Five Blockchain Use Cases for Manufacturing

 

Bringing a product from factory to market is currently a slow and expensive process. Supply chains are fragmented among hundreds of organizations and multiple ledgers, making them prone to security problems and vulnerable to fraud, and defective products, leading to billions of dollars in losses. Furthermore, moving products along a supply chain requires mountains of paperwork, emails, phone calls, endless meetings, and site visits.

 

A solution to these problems is blockchain. Manufacturers can positively benefit from blockchain not only by boosting trust among suppliers, distributors, service providers and customers, but also by improving operating efficiency while reducing costs. There are five main blockchain use cases for manufacturing, each of which will be discussed below.

1. Tracking Parts Along The Supply Chain in Real Time

Manufacturers today often do not know where a machine part is located at any given time. When a part leaves or arrives at a location, that information is not typically relayed in real-time. With blockchain technology, every part can be tracked in real-time. For example, when an automotive part arrives at a manufacturing plant, that part communicates its arrival to nodes at that destination. Using the blockchain consensus mechanism, these nodes would “agree” that the part has arrived and communicates their agreement to the rest of the network.

2. Regulatory Compliance for Food and Pharmaceutical Supply Chains

For obvious reasons, regulatory compliance for guaranteeing safety and reliability of food and pharmaceutical supply chains is paramount. Pharmaceutical companies and food distributors are required to store and ship their products in climate controlled conditions. They can use IoT sensors to track refrigeration, temperature, and humidity while moving their products along the supply chain. To boost regulatory compliance, these sensors would be connected to the blockchain to ensure transparent, tamper-proof, and verifiable records.

3. RFID Integration

IoT devices such as RFID location chips and barcode scanners can transmit data to a blockchain used by suppliers and customers. The RFID chip could be attached to a parcel for identification. A sensor positioned at an entrance or exit gate of a warehouse detects the parcel and sends a signal that the parcel has entered or left the building. As shipments of goods using RFID technology move through multiple distribution points, the package location and temperature data could be updated on the blockchain for all parties to see.

4. Anti-Counterfeiting and Fraud Prevention

Counterfeiting remains a significant problem in traditional supply chains. For example, there is a small yet significant fraction of pharmaceutical products that are counterfeit or otherwise not up to stringent quality standards. Since this can have potentially fatal consequences, both pharmaceutical manufacturers and consumers need a way to verify the authenticity and expiration dates of all medications. With tamper-proof records of a medication’s origin and history on the blockchain, consumers can verify the authenticity and potency of the medication they are about to take.

5. Infrastructure Management

Blockchain can also facilitate record-keeping and transparency within processes involving multiple parties worldwide, as with global supply chains. Each and every manufacturer, supplier, and business could track records, transactions, and proof of ownership across a distributed business network. This capability makes it possible to not only speed up to-market times at reduced cost, but also create and enforce service agreements with smart contracts.

Conclusion

By integrating blockchain with the use of their IoT devices, each supply chain participant can obtain a real-time view of their supply chain and its documentation. These IoT devices link the physical world with the digital space by collecting data from real-world objects, aggregating that data, and presenting that data via analytics to decision makers. With accurate product tracking in real-time, regulatory compliance, improved quality assurance, RFID integration, and anti-counterfeiting, trust would not be a question as records on the blockchain cannot be altered or tampered with.

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