March 2020

28 n BLOCKCHAIN March 2020 www.drivesncontrols.com Blockchain: the key to trust and transparency? B lockchain, a technology that is usually associated with cryptocurrencies such as Bitcoin, is a digital ledger that can be used to store, record and manage transactions. The technology supports financial transactions with the aid of smart contracts, but it can support the transfer of any data or digital asset. Because records along the chain are stored and distributed across different nodes in a network, it is difficult to counterfeit these records, making blockchain a secure, immutable and transparent way to record and service transactions. This advantage strengthens the case for blockchain applications outside of cryptocurrency exchanges, even though we don’t hear about these other applications as often. Bitcoin is just the tip of the blockchain iceberg as decision-makers across industries, including manufacturing, are starting to ask: “What does blockchain mean for our future?” Theoretical? Even though the value of blockchain is projected to exceed $176bn by 2025, and $3.1 trillion in 2030, so far, much of the potential for blockchain in manufacturing has remained theoretical. Around the world, factories manufacture products in huge volumes. However, there is still no guaranteed method of knowing how, when and from where these products originated, were produced or shipped to their end-users. Before reaching the user, goods have to travel through a network of manufacturers, suppliers, transporters and storage facilities that participate in the production, design, sales and delivery stages. In almost every case, the journey of the product remains unseen, resulting in a lack of transparency. Many end-users want to be able to monitor each step of the production process to ensure the authenticity of the product. In fact, most customers are looking for transparency in the production process. If the manufacturing supply chain could be made transparent, everything could be monitored and made visible, helping manufacturers to establish trust in their systems and products. Blockchain offers a way to have more control and to provide insight into the value chain because everything is on a real-time ledger of actions visible on the blockchain. Audit trails One of the key areas where blockchain can bring value is in the audit trail. Currently, we do not have a proper and uniform standard to aggregate and share data. Modern supply chains need a system that can enforce standards for parties to access the full set of data that they need. Essentially, this is the purpose of a blockchain. If there are defective products in a supply chain, they can be tracked easily in a way that has never been possible before. Instead of shuffling through reams The value of blockchain technologies for manufacturing applications is predicted to exceed $26bn by 2025. Frost & Sullivan industrial programme manager Karthik Sundaram explains how blockchain will affect trust, transparency and revenues in manufacturing supply chains, from making payments and performing audits, to tracking inventory and assets. How blockchain will work for manufacturing supply chains: the blocks cannot be edited or tampered with Source: Frost & Sullivan Blockchain offers a variety of attractions for manufacturing supply chains Source: Frost & Sullivan