Blockchain, Bitcoin, Web 3.0 have become the buzzwords of the year 2021. Even if you are living under a rock, there is a chance that you would have heard these words a couple of times.
Well! They are not just fancy words that make you sound like a tech wizard but they are capable enough to revolutionize each and every industry and change their shape.
Although Blockchain and Bitcoin are often used together, Blockchain is not limited to Bitcoin.
Blockchain is a technology and Bitcoin is one of the applications of Blockchain. Blockchain technology can be used in many more real-time applications. It can be used in the Healthcare industry, Government, Insurance, Telecommunications, Media, Manufacturing, and many other sectors. The mechanism of Blockchain is such that it is capable of overcoming most of the drawbacks that major industries face with conventional technology. Due to the same reason, Blockchain has a huge impact on the manufacturing industry. In order to understand them, let us first try to understand the basic mechanism of Blockchain.
How does Blockchain technology work?
As the name suggests, Blockchain is a chain of blocks where each block contains a set of information and is connected to the next block. Information in the block is secured and protected with a Hash. Hash is a unique encrypted key attached to each block. Any modification of the information present in the block changes the hash value making the data change traceable. Information present in the block cannot be overwritten since all the blocks in the blockchain are connected to another, change in a single block replicates changes in another hence it provides no scope for manipulation of data. On the whole, blockchain acts as a digital record of sequential activities
Blockchain technology is decentralized. It allows everyone to access any data transparently by distributing data over multiple systems on the internet. This functionality of Blockchain finds numerous applications in real-world applications. In this article, let us try to understand how this functionality influences the Manufacturing industry.
Blockchain technology impact on manufacturing industry
Manufacturing industry is one of the hard-core industries with many complexities. There would be several processes to be performed for a single product to be manufactured. Usage of Blockchain technology simplifies most of them. Here is how the blockchain contributes to the manufacturing sector:
Provides transparency in supply chain management
While a product is being manufactured, there would be a lot of data to be shared in the process and this data is shared among all the business partners involved in it. Blockchain supply chain ledgers allow all the partners involved in the supply chain to access the data transparently and build trust among them.
Brings ease in Logistics
To manufacture a product, all the required resources have to be brought to the manufacturing unit to assemble them. Logistics plays a crucial role in the manufacturing industry. Blockchain lets you store and maintain appropriate and structured data of logistics which reduces ambiguity involved in the process. Hence reduces time and effort.
Simplifies quality check
Blockchain helps to keep a continuous control on quality check. As the data is immutable, the documentation about quality check can be shared with customers as an assurance of the quality of the product being manufactured. Acknowledging customers about the quality check process builds trust among them. This helps not only to retain customers but also to attract new customers. After all, people would not hesitate to use trustworthy products.
Further, blockchain also reduces audit efforts as the database tags each and every product and inscribes every transaction into a new block in the blockchain. This reduces inbound quality checks significantly.
Paves a path for Machine-as-a-service
Blockchain paves the way to implement a unique pay-per-use model for machinery, often termed as machines as a service (MaaS). Here, instead of selling production whole equipment, a machinery provider charges for the specific equipment needed to produce the desired output. For example, instead of selling a compressor, the machinery provider sells compressed air by volume. MaaS helps the manufacturers to avoid large upfront capital investment and allow them to upgrade to the latest equipment to gain access to the latest technology. If used properly, the MaaS model lets manufacturers scale their production flexibility significantly in a shorter time with lower investment.
Safe and secure transaction
Bitcoin is a prominent application on Blockchain. Bitcoin is similar to digital money. Along with Bitcoin, most of the cryptocurrencies are built based on Blockchain technology which shows Blockchain has direct application in transaction.
Not only in crypto transactions, Blockchain can also be used in conventional money transactions to make them secure and prevent all kinds of middle-man attacks.
These are major applications of Blockchain in the manufacturing industry generalized to every product. If used in an efficient manner, blockchain can find numerous applications in the manufacturing industry based on the product being manufactured.
Undoubtedly, Blockchain is the future technology that is going to revolutionize every sector. Transparency and immutability of the data in blockchain make it find applications in the real time world. Blockchain contributes to establishing trust with safe distribution of data among individuals providing no scope for manipulation and discrepancy. This makes blockchain a potential replacement for conventional technology. Let us wait to see industries transforming to better in near future.