When we talk about blockchain technology, we generally associate it with Bitcoin. It's true, but only when we discuss the emergence of blockchain technology. However, the time has passed, and blockchain app development has progressed significantly. Innovation-driven businesses are exploring it as a distributed ledger technology across industries like manufacturing, healthcare, real estate, and more.
Blockchain's Potential
Distributed ledger technology has found a new space in the manufacturing industry. Many organizations regard blockchain development as having the potential for improving numerous processes across the industry. They feel that blockchain can help them comply with current and future regulations. They also believe that blockchain can help them sell more products in new countries and avoid product recalls.
Also, Read | Blockchain App Development In the Manufacturing Industry
The Manufacturing Industry's Challenges
The manufacturing industry has been battling several constraints, including:
- Outdated technology and industrial processes: According to studies, inefficient procurement processes cost the North American economy $1.55 billion per year.
- Lack of traceability: As global trade has grown, businesses have become increasingly difficult to keep track of particular activities. As a result, shipments are frequently lost, delayed, or stolen.
- Entering the supply chain with counterfeits: It's sometimes difficult to prevent entering the supply chain with counterfeits due to a lack of documentation, especially in the automotive, aerospace, and healthcare industries, where false items have more implications.
- Lack of accessibility and visibility: There is a lack of insight into the procurement process, making it difficult for practically all buyers to select a suitable manufacturing supplier.
- Lack of intellectual property protection: In the previous few months, several businesses in the manufacturing industry have experienced a breach in their intellectual property, making it a top issue.
Blockchain Applications in Manufacturing
The manufacturing industry, which accounts for 17% of global GDP, has long struggled with issues such as quality control, inefficiencies, and other issues. By providing visibility across all aspects of manufacturing, blockchain can completely change it. Here are some examples of how blockchain technology could be used in manufacturing.
Also, Read | Drive Your Automotive Business Ahead with Blockchain Solutions
Improved Traceability and Tracking
An IoT-powered system can follow the provenance of a manufacturing part from the point of manufacture to retail destinations, improving transparency and traceability for everyone involved in the value chain. IoT sensor data can be uploaded into the Blockchain, providing for a shared view and guaranteeing that commodities are handled correctly as they move through the supply chain. With the use of Blockchain, multiple processes like paperwork, obtaining certificates, timestamps, and quality checks can all be considerably improved.
Product Procurement Efficiency
Inefficient product procurement has been a key source of financial loss for manufacturers. Organizations are frequently exposed to risks and unwelcome charges as a result of their complicated supply chain. Companies can use Blockchain technologies to streamline and automate their supply chain and speed up the procurement process, including ordering items and the payment process.
Also, Read | Blockchain in Retail | Significant Applications and Use Cases
Better Payment Process
Because multiple parties are involved in validating and issuing payments, manufacturers frequently experience delays in payments as well as a lack of transparency in the payment process. Payments become delayed at numerous points in the supply chain. Blockchain's smart contract capability automates the payment process and ensures faster and more reliable payment to suppliers.
Improved Inventory management
The records may be accessible by anybody in the network since Blockchain allows you to connect with every stakeholder in the supply chain, including suppliers, distributors, and even retailers. This means that everyone has a copy of the information, reducing the amount of confusion in the supply chain. This makes inventory planning and management easier.
Also, Read | Blockchain for Document/Records Management across Industries
Improved data security and access
Using traditional means to communicate information such as invoices and contract data in any supply chain can be quite dangerous. This is where Blockchain comes in to assist secure the data using the most advanced cryptographic techniques. The dangers of information being hacked are eliminated because information blocks are nothing more than chronologically stored copies of documents that are linked to the prior block.
Automated supplier payments
The transfer of funds directly between the payer and payee in any part of the world, swiftly and securely, is made possible by blockchain. Even an hour of waiting time is no longer necessary- it's that simple! Smart contracts start the payment process as soon as the digitally secure transaction data is included in blockchain agreements and your network agrees to the terms and conditions.
Also, Read | Blockchain a Must for Supply Chain Development after COVID-19
Manufacturing plants and blockchain
For scheduled maintenance, some industrial plants already integrate IoT and machine learning. When combined with blockchain technology, data on the lifespan of machine parts can be collected and kept in a blockchain network, and new parts can be purchased and paid for regularly by smart machines. When equipment breakdown and parts must be purchased manually, this lowers downtime, making predictive maintenance more efficient. Manufacturers can utilize the blockchain network to store their data and link their ERP systems to their suppliers' systems.
Management of Warrants
False claims, phony items, misunderstandings regarding coverages, and other issues plague businesses when it comes to warranty management. It is becoming increasingly important for manufacturers to prevent fraud, reduce costs, and provide a superior customer experience.
By bridging the information gap between manufacturers, warranty providers, and other supply chain participants and tightly securing the chain of custody, blockchain can strengthen the warranty lifecycle. Further, it can ensure that counterfeits do not enter the supply chain and that no fraudulent claims are filed.
Also, Read | Strengthening Automotive Operations with Blockchain Solutions
Conclusion
We just touched on a few blockchain applications in the manufacturing industry. The technology still has a long way to go before it is generally adopted, and there are other difficulties to overcome, including industry standardization and others. However, one thing is certain: blockchain can revolutionize the way manufacturers conduct business.
It has the potential to transform a slow, insecure, manual system into a digitized, safe, quick, and automated network that can be managed from a single platform.
Connect with our blockchain development experts for more information about blockchain in the manufacturing industry.