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From Metaverse to Cryptocurrency, we are experiencing an exciting phase in our lives. On the business side also, technological evolution such as Blockchain and industry 4.0 has caused rapid shifts. Thanks to these two, companies are moving forward with unprecedented speed and taking a data-driven approach to operations.
The same goes for the manufacturing industry. Industry 4.0 technologies such as Blockchain, AI, and IoT have transformed historical business functions of the manufacturing industry and allowed enterprises to rethink operations, enhance data security, and build more flexibility and resilience.
But, at the moment, the potential of Blockchain in the manufacturing industry is largely untapped. In this article, you will understand the concept of Blockchain and industry 4.0 in-depth and explore how they are changing the norms of the manufacturing industry.
What is the Significance of Industry 4.0?
Since the 18th century, the manufacturing industry has undergone tremendous shifts. The introduction of mechanization, mass production, and automation marked the three critical evolutionary phases in the industry. And the fourth phase is what is known as Industry 4.0.
As of today, Industry 4.0, also known as smart manufacturing, involves the use of advanced technologies to revolutionize the way companies procure, manufacture, distribute, and gather data. These smart factories have advanced sensors, embedded software, cloud network, robotics, and the use of other technologies to help businesses make better decisions and accelerate their operations.
The concept has been around ever since companies started getting into digitalization. As manufacturers continue to adopt advanced technologies such as IoT, Blockchain, and automation, it has given them real-time visibility into operations, leading to higher productivity and improved product quality.
What is Blockchain, And Where Does it Fit in Industry 4.0?
Manufacturers are obsessed with one thing - customer satisfaction. And customers want quality products to be delivered fast. However, legacy systems, lagging digital touchpoints, and unsecured financial systems can prevent this.
Blockchain is the answer to these problems.
In a nutshell, a Blockchain is a shared and unchanging ledger that helps you keep track of every transaction and asset. The unique thing about Blockchain is that it is decentralized, meaning the data storage does not happen at one physical location. Many copies of the data are stored in multiple computer devices and spread via a network.
The blockchain industry works on the principle of transparency and trust. You can save massive data sets in the Blockchain network and track every entry. And since all members share the same ledger, things are transparent. The decentralized feature of the blockchain industry makes it impossible for third parties to tamper with the ledger data, making every transaction and data entry safe and secure.
So how does disruptive technology fit in industry 4.0?
It allows manufacturers to foster a trusting environment that unlocks new possibilities for industry 4.0. For instance, when IoT facilitates data exchange between multiple systems and devices, Blockchain enables direct interaction between all the participating parties smoothly and reliably.
Practical Applications of Blockchain in the Manufacturing Industry
Let’s explore the practical applications of Blockchain in the manufacturing industry!
- Adding Visibility to Procurement
In the manufacturing world, speed and quality are non-negotiable. Research shows that 42% of businesses suffer high costs and lower profit margins due to prolonged transit times. And procurement is one of the most reasons why this is happening.
Inaccurate data, uncertainty, and lack of internal communication can prolong the procurement cycle. Since transparency is the foundation pillar of the blockchain industry, you can obtain information from every digital touchpoint, audit the process, and track every item in the supply chain, helping you to nip any issues from the start.
Here’s how Ford is using Blockchain to foster transparency in its supply chain:
The US carmaker has been using the immutable ledger to trace its supplies, mainly cobalt mineral - a vital ingredient for electric car batteries to ensure all the materials are ethically sourced. The company uses the technology to trace the mineral from the South Korean plant to its factory in the US to avoid labor exploitation and create an immutable audit trail.
- Using Smart Contracts to Automate Workflows
Blockchain and Industry 4.0 have been valuable in helping companies create automated workflows in their supply chain. And smart contracts are no different.
Smart contracts are programs stored on Blockchain that automatically executes actions when certain conditions are met. These actions include transferring digital assets, sending notifications, issuing tickets, or registering a purchase.
Here’s a practical use case of smart contracts in the manufacturing industry:
A recent case study by IBM discusses how Home Depot uses smart contracts to strengthen buyer-supplier relationships by resolving grievances and enabling real-time communication between the parties. The company uses the immutable ledger to share information about goods between suppliers throughout the shipping process, reducing supplier disputes.
- Managing Financial Transactions
The blockchain industry promises to reduce fraud and data discrepancies with its decentralized and interconnected system. And for manufacturers, managing, verifying, and processing hundreds of invoices can be a nightmare.
With smart contracts, you can resolve this headache in minutes. As stated above, smart contracts automate workflows and execute actions when conditions are met. This will help you process payments within minutes and track every entry, making it easy to eliminate data discrepancies.
Let’s look at an example to understand in depth:
Walmart has been the undisputed supply chain leader. However, for years, Walmart Canada suffered from the massive problem of data discrepancies, making it difficult for the company to process payments and reconcile to third-party freight carriers.
With Blockchain, the company was successfully processing and reconciling payments from more than 70 third-party freight carriers and tracking shipments from its distribution centers and stores across Canada.
Why Blockchain 4.0 and Blockchain Matter For Your Business?
Whether you are a small business owner or an enterprise, you may be facing problems scaling your operations, infusing visibility, or creating a secure system for processing payments.
Blockchain and Industry 4.0 offer you solutions to your problems. As Industry 4.0 evolves, technology adoption is more accessible than ever. With these technologies, you can save valuable resources by automating your processes and workflows and can thus make informed decisions. With AI and machine learning, you can gain actionable insights from massive data sets, and Blockchain can help you secure your payments and help you keep track of your finances.
For small business owners, adopting Industry 4.0 technologies may seem scary because of high up-front costs. But it is a myth. By working with the correct technology partner, you can design a solution that doesn’t break your bank.
Reinvent Your Manufacturing Business With ATC!
Blockchain is no longer a buzzword floating around the manufacturing industry. It has become relevant for businesses looking to unlock growth and scale their operations.
And designing a Blockchains system doesn’t have to strain your resources. ATC can help you with that.
At ATC, we will help you navigate through this game-changing technology and design a system tailored to your business. No matter which stage of business transformation you are in, our experts will help you take the next critical step. Connect with us to start your blockchain journey today.