Benefits of a Blockchain-Based Manufacturing Protocol

Manufacturing is a complex process with large production orders, multiple stakeholders, multiple supply chains, raw materials, and countless machines—both large and small. A company fulfilling a production order must keep track of all these moving parts but even if they do, they don’t have full end-to-end visibility into their supply chains.


This is a major source of frustration for manufacturing companies and it forces them to search for a better solution in the Industry 4.0 era. One solution with enormous potential is a blockchain-based manufacturing protocol that can combine all of these components and logistics into a single and transparent production line.


The following are the benefits of a production protocol based on the blockchain aimed to ease the manufacturing process:

1. Comprehensive Support for Full Production Process

The full production process consists of design, production, business processes, logistics, and payment processing. Multiple parties can be involved in every stage of this process, and all parties need to communicate readily and clearly in order for the production order to be fulfilled successfully and inexpensively. A blockchain-based production protocol can bring all parties together onto a single platform that handles every part of the production process.

2. Creates Customized Products at No Extra Cost

Manufacturing is expensive, but more customers demand higher quality at lower prices than ever. This, and fierce competition within the industry, pressures manufacturers to produce high quality products at the same cost or even lower. Lower costs is a major selling point for blockchain-based manufacturing protocols. They allow manufacturers to scale their operations and to deploy Manufacturing-as-a-Service business models on a shared cloud infrastructure network. Even better, they can do so without spending money on creating new communication systems or trying to get existing fragmented systems to work together, enabling manufacturers to produce better goods at lower cost.

3. Rapidly Scales New Business Models

Instead of taking the risk of holding large amounts of inventory that may not move, manufacturers can create a manufacturing-on-demand service that can rapidly scale as demand increases. To meet that goal, a blockchain-based platform with smart contracts is necessary to align communications and logistics between customers, businesses, suppliers, manufacturers, and even smart sensors in factories also known as IoT devices. Small businesses and entrepreneurs can also participate in the ecosystem as they have stronger IP protection along with proofs of product existence and ownership.

4. Outperforms Existing Infrastructure

Using a blockchain protocol to run manufacturing operations and managing supply chain logistics provides more secure connectivity and protects rich data exchange between multiple parties. Worldwide accessible blockchain protocols can connect suppliers, manufacturers, other businesses, and smart IoT sensors to an international marketplace with robust and transparent communications technologies. Using Ricardian smart contracts can provide higher throughput, lower transaction costs, and legally binding agreements for manufacturers, suppliers, transport agents, and other digital services.

5. Boosts Processing Speeds While Lowering Costs

When a protocol is based on blockchain technology, manufacturers and other users of this protocol can deliver products faster due to higher end-to-end visibility on their supply chains. They can quickly scale their operations to current customer demand, hold less inventory, mass-customize their products, and deliver their products to the market faster. These benefits culminate in quicker processing of production orders, higher transparency in supply chain logistics, faster delivery, and most importantly, reduced costs.


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