufacturers looking for custom application-specific integrated circuits (ASICs) instead of traditional, complex processes and systems on chips. With the rapid adoption of the IoT and edge computing, companies are integrating multiple sensors on the edge to deliver powerful and intelligent end-to-end systems. Even mid-sized companies are considering developing their own custom ASICs.

In response, service providers have evolved their offerings from conventional design and validation to multiple stages of ASICs. Some service providers are developing smaller and less complex ASICs through turnkey development engagements for clients that are new to this space.

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