Blockchain has grown rapidly in the last few years, we often hear of it saving companies ‘billions of pounds’, but what does a blockchain rollout look like in manufacturing?
Blockchain, or distributed ledger technology (DLT), is simply a list of digital records, or blocks, which are linked together in a time-sequenced chain.
Transactions are logged, time-stamped and a chain’s history cannot be modified. It could be the revolutionary method to trace products throughout manufacturing supply chains.
“It is common sense,” says Marc Tavener, global ambassador for Bitfury Group. “But it is about first working out what you want to solve.”
This kicked off Taverner’s keynote at the first ever Industrial Blockchain Summit held in London earlier this month (April 11).
“You need to start small, implement it in contracts or something internal, then constantly test the system and measure it, until it works efficiently and you can begin to use it in something more complex like supply chains.”
In recent Catapult research Blockchain in Action, which surveyed firms creating blockchain systems, 75% of the tech companies have products ready to demonstrate, but most work still comes from the financial sector.
Why do we need blockchain?
- Any information can be digitalised
- Any person can get free access to it
- Information can be transferred in hundreds of ways instantly
The industrial sector has yet to embrace blockchain in the way financial services has, one reason for this is because manufacturing has complex supply chains with many firms involved.
Often physical-not just digital-goods will be moved around, the quality of which can vary, making it a more challenging sector to utilise the technology.
Blockchain also requires all partners involved in an operation to collaborate and data share.
If for example, an automotive manufacturer wanted to use blockchain in its business, this would be difficult to implement because of its complicated supply chain, the requirement to get all partners around one table to discuss what distributed ledger technology they want to use, and the need to share data with those partners.
Taverner’s key benefits of blockchain in the supply chain:
- Resistance to cyber attacks and internal fraud
- An integrated common data space
- Direct access to data
- Transparent coordination throughout the supply chain
- No accounting manipulation
- Timestamps of when product changed hands and by who
“If you want to test it in your manufacturing business, I would suggest to take the word ‘blockchain’ out and just call it distributed ledger technology. When you test it you build a bank of data that you can measure, and so you can establish what you are achieving, or not achieving. It is simple, and the benefits for adopters are potentially huge.”