Manufacturers need to embrace blockchain technology to realize higher levels of transparency, accountability and efficiency.
May 31, 2019
by Brian Berry, Lindsey Donato and Will McCarthy
It may have humble origins as a nine-page whitepaper published in 2008 by an anonymous scientist, but just a mere 11 years later, blockchain technology has infiltrated the world of industry. And while most associate this innovative database with the financial trade, manufacturers are increasingly looking toward the form of machine-generated data to better understand customers’ needs.
For the uninitiated, blockchain is a distributed, de-centralized database; there are multiple copies of the blockchain database, and each copy is considered a “peer” of the others. As such, when a change occurs to one copy, the technology works to ensure that the same change is applied to all, so in effect, there is no “master” database. Think of blockchain technology as shared documents; both distribute information in a peer-to-peer mode with updates to the document in real time and with all parties having access to the most current version of information.
Consider the applications blockchain can have on the manufacturing industries. With the capability to track and monitor their products throughout the supply chain, manufacturers can make better decisions, reduce processing time, decrease errors and may even lessen costs.
Then ponder the human factor. Today, with consumers having access to more information than ever before, their ability to be selective when choosing a product is high. Since customer expectation is a main driver, manufacturers must be able to track and anticipate those expectations in order to retain consumer loyalty and keep a step ahead of the competition. To do so, they need to invest in emerging technologies, such as blockchain.
The synergy potential created when manufacturing and blockchain meet is enormous. It can help speed the flow and reduce the cost of new products; create new market opportunities and increase market efficiencies through mass product customization.
Historically, one of the primary concerns and cost factors in manufacturing is unplanned “downtime,” most often as a result of maintenance issues. Manufacturers using older equipment and outdated maintenance systems can suffer significant losses in a very short period; however, blockchain technology provides an interoperable single source ledger that all participating parties on a supply chain can consult to achieve real time updates. As such, manufacturers can be better equipped to identify and monitor maintenance issues and progress.
Moreover, the security aspects supported by blockchain are many, including ledger ability to record every transaction in the blockchain thereby increasing the protection of sensitive data. The technology ensures that the appropriate people – both internally and externally – have access to needed information at the proper time. Blockchain security helps prevent malicious attacks and protects data through encryption.
Ultimately, blockchain technology can effect deep-seated change in manufacturing supply chains by streamlining processes, simplifying data management and improving security. Those manufacturers who embrace this new order of technology have the potential to realize higher levels of transparency, accountability and efficiency.
Brian Berry, Lindsey Donato, CISA, PMP, and Will McCarthy, MSA work for blumshapiro (www.blumshapiro.com), the largest regional business advisory firm based in New England, with offices in Massachusetts, Connecticut and Rhode Island. They can be reached at email@example.com, firstname.lastname@example.org, and email@example.com.