Top Blockchain use cases in production

Top Blockchain use cases in production

January 7, 2022

From supply chain optimization to machine-driven maintenance, discover the top 5 blockchain use cases in manufacturing.

On top of the numerous and unexpected challenges posed by Covid-19 over the past 18 months, the global manufacturing sector is facing a number of long-standing issues that continue to challenge the industry. 

These include the complex infrastructure and supply chains with an increasing number of players, and the need for both digitization and continuous improvement to remain profitable. Now, however, blockchain use cases in manufacturing are emerging as a real solution to many of the challenges in the manufacturing industry.

So much so, that IDC data predicts that by 2025, 30% of manufacturers will use blockchain in new ways, such as connecting with IoT technology to deliver reliable provenance, leading to a 90% increase in audit efficiency. 

As the manufacturing industry begins to realize the potential of blockchain, applications of the technology are revolutionizing the industry by creating supplier ecosystems, providing better oversight of entire supply chains, eliminating fraud and providing better oversight of internal processes.

Blockchain in manufacturing use cases

Blockchain's innate immutability, decentralized infrastructure and the fact that no single party owns the data make blockchain the ideal technology for improving manufacturing processes.

A blockchain is a database that contains blocks, each of which contains information. It is this information or data block that contains the what, when, where, who, how much and the state of a particular good or shipment. 

Each block is cryptographically encrypted and connected to the blocks before and after it, securely linking them together. This prevents a block from being changed and provides an immutable ledger that is trusted and secure. Using blockchain in manufacturing gives manufacturers the peace of mind of knowing that their processes are running as they should with transparency, oversight and accurate data, facilitating a smoothly running ecosystem.

1.   Ensuring the authenticity of materials

Counterfeiting and fraud in the supply chain are problems that have plagued the industry for years. As this problem continues to cause problems, manufacturers are turning their attention to blockchain solutions to create a secure and immutable database of assets or products. 

Blockchain technology enables the creation of a shared digital ledger (ledger), which addresses the issues related to the sharing, and speed of sharing, of information within the fragmented supplier ecosystem. Suppliers have access to a secure and authorized database in which no single entity owns the data. This reduces the risk of certain suppliers fraudulently altering data. 

Blockchain for manufacturing also eliminates the reliance on paper audit trails and the miscommunication that results. Digital twins of physical assets can be created, allowing physical goods to be represented on a shared digital ledger, allowing them to be tracked in real time throughout the supply chain. 

This also allows those involved in the manufacturing industry to verify where their materials come from, while preventing counterfeit materials from entering the ecosystem. Because blockchain in manufacturing is able to track and prove the origin of materials, an immutable audit trail is achieved while reducing the risk of fraud.

2.   Machine-Driven Maintenance

Outdated paper checks to detect and fix problems have come a long way in the manufacturing industry. Today, manufacturers are using IoT devices that give the industry a better understanding of what is happening on the factory floor. Using blockchain, manufacturers can go a step further by creating a secure network for IoT-enabled machines. 

This solves the problem of unreliable and bottleneck sensitive IoT networks; networks that leave manufacturers vulnerable to attacks and downtime, which costs them dearly. Data shows that manufacturers can lose as much as 20% of their productivity, which can amount to 800 hours of downtime, resulting in millions of dollars in lost revenue. 

Using blockchain technology in manufacturing, manufacturers receive more accurate and reliable data from their IoT-enabled machines, allowing them to put together preventative measures. 

Through the use of smart contracts, these checks can be performed according to preset conditions, while ensuring that real-time diagnostic data is reliable and verifiable through immutable maintenance ledgers. 

The ability to address problems quickly before unplanned downtime occurs is also beneficial to manufacturers.

3.   Simplify and ensure quality control.

Another blockchain use case in manufacturing is to simplify and ensure quality controls. Without the help of blockchain within the manufacturing industry, providing full transparency requires costly support from other areas managing IT platforms. 

In addition to providing customers with track and trace capabilities, blockchain delivers quality controls through immutable documentation. This eliminates the need for inbound quality control to verify checks because multiple parties have access to the available data. 

Not only that, but the need for audits by central authorities is reduced because stakeholders can use blockchain technology in production to gain complete transparency into the required documents.

4.   Warranty Fraud

Warranty Fraud costs the manufacturing sector billions of dollars a year. So much so, that one study estimated this figure to be around $2.61 billion per year. When companies are faced with the problem of managing false warranty claims to replace products, they often incur more costs by depleting resources. 

However, by using blockchain, companies can verify the information about a product, whether it is a serial number, the ownership of the product or whether the product actually has a warranty. Blockchain is necessary for this because it provides an immutable record that cannot be falsified or manipulated. 

In turn, manufacturers ensure that fewer false claims are processed, providing a better customer experience for customers with genuine claims.

5.   Questionably sustainable supply chains.

With supply chain fraud being such a problem for the manufacturing sector, blockchain in the manufacturing sector can produce positive results that improve supply chain problems. By connecting everyone involved in the process: suppliers, distributors and retailers, everyone has access to the information they need in real time, while also being assured of its validity. 

With no more confusion possible, inventories are better managed and planned for. With manufacturers sitting between their suppliers and their customers, ensuring a smooth supply chain is important to a company's success. And blockchain in the manufacturing industry helps to achieve this. It allows for better collaboration between everyone involved in the supply chain, sharing information securely and ensuring that no single entity has control over the data.

What are the benefits of Blockchain in manufacturing?

By providing a private ledger that is secure, immutable, transparent and distributed; blockchain in manufacturing helps improve processes and reduce costs while optimizing the manufacturing ecosystem. With the growing adoption of blockchain-based solutions, manufacturers are realizing the potential that the technology can bring, such as immutability, transparency and more efficient shared environments.

By leveraging flexible and interoperable blockchain platforms, such as the ARK Core platform, and more; builds customized blockchain solutions for manufacturers. Solutions that give manufacturers unparalleled supply chain visibility, but also enable linkage to IoT machines to generate greater efficiency, cost savings, better machine maintenance and more accurate data.

Book a free consultation with our blockchain experts to explore how blockchain technology can help your organization gain better oversight of your supply chain, increase efficiency and generate cost savings.

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