Blockchain Application Development In the Manufacturing Industry

Posted by : Mudit Kumar | 12-Nov-2020

  • blockchain in manufacturing

    The effect of blockchain and its applications like smart contract solutions are becoming more widespread as manufacturing factories across the world become more connected. 

    A retailer must perform a systematic review to figure out the best location for blockchain, which starts by defining the existing market challenges and potential needs of the organization. Subsequently, it will then analyze how it uses the technologies to mitigate the pressure points of the plant and satisfy its needs.

    In all phases of the manufacturing supply chain, Blockchain will scale transparency and confidence, from purchasing raw materials to shipping the finished product. It could help to fix pressure points, including:

    • Monitoring of the supply chain with better accountability 
    • The provenance of materials and identification of counterfeits 
    • Tech architecture for high-complexity long-term goods 
    • Management of identity 
    • Tracking properties 
    • Assurance of consistency 
    • Compliance with regulation

    Blockchain Technology

    Essentially, as the name implies, Blockchain is a sequence of blocks. There are digital records (the block) in a shared archive instead of a physical chain, though. As a block stores new information generated by participants, blockchain makes it immutable.

    Blockchains can improve accountability across supply chains, monitor key staff identification and credentials, and facilitate more streamlined functionality of audit and enforcement. It does not, however, mean that it is an equally tenable option for all businesses or sectors of industrial production.

    Also, Read | What is Blockchain Technology and How Does it work

    Blockchain in Manufacturing

    Blockchain will allow for an entirely new manufacturing business model to improve accountability in all aspects of the network, from manufacturers, strategic sourcing, distribution, and supplier efficiency to shop floor operations that provide machine-level control and support. Supply chains are the backbone of all trading firms, most of which can use the distributed ledger structure and block-based method of blockchain to aggregate value-exchange transactions to increase performance. Manufacturers will be able to better meet delivery deadlines, boost inventory efficiency, and eventually sell more by scaling retailer order consistency, product quality, and track-and-traceability. 

    Track and Trace Improvement 

    Business can employ blockchain technology solutions to share knowledge more efficiently, reliably, and safely across diverse supply chains. It can provide a permanent digital record of components, parts, and items that allows end-to-end exposure and provides all members with a single source of reality. These advantages are important if many participants with separate IT structures remain involved in the supply chain, or if there is a lack of confidence among participants or the need for new participants to be on board.

    Also, read | EDI Management with Blockchain for Efficiency, Automation, and Security

    Critical Intellectual Property Rights and Monetization 

    Organizations spanning industrial sectors face IP security dependence. IP security, in tandem with quality, is an important factor in determining whether to manufacture parts in-house or purchase them from a supplier. In the case of a patent dispute, one option is for a corporation to use blockchain technologies to help show that it owns IP. For instance,  Bernstein Technologies has developed a web service that allows its users to register IPs in a blockchain. It generates a certificate that proves the life, legitimacy, and possession of the IP.

    Automate and Safeguard Quality Controls 

    A company will scale value for consumers, another primary goal of the plant of the future, by using blockchain to help quality management. Today, instead of blockchain, it offers users absolute disclosure and complete documentation on the efficiency of systems and goods that need costly assistance from central actors running IT networks.

    Blockchain supply chain management offers immutable archives of quality controls and manufacturing process details, in addition to helping consumers track and locate inbound parts along a supply chain. The database uniquely marks each commodity and instantly records on the blockchain any sale, alteration, or quality check. The development setup must include automatic quality checks that produce and write measurements directly to the blockchain to allow this application. This use case facilitates data access from various stakeholders and will remove the need for inbound quality management to validate the supplier’s conducting tests. The need for checks by suppliers of original equipment or central authority to check quality controls can also be decreased.

    An Advanced Machine as a Service 

    Emerging tech facilitates opportunities for using an advanced pay-per-use platform for equipment, also known as machines as a service (MaaS). In this model, a machinery dealer charges for the use of the equipment based on the output it produces, instead of selling manufacturing equipment. For eg, instead of selling a compressor, compressed air is supplied by volume by the machinery supplier. Manufacturers can save major upfront costs by depending on MaaS instead of their machines and can quickly update equipment to obtain access to the new technologies. If correctly implemented, the MaaS model would allow producers to efficiently scale their output flexibility.

    Also, Read | Verifying Product Authenticity with Blockchain and Smart Contracts

    Enabling Maintenance Operated by Machines 

    New maintenance methods, including electronic management arrangements and shorter maintenance periods, can be assisted by Blockchain. To control the higher complexity and technical maturity of advanced manufacturing equipment, these advances are required. Users append service agreements and implementation documents relevant to each system to the blockchain record to enable outsourced servicing, providing a digital twin of the device.

    The automatic execution and payment for scheduled repairs will then be allowed by blockchain technology. A computer needing maintenance will cause a service request and create a smart contract for the job or a replacement component. Payment collection occurs immediately upon completion of the request. Also, blockchain adds immutable evidence of the maintenance history to the distributed ledger. These applications, which are still in the early stage of development, improve the durability of the equipment, promote control of the health and attrition of the equipment, and establish auditable machinery health evaluations.

    Also, Read | Making Supply Chains Smarter with Blockchain Smart Contracts

    Best Practices for Blockchain Adoption in Manufacturing

    It is also worth exploring the four best practices for blockchain solutions in the manufacturing industry.

    Define the Use Case for Your Company 

    Blockchain can be a strong tool; it’s not indestructible, though. Ensuring that it is a strategic fit is crucial. Although there is a need to ensure that multiple parties exchange and update information, where time is limited, blockchain technologies are especially successful, and trust between parties is required.

    Build a Network

    One of the main problems of blockchain is putting together a community of stakeholders to mutually agree on a set of principles that will describe the business model. Participants must determine the rules for participation, how to ensure the risks and rewards are spread equally, and what mechanism for risk and management should be used.

    Designing Purposefully 

    A business must diligently think about the design of a blockchain’s architecture. Would it be without authorization, allowing anybody to initiate or authorize transactions and display them, limiting access to those parties? The Global Blockchain Report of PwC indicates that enterprises are implementing all these techniques as well as creating hybrid implementations. For most business solutions, private blockchains solutions are more suitable as their owners or regulatory authorities may structure rules with an eye on privacy and data protection.

    Also, Read | A Compact Guide to Proof-of-Concept Development for Blockchain

    Conclusion

    If blockchain technology matures, it will encourage manufacturers, by confidence, to clear such barriers that have impeded the full-scale rollout of other next-generation innovations and disruptive business models. As a result, more effective factory operations that include data exchange and coordination between complicated business and computer networks will be built and set as a new industry-wide standard.


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Mudit Kumar (Writer)

Mudit has been working with Oodles since 2017. He writes about technologies that not only disrupt the digital space but also influence the physical world. Initially, he explored revolutionary technologies like ERP (Enterprise Resource Planning) and AI (Artificial Intelligence). Now, he focuses on unfolding the elements of blockchain technology, given its potential and edge over others.

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