The smart factory concept has taken off in many parts of the world. While IIoT devices and the data they generate have helped manufacturers increase productivity and reduce cost, they are not without problems or issues. In this sense, blockchain can come in handy.
The smart factory concept has taken off in many parts of the world. While IIoT devices and the data they generate have helped manufacturers increase productivity and reduce cost, they can be further enhanced by the blockchain technology.
That was the point raised in a recent whitepaper by
ABI Research titled "How Blockchain Is Impacting Industrial Manufacturing and Supply Chain Logistics."
Needless to say, the Industry Internet of Things (IIoT), also known as Industry 4.0, has become a popular concept as manufacturers increasingly rely on connected devices and the data they generate to enhance operations and efficiency. However, despite all the wonders that IIoT promises, there are still issues. As more and more players join the supply chain, visibility becomes a problem, making fraud and false accounting more likely. Cybersecurity, also, becomes a concern.
“Overall, there are a lot of teething issues around 4.0 operational processes and adopting new technologies. Operators need to integrate them with existing legacy systems, which can be a complex affair, making for uncertain uptime, slower provisioning, and trickier maintenance,” the whitepaper said.
This is where manufacturers can be helped with blockchain, which eliminates the use of a central server that manages all transactions and are subject to tampering or other fraudulent practices. “Blockchain can step in to resolve some issues — not by replacing the existing technology — but by bridging some of those gaps and offering some solutions to these ingrained issues,” the paper said. “For example, public ledger can provide transparency and visibility end-to-end from the product source all the way through to final form and delivery post-market. Smart contracts and decentralized autonomous organizations (DAOs) can make deployments more autonomous and more intelligent, enabling machines to carry out tasks faster by taking them over from the human element and essentially automating them.”
Various use cases
There are several use cases cited by the whitepaper where blockchain has the potential to enhance the smart factory concept. One is around predictive maintenance, where impending machine failure is detected by sensors and reported to the operator. Blockchain can take it a step further. “By leveraging machine intelligence and end-to-end communications, the devices in a production line could trigger the ordering of a new part or an off-schedule service maintenance autonomously. One could code prognostic health management and even predictive maintenance intrinsically into a DAO or smart contract,” it said.
According to the paper, anti-counterfeiting is another headache for original equipment manufacturers (OEMs) that can be minimized through a blockchain solution. “Time-product information and movement into a blockchain can not only allow for tracking from fabrication to the end user, but also this intelligence could monitor suspicious behavior,” it said. “Hypothetically, if a tracked product with a unique identity suddenly starts multiplying inexplicably, the OEM can potentially more easily find where the fraud took place. Any product without an ID tied to a blockchain can be immediately determined counterfeit.”
In the area of logistics, blockchain can also solve several issues, notably around lack of visibility as the supply chain gets crowded, the paper said. “Consumers may have limited visibility of where their purchases come from. For example, you take the supermarket or restaurant at its word that they have followed the required legal and ethical steps, stating that what is written on the sticker at purchase is true. However, when you place all the major participants — from the farmer to the consumer — on the blockchain, you can get a much clearer picture of the product’s history,” it said. “You can learn whether or not it has been certified, if it conforms to a certain standard, who certified it, the results of that quality control, and even previous ownership. One can also imagine the value of that information in a secondhand market.”