What we need to be clear about is that in any industrial process where we are talking about transactional data, we should consider using a DLT or blockchain system. With that basis in mind, when we speak about “transactions”, especially in industries such as finance, it can be complex and time consuming. In this case, blockchain can replace this paradigm with an alternative that is transparent, verifiable and tamper-proof.
A blockchain system is a sort of database stored in multiple locations that can maintain increasing records (or blocks) which are time stamped and linked to previous blocks in a way which cannot be undone. This is a method of recording data – anything that needs recording and verified as happened. Once data has been recorded, it cannot be changed, only added to, and updated on the entire network.
So, why is the blockchain important to manufacturers? In modern manufacturing the supply chain can work across multiple organisations and countries, which can make it difficult to chase individual events or find solutions to increase efficiency. Most company information flows through a supply chain characterised by communication with little or no agreement on data taxonomy. A blockchain system has the potential to track the journey of a product through a clear and solid audit trail, with real-time visibility for all the participants. And exactly that, the visibility of all participants to incorruptible data is what makes blockchain disruptive in a logistics environment.
The more participants, the greater the gain for all of them in our project. Blockchain has the ability to turn competitors into collaborators and suppliers into loyal supporters of our system, making our supply chain much more efficient.
We can track materials and determine where they arrived, who received and handled them, as well as how and when they were transported to the next stage. And all this with the assurance that no one can manipulate my data, thus providing security and transparency in the supply chain.
A blockchain system has the potential to track the journey of a product through a clear and solid audit trail, with real-time visibility for all the participants.
There are four types of supply chain visibility. Here are some examples of how blockchain can help:
- Cargo Location: Instead of being lost through paper, information on a product’s location and origin can be available extremely quickly if we combine Blockchain and AI. You can even identify parts or materials that are , for example, defective.
- Rates are defined as the costs related to the transportation of cargo. Understanding in real-time how much they are spending moving, shipping and delivering freight is a spectacular advance if we combine the use of technology that guarantees that the data is accurate at every moment of the transport of the goods.
- Auditing Records. Truth. This information is invaluable within the auditing process as it allows businesses to fully inspect, review and validate past completed orders. Regulatory compliance is essential, especially with companies operating in several countries. The ability to create auditable and unalterable records is essential and avoids a huge amount of money and efficiency in regulatory departments never seen before.
- Automate payments to remove the lost invoices issue: blockchain can handle this making use of smart contracts where payments are triggered as products ships. Smart contracts will remove the need for businesses to send invoices and chase payments, saving significant time and ensuring that everyone is paid promptly.
A good traceability reduces business risk as it’s a key component in tracking manufactured goods and ensuring compliance with current and future regulations.
Another example could be how blockchain could support distributed manufacturing. Distributed manufacturing makes possible methods such as 3D printing where manufacturers design and create new products and get them made by sending design files to a manufacturing facility which they can “rent out” as and when they need it.
Blockchain could aid the deployment for this kind of 3D manufacturing by creating low-cost, distributed and assured integrity when it comes to contracts and production processes.
Another area blockchain could support manufacturing is through records management and the protection of intellectual property. But we will get deeper here another day.