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 A PROJECT REPORT ON
Use of Blockchain in
Manufacturing Process

(Submitted in partial fulfillment of the requirements for

Master in Business Administration (MBA)

Submitted By (Piyush Sharma) Under the guidance of: Shubham

Aggrawal Name of Student: Piyush Sharma

Father's Name:
Batch of 2020-22

LLOYD INSTITUTE OF MANAGEMENT & TECHNOLOGY

PLOT NO 11, KNOWLEDGE PARK-2, GREATER NOIDA-201306 (UP)

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 Contents

• Introduction

• Scope of Innovation

• Feasibility

Operating/Production Feasibility

• Description

• USP

• Conclusion

• References

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 Introduction

Perspectives on the upcoming impact of blockchain technology and use cases for the manufacturing
industry

For centuries, businesses and in some cases entire industries have been built on the simple principle of

trust between multiple parties. However, this business of trust is about to be disrupted and

transformed with the advent of blockchain technology. Blockchain can be defined as a distributed

ledger technology that can record transactions between parties in a secure and permanent way. By

‘sharing’ databases between multiple parties, blockchain essentially removes the need for

intermediaries who were previously required to act as trusted third parties to verify, record and

coordinate transactions. By facilitating the move from a centralized to a decentralized and distributed

system blockchain effectively liberates data that was previously kept in safeguarded silos. What kind of

impact could this have on everyday life? Imagine in healthcare, sensitive data from all stakeholders –

ranging from patients to medical companies – could be shared using the highest levels of encryption

and data protection to greatly

improve service efficiency and quality. Or in finance, companies and customers could potentially adopt

a common digital currency as an alternative to traditional money, reducing the cost of transfers and

enabling micro transactions. And in manufacturing, data sharing across the supply chain could enable

higher levels of transparency, empowering consumers to make better choices about the products they

buy. These are just some of the many opportunities that blockchain presents. Despite its brief

history

,blockchain is currently enjoying a rapid rise to prominence in corporate agendas as well as in the

media. Mainstream awareness can be largely attributed to its original application as the underlying

technology of digital currencies, in particular bitcoin.

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Besides the adoption of this technology in powering cryptocurrency networks, there are open questions

about where blockchain is headed, when it will yield positive results, and who will benefit most from it.

What’s clear at this point is that blockchain applications may have one of the most profound impacts on

the manufacturing industry, especially the supply chain. Vipul Goyal, an associate professor at Carnegie

Mellon University, states “a lot of companies are interested in blockchain for creating more efficient

workflows, but supply chain management is one of the big killer apps”. This is because global supply

chains are highly complex, with diverse stakeholders, varying interests, and many third-party

intermediaries – challenges that blockchain is well suited to address. In the manufacturing industry,

blockchain can be harnessed in two key ways, namely, to drive efficiency and enable new business

models: Drive efficiency: Blockchain can potentially improve efficiency in global trade by greatly

reducing bureaucracy and paperwork. For example, a multi-stakeholder process with a lengthy paper

trail could be replaced with an automated process storing information in a tamper-evident digital

format. Another example is the automation of services that currently require an intermediary such as

insurance, legal, brokerage, and settlement services. Blockchain could be used to track a product’s

lifecycle and ownership transfer from origin to

store shelf, even as it changes hands between the manufacturer, manufacturing service provider,

wholesaler, retailer and consumer. It would facilitate and automate each business transaction, enabling

a more direct relationship between each participant (e.g., automating payments and transferring legal

ownership between parties). Enable new business models: Micro payments, digital identities,

certificates, tamper- proof documents and much more can be introduced and radically improved using

blockchain-based services. For example, driver training organizations could replace easy-to-fake paper-

based certificates with tamper-proof digital versions that can then lead to new identity-related services.

Just as the Internet began a revolution of communication, blockchain technology could disrupt current

business practices and models. With significant benefits in sight, the overall market for blockchain is

expected to boom with some estimates projecting growth of blockchain technology from USD $411.5

million in 2017 to $7.68

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billion by 2022.2 Reasons for this rapid growth are the rise in banking, financial services and insurance

applications including digital currencies and identities, as well as the continuing development of this

technology and growth from major vendors. And while blockchain is not yet fully mature, its huge

potential suggests this is the right time to learn more. Companies need to understand how blockchain

technology can empower groundbreaking innovations, what obstacles must be overcome, and the

likely value and tangible rewards it can deliver, especially in manufacturing.

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 Scope of Innovation

How Blockchain Technology Works – An Overview of Key Features

Blockchain technology does not introduce an entirely new paradigm. Rather, it builds on the old

template of a ledger – something that is used to log transactions over a period of time. Traditional

ledgers are owned by one entity (such as a business, organization or group) and controlled by a

designated administrator (for example, an accountant). A typical ledger from the 1950s detailing

creditor payments; Source: Edinburgh City of Print This administrator can implement changes to the

ledger without requiring consensus from all of the ledger's stakeholders. In contrast, blockchain is a

shared, distributed ledger among a network of stakeholders that cannot be updated by any one

administrator. Instead, it can only be updated with the agreement of network participants and all

changes to the distributed ledger are auditable. To illustrate how this operates, figure 5 shows a

financial transaction recorded on a blockchain. A similar process can be used to trace other types of

asset transfer, to commit new data to a blockchain, and to update data in a blockchain. This

‘mutualization of data’ in a blockchain-based system is only possible with strong cryptographic

techniques that make certain that copies are identical, transactions are not duplicated, and specific

permissions are enforced to access stored data. Here, public and private keys are used to ensure

confidentiality and privacy. In simple terms, a public key can be likened to the address of a physical

mailbox, which is publicly known by senders. A private key is similar to the key or

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password required to unlock the mailbox; it is safeguarded at all times by the owner and must not be

shared with third parties.

The transformative power of blockchain comes through the unique combination of its differentiating

features and characteristics. Below is a summary of the four key features – these are data transparency,

security, asset management and smart contracts. 1. Data transparency – Blockchain technology

includes mechanisms to ensure stored records are accurate, tamper-evident, and from a verifiable

source. Thus, instead of multiple parties maintaining (and altering) copies of their own dataset, now

every stakeholder receives controlled access to a shared dataset creating a single source of truth. This

gives confidence to everyone working with this data that they're using the most recent, accurate, and

reliable dataset. 2. Security – Traditional ledgers typically provide a blanket layer of security which,

once breached, allows access to all stored data. In a blockchain-based system, the security mechanisms

make sure that individual transactions and messages are cryptographically signed.

This ensures essential security and effective risk management to tackle today’s high risks of hacking, data

manipulation, and data compromise.

Asset management – Blockchain technology can be used to manage the ownership of digital assets and

facilitate asset transfers. For example, it can be used to track the ownership of titles (e.g., land titles

and diamond certificates) and rights (e.g., copyright and mineral rights). It can also be used to manage

the digital twin of a physical object in the real world.

Smart contracts – Manual processes that are normally guided by legal contracts can be automated

with a type of self-executing computer program called a smart contract. A smart contract is a

component of a blockchain-based system that can automatically enforce stakeholder-agreed rules and

process steps. Once launched, smart contracts are fully autonomous; when contract conditions are

met, pre-specified and agreed actions occur automatically. These capabilities can be deployed across

two types of

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blockchain-based system: public permissionless blockchains where anyone can participate (e.g., the

bitcoin network) and private permissioned blockchains where participants must be safelisted. Figure 6

shows the key differences between these two types of blockchain-based system. Public, permissionless

blockchains are open and therefore likely to spur faster innovation as they can be used by many parties

and can gain network effects. However today, companies tend to adopt private permissioned

blockchains as these support a closed ecosystem of participants with enterprise features such as strict

access controls and privacy protections. Therefore, the choice between using public versus private

blockchains should be determined by the individual needs of each blockchain implementation.

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 Operating/Production Feasibility

Key Challenges Facing Blockchain Technology

Today Blockchain has the potential to deliver vast savings by improving operational efficiency and

generating value through new business models. However, as with many emerging technologies,

considerable challenges must be overcome before blockchain can achieve mainstream adoption in all

industries. Gaining industry adoption is the most critical challenge and this will determine the success

of blockchain technology in manufacturing. Being able to accurately and safely exchange information

within a community is a key advantage of blockchain and stakeholders benefit the most when their

community contains many relevant members. Therefore, similar to Facebook, the value of the

community increases when it is adopted by a growing number of relevant stakeholders. A powerful

network effect is triggered in the supply chain when stakeholder adoption reaches a critical mass. As

more and more supply chain stakeholders participate, blockchain becomes more valuable, evolving into

an industry practice. However, it will be difficult at first to obtain stakeholder commitment because of

differing levels of digital readiness and the initial requirement to recognize the mutual benefits of

blockchain-based collaboration. This will be particularly tricky when there are legacy processes,

regulations and laws governing various aspects of the business, as stakeholders will incur cost to

migrate from legacy systems and integrate with new

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systems and practices. Another challenge is the development of standards and governance of

blockchain in each industry. There will probably be not just a single blockchain-based system in the

manufacturing industry; instead, there will likely be multiple private permissioned blockchains due to

the competitive nature of business. And of course in future there will be multiple public blockchains.

Organizational bodies will be required to determine standards and agreements, especially in the

context of interoperability between blockchains. To tackle this challenge, the first blockchain consortia

are now beginning to emerge; for example, the Blockchain in Transport Alliance (BTA) in the

manufacturing industry. It is necessary to make progress with blockchain technology itself in order to

overcome current technical limitations. This is especially required for companies moving from a pilot

implementation to full-scale deployment. For example, some blockchain implementations have been

known to scale poorly and suffer from high latency although new innovations are being developed to

address these scalability and performance issues. In some specific applications (such as large-scale,

public cryptocurrency networks) there are issues with energy consumption and computing power

requirements. These obstacles will need to be addressed for blockchain to reach maturity. Organization

and culture play a significant role in the success of digital transformation in any industry. Particularly

with blockchain technology, this cannot be overlooked as its adoption will require a collaborative

mindset to engage with a large number of stakeholders. Therefore, within organizations, a culture of

embracing new opportunities from blockchain technology should be fostered. Managers, particularly

those in IT functions, must gain blockchain expertise to proactively push organizational exploration and,

if applicable, adoption of blockchain-based solutions. Across organizations, stakeholders need to

engage in shared governance, defining roles and answering key questions (e.g., on process

transformation, development of the solution, active versus passive participation). Companies should

therefore embrace concepts of collaboration and coopetition in order to derive the greatest benefits

from a blockchain transformation. While there are many hurdles to overcome, these challenges with

blockchain are not insurmountable. Already this technology, despite its

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relative infancy, is showing promise across a wide range of industries including citizen services, retail,

life sciences and healthcare, automotive, manufacturing, energy, and manufacturing. The next section

explores today’s most promising applications of blockchain.

BLOCKCHAIN EXAMPLES ACROSS INDUSTRIES

As blockchain technology matures, businesses in almost every industry are exploring how to capture

new opportunities. This chapter reviews a selection of promising and disruptive examples of blockchain

application and considers how these can inform future direction.

Retail – Encouraging and Ensuring Ethical, Sustainable Consumption Blockchain technology is being

applied by retailers and consumer goods manufacturers to drive fair and responsible business. For

example, it is empowering consumers by providing more information about how each item was

produced, particularly identifying whether a product has been ethically and sustainably sourced.

In the UK, the fashion designer Martine Jarlgaard is collaborating with Provenance and other partners

in a pilot program that makes fashion supply chains fully transparent. This solution encourages and

enables consumers and retailers to buy goods from fashion supply chains in which each stakeholder

adheres to ethical and sustainable business practices. Users can look up a garment's supply chain

history on the blockchain-based system by scanning its QR code or NFC-enabled label with a

smartphone app. Building on this successful pilot program, Provenance is now working towards an

open traceability protocol. This would allow anyone to track the place of origin for anything, from

coffee beans to a roll of fabric, and hopefully accelerate the movement towards sustainable

consumption. Another example of ethical sourcing is from Everledger in the UK. Everledger is

developing a blockchain-based system to provide secured proof of origin and ethical sourcing for high-

value goods such as diamonds, wine, and even fine

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art. It uses blockchain to store a digital record for millions of precious goods. For diamonds, this system

would replace the flawed paper-based certification process currently used by diamond suppliers,

intermediaries and buyers. Unlike paper records which may be forged or lost, blockchain records are

permanent. Everledger achieves this by creating a digital thumb-print for each individual diamond. This

digital thumb-print contains unique identifiers that consist of over 40 metadata points, the diamond’s four

Cs (color, clarity, cut, and carat weight) as well as the certificate number which can be laser inscribed

on the physical diamond if required. This thumb-print is then made visible and stored with all

participants on the blockchain-based system.

Automotive and Manufacturing – Managing Physical Assets with Blockchain Some of the excitement

surrounding blockchain technology in the automotive and manufacturing industries is to do with its

application in digital twins. A digital twin is a dynamic, digital representation of a physical asset which

enables companies to track its past, current and future performance throughout the asset’s lifecycle.

The asset, for example a vehicle or spare part, sends performance data and events directly to its digital

twin, even as it moves from the hands of the manufacturer to the dealer and ultimately the new

owner. Blockchain can be used to securely document everything related to the asset.

Groupe Renault is experimenting with storing the digital twin of its vehicles on a blockchain-based

system which would provide a single source of truth for each vehicle’s maintenance data. In July 2017,

the company released a prototype that was created in collaboration with Microsoft and VISEO – it uses

blockchain to connect each new vehicle’s maintenance events to the vehicle's digital twin. This data is

fully traceable and visible to authorized parties such as the vehicle owner. As the digital twin is fully

transferable on the blockchain-based system, each vehicle's maintenance history remains connected to

the vehicle even when there is a change of vehicle ownership – a very useful and practical data

management service that automotive companies can provide to their customers. For a different reason,

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Bosch and a German certification authority, TÜV Rheinland, are also experimenting with digital twins of

vehicles. These organizations aim to prevent illegal odometer manipulation. In Germany, one of Europe’s

largest used car markets, it is estimated that every third car has been subject to illegal odometer

manipulation. The fraudulent increase in value per car is estimated to be USD $3,700 alone, which in

Germany means almost $7.5 billion in fraud every year. To solve this challenge, the partners created a

blockchain-based system with an in-car connector to regularly record the distances travelled by each

vehicle which acts as an ongoing, tamper-evident record of odometer readings. Here, the recorded data

on a distributed blockchain network makes it obvious if an odometer is manipulated. This use case

shows how manufacturers can increase data credibility and protect public safety; it also has value for

regulators, fleet owners and drivers who need access to trusted data on used vehicles. In future, the

entire automotive industry could collaborate on a single blockchain-based platform to store the digital

twin of every vehicle, including important events and status updates. This would allow, for example,

maintenance data and odometer readings to be stored together as a comprehensive record. Of course,

to become reality this would necessitate industry-wide collaboration.

Energy – Eliminating Marketplace Inefficiencies

The energy industry is likely to find many uses for blockchain technology. Transformational examples

include enabling the operation of self-managing utility grids and facilitating peer-to-peer energy

exchanges – individual households could sell surplus energy (self-generated by solar panels) to their

neighbors. In addition, there are many near-term examples of process improvements that could help

energy companies to run more efficiently and save money. Power Ledger, an Australian startup, has

created a local marketplace to sell surplus renewable energy through cryptocurrencies (see figure 13).

The blockchain-based system enables the sale of surplus energy generated at residential and

commercial developments connected to existing electricity distribution networks, or within microgrids.

This

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empowers renewable energy asset owners to decide who they want to sell their surplus energy to and

at what price, and allows for each unit of electricity to be securely tracked from the point of generation

to the point of consumption. From local to cross-border trading, BP, Eni Trading & Shipping, and Wien

Energie completed a European energy trading pilot program in mid-2017 using a proprietary blockchain

development platform from BTL Group in Canada. This pilot used blockchain technology to streamline

cross-border trading and back-office processes such as confirmations, actualizations, invoice generation,

settlement, auditing, reporting, and regulatory compliance across the energy trade lifecycle. BTL Group

now aims to create a live, commercial version of an energy trading solution that will reveal significant

cost savings applicable to numerous areas of the energy sector. It’s clear that companies in almost every

industry are starting to unlock greater efficiencies and new business models using blockchain. They're

doing so by leveraging many of the key capabilities of this technology including data transparency,

security, asset management, and smart contracts – all of which can be widely used in manufacturing.

The next chapter explores the ways in which blockchain technology is already benefitting the

manufacturing industry and investigates how it could shape manufacturing in the near future.

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 BLOCKCHAIN IN
MANUFACTURING

Unlocking Value in Manufacturing

Achieving excellence in manufacturing involves working collaboratively with others to optimize the flow

of physical goods as well as the complex flow of information and financial transactions (see figure 14).

But today there is a significant amount of trapped value in manufacturing, largely stemming from the

fragmented and competitive nature of the manufacturing industry. For example, in the US alone, it is

estimated that there are over 500,000 individual trucking companies.8 With such a huge number of

stakeholders involved in the supply chain, this often creates low transparency, unstandardized

processes, data silos and diverse levels of technology adoption. Many parts of the manufacturing value

chain are also bound to manual processes mandated by regulatory authorities. For example, companies

must oftentimes rely on manual data entry

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and paper-based documentation to adhere to customs processes. All this makes it difficult to track the

provenance of goods and the status of shipments as they move along the supply chain, causing friction

in global trade. Blockchain can potentially help to overcome these frictions in manufacturing and realize

substantial gains in manufacturing 3 BLOCKCHAIN IN MANUFACTURING 3.1 Unlocking Value in

Manufacturing process efficiency. This technology can also enable data transparency and access among

relevant supply chain stakeholders, creating a single source of truth. In addition, the trust that is

required between stakeholders to share information is enhanced by the intrinsic security mechanisms

of blockchain technology. Furthermore, blockchain can achieve cost savings by powering leaner, more

automated, and error-free processes. As well as adding visibility and predictability to manufacturing

operations, it can accelerate the physical flow of goods. Provenance tracking of goods can enable

responsible and sustainable supply chains at scale and help to tackle product counterfeiting.

Additionally, blockchain-based solutions offer potential for new manufacturing services and more

innovative business models. This chapter explores some of the most prominent use cases for blockchain

in the areas of global trade manufacturing, supply chain transparency and traceability, and commercial

processes in manufacturing. The final part of this chapter outlines the key success factors for industry

adoption of the technology.

Faster and Leaner Manufacturing in Global Trade

Manufacturing is often considered the lifeblood of the modern world, with an estimated 90% of world

trade carried out by the international shipping industry every year.9 But the manufacturing behind

global trade is highly complex as it involves many parties often with conflicting interests and priorities

as well as the use of different systems to track shipments. Therefore, achieving new efficiencies in trade

manufacturing is likely to have significant impact on the global economy. According to one estimate

from the World Economic Forum, reducing supply chain barriers to trade could increase global gross

domestic product (GDP) by nearly 5% and global trade by 15%.10 Blockchain technology can help

alleviate many of the frictions in

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global trade manufacturing including procurement, transportation management, track and trace,

customs collaboration, and trade finance. With over 50,000 merchant ships11 involved in the global

shipping industry and multiple customs authorities regulating the passage of freight, a major area of

focus for efficiency gains is ocean freight. Blockchain technology has huge potential to optimize the cost

as well as time associated with trade documentation and administrative processing for ocean freight

shipments. One example that highlights the complexities behind ocean freight today is the estimate

that a simple shipment of refrigerated goods from East Africa to Europe can go through nearly 30

people and organizations, with more than 200 different interactions and communications among these

parties.

To unlock efficiency in ocean freight, Maersk and IBM have started a venture to establish a global

blockchain-based system for digitizing trade workflows and end-to-end shipment tracking (see figure

17). The system allows each stakeholder in the supply chain to view the progress of goods through the

supply chain, understanding where a container is in transit. Stakeholders can also see the status of

customs documents, and can view bills of lading and other data. Blockchain technology ensures secure

data exchange and a tamper-proof repository for this documentation. The two companies expect this

solution to track tens of millions of shipping containers annually. It has the potential to significantly

reduce delays and fraud, which could lead to billions of dollars in savings in the manufacturing

industry.13 Ocean carrier company ZIM has conducted a pilot to digitize the actual bill of lading, often

hailed as a ‘holy grail’ application in manufacturing. The bill of lading is one of the most important

documents in ocean shipping, and it acts as a receipt and a contract for the goods being shipped. The

information stored on a bill of lading is critical as it contains all necessary details such as the shipment

description, quantity and destination, as well as how the goods must be handled and billed. During the

trial of a blockchain-based system developed by Wave, ZIM and pilot participants issued, transferred,

and received original electronic documents successfully through the decentralized network.

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The containers, shipped from China to Canada, were delivered to the importers (i.e., consignees)

without a problem.14 Although still in pilot phase, industry adoption of a digital bill of lading would be

significant. It could greatly support supply chains in reducing costs, enabling error-free documentation

and fast transfer of original documents. Accenture is developing a blockchain-based system also

focused on replacing the traditional bill of lading as well as facilitating a single source of truth for all

supply chain stakeholders for freight inquiries up to issuance of trade documents. Here, a decentralized

network connects all parties in the supply chain and enables direct communication, eliminating the

need to go through central entities and rely on intermediaries. According to Adriana Diener, Global

Freight & Manufacturing Lead at Accenture, the proven value of this project is surpassing expectations:

“Using blockchain to replace the traditional bill of lading documentation to ship goods will drive

millions of dollars in process efficiency and operational cost reduction benefits across the supply chain

for multiple parties in the trade ecosystem including shippers, consignees, carriers, forwarders, ports,

customs agencies, banks, and insurance companies”. 3.3 Improving Transparency and Traceability in

Supply Chains Many projects are underway using blockchain technology to improve supply chain

transparency and monitor provenance. These initiatives amass data about how goods are made, where

they come from, and how they are managed; this information is stored in the blockchain-based system.

This means that the data becomes permanent and easily shared, giving supply chain players more

comprehensive track-and-trace capabilities than ever before. Companies can use this information to

provide proof of legitimacy for products in pharmaceutical shipments, for example, and proof of

authenticity for luxury goods. These initiatives also deliver consumer benefits – people can find out

more about the products they are buying, for example, whether a product has been ethically sourced,

is an original item, and has been preserved in the correct conditions.

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Automating Commercial Processes in Manufacturing with Smart Contracts

Current industry estimates indicate that 10% of all freight invoices contain inaccurate data which leads

to disputes as well as many other process inefficiencies in the manufacturing industry.18 This problem

is so prevalent that in the oil and energy industry alone, Accenture expects that at least 5% in annual

freight spend could be reduced through improved invoice accuracy and reduction of overpayments.19

Blockchain has the significant potential to increase efficiency along the entire manufacturing and

settlement process including trade finance and help to resolve disputes in the manufacturing industry.

As digitized documents and real-time shipment data become embedded in blockchain-based systems,

this information can be used to enable smart contracts (see figure 21). These contracts can automate

commercial processes the moment that agreed conditions are met.

One of the first startups to pursue such smart contract applications in the manufacturing industry is

ShipChain. ShipChain is an early-stage company which has designed a comprehensive blockchain-based

system to track and trace a product from the moment it leaves the factory to final delivery at the

customer's

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doorstep. The system is designed to encompass all methods of freight and there are plans to include an

open API architecture that can integrate with existing freight management software. All relevant supply

chain information is recorded in an immutable blockchainbased database that can execute smart

contracts once the conditions have been met (for example, as soon as the driver transmits confirmation

of successful delivery). A key element to automating the settlement process is through ShipChain's

digital currency called "SHIP tokens". Participants of ShipChain's platform purchase these tokens in

order to pay for freight and settle transactions on the platform. In this use case, blockchain in

combination with the Internet of Things (IoT) in the manufacturing industry will enable even smarter

manufacturing contracts in future. For example, on delivery a connected pallet will be able to

automatically transmit confirmation and the time of delivery as well as the condition of the goods to

the blockchain-based system. The system can then automatically verify the delivery, check whether the

goods were delivered as per agreed conditions (e.g., temperature, humidity, tilt) and release correct

payments to the appropriate parties, greatly increasing efficiency as well as integrity. Blockchain can

further be used in the context of IoT to automate machine- to-machine payments (e.g., connected

machines negotiating and executing price based on the manufacturing activities performed). Another

example of smart contracts in the manufacturing industry is the digitization of letters of credit (L/C) in

order to accelerate the preparation and execution of a standard paper-based L/C

– a process which currently tends to take from a few days to a few weeks.

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 Description

Getting Started with Blockchain in Manufacturing

Once a company understands and recognizes the potential of blockchain technology to drive efficiency

and value, the next step is to establish a roadmap for application. This should start from a willingness to

collaborate, and involve building blockchain knowledge and capabilities with focus on driving value for

all stakeholders. There are three main success factors for every blockchain initiative:

Success factor #1: Create a culture of collaboration When a company agrees to work with blockchain

technology, it is signing up for an intensely collaborative endeavor. This is because a huge part involves

facilitating trusted collaboration between multiple parties including both public and private entities of

all kinds – government agencies, industrial organizations, regulators, partners, and even competitors.

Taking the example of the highly competitive financial services industry, collaboration platforms have

been created for competitors to work together researching the application of blockchain technology.

Although competitor collaboration might seem counterintuitive, economies of scale impact the value of

blockchain. When more parties agree to use a single blockchain solution, more value is created for each

participating organization. That’s why right now several blockchain consortia are emerging in the

manufacturing industry

Success factor #2: Build up blockchain knowledge and capabilities Knowledge and capabilities enable

organizations to identify and realize the value of new operating models. So it is essential to provide

empowering partner organizations and individual contributors with the time, tools, and resources they

need to successfully contribute to each blockchain project. These contributors must be able to liaise

effectively within the blockchain ecosystem and with relevant technology players, implementation

partners, and associations.

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Success factor #3: Focus on value and engage with stakeholders on blockchain opportunities By

participating in blockchain-based prototypes, stakeholders are able to prove and understand the

business value of a new initiative, as well as establish technical feasibility. It is important to set realistic

expectations and acknowledge that blockchain technology remains in an early phase of the software

maturity lifecycle. It has yet to be applied at scale. Realizing the full value of this technology depends

on collaboration with the entire stakeholder ecosystem, and participants must be ready for this. When

identifying promising blockchain use cases, companies should scrutinize each idea to establish its

dependency on blockchain technology. This process can be facilitated by the decision tree

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 USP of Blockchain

SELF REPORTING

Self-reporting through a digital representation of the conditions such as a photo, video, or a digital file can

be stied at the product facility or a mobile app.

REAL TIME ANALYTICS

Provides real time analytics by allowing multiple parties to update the decentralized database.

PREDICTIBLITY

The continuous tracking of changes in the environment can aid in improving predictability per item.

TRACKING

Tracking of food items & volumes on the supply chain.

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 CONCLUSION

Blockchain technology is emerging from its first deployments in cryptocurrency and is now likely to

have significant impact across almost all industries. Like a pebble dropped into a lake, the ripples from

this technology are beginning to expand outwards in all directions including the manufacturing

industry, where blockchain promises to make business processes more efficient and facilitate

innovative new services and business models. Already many projects are underway to apply blockchain

technology to global manufacturing, adding value by boosting supply chain transparency and

automating administrative operations. In future we can anticipate blockchain technology will intersect

with other innovations to amplify impact. Imagine how the physical flow of goods can be more

effectively orchestrated and synced with information and financial flows when blockchain is combined

with the IoT, artificial intelligence, robotics and more Moving from today’s era of proving concepts and

piloting applications to actually deploying productive solutions at scale will require further technology

development, organizational transformation and, crucially, collaboration between all stakeholders.

Success depends on all parties working together to transform legacy processes and to jointly adopt new

ways of creating manufacturing value. In the highly fragmented manufacturing industry, consortia that

bring together stakeholders will play a key role in achieving blockchain’s potential in the industry.

Despite all the hype surrounding blockchain today, we believe

that the manufacturing industry needs to leverage new technologies and embrace ways of rethinking

old processes in the digital era. While there are still many challenges to overcome, we invite you to

explore with us the opportunities that blockchain presents. By joining forces, we can create the right

foundations for successful industry adoption of blockchain and we can ultimately unlock new value in

manufacturing.

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References

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