The industrial revolution is described as the time period when manufacturers transitioned into the use of new production methods. Though it may sound boring off hand, the revolution not only changed the way items were produced, but it changed the way many people lived.
The impending manufacturing revolution will do the same.
The Manufacturing revolution: Coming Soon!
The next revolution to be written down in history textbooks and taught to many uwilling school children, is the manufacturing revolution. The cause for this revolution?
Blockchain distributed ledger technology has larger capabilities than just tracking where digital tokens are and executing smart contracts. In fact, the opportunities to implement blockchain technology into our society are seemingly endless. The industry that is currently experiencing the most growth and innovation because of blockchain, is the manufacturing industry.
The manufacturing industry, much like other industries, utilizes supply chains to obtain products. Supply chains can be long, short, fast or slow. The bananas that you have sitting on your kitchen counter are there because of a supply chain. That Boeing 747 is in the air right now because special screw #42 arrived to the manufacturing center and was installed correctly.
According to a study conducted by the Capgemini Research Institute, ‘Does blockchain hold the key to a new age of supply chain transparency and trust?’, the manufacturing industry is the industry that has the most at scale implementations, quickly followed by consumer products and retail. Capgemini surveyed 731 organizations about their existing and planned blockchain projects.
With the combination of the IoT (Internet of Things) and distributed ledger technology, the speed and accuracy of supply chains will be greatly increased. Users will be able to view current locations of their orders, know exactly where their items come, and have greater order accuracy. You will be able to know exactly what country you coffee beans came from, or even the farm where your bananas were grown.
Speaking of food, did you know there was over 450 food recalls in the US alone last year, costing over $3.5 billion. That’s just below $8 million dollars in expenditures per recall. Blockchains high audibility capability could help drastically reduce this number in compliance-intensive industries, such as food products.
Adoption of blockchain technologies is still slow even though efforts are being made. Below is another graphic from Capgemini that visualizes what industry areas are seeing the most adoption.
What’s stopping more manufacturers from implementing blockchain into their manufacturing processes? Lack of a clear ROI, immature technology, and regulatory challenges are the top three reasons companies are slow to invest and implement these technologies. All implementations share these three barriers in addition to having to struggle to find IT systems at partner organizations to utilize this technology. The graphic below compares the reasons manufacturers are hesitant getting involved in blockchain projects.
The manufacturing revolution is upon us, no matter the barriers standing in our way. Within the coming years you will be able to know anything about everything you buy. Where the materials came from, who crafted the product, and who sold it to you. All by utilizing blockchain technology.