5 ways blockchain could revolutionize the manufacturing industry
Every nation’s manufacturing industry is one of the most vital economic sectors. Regarding Canada specifically, according to the Financial Post, manufacturing accounts for about 10 percent of the country’s GDP. Scalability in a country’s manufacturing industry implies more significant economic growth for the country. The more the manufacturing industries of a government grow, the greater will be the overall economic prosperity.
Outstanding technological innovations and the global manufacturing industry have become more scalable.
With the integration of state-of-the-art technologies, the manufacturing sector is growing by leaps and bounds. In addition, we are witnessing a massive digital revolution that is transforming the ways of the world in unimaginable ways.
While a wide range of technologies are driving transformations in the manufacturing sector, blockchain technologies are disrupting the industry with the most significant momentum. The charm and prowess of blockchain technology is not limited to cryptocurrencies.
Indeed, blockchain technologies have the potential to completely transform major economic sectors
Indeed, blockchain technologies have the potential to completely transform major economic sectors, including the manufacturing industry. This explains why many manufacturing companies are now subscribing to blockchain solutions.
According to Globe Newswire, the global market for blockchain in manufacturing is estimated to grow at a whopping CAGR of 66.4 percent between 2022 and 2027. The market for blockchain solutions in manufacturing is expected to reach a net value of USD 17047.8 million by 2027. indicating that companies are seeing great opportunities in blockchain technology to add greater value and efficiency to manufacturing operations.
This blog looks at the key benefits of blockchain technologies for the manufacturing industry. In other words, this blog sheds light on how blockchain technologies can revolutionize the manufacturing sector.
Five incredible benefits of blockchain for the manufacturing industry
1. Improved and improvised traceability
In manufacturing, traceability is essential at every stage of the production process. Better traceability facilitates more significant operational efficiency and better coordination between the teams. To explain, with blockchain systems in place, manufacturers can keep systematic records of all data about materials, processes and finished goods.
Since blockchain is a decentralized ledger, manufacturers can efficiently store and share information about the origin of materials, shipping status, compliance measures followed and other details. In this way, companies can track all their assets and goods systematically and easily by using the blockchain ledger.
Also, with greater traceability, the sales team can also respond to customers’ questions about sustainable practices, animal testing or other concerns in a more organized manner. The fact is that greater traceability further paves the way for greater transparency. When there is greater transparency in operations, employee engagement is high, and customer experiences can be improved.
We must recognize the fact that modern customers love transparency from brands. Therefore, the kind of traceability and transparency blockchain can provide is invaluable for producers. In this way, they can optimize their employees’ experience and customer service dynamics.
Moreover, in case of product recall, effective traceability will have such a crucial role to play. The product recall process in case of defects or improvements will be relatively easier when data is stored in a ledger.
2. Optimized inventory management
Supply chain operations and inventory management form the backbone of the manufacturing industry. Therefore, any inefficiency in the supply chain and warehouse operations can derail the entire range of manufacturing operations. It is important for manufacturers to have regular insight into their supply chain.
This is where blockchain solutions prove to be game-changing for manufacturers. With the blockchain ledger, manufacturers can track their supplies through all stages of production. Furthermore, with this ability to track supplies and processed goods in real time, manufacturers can make clear delivery commitments to their customers.
To add, given the decentralization feature of blockchain, manufacturers can share this important information with their supply chain partners and managers for better coordination.
Furthermore, with blockchain technologies, manufacturers can also trace the source of defective supplies or materials that do not conform to their quality assurance standards. Companies can easily track all risks and inefficiencies in their supply chain operations, based on which they can quickly reduce risks in real time.
Security is also becoming a significant issue in automated warehouse management and supply chain operations. Blockchain solutions also offer the incredible benefit of improved security in global supply chain operations involving an extensive network of vendors and suppliers.
All these advantages explain why the importance of blockchain in the global supply chain market is increasing at a tremendous pace. According to Allied Market Research, the market size of blockchain in supply chain operations is estimated to grow at a staggering CAGR of 80 percent in the coming years.
Innovative businesses will vouch for blockchain integrations in supply chain and inventory management. Are you ready to embrace the incredible benefits of a digital supply chain revolution?
3. Improved data security
Now that most sectors run on big data, it leads to increased security from cyber attacks or leakage of confidential data, which has become crucial for manufacturing companies. For example, manufacturing companies must secure details of contracts and invoices from becoming a target for data breaches.
Also, as discussed earlier, automated supply chain operations must be protected from cyber threats and vulnerabilities. Blockchain solutions keep sensitive data more secure with effective cryptography techniques in place. Moreover, they eliminate threats in a more dignified way.
Blockchain ledgers come with end-to-end encryption for maximum security.
Besides, another important feature of blockchain is that companies can store all data on a network of computers instead of storing all information on a single system. This makes it very difficult for cyber attackers to gain access to confidential information.
Since it is a distributed ledger, no individual can alter or manipulate the data in a personal way as authorizations must be sought. If an unauthorized person tries to manipulate the information, those who have access to the ledger will receive alerts.
Blockchain can effectively transform the manufacturing sector in terms of data security in an incredible way. With the integration of blockchain solutions, manufacturers do not have to worry about large amounts of customer and supplier data. The risk of vulnerabilities in the event of a breach will be minimal.
4. Automated payments with smart contracts
Smart contracts are gaining traction in the modern business world and are becoming a common feature across industries. To explain, smart contracts are blockchain programs that perform the next step by meeting pre-defined conditions. The purpose they are intended to serve is the automation of contract execution to reduce third party involvement or unnecessary waste of time.
In fact, according to Globe Newswire, the global smart contracts market size is estimated to grow at a CAGR of 24 percent between 2022 and 2024. The manufacturing industry involves several recurring payments to vendors and suppliers. Blockchain can enable manufacturers to automate these recurring payments via smart contracts to minimize third-party trust.
Also, smart contracts will eliminate the possibility of human error or unprecedented delays in payment due to human inefficiency. When smart contracts run on a blockchain, the payment will automatically be made if the prerequisites are met. In fact, if the prerequisites are met in times to come, the benefits of blockchain in payments will only get bigger and better.
With effective automation in the payment settlement, manufacturers can rather focus on optimizing other operational aspects. Also, with a more secure payment system, businesses can avoid unprecedented financial losses. Also, manufacturers can reduce the overhead costs of transactions with smart contracts. They can then save a significant part of the operating costs.
5. Effective talent management
It is correct to say that a company is ultimately as competent as its people. This is the simple reason why companies place enormous importance on talent management and performance management. Interestingly, according to Forbes, companies with high employee engagement can be 21 percent more profitable.
However, in order to acquire the prerequisite levels of motivation and engagement in the workplace, companies must ensure that they get everything right about talent management. Blockchain can offer a huge opportunity for managers in manufacturing companies to drive optional achievements.
To explain, managers can maintain effective blockchain records containing specific details about employee performance, employment history, skills, education and training. Moreover, the HR managers can also store details of preferred employee benefits and compensation forms. Indeed, these are the times of HR analytics.
Organizations are now embracing a data-driven approach to employee experience and employee engagement. As a result, businesses can effectively manage and share all necessary data and information about employees and relevant authorities. In addition, the blockchain’s manifold advantages for recruitment must be looked at. Finally, organizations’ guidelines for optimizing engagement and retention.
From optimizing the supply chain to getting the best out of employees, blockchain brings huge benefits to industry. The market size for blockchain solutions in the industry is increasing at an unprecedented rate. More and more manufacturing companies are now investing wholeheartedly in the potential of blockchain. We can say this with assurance that blockchain holds the key to the future of the manufacturing industry. The sooner manufacturers embrace blockchain sock chains, the more beneficial they will be.
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