Blockchain Solutions, Industry 4.0, and Supply Chain
Industry 4.0
Industry 4.0 is defined as the integration of smart digital technologies into manufacturing and industrial processes. It includes a range of technologies like industrial IoT networks, AI, Big Data, robotics, and automation. Industry 4.0 enables smart production and the creation of intelligent factories, aiming to enhance productivity, efficiency, and flexibility, while allowing for smarter decision-making and customizations in production and supply chain operations (https://www.sap.com/uk/products/scm/industry-4-0/what-is-industry-4-0.html)
This article will focus on examining the advancements in computing within the industrial technology sector through the blockchain lens, assessing the benefits this technology brings. It’s a descriptive piece discussing the advantages of adopting a blockchain-based solution in the industrial arena, especially in supply chain management.
To summarize what we mean when we talk about blockchain, the blockchain is a decentralized digital ledger that records transactions in data blocks linked in a chain. Each block contains a number of transactions, and once a block is completed, it is permanently added to the chain, forming an immutable chronological sequence.
Blockchain is highlighted for its fundamental properties such as immutability, security, transparency, and negligible costs for data reading, making it highly suitable for renewing one’s production chain. The cost-effectiveness in writing is variable and depends on the blockchain chosen.
The scenarios considered include enabling users to track the product supply chain, facilitating audit operations, and conducting business intelligence on one’s production chain. Data can be easily structured, thanks to operators like TheGraph, to train artificial intelligence algorithms, and significantly reduce data maintenance costs.
Blockchain Solutions Use Cases
Blockchain technology in supply chain management significantly enhances product traceability and efficiency, especially in global logistics. It facilitates diverse product management, including perishables, improving economic efficiency by reducing costs and time associated with product recalls. Key benefits include:
- Enhanced Traceability: Improved tracking of products, crucial in sectors managing a variety of items.
- Increased Transparency: Allows precise asset movement tracking and information recording, enhancing regulatory compliance and corporate governance.
- Cost Reduction in Management: Especially in logistics, blockchain cuts down bureaucratic costs, which are a major part of transport expenses.
- Sector-Wide Applications: Adopted in various industries, such as ensuring product authenticity in the food sector and tracking vehicle lifecycles in automotive.
These use cases demonstrate blockchain’s versatile role in modernizing and streamlining supply chain operations across different industries.
Who is Adopting Blockchain Solutions
Louis Vuitton
Louis Vuitton has launched AURA, a blockchain-based platform to track the authenticity and origin of its luxury products. Customers can scan a QR code to access detailed information about the origin and manufacture of the product.
De Beers
De Beers utilizza una piattaforma blockchain, Tracr, per tracciare il percorso dei diamanti dall’estrazione fino al consumatore finale. Questo sistema garantisce che i diamanti siano eticamente estratti e non siano “diamanti di sangue”
Tony’s Chocolonely
This Amsterdam-based chocolate company has developed a blockchain prototype to ensure ethical practices in its cocoa supply chains. The blockchain tracks each batch of beans, aiming to end child labor and modern slavery in cocoa production.
Some other examples of companies that are active in the blockchain sector include: Merck, IBM, PwC, Walmart, FFF Enterprises, Bumble Bee Seafoods, Naturipe Farms, ADNOC, JD.com, Microsoft, Linux Foundation.
Return of Investment
The adoption of blockchain technology by enterprises has led to demonstrable returns on investment (ROI), a testament to blockchain’s unique attributes. These returns are primarily driven by blockchain’s enhanced security, unparalleled transparency, and the efficiency of its data management capabilities in handling transaction records. The synergy of these features fosters more streamlined, efficient, and reliable business operations, paving the way for considerable cost savings and elevated profitability for companies incorporating blockchain into their processes.
Illustrative Examples of Positive ROI: Despite facing certain challenges, numerous enterprises have experienced substantial ROI following the integration of blockchain solutions. A notable instance highlighted in industry reports reveals a striking 41% increase in ROI among businesses leveraging blockchain technologies. This impressive figure is largely credited to the fortified trust and immutable nature of transaction records facilitated by blockchain systems.
Read more about achieving ROI with blockchain in enterprises
Enhancing Cost-Efficiency: Beyond just ROI, blockchain solutions are instrumental in driving significant cost reductions. They achieve this by simplifying administrative processes and supplanting outdated legacy systems. For instance, in the oil and gas sector, blockchain implementation has culminated in a remarkable 5% decrease in freight expenditures, translating to a savings of approximately $100 million. Moreover, the technology plays a pivotal role in mitigating financial risks and preventing potential losses across various business activities.
Explore the evaluation of blockchain technology’s ROI in supply chain management
Data Security
In this article, we mentioned a type of blockchain where everyone can read the data, but only authorized individuals have permission to write. For more information on different types of blockchain, you are invited to read the article “Navigating the World of Blockchain: Understanding the Differences between Open/Closed and Public/Private Blockchains”.
It’s crucial to remember that only data intended for public availability should be uploaded to a public blockchain. For confidential information, a hybrid solution is recommended.
For example, to track a maintenance operation by a worker, a code (HASH) representing the worker could be linked to the operation and kept in a private database. This approach can be adapted for various contexts.
Additionally, sophisticated cryptographic mechanisms like Zero Knowledge Proof can demonstrate the completion of an operation without revealing sensitive data.
Risks
When adopting blockchain solutions, it’s crucial to consider the risks associated with choosing the appropriate layer for deploying applications. Selecting established and reliable blockchain platforms like Polygon or Ethereum, based on desired transaction costs, is advisable.
Additionally, data privacy norms must be meticulously evaluated, considering that once data is uploaded to the blockchain, it is irreversibly saved on the network. This permanence underscores the importance of careful data management and compliance with privacy regulations in blockchain applications.
Contact us
If you need a free consultation to understand how to innovate your production processes using blockchain or cloud technologies, you can contact us directly by sending an email to contact@kchain.solutions or visit https://kchain.solutions/contact-us.
