Decentralised and Autonomous Engineering. Do we need Blockchain based Manufacturing?
Blockchain technology combined with smart contracts has the potential to disrupt the manufacturing industry beyond recognition. We have all heard of Blockchain but automatically assume that this means cryptocurrency. So, how is Blockchain technology relevant to manufacturing?
What is a Blockchain?
The original objective of Blockchain technology was to facilitate trusted fiscal transactions between two parties without the necessity for a third party such as a bank to be involved. This enabled faster and less expensive transactions. Due to the security and immutable nature of the Blockchain it also has complete integrity as the transactions are verified by the system itself.
Transactions on the Blockchain are stored and distributed across multiple nodes within the network. These transactions or records are very secure due to how the Blockchain works (see our previous article for more information), which makes this technology the perfect method of transparently and securely recording transactions and documents. As the data is held across shared nodes, the technology can be used to create and maintain a common and constantly updated database. This presents a multitude of applications for Blockchain outside of the cryptocurrency industry.
What is a smart contract?
Smart contracts have the ability to use rule-based intelligence to perform functions. Blockchains support the construction of smart and trusted code that is embedded securely into the Blockchain. Participants can use this to specify terms, conditions and any other logic into their transactions, thus creating a smart contract.
As an illustration of how a smart contract would work, take the example of an aerospace manufacturer issuing a smart contract onto a Blockchain marketplace that includes precise terms and conditions for a wing spar that is to be manufactured from Aerospace grade Aluminium. Along with this they have included the exact component specifications with delivery and payment requirements.
Any supplier on the Blockchain can bid for the contract as long as they have the correct quality credentials and machinery that is capable enough to manufacture the component.
If the delivery timescale is not satisfactory then the contract can automatically distribute the requirement across multiple qualified suppliers to achieve the required delivery date. Therefore, allowing buyers to dynamically scale the manufacturing system to meet their requirements.
Once the Blockchain data has confirmed that the specifications of the smart contract have been fulfilled i.e. the parts have been delivered to the required quality standard and are on time, then the smart contract will execute the payment automatically. This will eliminate trust or compliance issues that may exist within that supply chain.
What are the issues with manufacturing today?
Every manufacturing facility must solve problems that negatively affect their production activities whilst finding ways to maximise their capacity. They also have the challenge of competing in a global manufacturing environment by becoming more efficient whilst maintaining quality and reducing costs.
For any manufacturer, under and over estimating demand leads to lost revenues, this is especially true for smaller factories. This can take the form of lost sales due to:
- Poor delivery performance
- Sub-standard quality
- Stagnant inventory
- Energy usage effectiveness
- Under-utilised assets.
In short, the largest inefficiency in any manufacturing system is in its inability to be flexible.
To combat these issues, global manufacturing is currently going through a technical revolution which has become known as “Industry 4.0” (see our previous article for more information). There is increasing focus on smart factories and intelligent manufacturing systems that have a greater integration between the physical and digital processes, thus creating “Cyber Physical Systems”.
But, is Industry 4.0 delivering on its promises? Despite investment the industry is still seeing widespread issues which include:
- Untrustworthy and opaque quality systems
- Outdated or unreachable technology
- Lack of Supply chain transparency and integrity
- Unproductive centralised supply chains
- Digitisation and control of inspection and traceability data
- Non-conformance management
- Manufacturing process control
- Constrained capacity planning
- Lack of machine health monitoring
- Energy efficient use of assets
- Inflexible processes
Industry 4.0 isn’t providing the benefits that it should be.
Why not? The key to obtaining value through Industry 4.0 is in combining Blockchain, Internet of things (IoT), automation and Artificial Intelligence (AI). Organisations are currently investing in these technologies individually.
The technology blend is the key to success.
How do we solve these issues?
With the advent of Industry 4.0 and Blockchain systems a transparent, decentralised platform is required that combines these technologies. It will enable interconnected supply chains and digital passport capabilities which also eliminates any barriers to entry for any size of manufacturer.
The building of such a system will resolve the complex problems of manufacturing systems with the following key technological innovations.
The Blockchain
By digitising Manufacturing Quality systems using the Blockchain a system would be created that is a registry and catalogue system for recording, tracking and monitoring any component across all supply chain members. The advantages of a Blockchain digital passport are:
- Immutable Blockchain based component digital passport
- The consensus mechanism of distributed ledger system keeps it secure.
- A tamper proof audit trail
- Complete provenance of any component
Smart Contracts
The system would disrupt the traditional manufacturing supply chain structure by engaging a transparent smart contract eco-system. This will enable the system to act autonomously, ordering tooling materials and making production decisions. This will eliminate the need for human interaction which is a bottleneck on today’s infrastructure. Smart contracts can also be used to create a integrity mechanism between suppliers and buyers, eliminating the trust and compliance issues that exist today.
Industrial Internet of Things (IIot) and Machine to Machine (M2M) communication
This kind of system would require a universal Blockchain connector to connect machinery to the Blockchain and process smart contracts. This smart hardware device will provide Blockchain transaction capability to any machine.
Allowing the machines to connect and interact with the Blockchain creates multiple nodes which will be used to validate transactions and provide the required trust and integrity mechanism. The device will also allow machines to communicate with each other via the distributed ledger giving them the ability to make decisions and react to changes in load and capacity. Therefore, allowing buyers to dynamically scale the manufacturing system to meet requirements.
Artificial Intelligence (AI)
By monitoring the environmental and machine maintenance event data, machine learning algorithms can be applied to predict any maintenance issues that may arise. Combining this with an energy management system will allow the machinery to be utilised in the most efficient way possible (See are previous article). Feature inspection outcomes can also be combined to ensure that machine capability and quality is constantly improved and is not impacted by environmental factors.
Conclusion
Manufacturing plants and factories around the world must rely on Blockchain, smart contract and IoT to meet the rising global demand and transform the way we order, control quality, manufacture and deliver components.
Blockchain and smart contract technology has the potential to radically disrupt the current manufacturing business model by enabling trust within the supply chains, streamlining processes and improving transactional security. But most of all it will digitise manufacturing data which can be utilised to increase the effectiveness of any manufacturing system.
Although Blockchain adoption is at an early stage, it will redefine the way manufacturing facilities do business. The manufacturers that innovate will be the ones that emerge from the pack and reap the rewards.
Intelligent, decentralised, adaptive manufacturing is essential for the future of manufacturing systems.
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