As a byproduct of globalization, supply chains are becoming increasingly complex and difficult to manage. Problems including intellectual property theft, counterfeit products, noncompliance, and product recalls continue to arise among global supply chains that lack visibility and transparency.
Supply chains involve multiple parties across borders, IoT devices, RFID technologies, machine learning, and data storage.Supply chain professionals in particular, have special needs for data security, including indisputable information about the provenance of all manufactured products.
More and more businesses are beginning to recognize blockchain technology and associated smart contracts as the solution that brings trust, security, provenance, and governance to manufacturing and cross-border supply chains.
The value of blockchain lies in the fact that all transactions, records, and documents are stored in immutable ledgers and therefore cannot be changed or deleted. According to a recent survey from the Aberdeen Group, manufacturers are already seeing vast potential in blockchain.
Additionally, 55% of these manufacturers are interested in using blockchain to increase supply chain traceability with suppliers, partners, and end-customers. They are especially concerned with product non-compliance and recalls. Therefore, they feel that blockchain can help avoid recalls and mitigate any supply chain interruptions.
Usage of IoT and blockchain is already increasing within the manufacturing sector. The ability of manufacturing companies to automatically track, log, and transfer data using industrial IoT technology saves them time and money, as well as the hassles of manually keeping track of all that information.
Supply chain management is also a big issue in manufacturing that must be addressed in 2019. However, it is also a very realistic use case for blockchain. Fully secure product tracking, accurate reporting of transactions, and automatic management of products can be done using blockchain. The best thing about it is it’s all automated without any human interference, as humans can supervise supply chain activity via transparent IoT feeds onto the blockchain.
Blockchain’s greatest potential is delivering business value within manufacturing, transforming the entire sector. In fact, this is already underway with Walmart, DeBeers, and British Airways already using blockchain technology.
The Capgemini Research Institute did a recent study on how blockchain could provide value to manufacturing, and the study had a few key takeaways:
By combining blockchain and industrial IoT, the manufacturing sector can revolutionize product safety, item tracking to prevent costly recalls, inventory management, and MRO (Maintenance, Repair & Overhaul). This would also lead to new usage-based business models for “smart” products with inter connectivity.