2018 has seen a considerable increase in recognition for Blockchain technology. The phrase, originally spelt as ‘block chain’, was coined in 2008 by Satoshi Nakomoto, the alias of a man who has never been traced. His white paper outlined a technology for the future of all transactions, and that future is quickly approaching.
Whilst associated with monetary transactions, the techniques incorporated in blockchain technology present opportunities for businesses in all areas of operations. In particular, blockchain has the potential to revolutionise the manufacturing process in a myriad of ways.
What is Blockchain?
Despite its growing recognition, many people don’t understand the details of blockchain technology. Whilst its complexity cannot be understated, there are a few key concepts behind blockchain that allow it to be simplified. At its core, blockchain is a series of connected data entries (blocks) that are stored and can be accessed in multiple locations across the world. Most importantly, these identical chains are unable to be changed – once something is on the blockchain, it will remain there in its current form on all versions. A common, albeit slightly basic visualisation, is one Google Document stored in over 100 places that can only be added to, but not edited, by the people involved.
The idea is that blockchain creates an unalterable and verifiable ledger of events that can be accessed by anyone concerned. Blockchain would remove the need for legislative third-parties in transactions. The major selling point of the technology, though, is its security. Nothing previously attached can be removed or altered, and its multiple locations make it harder to target for hacking.
It is these core ideas that businesses are slowly looking to transfer into other areas of operations. Whilst its uses are wide-ranging, one of the clearest future sectors for blockchain is manufacturing, an area where attention to detail and accountability are paramount.
Manufacturing’s limited understanding of cyber-security regularly causes problems for businesses in the sector. Consequently, the security of blockchain is the technology’s obvious benefit. However, its advantages in this area go further than just securing payments and protecting from hackers. A major positive that the manufacturing sector will receive from this technology is its ability to create a ledger of events throughout the whole supply chain process.
Many national and international manufacturers rely on materials that can sometimes travel through multiple businesses before arriving at the manufacturer. When manufacturing takes place at this scale, it can be hard for companies to pinpoint the reasons for issues, such as supplying delays, that could be taking place at companies with which they have no first-hand communication. Even upon research, differences in auditing techniques make it a challenge to confirm problem areas.
The adoption of blockchain throughout the sector would create new levels of visibility, allowing the progress of materials to be tracked in real-time and, depending on the level of adoption, down to fine details such as the person in charge and the exact problems that were faced. Blockchain would introduce a new level of accountability to many manufacturing processes, allowing issues to be discovered and resolved much quicker.
Another bonus for the manufacturing sector would regard the use of intellectual property. Not only would the added security help protect companies and manufacturers from hackers who may look to intercept the IP data, but the economic benefits of blockchain can also make the process of paying the owners of certain IPs much easier, particularly when it relates to a sole third-party inventor.
Ahead of the Curve
Blockchain is a technology that, for many businesses, is still in the process of being understood. A global survey by Capgemini earlier this year found that only 6% of manufacturing businesses studied had implemented blockchain technologies into their corporation. However, the same study also found that 86% of manufacturers were in a concept stage. This shows that, over time, blockchain is likely to become the norm for the manufacturing sector.
Blockchain presents incredible opportunities for manufacturing businesses, and not just in the future. By getting ahead on the technology now, you can put your business in the best possible position to take advantage of this technology before your competitors. ERA has extensive knowledge in manufacturing sector supply chains, helping major organisations achieve manufacturing cost reduction by streamlining their procurement. We can help your business understand blockchain, see whether it is suitable for your business and help you plan the implementation of the technique into your organisation. If you are interested in finding out what blockchain could do for your business, contact us today.