Market trend Everything you need to know about blockchain
Blockchain has become the new buzzword but what exactly is the technology about and how is it relevant to the manufacturing industry? MM International breaks it down for you.
“Blockchain cannot be described just as a revolution. It is a tsunami-like phenomenon, slowly advancing and gradually enveloping everything along its way by the force of its progression,” says William Mougayar, author of ‘The Business Blockchain’. True that! Blockchain which was once associated only with the cryptocurrency, Bitcoin is now slowly showing its potential in other dynamic industries such as manufacturing as well. Its numerous advantages are set to transform the manufacturing industry like never before but what exactly does Blockchain mean and how does the technology prove beneficial for the industry? Let’s give you an insight.
What is blockchain?
Blockchain is a distributed ledger technology that can be programmed to record and track valuable information such as financial transactions, product designs, machine parameters, etc. What makes blockchain unique is its process. The revolutionary technology stores information in groups called blocks that are linked together in a sequential order and in a straight line such that it forms a chain of blocks.
If one has to make changes to the information stored in a particular block then instead of over writing the information in the block, the altered information is stored in a new block with details of the change along with the time and date. This enables the organisation to track data changes over a period of time.
Blockchain is a decentralised system and distributed across a large network of computers. This reduces the chances of anyone messing around with the data. Also, before a block can be added to the chain of blocks, a cryptographic puzzle must be solved which is then shared and verified by all the other computers in the specific network. Once these criteria’s are met, the new block is added. This process makes sure that the data in each of the blocks is trustworthy.
The transparency of this technology also eliminates the need for intermediaries that are costly and time consuming. Hence, blockchain completely revolutionises the manner in which industries function with regards to their data.
Role of blockchain in manufacturing
Blockchain in the manufacturing market is expected to be worth 30.0 million dollars by 2020 and 566.2 million dollars by 2025, growing at a CAGR of 80.0 % from 2020 and 2025, states a report by market analyst firm, Market Watch. The reasons behind this growth are multiple and one of them includes the various plus points of this technology.
Traceability is hands down one of the biggest benefits of blockchain for the manufacturing sector. There are many instances of manufacturers suffering heavy losses due to disruptions in the supply chain. This happens due to many factors such as the parts failed to make it on time; the parts were not examined according to the right quality tests, or did not come with the correct certification, etc. Also, manufacturers are unable to determine the status of the ordered parts in the supply chain.
With the assistance of blockchain, all the players involved in the supply chain can be connected together on a single platform. Hence, manufacturers will be able to track all the parts in real time, the parts will be dispatched with the right certification and quality test as the instructions will be clearly mentioned in the blockchain. In addition to this, in case there are any defects or errors, the manufacturer can also find out the source of the defected part. This ensures greater transparency.
Zooming ahead in the automobile industry
The automotive industry is considered to be one of the biggest industries to adopt blockchain in their processes. In a fresh report by IBM Institute for Business Value, it is stated that 62 % of auto execs believe that blockchain will disrupt the automotive industry within three years from now. In another report by market research body, Markets and Markets, the automotive blockchain market is projected to grow from 0.35 billion dollars in 2020 to 5.29 billion dollars by 2030, at a CAGR of 31.19 % during the forecast period.
In addition to this, with an aim to establish a new digital mobility ecosystem, the global automobile giants – BMW, Ford, GM and Renault have recently partnered with tech providers and start-ups to implement blockchain tech in the automotive sector. Called the Mobility Open Blockchain Initiative (MOBI), the group intends to create common standards and APIs via this initiative to assist payments and data-sharing between cars.
Blockchain in 3D printing space
Blockchain also holds significant weight age in the 3D printing industry. Some of the advantages of this technology in this segment include data and IP protection, file ownership, receiving products that are tamper proof, increasing and maintaining quality control, and so on. This enables one to improve data governance and eliminate the security hurdles faced by the 3D printing industry.
Players involved in the 3D manufacturing space such as Original Equipment Manufacturers (OEMs), service bureaus and software providers that deal with CAD and PLM solutions can use blockchain for diverse applications. For instance, OEMs can adopt blockchain to trace the process of the manufactured parts such as the machine parameters on which the part was produced on, the material which was used for producing the parts, etc.
Next, the service bureaus that work in coordination with OEMs to produce parts can also implement blockchain to display their work and expertise. Similarly, the software providers can track their files, protect their designs and IP, and even complete audit trials. The 3D printing hardware makers can also benefit from blockchain by tracking the number of parts that were printed, on which machines they were printed, determine the machine parameters used for production, etc.
With so much to offer, blockchain is the next big phenomenon that is set to captivate the entire manufacturing industry across the globe. So, start developing your business blockchains right away!