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Get Fluent in Blockchain, Architect a Better Future

Brett Brune
By Brett Brune Editor in Chief, Smart Manufacturing

These days mirror the late 1990s, when the Internet evolved to widespread use—and the topic bedeviled many. But others—in banking and entertainment, for example—who quickly learned the new lingo and jumped at the chance to explore the Web’s potential benefited greatly.

Today’s tantalizing topic: blockchain.

Smart Manufacturing magazine interviewed 20 experts on blockchain and manufacturing. The resulting special report, “In blockchain we trust,” takes pains to make manufacturers fluent in blockchain—so they can get in on the ground floor of what is sure to be a sea change in the way they interact with suppliers, for starters.

“The biggest application we currently see is use of blockchain in the supply chain context,” said Martin Ruskowski of the German Research Center for Artificial Intelligence. “Blockchain is feasible where you have non-trusted environments, such as suppliers delivering parts and you want to have full traceability throughout your delivery.”

A quick primer: blockchain is a decentralized register made up of endless, connected cryptographic blocks. Data is stored, time-stamped—and automatically distributed to many servers at once. Security is a key value. Blockchain is tamper evident—any change is immediately apparent to all involved. Where multiple entities are involved, as on a multiple-tier manufacturing supply chain, blockchain creates a record of every transaction. If someone adds to the data, the widely distributed ledger shows when and where that addition happened.

Blockchain propelled Bitcoin to success. But, said IBM Blockchain CTO Krishna Ratakonda, the technology has the potential to go “way beyond Bitcoin. Blockchain acts as a common source of truth, processing, organizing, and connecting data in a way that was not possible before.”

Joel Neidig, director of R&D at ITAMCO, marveled at the size of the market for blockchain. “Every technology leader—IBM, Microsoft, Amazon—is going to be into it. Blockchain will eventually become a technology like the Internet,” which is now indispensable for business.

How the connectivity and the software behind blockchain is applied is “where the solutions will happen,” he added. “The key is developing those first use cases and filling those out.”

On that front, our report details work on blockchain happening inside IBM, Intel, KPMG, L’Oréal, Microsoft, nScrypt, Rockwell Automation, SAP and Siemens. SAP piloted blockchain with 15 pharmaceutical firms, said Hans Thalbauer, senior VP for IoT and digital supply chain. The No. 1 use case for blockchain is all around track-and-trace: knowing where a product is and how it is holding up, he asserted.

In the six-month pilot that ended in May 2018, SAP did one billion transactions on blockchain, said Gil Perez, senior VP of products and innovations and head of digital customer initiatives.

SAP also partnered with Intel to experiment with blockchain. “In the high-tech industry, it’s again the track-and-trace scenario. They are tracking their products, making sure that the components going into the finished product are serialized and can be matched and mapped,” Thalbauer said. “It’s also the digitization of documents. For example, in the whole import-export scenario, there are thousands and thousands of documents that can be digitized. It makes life so much easier—whether it is dealing with government officials or truck drivers.”

This kind of situation “is where blockchain technology, combined with today’s super-cheap sensors, can automate a lot,” Thalbauer said.

Cargo ships will no longer sit in port for days waiting for paperwork. Digitized paperwork—that becomes part of a blockchain-based recordkeeping system—“can take out 10 days in the shipping process,” he asserted.

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