How Blockchain Boosts Manufacturing Industry in 2019
A Brief Insights – Blockchain Technology:-
Blockchain has the potential to deliver the greatest manufacturing value in business. Not only that, but it will also give you an insight into visibility in all the aspects of manufacturing.
From suppliers, strategic sourcing to procurement it will also allow you to see supplier quality to buy floor operations, that includes machine-level monitoring and other services. It can also enhance and introduce a completely new model of the manufacturing business.
As a matter of fact, for every manufacturing business, the supply chain works as a foundation. To increase the efficiency of the supply chain it uses the blockchain distributed ledger structure and block-based approach. This enables it to aggregate the deals of value exchange.
In fact, working on the improvements in supplier order, quality, and the track and traceability will ensure that the manufacturer will meet the essential requirements. Like delivery data, product quality, and increase in sale rate.
Highlights of Blockchain Technology in Manufacturing Industries:-
- According to Gartner, by 2025 the business value of Blockchain will grow somewhat around $176 Billion, then by 2030, it will exceed by $3.1 Trillion.
- Typical products can be prevented from damages by the track-and-traceability feature of Blockchain. In fact, critical product recalls costs are $8M
- A combination of blockchain and IoT will create a remarkable impact on product safety, track, and traceability of the product warranty management. It will also repair, overhaul and maintain. This will lead to the new usage-based business model for connected products.
- Around 30% of the company with more than $5 B revenue, will be having Industry 4.0 pilot projects implemented by using the blockchain according to Gartner.
In-Depth Findings with Regards to the Manufacturing Industry:-
A recent study on “Does blockchain holds the key to a new age supply chain transparency and trust?” by Capgemini Reseach Institute has provided significant insights on how a blockchain can positively improve the supply chain and the manufacturing industry.
For the purpose of the study, Capgemini surveyed around 731 organizations globally on the existing plan and the preparation of blockchain initiatives. To start with the research, initially, 447 organizations were interviewed who are currently implementing or experimenting with the blockchain. They have provided with the valuable insights of the subject matter.
Here are some of the key notable points of the study that includes:-
- Nearly $8 M spent on critical product recalls. However, that can be prevented with the track and traceability feature of blockchain.
- In a survey, it was discovered that 456 food recalls in the U.S. alone this last year and that nearly costs $33.5 B. The Blockchain’s general ledger structure allows a real-time audit trail. So that you can monitor all the transactions that are secured against modifications. Thus, it will be ideal for the companies associated with audit and compliance-intensive.
- There are top three drivers of Blockchain for manufacturer’s investment. Namely: Increase cost-saving ratio (89%), improvised traceability (81%), complete transparency (79%).
Apart from these, there are other additional drivers that include. Greater revenues (57%), minimizing the risk involvement (50%), making new and innovative business opportunities (44%), adding value to the customer-centric services (38%).
According to the study backed report from Capgemini, enhancing the track and traceability feature of blockchain is the essential drivers among all the manufacturers. As a matter of fact, the manufacturer has become more consistent in relying on the broader trend of using software application for improving this functionality. Hence, additional compliance requirements are increasing rapidly in 2019.
On the other hand, these manufacturers are competing with the highly regulated industries, for instance, aerospace and defense, medical devices and pharma. Even they are experimenting in blockchain for an improved competitive edge.
According to the logical prediction of Capgemini, blockchain will experience the greatest improvement in five broad areas. Those are the digital marketplace, tracking the complicated supply chain parameter, tracking the quality of the components, protection from counterfeit products, and tracking asset maintenance.
Based on various interviews conducted with the industries top experts and the startup projects, Capgemini discovered 24 cases of blockchain use and those cases are compared with the level of adoption and complexities. From the study of use blockchain cases, the fact has become clear that managing the supplier contracts is already a prominent part of blockchain use for almost all the manufacturing industries. Certainly, this will increase further as and when the compliance becomes even more essential in 2019.
- Manufacturer nowadays implemented the at-scale deployment of blockchain. Leading the industries that are actually included in the study.
The adaptation of the blockchain among all the industries that are mentioned in the study just comes into existence with potential future improvements. Nevertheless, today the manufacturers have implemented 6% of the blockchain concept. With 15% of active participation of blockchain, the customer products manufacturers are leading in pilots with limited scope.
- Maintaining a combination of blockchain and IoT in the shipping container level of the supply chain, allows you to increase the authenticity, transparency, product compliance, and other contractual requirements. While on the other hand, it will also help in reducing the counterfeiting.
Using the combination of blockchain and IoT will allow you to monitor the shipping container condition in real-time data. It will help you to monitor each and every container’s location history, also in the case of a change in the condition of products and the temperature as well.
- Capgemini during the study has witnessed in use case of blockchain. The change of the shipment’s temperature was measured by a sensor by sending alerts with regards to contractual compliance of perishable meats. It prevents the goods from potential damages and rejection of the same when they reached the destination.
- Almost 13% of the manufacturers are pacesetters and they either implemented blockchain at per or pilot in at least one of their site.
Around on an average 60% of the pacesetters believe that blockchain has already transformed the process of collaborating with their partners. Based on such improvement in the result, the pacesetters are ready to take off the investment by 30% in the coming three years.
- They lead all the primary stage experimenters and implementers on three broad head of the organizational operation. These include complete transparency and visibility across the operation, detailed supportive process and also the availability of accurate source to achieve the targeted goal.
- Top three hurdles that a pacesetter manufacturer face while initiating and accepting blockchain into production are no clear idea of ROI, immature technology and challenges faced while regulating.
All types of implementation have to undergo these three hurdles, in addition, to cope up with lack of complementary IT support in the partner organization. Below is the graphical representation of hurdles that the manufacturers face during the process of blockchain project implementation.
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