Will Blockchain Disrupt Manufacturing? A Look at Promising Use Cases

Image Source: mhlnews.com

“Henry Ford launched the modern assembly line in a suburb of Detroit a century ago—and helped spark a radical transformation of both manufacturing and society.”—Daily News

Every year we look forward to a new Apple product—where lines bend round the corner with customers eager to be the first to buy it. New vehicles appear in ads every fall and if one is in the market for a new car, he or she is quick to get to the nearest dealership. But it all happens with manufacturing—a process of producing products we all want and desire—is as old as humanity itself. Not until the late 1800’s did Ford’s assembly line disrupt the status quo of manufacturing.

Indeed the Highland Park Assembly in Detroit was the single most important contribution to manufacturing. It was disruptive in the automotive manufacturing industry. The advent of the modern assembly line helped to “spark a radical transformation of both manufacturing and society,” writes the Daily News.

Today—blockchain has the potential to disrupt manufacturing systems to bring about significant improvements in efficiencies and cost savings.

Blockchain for Manufacturing

According to Louis Columbus blockchain’s greatest business potential may well be in manufacturing. Looking at trends, blockchain has an increasing visibility in every area of manufacturing from suppliers, to strategic sourcing, or procurement.

In this article—I review three blockchain use case scenarios:

    • Supply Chain
    • Internet of Things (IoT)
    • Smart Contracts

Supply Chain

One of the most applicable use cases for manufacturing is the supply chain. They form the foundation of every manufacturing business. With blockchain’s distributed ledger technology, a blockchain use case application can improve supply chain efficiencies.

Integral to manufacturing are the goods needed to produce a product. Whether it is wood to build furniture, or wheat to produce breads and cereals—manufacturers move products in their production process from the source to the plant—and then the final product is moved to the market.

It is no wonder then that for manufacturers, much of blockchain use case scenarios is focused on “how it can work for supply chains.” (Asavin Wattanajantra)  Blockchain will improve supply chain systems with “supplier order accuracy, product quality, and track-and-traceability, manufacturers will be able to meet delivery dates, improve product quality and sell more,” suggests Columbus.

With current manufacturing processes, the supply chain works globally. This adds to the complexity of tracing a product when there is an event, such as a defective product that needs to be recalled. Blockchain technology for supply chain applications can improve the efficiencies and lower costs in globally tracing a product. (Asavin Wattanajantra)

With current practices, company information flows through a supply chain communication process where there is no agreement on data standards on how to record or store information, nor on how it will be exchanged. According to Wattanajantra, blockchain has the ability to process all the relevant supply chain data “to create smarter and more secure supply chains, tracking the journey of a product through a clear and solid audit trail, with real-time visibility.”

Image Source: logisticsmgmt.com – The most common tool in the supplychain, the delivery vehicle. We see it every day those amazon delivery vans.

IoT: In-House use for blockchain

Within the plant itself, blockchain has the ability to enhance shop floor operations. Many manufacturing plants have machines that require scheduled maintenance. Here, a potential exists for blockchain to improve the scheduled and unscheduled machine maintenance and replacement of parts. This will result in reduced interruptions in manufacturing within the plant itself.

Blockchain—coupled with machine learning and Internet of Things (IoT) technology—can be used to record and store the lifespan of machine parts. Smart machines can then order and pay for replacement parts on a scheduled timeline, thereby reducing downtime and costs compared to manual intervention.

Contract Management with Smart Contracts

“In the many industries, there are suppliers and purchasers,” says David Seo.  Agreements are entered into to define the terms of delivery dates, prices, quantities, and other areas of concern. Human nature naturally results in “disputes and misunderstandings, not to mention fraud,” says Seo.

These can be mitigated when agreements are submitted to a blockchain smart contract, saving time and money. The details of that contract “can only be modified when both parties agree to them and submit them into a new block.”

Smart contracts can be set up automatically. When products are shipped, they can automatically be tracked, transparently delivered, and payments made. Thus, issues of misplaced or lost invoices, or misunderstandings—have all been eliminated.

Conclusion

While much of the excitement of blockchain has centered on cryptocurrency over the past ten years, blockchain clearly has a use case application that goes well beyond the volatility of cryptocurrency.  From supply chain, to smart contracts, to IoT—blockchain use case shows a good deal of promise to disrupt manufacturing processing systems.

If you liked the topic of this article be sure to check another one similar by clicking here -> From Bait to Plate! A Blockchain Supply Chain Use Case for the Seafood Industry

Eric W. is a self-educated ghost writer who for the past seven years has been involved in Blockchain, Cryptocurrency, and Digital advertising sectors as Project Director, Miner, and NRA (Network Resource Application).

Contact Eric

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