Blog Description

How Can Blockchain Power Industrial Manufacturing?

ICT | Mar, 2023

Enterprises across the world are starting to realize that there is more to blockchain than just cryptocurrencies. The business value of blockchain is predicted to exceed more than USD175 billion by 2025, owing to rising investments by organizations in blockchain-based solutions to deliver reliable provenance. Applications of the blockchain technology are on the rise as intelligent automation is gaining traction across a number of industries. 

Manufacturing industry has been seen as a tradition-bound business, but as more efficient industrial operations are emerging, data sharing and collaboration among complex networks or companies and machines will require the rapid adoption of cutting-edge technologies such as blockchain. The blockchain uses cases will accelerate Industry 4.0 journey for manufacturers due to the inherent qualities of the technology such as immutability, superior transparency, and data security. Additionally, facilitating multi-party transactions in a friction-less and cost-efficient manner, the blockchain technology is bringing benefits to the manufacturing ecosystems, which consists of multiple parties interacting with each other at every step of value chain. 

Blockchain Improves Data Security

In this digital age, data is the most valuable asset on the globe. Modern industries are using and storing plenty of data at a scale like never before. Growing incidences of theft or loss of data are becoming a concern for manufacturers everywhere. Manufacturing industry remains a top target for attackers as disturbing the supply chains strikes at the heart of a manufacturer’s ability to meet customer expectations. Moreover, tech stacks of manufacturers are often built on legacy OCS, OT, and IT systems, which have limited visibility, which makes them an easy target for a wide variety of cyberattacks. The average damage from a manufacturing breach is approx. USD2.8 million, most of which can be attributed to ransomware attacks. 

The blockchain technology ensure secure recording and storing of data throughout the manufacturing value chain. Leveraging blockchain technology, manufacturers can classify the ownership and legitimacy of data while also security it, which will help manufacturers enjoy operational improvements, limitless supply chain visibility, and comprehensive asset monitoring. Blockchain technology can help lower losses from counterfeit/grey market trading, which concur losses of more than USD500 billion a year. With blockchain technology, only suppliers can have access to a secure and permissioned database and no-one entity owns the data, which mitigates the risk of altering data fraudulently. Enabling the creation of a shared digital ledger, blockchain technology remove the reliance on paper-based audit trials and miscommunication, which tackles the problem of sharing, and the speed of sharing information across supplier ecosystem.

In 2022, blockchain platform Coinweb and German car manufacturer BMW collaborated to integrate decentralized tech to eliminate complex paperwork and automate time-consuming manual processes while streamlining the company’s automobile financing services. In 2020, BMW launched blockchain-powered supply chain management solution called “PartChain” to use distributed ledger blockchain technology for enhanced transparency and traceability of components and raw materials utilized for the production of automobiles. In 2018, BMW used blockchain technology to track its cobalt supply and ensure that products are supplied through ethical practices. Many other car manufacturers such as Mercedes-Benz, and General Motors are adopting blockchain technology to reduce dependency on paper and email, address end-to-end traceability, speed product delivery, and increase the efficiency and transparency of processes. In 2021, Tesla partnered with Australian mining giant BHP to collaborate on ways to make the battery supply chain more sustainable with end-to-end raw material traceability using blockchain. 

According to TechSci Research report on “India Automotive Blockchain Market By Application (Manufacturing, Supply Chain, Mobility Solutions, Financial Services, Others), By Mobility (Personal Mobility, Shared Mobility, and Commercial Mobility), By Provider (Application & Solution, Middleware, and Infrastructure & Protocol), By End User (OEMs, Vehicle Owners, Mobility as a Service Provider, Others), By Region, Competition Forecast and Opportunities, FY2017-FY2027”, the India automotive blockchain market is projected to grow at a significant rate during the forecast period. The market growth can be attributed to the increasing demand for automotive blockchain technology for logistics & transportation, insurance, secure transportation, etc. 

Blockchain Streamlines Operation in Aviation Industry

The aviation industry is growing at a pace like never before, with passenger number expected to reach 7.2 billion per year by 2035. This will lead to more aircrafts, especially new, younger, and more fuel-efficient and environment-friendly fleet coming into operation. The time required to manufacture an aircraft can takes around 9-12 months. Today’s commercial aircrafts require multiple parts, which are sourced from multiple different suppliers, and ensuring the quality and accessibility of each one can be a task. 

Aerospace companies across the globe of all types and sizes are realizing the importance of blockchain technology to improve operations and securely share data across many domains and touchpoints. The aerospace industry remains under the constant burden of creating, processing, managing, and storing paper records for compliance, but much of the work is completely relentless. Furthermore, companies need to store records in warehouses and third-party locations for years and the sheer volume of paperwork can overwhelm organizations. The digital traceability feature of blockchain and enhanced transparency in supply chain eliminates the paperwork and improve safety and compliance. 

Recently, Boeing collaborated with Canada’s TrustFlight and developer RaceRockers for building a digital aircraft record systems to keep up with the information about the required maintenance leveraging blockchain technology, which could save 25% in maintenance costs, worth billions. Boeing had added more than USD1 billion in GoDirect Trade, a blockchain platform to ensure that the aircraft parts comply with the safety standards. Traditionally, aircraft parts used to have a paper “birth certificates”, quality documents, which were required to be physically moved from place to place and re-entered into the new owner’s accounts.

MOBI Advancing Blockchain in Mobility

Launched in 2018, Mobility Open Blockchain Initiative (MOBI) is a group founded by auto manufacturers such as Renault, General Motors, Ford, BMW to build a vehicle digital identity prototype that can secure a vehicle’s odometer on distributed ledgers. This consortium creates more accountability within the market as vehicle information could be uploaded and tracked using a system that could not be infiltrated. The project is aimed towards reducing frauds and allow people to purchase second hand cars by going through honest and accurate vehicle history. The member-driven consortium enables Web3.0 digital infrastructure for connected vehicles and IoT commerce. Hence, MOBI works to create and promote high industry standards with smart mobility blockchain adoption. Recently, DMI, a global digital transformation services company, has joined MOBI to accelerate the adoption of blockchain technologies.

How can Leveraging Blockchain Lead to Low Carbon Emissions?

According to Environmental Protection Agency, organizations’ supply chain often account for more than 90% of their greenhouse gas emissions. To reduce carbon emissions, industries are utilizing advanced technologies such as blockchain to accurately collect and track reliable data for improving ecological compliance across the supply chain. The implementation of distributed ledger powered by smart contracts is enabling users to automate reporting of fuel quality and carbon emissions to claim credits for improvements. The ability for blockchain to cut down carbon emissions lies in its core values to businesses—cost efficiencies, risk reductions, and consensus-based processes that support commodity-driven relationships. 

Global logistics company, Maersk and IoT solution provider, IBM launched the TradeLens ecosystem, a platform that collects and combines data on freight traffic from suppliers into a single secure blockchain network, to track vehicles, containers, and cargo. The digital business process automates all the entire document flow and reduce overall inefficiencies in the industry. FedEx plans to use blockchain technology and smart contracts to create a standardized ledger for manufacturers and transport companies. 

According to TechSci Research report on “Web 3.0 Blockchain Market - Global Industry Size, Share, Trends, Competition, Opportunity, and Forecast, 2017-2027 Segmented By Blockchain Type (Public, Private, Consortium, Hybrid), By Application (Cryptocurrency, Conversational AI, Data & Transaction Storage, Payments, Smart Contract, and Others (logistics, IoT, Identity Management, Settlements, Supply Chain, etc.)), By Vertical (BFSI, Healthcare & Pharmaceuticals, E-commerce & Retail, Media & Entertainment, IT & Telecom, and Others (Agriculture, Renewable Energy, Real Estate, etc.)), By Organization Size (Large Enterprises, Small and Medium-Sized Enterprises), By Region”, the global web 3.0 blockchain market is predicted to register significant growth. The market growth can be attributed to the high adoption rate of web 3.0 decentralized technologies across various industries.

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