Understanding Manufacturing through Blockchain

When aircraft manufacturers today are faced with a problem in a plane that has been in service for many years, they encounter a significant challenge tracing the history of the suspected part or component and chronology of events surrounding it to find the right fix. These could be issues or damages fixed right from the manufacturing process, flight test observations, customisations by lease operators, maintenance observations and changes, damages due to in-flight incidents such as a hard landing or bird strike and pilot logs from in-flight observations and issues.

All this data is spread out in multiple systems across organisations in the supply chain, and data gathering and reconciliation becomes an extremely challenging exercise. Some airlines spend as much as 90% of the time and effort finding and organising the data chronologically, and only 10% of time in finding the fix. And the aircraft are grounded during this time – massive revenue loss for an industry with high asset utilization targets.

Now imagine the savings that would be possible, if there were a system of records that brought together all of the information from all of these sources in one place, all organised in chronological order. With such a system, aircraft could be back in the air within just 20% of the time taken earlier. Enter blockchain!

These examples taken from the aircraft industry also have relevance to all manufacturing industry.

By enabling all the parties to share their data on a common network as and when the data is generated, and using a common identifier for a part or component that lets the entire history be traced, blockchain could just be the solution to this challenge.

The manufacturing industry is experiencing significant transformation as blockchain streamlines processes and brings accountability among stakeholders. The technology is a powerful recorder of transactions enabling provenance tracking of goods and its movement through the supply chain.

Organisations today face challenges in coordinating with their stakeholders in the value chain, due to information asymmetry caused by silo-ed databases, resulting in inaccurate forecasts and delays due to insufficient inventory. In a globalised world, organisations procure and sell goods in different parts of the world. Their partners in the supply chain have increased exponentially, raising the need for a single source of truth.

Consumers also demand products that are crime-free, sustainable and of the highest quality. The ability to validate the ethical production of products and to trace its origin not only provides transparency, but also increases brand loyalty, brand value and revenue.

Blockchain has come to be recognised for its potential to create a fundamental, disruptive shift in the way information is processed, making them faster, accurate and tamper-proof. Organisations are recognising the inevitable force of this technology, and its ability to build an ecosystem that would transcend geographical barriers, its automation capabilities and the enormous cost benefit.

While Blockchain offers enormous potential, manufacturing companies need to leverage it in chosen business areas, where the impact of this technology is the most.

The aerospace industry is one of the sectors which stands to gain a lot from blockchain. Blockchain has various applications in the aerospace industry, such as supply chain management enabling stakeholders to trace the sub-components back to its manufacturers and access its quality details.

It also helps the stakeholders to streamline their inventory management by tracking the production of assets and the monitoring of the inventory of their suppliers and customers. And as mentioned earlier, it can help to quickly provide aeronautical engineers access to the history of the aircraft, and the damage and repairs to help accurately identify the problem and design the solution for the aircraft. Other Blockchain applications include:

Supply Chain Management

Inventory Management: OEMs procure goods from across the world to meet the demands of local customers, but stakeholders in the same city do not have the information required to plan their procurement and production activities.

Blockchain promises to end the struggle to coordinate between stakeholders in the value chain by bringing them on a single platform and creating a sole source of truth. Blockchain helps track products as they move along the supply chain providing real-time inventory updates to all the stakeholders. This helps manufacturers plan their procurement and production activities.

Provenance Tracking: Customer awareness has resulted in the need for organic food, crime-free and environmentally-sustainable products. Customers can use the blockchain to trace products and its constituents back to its origins. They can view quality certificates and certifications from third parties to verify the sustainability or ethical practices of the company.

The airline industry needs to track several components within a part or section of the plane. The ability to track components of a section and verify its presence is crucial for the airline industry. Blockchain helps the airline industry account for every component and assigns accountability among its suppliers for missing parts creating safe skies for all air travellers.

Counterfeit Prevention

Manufacturers struggle to stop the global supply chain fraud and leakage, which accounts for losses of over $300 billion per year. By tracking products through the supply chain, organisations can ensure counterfeit products do not enter the supply chain and provide customers a tamper-proof record of the product’s lifecycle to verify authenticity.

Blockchain enables aerospace industry to track products through the value chain, thus preventing counterfeits from entering the market and enabling customers to verify the authenticity of the product.

Equipment Automation

Smart contracts on the blockchain can be used to automate payment to suppliers and service providers. They can also be used to automate equipment to perform functions at specific instances. Sensors on equipment can capture data which can be used to certify the quality of products or smart contracts can stop production of faulty products if an anomaly is detected.

Equipment Maintenance Tracking

By tracking equipment procurement and their breakdown, blockchain enables manufacturers to trace faulty components back to their suppliers and reduce the downtime of production facilities.

In the airline industry, for instance, blockchain could help track aircraft through production, servicing and its entire lifecycle tracking parts usage and damage history. Data can then be made available for damage detection, analysis and repair of parts.

The manufacturing industry is on the verge of a blockchain revolution. By connecting every company and every customer it helps create greater transparency and trust and enable businesses all over the world. As more and more companies deploy blockchain in their supply chain, an ecosystem free from information asymmetry and counterfeiting seems a real possibility.

Source:  Deccan Herald (The writer is Vice President and Head of Center for Emerging Technology Solutions at Infosys)   December 24, 2017

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