Cryptocurrencies are making their mark on the financial sector and regularly making headlines in global news portals,andblockchain is the technology that made it all possible. Blockchainis changing the finance industry, and there is potential for it to revolutionize other industries too. Here Jonathan Wilkins, marketing director at obsolete industrial parts supplier EU Automation, explains how blockchain can revolutionize manufacturing.
Blockchain technology allows bitcoin owners to complete secure transactions without a bank playing the middleman.Bitcoin is just one of the many cryptocurrencies changing how many people deal with their finances. Now, other industries are beginning to realize that blockchain can complete any digitized transfer of information and manufacturers are seeing how this could help realize Industry 4.0.
The easiest way to think about blockchain, and its lack of a central location, is to imagine it as a shared and simultaneously updated database. It is shared between each computer on the network, so no information is stored in a central location.
This also means it is truly public and easily verifiable, essential for traceability and supply chain monitoring.
The fourth industrial revolution is takingdigitization one step further, strengthening the connection between the digital and physical world. Blockchain can advance this connection, making it easier for humans and machines to connect and understand each other.
Blockchain is essentially a peer-to-peer recordkeeping system that cannot be altered. It can reduce the amount of paperwork across the supply chainas manufacturers can convert important documents, such as legal papers, that could be lost when exchanged between companies, to simple automated files.
Each time a document is shared, it creates a block that attaches to previous blocks to form an easy-to-follow chain. This improves traceability in the supply chain as everyone can see where the information has gone.
Particularly important in the food and beverage industry, the timed and dated location-based records using distributed ledgers are essential to certifying the backstory of any batch. Because these records are unable to be altered, either due to human error or foul play, they can be trusted absolutely, which improves the process of a product recall, if necessary.
An updated recall process can help to ensure members of the public are safe and not eating food products that were part of a recall. In addition, it reduces the amount of food wasted and the financial impact of a recall, by accurately identifying which products are involved.
Supply chains can span multiple locations worldwide and have many stages, making it difficult to trace every component and process of product development, manufacture and delivery. Blockchain can create a smarter, more secure supply chain because it provides a solid trail that is visible in real time.
A transparent, real-time supply chain system allows manufacturersto detect and address any problems quickly, whether it is a mistake with a product or a breach in security.This reduces the likelihood of expensive product recalls.
Keeping information secure is vital in manufacturing and, unfortunately, cyber attacks are becoming a common threat.
Hackers can easily hide their presence in a system for a long time before actually attacking andwithout frequent updates, anti-virus software can be easy to outsmart.
Blockchain could be the answer to this problem, as data stored on a blockchain is incorruptible.
Because of this, supply chain partners can check product and process authenticity at any stage because of the easily visible chain of documents and processes. Blockchain is also constantly evolving. It is possible for someone to break into a block, but by the time they do, multiple new blocks have been created.
Unlike traditional systems, there is no single point of failure, reducing the risk of the chain becoming corrupted. If one computer within the network, known as a node, was attacked, the information would be safe as it is held within the entire network.
As essential as cybersecurity is, any network can only be as safe as its operator training allows. For example, the trend of bring your own device (BYOD) in manufacturing plants, which allows plant operators to use their own devices such as mobile phones and tablets, has divided the manufacturing industry.
While it brings many possibilities, a third-party device could be the weak link in an otherwise secure network, if it is not well protected.
Within the finance industry blockchain, with its uneditable and secure records, is being used for identity management. There is hope that in the future, it could be used to keep a record of, and even analyze, user permissions within a plant. From everything from access control to administration rights of control systems.
Technology is advancing at such a rapid pace that it can be difficult for plant managers to ensure they have the most up to date technology. It is also challenging to properly maintain technology at this volume.
As machines become more intelligent, they can learn to diagnose themselves and alert staff of any issues that could lead to expensive downtime. Blockchain can take this further, making machines more autonomous. Manufacturers can add blockchain between the enterprise resource planning (ERP) at the plant and the parts supplier. Then, the machines can autonomously place an order for their own replacement parts before they break.
Another feature of blockchain is smart contracts. A simple contract can be executed automatically when the conditions of the contract are met. This provides a new type of automation that is safe from hacking or altering. With current technology and processing capabilities, using blockchain can mean a derivativeis automatically paid when a financial instrument has met benchmarks.
Many manufacturers are hopeful that smart contracts could make the automation of remote systems management possible, essential as plants expand geographically.
While bitcoinkeeps creating millionaires across the world, where it fits in the future of manufacturing is less defined. However,Blockchain does have the potential to benefit manufacturing companies, their suppliers and their customers by simplifying and securing many processes in the supply chain. Using blockchain outside of the financial sector is still in early stages, but it looks like the technology is here to stay.
For further information contact:
Jonathan Wilkins, EU Automation
Unit 3, Parker Court, Staffordshire Technology Park, Stafford, ST18 0WP
Telephone:+44 (0) 845 521 3088