Blockchain as a Security Solution for Manufacturing

Manufacturing is the backbone of modern civilization established well before the latest industrial revolution. Due to increasing demand for manufactured goods, technology companies developed more efficient machine-powered and automated manufacturing processes. Blockchain technology, including distributed ledger systems running cryptocurrencies like Bitcoin and Ethereum, can be leveraged to make the manufacturing industry more efficient.


Rising costs of production and catching counterfeited products are some of the major bottlenecks the manufacturing industry currently faces. In this article, we will explore how blockchain makes the manufacturing industry more secure in three ways:


  • Boost Security on Manufacturing Premises
  • Combating Counterfeits
  • Theft Protection


Blockchain as a Security Tool in Manufacturing

The manufacturing sector is at a high risk of cyber attacks due to old technology, outdated systems, human factors, and lack of access to vital real-time information. The consequences of a successful cyber attack on a single manufacturer like a chemical plant can be catastrophic.


For example, a cyber attack could allow remote control of the manufacturing unit. This means the the factory, its environment, and human life in and around the factory may lie in the hands of the attacker.


Worst case scenarios could include the release of substantial amounts of toxic chemicals to the environment or loss of human lives and properties. This justifies the need to incorporate blockchain to secure manufacturing systems.


Blockchain can be used alongside the Internet of things (IoT) to secure manufacturing premises. The fact that no blockchain database has ever been hacked to date makes blockchain the most secure and trusted security technology option. Manufacturing IoT systems are incorporated with smart contracts to monitor and manage industrial processes, production and reordering supplies as may be required.


With a smart contract embedded on the industrial control system, unauthorized access of the system can easily be detected and prevented. Although the intruder is not detected, he wouldn’t be able to change the smart contract that runs the systems since all data would be encrypted (Kirby Wadsworth)


Digital Asset Storage to Combat Counterfeiting

Counterfeiting costs legitimate manufacturers billions of dollars in losses every year. Preventing counterfeits is not only an objective of manufacturers but also a need of many consumers.


Consider a popular machine spare parts manufacturer such as Caterpillar. Caterpillar sells thousand pieces of heavy construction and mining equipment across the world yearly. Shady manufacturers, however, use this opportunity to produce similar spares cheaply. These fake spares would either under-perform or break down before their guaranteed life span.


To protect its customers, Caterpillar needs to develop a blockchain-based system to fight counterfeiting of its products. Using blockchain, the supply chain of all Caterpillar products could be verified to be authentic. The supply chain would be decentralized and store complete transaction histories on a distributed ledger making it easier to trace authentic products.


All supply chain data collected using blockchain technology can authenticate, trace, and prove the origin of a manufacturer’s products. Counterfeits would be easy to detect and remove from the market. This applies to all industries, including and especially food, pharmaceuticals, and ammunition.


Safeguarding Intellectual Property From Theft

Intellectual property includes intangible creations of the human intellect and primarily encompasses of copyrighted digital assets, patents, and trademarks. It is nearly impossible to stop the reproduction of digital assets and the misuse of intellectual properties like branding, licensing, manufacturing processes, etc. Third party interference, human interpretation, and remuneration for breaches are still hard to penalize.


However, using immutable characteristics of blockchain and smart contracts, establishing and enforcing IP agreements becomes more feasible because the rules and restrictions for every digital asset would be encoded directly on to each asset.


In an event of an IP breach or unauthorized reproduction, these products can be easily traced to the offender. The individual violating the terms would be quickly identified. The affected entity would then be compensated following a predetermined smart contract (Rhys Skellern).


With stronger protection of intellectual property rights using blockchain technology, researchers and developers would be encouraged to invent new processes and products since they are assured of remuneration from their investments.

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