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Blockchain Technology

How Blockchain Technology Enhances Interconnectedness In The Factory?

Mihir Mistry,

Have you heard of the recent buzzword “Industrial Empowerment” yet? If not, you will discover it in this blog. Factories, especially manufacturing industries, are taking a leap of faith by adapting to new technology trends. This adoption of innovative solutions set expectations of a rise in productivity and work efficiency. The interconnection between various operations is challenging but not impossible. Blockchain technology has jumped into the operations in the industry and is soon bringing in a digital revolution. If you ask me the role of blockchain in manufacturing, I would simply say it’s enormous. The conventional ways of handling the tasks have been automated, but the dilemma of making the shift still prevails amongst manufacturers. 

You may wonder, why the fear? The fear majorly revolves around the topic, data sharing. Manufacturers are so used to the traditional ways of handling data sharing across platforms that they fear data breaches in the process of sharing. However, the blockchain in the factory trend will bring a solution to the query.

Continuing The Blockchain Curiosity….

Blockchain is a digital ledger that will capture various versions of changes or any form of tampering or store data securely. Both the parties, the one sharing the data and the other receiving it, should rest assured about the data security during the process.

Blockchain innovation can also be used to come up with innovative business models and break their shackles in factory operations. Blockchain ledger acts as a central point and has exceptional features to offer for speedy transactions and implementation. 

This being said, direct implementation of blockchain in manufacturing is tricky. It is upon the company to carry out an assessment and the company’s shortfalls where blockchain technology can be of help. This analysis can be of great importance while we plan the implementation of blockchain in the manufacturing industry. You can address the pain points and take the entire experience to the next level.

blockchain technology in factoryHow can blockchain be the panacea for factory problems?

“Trust” is a big word, and we all know that, but what we less believe is the fact that it is of utmost importance when two parties share their private information. This is why companies conduct their internal audits and adopt six sigma practices. However, these practices are costly and many times are performed on compromising grounds. Blockchain, on the other hand, offers the following benefits.

  • Blockchain stores every single detail of the transactions, which can be validated across shared participants.
  • The blockchain data is protected by cryptographic signatures, automated verification, and decentralized storage makes it impossible for anybody to tamper.
  • A blockchain data copy is shared across multiple locations and can be operated from anywhere. 

How does a blockchain in a factory work?

When a change is initiated by the editor in the blockchain ledger, the other users are asked to approve the change. Whosoever approves the change, the data is recorded cryptographically and added in the version. 

Once this is performed, the blockchain data is updated in the version list in an unchangeable format. 

This was not possible to achieve with the previous blockchain methods and scalability, interoperability, and processing speed were put into question. But, the new blockchain versions satisfy the requirements and increase the efficiency & speed of transaction verification.

In addition to blockchain, the Internet of Things will help in keeping the devices connected and facilitate seamless communication between the members. This enhanced transparency and security will be a blessing and help manufacturers uncover the potentials of operations.

Add-on to the blockchain service:

Have you heard of the launch of blockchain as a service (BaaS)? This will help businesses in the smooth implementation of blockchain. How is this service different? Well, blockchain, in general, is self-managed, and companies have to define the database’s capabilities and also host the nodes on the cloud or local. 

BaaS, on the other hand, is also a self-managed blockchain but offers management and deployment tools. If you are a business running out of resources or managing with a shallow team overloaded with work, you should opt for BaaS. 

drawback of blockchain

Any drawback of blockchain in factory implementation?

Blockchain in production is a great thing but becomes quite challenging when it is about real-time data. Especially for the operations where you need to exchange data immediately, it can become challenging with blockchain.

Blockchain technology falls short in running advanced analytics.

A manufacturer should therefore look out for other options and check for themselves if there are any other databases serving as a better option.  One of the newly developed central ledger databases serves the purpose of blockchain offerings. But the use is limited to fewer cases. 

However, central ledger databases work in full potential to handle a high number of transactions. 

Use cases to justify the importance of blockchain technology in factories;

By now, you would have already grasped the ecosystem the blockchain creates within the system. Well, to elaborate more, here are a few use cases that will make things more clear to you. 

Amplify the track and trace:

Blockchain makes things simple within the supply chain. The data between the partners can be exchanged in a more accurate and secure manner. The unchangeable nature of data versions brings a lot of transparency and puts forth nothing but only truth to the people.

If the company has multiple users operating on an independent IT system, or there are frequent new hires, blockchain proves to be extremely valuable.

Protect and monetize Intellectual property:

Intellectual Property data share becomes a great deal if done in an insecure manner. IP plays a vital role in the decision-making of warehouse parts and other things.

Companies who fear patent disputes can resort to blockchain technology and claim the patent. A great example of this is Bernstein Technologies. They have developed a web service where their users can register IP; sounds interesting, doesn’t it?

When it comes to monetizing digital assets, again, blockchain comes to the rescue. Wondering how? Machines that are interconnected by the internet of things (IoT) and blockchain are coded by digital signatures and stored in the blockchain format. The same data can be used to prove the proprietary information and avail the licensing.

Quality control in production:

Companies using blockchain can boost their quality of deliverables to the customers, isn’t that the ultimate goal of businesses? How? Well, the operations remain transparent, the documentation remains thorough, and everything that is required to deliver high quality is satisfied. No IT policy is breached, and the quality of the product is well-maintained.

Additionally, customers can also keep track of inbound parts and ensure detailed documentation of the quality process. The blockchain database is tagged with every single detail of the transaction, amendments, and product info. However, this can be implemented once the production at the factory is automated and the data directly gets uploaded to the blockchain database.

By doing this, companies will be free from regular audits from the central authorities or by the original equipment manufacturer. 

One way to do this and control the products is by implementing a blockchain that provides flexible and comprehensive systems open for all. All the relevant information about product parts and processes is logged and tracked. No manufacturers own it, and the data remains completely auditable.

The transparency remains intact, and users can have their hands on data, including raw material details, maintenance cycles, performance testing, etc. The history of services thereafter is like an open book and can be used to optimize the performance of the part or product.

But the challenge that companies might face in this scenario is to trust and link a physical object with a digital replica. This interconnection should not allow any human interference to ensure the accuracy and connectivity of devices. 

Using Machines as a Service:

blockchain technology will open gates for using innovative pay-per-use models for machinery. Often referred to as the Machine as a Service model, the machine provider will charge the client based on the output generated by the equipment. For instance, if a company wants to buy a compressor, the machinery provider will sell compressed air by volume.

By adopting this model, the company will remain in a win-win situation. First, they wouldn’t have to invest heavily behind buying machinery, and second, they can update the process to the latest technology whenever they want.

Blockchain technology, when combined with MaaS, makes the system more efficient to handle complex applications. It can help you protect IP, performance management, document management, etc. 

To define an instance, say when the manufacturers input accurate data about performance and other parameters, and when the user uses it, the machine will automatically trigger a payment bill to the user. 

Enables Machine-controlled maintenance:

Blockchain technology is now being used for automated maintenance approaches. Automation also reduces maintenance times while also handling complex operations.

If the manufacturing company opts for outsourced maintenance, the service agreements are digitally uploaded, secured by signatures, and connected with the device. The automated maintenance is then forward triggered, and the payment processing also occurs automatically. This way, no maintenance date is compromised or missed, and the proof of the maintenance is also received instantly. The record remains with the team and the executor, both.

The convenience and ease of maintenance will encourage the manufacturers to upgrade the machinery frequently and keep the records up-to-date.

Implementation of blockchain technology use cases:

Whether you hold a sole proprietorship or a shared factory, it is always best for you to unleash the potential of blockchain technology in your factory. Even a shared additive manufacturing can help you benefit from blockchain in almost similar ways as a sole proprietorship. You can have comprehensive information that can be tracked at each production stage, or protect an IP using encryption, or monitor the quality of production, or even execute machine-controlled maintenance.

The application of blockchain in either use case should be based on the following factors:

  1. Desirability

    A manufacturer should decide whether the implementation of blockchain in the factory is of multiple uses. Will the implementation solve existing pain points or help manufacturers in overcoming the barriers. If and only when you know what pain points to highlight using the blockchain you can use it to its full potential.  

  2. Feasibility

    A manufacturer should check the feasibility of blockchain technology implementation. Do you have the cash to sponsor the execution? Does the operation time frame permit you to try the implementation of blockchain technology? The manufacturer should also check the operational feasibility of the process before deciding upon the execution.

  3. Viability

    Is the implementation process viable? Will it have any financial impact or risk attached to it? Answers to all of these questions will help you in foreseeing the challenges. 

  4. Regulatory considerations

     Each country will have its own regulations to support a change. The blockchain revolution will demand data security and safety. A manufacturer should assess the regulatory requirements of the country they are operating in so that no sensitive information is leaked or breached. 

  5. Strategic Alignment

    The manufacturer needs to ensure that the blockchain implementation approach is aligned with the company’s strategy. If not, figure out ways to mitigate the discrepancies so that it doesn’t serve as a hurdle. 

  6. Technical validation

    Manufacturers should seek expert’s help and advice to find out whether the decision of making the shift to the blockchain is valid or not. Carry out due diligence so that you can ensure that the efforts are put in the right direction.

In the end:

Blockchain is definitely becoming the industry’s first choice, but it is yet evolving. The speed and the data privacy & governance the technology confirms are unparalleled. The ability to handle complex connections and yet deliver accurate results is something that is high in demand in factory operations. This next-gen technology will be a blockbuster for sure, and if you are thinking of implementing the same in your company, we would say, go ahead. It is the right time that will help you mark your presence. All the best! 

Mihir Mistry

Mihir Mistry is a highly experienced CTO at Kody Technolab, with over 16 years of expertise in software architecture and modern technologies such as Big Data, AI, and ML. He is passionate about sharing his knowledge with others to help them benefit.

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