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.
What Manufacturers Are Saying
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.
● 51% say they want to use blockchain to automate their supply chains.
● 49% believe that blockchain can ensure better compliance with regulations.
● 44% say that blockchain will help them respond to evolving customer demands.
● 28% think that blockchain will reduce the risk of product recalls.
● 31% state that blockchain can enable better product sales in new markets.
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.
What’s in Store for 2019
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.
Future Projections
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:
● The addition of business value by blockchain will grow to slightly more than $176 billion by 2025, and $3.1 trillion by 2030.
● By 2023, 30% of manufacturing companies with more than $5 billion in revenue will have implemented Industry 4.0 pilot projects using blockchain, up from less than 5% today.
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.