Once upon a time – not too long ago – the possibility of disseminating information to anywhere in the world seemed preposterous. Internet was the buzzword then. Blockchain is the buzzword now. The technology is expected to take us from the “Internet of Information” to the “Internet of Value”, according to Don and Alex Tapscott, co-authors of Blockchain Revolution and founders of the Blockchain Research Institute.
A survey from the World Economic Forum in 2015 had predicted that 10 per cent of global GDP will be stored on the blockchain by 2027. From finance and agriculture to governance and healthcare, blockchain is slowing disrupting the way business is done in almost every sector. How long before the manufacturing industry embraces this Industry 4.0 technology?
For, the benefits can be wide-ranging: streamlined processes, simplified data management, improved security, effective fraud prevention, trustworthy digital relationships, efficient asset management, minimized manufacturing downtime and reduced costs. Let’s look at the top 5 possibilities for the manufacturing industry to be a part of this digital revolution:
Trusted supply chain
Traditionally, third-party inspectors have been entrusted with the difficult job of selecting, managing, monitoring and certifying participants in the supply chains. However, the growing “trust tax” in manufacturing – that had led to increased operating expenses and reduced productivity – calls for a decentralized system that does away with the whims and inefficiencies of middlemen.
As a software-based distributed ledger system maintained on multiple computing nodes, blockchain technology offers an innovative way of tracking product journeys. Each good can be uniquely identified via a token transferred through blockchain; each transaction verified and viewed in real-time in an encrypted, secure process. In other words, a solid audit trail can facilitate early detection of problems in the supply chain.
When Maersk Line, the leading container ship and supply vessel operator in the world, joined hands with technology giant IBM to test the application of blockchain in logistics, they found that the technology can be used to automate complex and time-consuming operations in the supply chain. Digitizing the end-to-end supply chain process can save the shipping industry billions of dollars.
By building a blockchain solution that can manage and track containers during the shipping process, manufacturers not only reduce the manual effort and paperwork, but also make operations more efficient, thereby significantly reducing costs. Together with IoT and predictive analytics, blockchain can also help manufacturers to proactively repair any equipment (in their service parts supply chain) before it actually breaks down.
These are exciting times for the manufacturing industry, when new decentralized models such as 3-D printing offer designers and inventors the leeway to “borrow” from a network of geographically dispersed facilities using information technology. Blockchain can be a game-changer in this space by countering the risk of intellectual property (IP) theft.
Once manufacturers have internet connectivity to 3D printing machines – and readable data from the machine – blockchain technology can provide an automatic audit trail in the supply chain. What’s more, smart contracts can be used to automatically find the nearest and cheapest 3D printer, as well as negotiate pricing and conditions. Finally, with blockchain, the Internet of Things (IoT) can stop being dependent on a central cloud server and start playing a bigger role in the world of mass customization. IoT-driven blockchain technology is the future.
By modest estimates, counterfeit products comprise about seven to eight per cent of the global trade. What if manufacturers had a fool-proof way of authenticating a product at each stage of its journey towards the end-customer? With blockchain, that’s a real possibility.
As each product is given a unique ID and key attributes on the blockchain registry, it’s easy for companies to track assets and ensure that the counterfeit products do not reach the marketplace. In other words, the supply chain infrastructure becomes a lot more secure, as irregularities are spotted in real time, cutting down on the risk of frauds and cyber attacks.
Typically, product information, instructions and related documentation are shared via e-mail or across cloud applications, and saved in different locations. The biggest challenge for manufacturers is to ensure that the latest, accurate data is available to all stakeholders at any given time.
With blockchain technology, enterprises can be assured that all the nodes in the network will be updated in real time, ensuring that the right data is available to the right person. From the execution of secure crypto-payments to the creation of ‘digital product memories’, blockchain reduces the reliance on third-party participants as well as middle management employees to make data management processes more transparent and efficient.
To sum it up
Just like the Internet, a couple of decades ago, the promise of blockchain today may seem too good to be true. Of course, the technology is still nascent and there are bound to be improved applications over the years. However, there is no denying that the manufacturing industry has a lot to gain from the blockchain revolution. Whether it is supply chain transparency and simplified business processes, or reduced risks and cost effectiveness, the early adopters of the technology are certain to reap long-term benefits. Are you ready to embrace the “Internet of Value”?