Blockchain technology, a decentralised ledger that holds details of all transactions in a network, has the potential to revolutionise how manufacturers design, engineer, make and scale their products.

A blockchain allows participants in a network access to a definitive and instant timeline of all transactions, safeguarding these details, without involving a third-party intermediary. Additionally, because the ledger cannot be erased or changed, participants can trust their transaction, helping manufacturers streamline operations, gain greater visibility into supply chains and track assets with unprecedented precision. Such a leap forward in efficiency is transforming the manufacturing sector, rewriting how firms interact, transforming pricing models and protecting reputations.

Blockchain is already allowing the industrial manufacturing sector to develop innovative commercial solutions. This powerful technology is helping the sector enhance their products and service quality, or solutions to long-standing industry challenges, including:

  • Resistance to cyber-attacks and internal fraud
  • Supply-chain monitoring for greater transparency
  • Materials provenance and counterfeit detection
  • Engineering design for long-duration, high-complexity products
  • Identity management
  • Asset tracking
  • Quality assurance
  • Regulatory compliance

Indeed, in PwC’s 2018 Global Blockchain Survey, 84% of executives across industries said their companies have had some involvement with blockchain, while 62% had a blockchain project underway. Such is the manufacturing sector’s enthusiasm for blockchain that the PWC survey placed the sector as the second most active in implementing blockchain technology (tied with the energy sector and following only financial services). Participants said their enthusiasm for blockchain-powered solutions was based on the ability to create value by overcoming current industry challenges. For example, respondents to the PwC survey stated that implemented well, blockchain can ‘increase transparency of supply chains, track the identity and credentials of key personnel and allow for more seamless audit and compliance functionality’.

Blockchain-powered solutions can seamlessly aggregate the vast reams of information, delivering significant value for industrial companies, by helping unlock the full potential of advanced technologies like augmented reality, Internet of Things (IoT) and 3D printing.

In the example of the Industrial IoT, manufacturers are considering how blockchain can maximise IoT security, protecting a supply chain information by only displaying minimal information and protecting all the details. For example, supplier or customer questions relating to sensitive data can be answered based on the ‘zero knowledge proof’ concept which allows data to be verified without revealing the actual data. For manufacturers whose data and IP often underpins their businesses, this is a significant competitive advantage.

The manufacturing sector has a number of pioneering blockchain projects including; OriginTrail, IBM Blockchain and the Mobility Open Blockchain Initiative (MOBI), an industry group consortium founded by large automakers including Renault, Ford, GM and BMW. The group uses blockchain to “build a vehicle digital identity prototype or car passport that can track and secure a vehicle’s odometer and relevant data on distributed ledgers”. In doing so, the group facilitates greater accountability within the market, as vehicle information could be uploaded and tracked using a system that would be difficult to infiltrate and fabricate data within, preventing fraud and allowing people purchasing second-hand cars to have access to an accurate vehicle history.

In Germany, OLI has applied blockchain technology to the energy market in order to build a “scalable network and that shares electricity within neighbourhoods, districts, regions and entire countries.” For manufacturers of solar panels, CHPs, batteries, and heat pumps using the OLI service optimises both single small power plants or entire buildings or industrial areas by connecting “energy cells” nationwide. OLI’s blockchain solution allows manufacturers to combine all types of energy usage data with external data, such as weather forecasts ensure the cost-efficient use of generation units, loads and storage systems by communicating other OLI ‘cells’ via Blockchain.

Also in Germany, Mercedes-Benz Car has developed a platform based on blockchain technology that increases transparency and sustainability in complex supply chains. Partnering with U.S-based software company Icertis, the blockchain technology is designed to allow for the storage of contracts in complex supply chains. By creating transparent and sustainable mapping of documents across the entire supply chain, “the blockchain technology has the potential to fundamentally revolutionise our procurement processes […] With our Blockchain-prototype, we are in the first step testing one of diverse possible applications with the aim of increasing transparency beyond our direct suppliers,” explains Wilko Stark, a member of the divisional board of Management Mercedes-Benz.

Technologies stemming from the fourth industrial revolution are transforming almost every industry. For the manufacturing industry, innovations such as blockchain could change the way they interact with their entire supply chain, making their operations more efficient, secure and consumer-centric. Whilst it is a technology that is in its infancy within the sector, the potential of blockchain is such that many manufacturers are considering it as central to their future competitiveness.


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