BlogSep, 2021

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How Blockchain is Changing Things up in Supply Chain & Manufacturing Industry

We've been swept up in the fourth industrial revolution since 2010. (Industry 4.0). It is a technological revolution characterized by data exchange and intelligent automation. Cloud-based systems, the Internet of Things (IoT), cloud computing, and cognitive computing are all pushing the manufacturing industry to progress rapidly.

The application of blockchain technology is gaining popularity in the manufacturing and distribution sectors. The airline industry uses it to supervise its fleet's maintenance procedures. Retail giants have shown interest in the use of blockchain to make their operations leaner and faster. 

Blockchain & Manufacturing Revolution 

As a solution to improving transaction processing time, blockchain is already being utilized to solve other issues, such as several problems in manufacturing.

For instance, blockchain technology may connect supply chain ledgers to increase the accuracy and efficiency of product tracking. Having blockchain facilitate more accurate tracking and tracing can shift a time-consuming, labor-intensive manual process into a quick automated task.

Efforts are being made to enable blockchain to be used in manufacturing. An open-source standard to combine blockchain and IoT has been jointly developed by well-known technology companies like Bosch and Cisco Systems and startups through the Trusted IoT Alliance.

The protocol's primary feature is a smart-contract interface that enables data to pass freely between and among blockchain-enabled systems. Early research into the technology-focused on its application to supply chains.

Developers also hope to develop applications that will be able to support immutable documentation and hardware trust. To expand blockchain applications, a standard would need to be integrated into new factory hardware and software.

Manufacturing today is affected by blockchain technology. Blockchain can increase clarity and assurance at every stage of the industrial value chain, from sourcing raw materials to delivering the final product. It may assist with:

  • Tracking the supply chain for more transparency
  • Tracking materials origins and identifying counterfeits
  • High-complexity, long-duration engineering design
  • I.D. verification
  • tracking of assets
  • assurance of quality
  • the ability to comply with rules and regulations

Blockchains can provide industrial and manufacturing companies with a complete view of their operations, along with solutions that can boost augmented reality and 3D printing.

What sort of impact does Blockchain bring to new Supply Chains?

1. Traceability and Transparency 

Data on a blockchain is permanent and cryptographic signatures are necessary to verify ownership of information. If two or more firms cooperate, they can leverage a blockchain system to store information on the whereabouts and ownership of their goods and materials. To provide a comprehensive history of all supply chain components, this data is recorded in the blockchain. 

All supply chain members have a clear view of the commodities as they go from business to company. These recordings are unchangeable and are easy to track. A faulty product's source can be more immediately recognized, leading to more efficient product recalls and minimizing the time interruption experienced amongst different supply chain parties.

If a company can see and understand all of the inventory items moving through its supply chain, it can make better judgments. An improvement in quality boosts confidence in both consumers and stakeholders. It's also an effective weapon against fraud and counterfeiting

2. Savings & Expenses 

Inefficient supply networks produce a lot of waste. Industries with perishable commodities, such as the food sector, are especially vulnerable to this. Blockchain can help businesses spot and correct these inefficient inefficiencies, allowing them to apply cost-saving initiatives on a targeted basis.

In addition to reducing expenses, blockchain also helps reduce fees paid by multiple bank accounts and payment processors for fund transfers. These costs may eat into profit margins; therefore, it's essential to exclude them.

3. Interoperability

Data sharing is a severe issue with existing supply chain software, as it cannot bring together data from every participant in the process. Distributed blockchains, on the other hand, were intended to preserve a unique and transparent database. Each member of the network has a role in contributing new data and ensuring its accuracy. This makes it possible for any entity on the network to view all information, so one firm may check data transmission.

4. Electronically exchanging data systems.

The transmission of data between different firms is often done using EDI. However, these statistics are released on a scheduled schedule rather than in real-time. Because of this, if an order is lost or prices fluctuate, the rest of the supply chain only finds out until the next EDI batch is released. Information is updated in real-time with blockchain, and it is immediately shared with all stakeholders.

5. Preserving and increasing the value of crucial intellectual property

Every manufacturing company has a responsibility to safeguard its intellectual property.

To avoid legal wrangling, a company may benefit from using blockchain technology to assert I.P. ownership in the event of a patent dispute. Companies have made it possible for users to register I.P. in a blockchain using a web service. A certificate is created that validates the existence, integrity, and ownership of the I.P.

It is also a method of protecting and securing I.P. when monetizing digital assets. When used, for example, connected machines can assemble parts through the use of digital design files. To share proprietary I.P., the firm licensing the I.P. on the blockchain allows the company that makes the part to access it.

6. Machine managed maintenance

Blockchain can aid in introducing new maintenance strategies (such as automated service contracts) and reducing repair times. The advances are essential to deal with the sophisticated machinery's increased complexity and technical sophistication.

To make things easier for contractors, customers may include information about each device's service agreements and installation plans in the blockchain, producing a product's digital twin. Blockchain technology may be used to run and pay for scheduled maintenance automatically. Machines that require regular upkeep can be serviced by the equipment, which generates a smart contract for repair or a spare part. Once the order is complete, payment processing takes place automatically.

Blockchain records for the maintenance history are also linked to immutable documentation. Such applications currently in the early stage of development increase equipment dependability, enable equipment health and attrition monitoring and generate auditable machinery health evaluations. In addition, the blockchain may serve as proof to equipment suppliers that maintenance was conducted as specified in the warranty and guarantee agreements, even if an in-house team handled the care.

Closing Thoughts: The future of supply chain management will be shaped by blockchain technology

Blockchain technology and supply chain management solutions are a match made in heaven. Due to the immutability of blockchain-based solutions, virtually all of the critical weaknesses of existing supply chains may be solved quickly.

Industry firmly believes that supply chains are one of the essential areas that blockchain can help improve. However, it is also relevant to note that blockchain will have some difficulties since it is very new to the business world. The sector is plagued with deficiencies, and blockchain appears to solve most of these problems.

Hopefully, the use of blockchain in supply chains will soon become standard. In the future, both customers and producers will come to know a new, better way of managing supply chains.