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 faster 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. Blockchain technology has advanced significantly in the market and provided additional advantages. In this essay, I’ll discuss blockchain technology, its development, and how it benefits the manufacturing sector.
Blockchain’s distributed ledger and blocks improve order, accuracy, product quality, tracking, traceability, logistics, and every functional aspect of the manufacturing process. It delivers end-to-end transparency and security so 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 to 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 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.
- Improve Customer Engagement: Blockchain is more durable than traditional storing methods. Because you may utilize data analysis to make projections and predictions, which can help you further to fix supply chain management problems. Additionally, your analytical tools may be able to increase client happiness. The blockchain database can be used to discover strategies for planning your delivery schedule. Additionally, clients may be able to access blockchain data to a certain degree. One garment company, for example, allows customers access while displaying an approval form or a labor union sheet. Data sharing will create transparency, and loyalty and enduring customer connections are the results.
- Security and transparency: The information gets stored cryptographically. No one can change the data without the 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 and 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.
Blockchain offers solutions to many prevailing industrial pain points in the manufacturing industry. 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 product quality, detect defects, and more.
- Regulatory compliance: Blockchain maintains indelible records of actions and assets’ movements and delivers significant value for the companies.
Although blockchain engineers successfully bring blockchain into 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 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 they move beyond the status quo to win in the market. Manufacturers can count on blockchain here to retain customer loyalty. These advantages come with a lot more features. Blockchain is one of several new technologies changing how manufacturing businesses handle their supply chains. The supply chain sector will undoubtedly experience the true meanings of openness, accountability, and efficiency as blockchain technology grows.
As the last point, manufacturing sectors will gain from a far better way of conducting business the sooner they implement the lucrative blockchain technologies.