The potential of blockchain in the manufacturing industry to deliver business value is high. The use of blockchain technology increases visibility and security in every segment of the industry including suppliers, sourcing, procurement, quality check, floor operations, and monitoring. In brief, it delivers a new business model in the industry.
The blockchain industry is booming at a faster pace owing to the maintenance of a decentralized ledger for all transactions in the network. The participants can confirm transactions without the involvement of a third-party.
The use of blockchain’s distributed ledger and blocks improves the order accuracy, quality of the product, tracking, traceability, logistics, and every functional aspect of the manufacturing process. It delivers end-to-end transparency and security in a way that manufacturers can improve quality, meet their deadlines, sell more, and earn more return on investments.
Gartner finds that 30% of manufacturing companies having more than $5 billion of revenue will implement blockchain by 2023. Further, Gartner reports that the business value of blockchain will grow more than $176 billion by 2025.
Let us explore how blockchain can get involved in the manufacturing industry. Before that, let us understand the key features of blockchain that are beneficial for the manufacturing industry.
Beneficial features of blockchain in the manufacturing industry
It includes the following:
Immutability: The data entered cannot be changed once it gets integrated into the blockchain. It is tamper-proof.
Easy traceability: It is easy to trace the data for peers from anywhere. They can track the movement of assets in real-time.
Decentralization: The data is not stored on the central server. It is distributed in the network and will not have a single point of failure. This makes it more resilient and efficient.
Security and transparency: The information gets stored cryptographically. No one can change the data without consensus of the participating parties. It is secure and transparent.
These features of blockchain technology are exploited in the manufacturing industry.
Blockchain solutions in the manufacturing industry
For manufacturers, the supply chains are sophisticated, complex with several nuances making transparency and accountability a real challenge. The multiple parts and pieces of equipment keep getting shipped to various places. With blockchain solutions, the manufacturers have can have live activity logs and keep tabs on the flow of goods. As the data is decentralized and shared across nodes, it creates and maintains a shared and reconciled database.
In the manufacturing industry, blockchain offer solutions to many prevailing industrial pain points. A few of them are briefed here.
Monitoring of supply chain:Blockchain provides transparency in the supply chain avoiding complexity, delays, and constraints that impact production and profitability.
Detection of counterfeits: World Trademark Review cites that the material sources, detection of forgery and piracy will reduce the $4.2 trillion impact on the global economy.
Identity management: Identity management helps to know the actions taken by attorneys, auditors, technicians, and engineers.
Asset tracking: Blockchain technology helps to monitor the logistics of complex and expensive equipment movements across geography.
Quality assurance: With blockchain, it is possible to track the production life cycle to determine the product quality, detection of defects, and more.
Regulatory compliance:Blockchain maintains indelible records of actions, assets’ movements, and delivers significant value for the companies.
Although blockchain engineers are successful to bring blockchain in the mainstream of any business, the technology is not yet adopted by all. The IT teams are researching the technology to gain the knowledge and experience for its successful deployment. As customer expectations are rising, it compels the manufacturers to invest in technologies that can provide quick and reliable service. Manufacturing industries can use blockchain technology to recognize issues, increase transparency, and streamline processes.
In essence, it is high time that they move beyond the status quo to win in the market. Manufacturers can count on blockchain here to retain customer loyalty.