Don’t Miss Out on These 3 Benefits of Adopting Blockchain in The Manufacturing Industry

Don’t Miss Out on These 3 Benefits of Adopting Blockchain in The Manufacturing Industry

Manufacturing is one of the industries that make a huge contribution to the world economy. It accounts for nearly 16% of global GDP in 2019, but at the end of 2020, the global manufacturing output has decreased by 11.1%. However, currently, the manufacturing industry has seen a gradual increase thanks to the adoption of blockchain technology – a game-changer for many industries. In the manufacturing industry, data management is the core part, so businesses have to find ways to effectively store, organize and classify data. Sharing data in a complex network of machines, products, and value chain participants (machinery providers, material suppliers, and logistics companies) creates difficulty for manufacturing companies. As blockchain technology can solve existing issues in the manufacturing industry, it has caught businesses’ attention. So, let’s find out the great benefits of Blockchain Applications in Manufacturing

1. Blockchain improves supply chain management in the manufacturing industry

a. Tracking & Tracing

Blockchain technology is a driving force for the manufacturing industry as it helps companies to track and trace their product’s information and situation easily and conveniently.  

Normally, the manufacturing supply chain management includes a variety of stakeholders (suppliers, manufacturers, distributors, retailers, customers, etc) with a wide range of products. The shipping process is not only about sending and receiving products but also involves packaging, unpackaging, and repackaging. Therefore, tracking and tracing the process of shipping goods seems to be hard, especially with large-scale companies with diverse products. However, blockchain – a distributed ledger is a great technology to tackle this problem. Since transactions in the blockchain-based platforms are immutable and time-stamped, companies can track products’ status and location anytime.

b. Counterfeit detection & material provenance

In the blockchain network, data once entered can not be deleted or changed without all parties involved knowing. Thus, blockchain technology can ensure the safety and authenticity of data, bringing a high level of security for manufacturing organizations, along with declining delays, waste, and counterfeit goods. Moreover, blockchain technology which enables suppliers to share and validate information will enhance the transparency and trust among partners.

With blockchain technology, customers can ensure material provenance and quality of goods in manufacturing supply chain
With blockchain technology, customers can ensure material provenance and quality of goods in the manufacturing supply chain

As we can see, with a transparent manufacturing supply chain, both manufacturing companies and customers can ensure material provenance and quality of goods. As a result, companies are able to build brand trust and then, increase customer retention.

We can take the Automotive Manufacturing sector as an example of excellent blockchain adoption in the manufacturing industry. Each year, auto manufactures had lost billions due to damaged, stolen, and counterfeit car parts. However, when integrating blockchain technology in the supply chain management system, auto companies can easily trace back where car accessories were lost or its origin with QR Codes or holographic labels. Customers can track their car parts by scanning its unique QR Codes on a tamper-proof that can not be mimicked easily to ensure authenticity.

2. Blockchain empowers 3D Printing Technology in the manufacturing industry

3D Printing is one of the potential sectors that can be adopted in different industries such as fashion products (eyewear, footwear, clothes, etc) or industrial products (manufacturing tools, end-use parts). And blockchain is a useful assistant to empower 3D Printing technology. Currently, various products have leveraged 3D Printing to captivate customers, for instance, Adidas’ 3D printing running shoes 4DFWD. These shoes have become a hot topic since they were worn by several athletes and medalists at the Olympic Game in Tokyo. The Adidas’ 4DFWD shoes have technology-enabled tricks that are well-suited with athletes and sports lovers: When compressed, the squashing motion advances your foot compared with the position of the sole on the ground. With 3D Printing technology, 4DFWD shoes have successfully provided users with a smooth transition and a unique running experience. 3D printing technology is also used in the aviation industry to produce high-tech parts for aircraft that satisfy standard safety requirements.

3D printing is a potential technology that can bring your product to a whole new level, but why do the majority of manufacturing companies still not apply it? The answers are security problems and expensive costs. The process of 3D printing includes a variety of steps such as the draft, CAD file, design, and the final 3D print file. However, due to poor security systems, these important files can be stolen, leading to serious damage for companies. Then, blockchain technology – which acts as an underlying safeguarding layer in the 3D printing chain, is considered a proper solution to solve the security problem. As blockchain is a decentralized ledger, data is stored in different computers that are placed in different locations. It means that to steal 3D Printing files from a blockchain-based platform, frauds need to make changes on over 50% of computers in that network. If frauds hack or alter data, all the remaining computers will recognize errors and promptly reject the changes. That’s why blockchain technology is the perfect match for 3D printing.

3. Blockchain smart contract offers a better security and transaction system

By making use of blockchain Smart Contract, manufacturing companies can reduce intermediates and costs, along with expanding their business by borderless peer-to-peer transactions. The term “Smart Contract” describes computer codes that execute an agreement automatically, which is stored on a blockchain-based platform, without the involvement of any third-party organizations. It is in charge of automating a workflow, executing the next actions in the agreements when preconditions are met. Especially, each code is copied in different nodes of a blockchain, thus, there is no fear of data loss. That’s why Smart Contract is a vital assistant that helps manufacturing organizations to automate the processes and achieve high accuracy and efficiency.

Additionally, with a peer-to-peer payment system, transaction processes between manufacturing businesses and international customers become faster and easier compared to traditional payments. Moreover, when adopting cryptocurrencies in the manufacturing industry, the transaction fees and the risks of charge-back, mainly caused by frauds and disputed transactions, are lower compared to traditional payment. For example, it takes only 1 cent for a transaction in the public blockchain, and the transaction fee in the private blockchain is even lower. Meanwhile, the average international transaction fee of traditional payment methods such as Visa or Credit Cards will be around 3% of the purchases’ value. 3% seems to be very small but for large orders, it takes a huge amount of money. Then, manufacturing companies should consider integrating blockchain technology into their management system to take advantage of Smart Contract, along with P2P payments.

Blockchain technology plays an essential role in upgrading car insurance management systems
Blockchain technology plays an essential role in upgrading car insurance management systems

For example, in the automotive sector, blockchain technology plays an essential role in upgrading car insurance management systems. A smart contract may help companies to identify the submission when a car insurer receives fraudulent information from false claims. Normally, a car owner will upload images of car parts they want to insure and update its condition such as damage level. Currently, most insurance processes are manual, then, it takes 3-7 days for verification of ownership, the authenticity of the claim, and identification of car parts. To tackle the time-consuming processes, blockchain is considered an excellent technology to build effective on-demand car insurance systems. Smart Contract takes responsibility for connecting car owners with insurance companies to implement on-demand insurance programs in real-time. It also can decide the level of access required by other participants in the insurance process. Additionally, the smart contract is also used to verify product suppliers, previous insurers, and the on-demand insurance provider data. All this information then will be synchronized in the blockchain network so that customers, suppliers, and manufacturers can check the authenticity of the product.

4. How to choose a blockchain company to leverage blockchain with manufacturing companies’ systems?

Blockchain is a powerful technology that can bring breakthrough innovation for manufacturing companies, from management, customer care services to applying other cutting-edge technology, such as 3D Printing. A blockchain-based platform that provides high-level security, data synchronization, and logistic optimization solutions will help manufacturing organizations achieve significant cost savings.

If you are wondering “ What are the best Blockchain Development Companies?” or “How to hire the right blockchain development company?”, don’t hesitate to contact us for free blockchain consulting. SotaTek is one of the top Blockchain Development Companies that provide several Blockchain Development Services as great solutions to overcome various problems in the manufacturing industry. With talented blockchain developers, we are confident to build and upgrade your businesses with a high-security,smooth-running system by leveraging blockchain technology. Get in touch with us now and let’s get the conversation started.

Leave a Reply

Your email address will not be published.

×

Hello!

Click one of our representatives below to chat on WhatsApp or send us an email to contact@sotatek.com

×