What is Blockchain Technology and how it is changing the manufacturing industry?
The transparent yet secure business process at best- that is Blockchain technology to industries. When Blockchain said hello to the world, industries never had had such a widespread assumption about Blockchain technique. It was touted as a promising security measure exclusively for digital currency (cryptocurrency) transactions. But Blockchain outpaced all the best guesses of industries and turned out to be an amazing scope for multifarious business sectors including manufacturing industries.
A market report by Gartner says the business value of Blockchain will outpace 3.1Trillion by 2030. It is evident from the report unrolled by Gartner that this technology is going to disrupt entire industrial growth estimates. However, let’s check how Blockchain redefines the manufacturing process and how it benefits its close supporting industries.
What is Blockchain?
Blockchain is a shared database technology that records data transactions across a decentralized network. As the name implies, it is a chain of data blocks distributed in a public or private network. The shared block constitutes a couple of information such as the values of the transaction, data about the previous and future transaction (hash) and the timestamp. Since it is a shared ledger, it offers high data transparency, yet the recorded blocks are immutable as it runs under a decentralized network.
In simple terms the process of Blockchain technology can be explained like; suppose a transaction was made between two persons in a network. Each transaction has been recorded in a block and seals with a digital signature (cryptography). This cryptographic encryption makes the network leak-proof and impenetrable.
Each event in a Blockchain process undergoes a consensus run. The participants of a network should agree with the transaction to record in a block. Plus, all the participants can see the transaction history and it is permanent. In short, being transparent, Blockchain is making it more secure from any sort of fraudulent activity by anyone in or out of the network.
Blockchain and Manufacturing Industry
The use cases of Blockchain technology is evolving as the technology grows. In the manufacturing industry, the competitive benefits of Blockchain are ostentatiously utilized across supply chain management. Combined with industrial IoT devices and smart product design machines, Blockchain technology is turning out to be a guaranteed solution for the daunting problems in manufacturing and its allied business practices.
The increasing problems such as asset misappropriation, corruptive billing, fraudulent disbursement, bid-rigging are haunting manufactures in their effective supply chain practice. As the manufacturing industry is a collective process of multiple stakeholders, the decentralized structure of Blockchain technology adds reliability across the channel. Further, implementing Blockchain use cases across the operational and transactional scenarios could help companies eliminate supply chain abuses by far.
Arraying all the business participants in a single chain, Blockchain can help the end-to-end supply chain management more transparent and reliable. By updating all the datasets across the distributed record, the decentralized stakeholders can build a corrupt-free asset transaction. Thus, Blockchain facilitates an accountable product supply chain management with effective regulatory compliance.
How Blockchain Benefits Manufacturing Industry?
The scope of Blockchain in the manufacturing industry spans around its different operational substreams. It can serve as a bridge between multiple business parties, a mapping tool for the supply chain channel, and provide mobility and data protection.
In supply chain operations, data exchange is an imperative part. It involves a lot of confidential agreements and contract documents. As it passes through more systems/hands, the data becomes more vulnerable. The cryptographic data encryption technology in blockchain resolves these daunting issues. It protects each data record with a digital signature. Thus, blockchain mitigates the possibilities of the data breach and protects the data network from hackers.
There are multiple stakeholders entailed in a manufacturing supply chain, from product manufacturing units to its last-mile delivery point. Connecting all of them in the transparent network enables all of the participants to access the data records. Yet, blockchain ensures that no one of them can alter the data individually. And thus, it helps to perform corrupt-free data accessibility for all in the network.
Traceable and transparent:
In Blockchain technology every data block is transparent, and all transactions are traceable with the timestamp. As a result, in a manufacturing setting, the data including the production process, trade documents, shipment details, management process, etc, can be stored permanently. Plus, as it is a permanent record, the participants in the network can track and trace the data individually.
Further, it gives more business advantage through legitimate source traceability. It provides a clear map of the product journey from the production unit to the end-user delivery. Pharmaceutical and electronic gadget companies can make use of it to build their brand reputation and trust.
Smart Business Contract:
The smart contract is the best blockchain application in a supply chain channel. Blockchain can act as a smart contract between two or more parties. It provides a trustful ground for companies upon a mutually agreed legal contract code.
As the agreed conditions are satisfied, this smart contract provisions the automatic exchange of data/products. This automation process works based on the blockchain principle. Allowing the maximum transparency and immutable data blocks, it is a reliable legal bound that businesses can leverage.
Connected Asset Management:
Befriending IoT devices, Blockchain provides a connected asset management operation. To identify the devices in the network and permitting changes and additions in a more secure and transparent way, Blockchain is a reliable platform. It records each alteration request and the performed changes across the network, and so leads to better inventory management.
Also, in an industry setting, Blockchain technology can be used to maintain a transparent maintenance record and how the machines have been treated all across their life cycle. This eliminates unnecessary expenses and ensures more responsible machinery service practice.
The benefits that industries can gain from Blockchain technology is not limited. As technology grows further, new ways to answer complex business processes will evolve. Thus, not only in the manufacturing industry, the amazing benefits of Blockchain technology can be more visible but also in every industrial sector.