What is the Importance of Blockchain in the Manufacturing Industry?

What is the Importance of Blockchain in the Manufacturing Industry?

Manufacturing Technology Insights | Wednesday, October 14, 2020

Blockchain is an innovative technology in the present era packed with a massive range of use cases.

FREMONT, CA: Despite the initial speculations and concerns, industries are beginning to adopt blockchain to use the technology’s transparent and underlying security. The companies which deal with finance, legal services, design, or any business that deals with a large volume of transactions are slowly investing in blockchain technology

Factors allowing a company to leverage Blockchain in Manufacturing

One usual instance that is generally overlooked in small-scale or startup manufacturers is how much the different parties deal with, making moving and delivering a product that heavily depends on transparency. For example, a manufacturing and supply chain process deals with many intermediaries, like suppliers, packers, and movers, and so on.

Consider a product certificate deciding the state of quality check done at each hub is missing in transit. This may not be a vital issue for that logistics service; but, on a larger scale. Additionally, there are various negative consequences, especially in the manufacturing industry, like the environmental impact, unethical manufacturing practices that compel transparency between the manufacturer, the customer, and everyone involved.

Blockchain helping Manufacturers to gain their customer’s trust

There are a few areas where blockchain in manufacturing can help gain customer’s trust. For instance, verifying the manufacturers’ integrity claim is often considered an expensive process in large-scale industries and needs proper scrutiny.

Many companies manufacturing food products go through several rounds of quality and integrity checks and use blockchain to maintain an identical copy of each node in the framework. This allows product inspection and auditing in real-time, thus decreasing the time and cost consumed. This kind of transparency makes network activities and other operations highly visible to the relevant authorities, thus automatically establishing trust. 

Asset tracking is one of the other essential entities in any manufacturing process. Tracking moving products and their associated components, like the product’s paperwork, can become a nightmare if there is no proper tracking mechanism in place.

Opportunities in Blockchain and Manufacturing

The term blockchain in manufacturing is no more a new concept as it is already being used to make the day-to-day consuming products. Understanding the technology’s importance and its long term susceptibility, not only manufacturers but also large-scale industries with a decently funded R&D department is continuously looking for ways to adopt blockchain into their operations.

The scope for this technology will only expand in the forthcoming years since consumers are starting to demand more transparency from the manufacturers. 

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