Need to Know: Biggest Blockchain Benefits

To stay competitive and successful, New York manufacturers need to embrace the latest innovations.

In recent years, manufacturers around the world are becoming increasingly interrelated using blockchain technology. How popular is the technology? Amid the COVID-19 crisis, the global market for blockchain in manufacturing was estimated at $32.6 million in 2020, and is projected to reach $980 million by 2026 according to a new market study published by Global Industry Analysts Inc., (GIA).

Blockchain technology has the potential to transform the supply chain by automating processes and making it virtually impossible for someone to make unauthorized changes. It can streamline the supply chain, improve transparency, facilitate auditing and reduce costs. So, how can you maximize the benefits of this technology?

Wait, What Is Blockchain?

First, let’s make sure you know what blockchain is, and we’ll go from there. Blockchain is a database that relies on a chain of data blocks and is linked by cryptography. It’s designed to deter data modification. Instead, once the data is recorded, it can’t be altered retroactively, making it difficult for a single user to gain control of the system.

One of the main differences between blockchain and a typical database using tables is the inherent structure. With blockchain technology, the information is stored in the blocks holding various sets of information. When the block is filled, it’s added to the existing chain. Any new data that’s compiled is stored in a new block that can be subsequently added to the chain. If you’re still struggling to understand this technology, here is a helpful short video you can watch to illustrate it further.

Blockchain Benefits?

Blockchain technology offers enhanced visibility across the entire manufacturing process, including operations at supplier warehouses, on the plant floor and all along the supply chain. As participation grows, users can benefit from the ledger structure to improve efficiency. Blockchain technology may help improve the following aspects of the manufacturing process:

Identification of problems in products

Product designs

Identity management

Asset and procedures tracking

Quality assurance

Compliance with regulations

Overall efficiency

Which Operational Aspects Are Improved?

Part of manufacturing is constantly improving your operation to boost efficiency. The main areas blockchain can help manufacturers in is improved performance and product quality. Ultimately, this leads to increased revenue and profits. Manufacturers who use blockchain typically see results in the following four areas of day-to-day business operations:

Quality control. Besides in-depth tracking up and down the supply chain, blockchain creates definitive documentation of quality checks and production data. Significantly, the database tags each product and automatically records each transaction, including quality checks and updates.

In addition, the system may be set up to provide automated quality checks that generate and write measures directly to the blockchain. This eliminates the need for other traditional checks for quality control involving suppliers. It may also reduce the number of audits required for verification of quality controls.

Tracking and tracing.Data is more transparent and accessible through blockchain technology. The system provides a permanent digital record of materials, parts and products, creating a single “voice of authority” for all participants.
Better maintenance.Blockchain creates the potential to support maintenance improvements, such as automated service agreements that can accommodate the influx of new types of machinery. With blockchain, machines can easily be scheduled for maintenance and serviced with greater speed and efficiency. For instance, a request for machine maintenance or a replacement part may be automatically triggered. After the procedure is performed, payment processing is instantly implemented. In addition, blockchain keeps track of maintenance records. These procedures are currently still in the development phase, but they’re widely viewed as an important component of the system.
Intellectual property protection.Don’t ignore the role that blockchain can play in protecting intellectual property and deciding whether to produce parts in-house or with an outside supplier. The blockchain data may create a virtual certificate of authenticity, helping prove that property is owned in the event of a patent dispute.

What’s Next?

Blockchain technology may result in a new business model for manufacturers to achieve competitive advantages in 2021 and beyond. Wondering if this technology is right for you? Contact RBT’s team of dedicated professionals now to discuss whether this approach should be a part of your long-term strategy.