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Blockchain: Great for Manufacturing Supply Chains

Joel D. Neidig ITAMCO SME Member Since 2014
By Joel D. Neidig ITAMCO, SME Member Since 2014

In 1994 I was 11, and my dad brought home a Canon PC with a 486 Intel processor running Windows 3.1. Yes, believe it or not Canon used to make PCs; before that, we had a Tandy 1000 at home. But it wasn’t until we bought our PC with Windows 3.1 that I really started to explore the Internet. Our small town of Plymouth, Ind., was awarded a federal grant to get the Internet, and I’m not kidding you, it was called “Skynet.” It was a public ISP, and I still remember going to our county building for the opening meeting and hearing them say, “We’re getting this thing called the Internet, and it’s going to change everything.” And, of course, the first thing I did when we got connected at home was search cheat codes for Doom II. We had Mosaic as a browser, but I vaguely remember using Gopher protocol, which was an alternative to the World Wide Web to retrieve documents, hence the cheat codes for Doom. I played a lot of Microsoft Golf at that time, but I digress.

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Blockchain, in my opinion, has the ability to change everything just like the Internet did when I was a kid. The Internet has become the very fabric of how we conduct our daily lives from personal to business to how we schedule our days and weeks.

Blockchain is a chain of blocks that form a database. Devices that store these distributed data are not shared servers. Each block is an organized record comprised of a reference to the previous block and the timestamp. The list of blocks inside the database is continually expanding. The principle of the blockchain is to combine digital records into blocks. Complex mathematical algorithms link these blocks together in a chronological cryptographic chain and new units are at the end of this chain. To rearrange the blocks in some places is impossible; the system will reject such action on the basis of the blockchain’s timestamp and structure.

Blockchain has already disrupted currency, so what’s next? Healthcare, business, government, energy, real estate, accounting, law or how about manufacturing? Technology today produces so much data, according to the Internet of Things Institute (ioti.com/industrial-iot/how-iot-data-tsunami-driving-manufacturing-innovation), that connected automobiles can produce up to a petabyte of data a day. Imagine all the manufacturing equipment in the world, supply chain processes and the data that those systems are producing. But, just like PCs of the early Internet age, their true power was not realized until connecting to the Internet.

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Manufacturing systems are still largely disconnected from one another—imagine if we could build the infrastructure for all these systems to communicate, just like how the Internet connected so many users, servers and organizations together. Numerous new businesses were started purely because of the Internet. Blockchain has the ability to create that infrastructure of securely connecting the Industrial Internet of Things and provide an immutable, non-reputable digital ledger and consensus network that will democratize the way we do business and manufacture today.

Envision that a farmer in Indiana has a tractor that recently broke a pulley on the engine. Instead of the local supply store having to stock hundreds of thousands of dollars of inventory, or ordering the part from the manufacturer and waiting for delivery, it has one metal 3D printer that can print any part on demand from the OEM’s catalog, allowing the supply store to provide the spare part within the same day to the farmer. Instead of “farm-to-table,” as they say in the food industry, we call this “filament-to-farm.”

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This reduces the overhead of the local farm supply store and provides the most competitively priced component to the farmer that can be executed through a smart contract where both parties are reimbursed. The transaction is seamless for them and the farmer.

Now, how do we protect the intellectual property and everyone between? Enter the blockchain. The digital thread of using models to 3D print various products for OEM catalogs can be secured in these digital blocks and only be accessed if payment is made, and then the file can be used once for printing on the machine the payment is made through. It’s almost like a “manufacturing vending machine.” Every entity along this supply chain is compensated for their effort, and the end customer is happy because they get the item instantly and in the most cost-effective way.

This may sound like futuristic thinking, but isn’t that what they said in 1994 about the Internet? This will change everything.

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Manufacturing Leaders Selected as 2020 SME International Honor Award Winners

SME’s 2020 International Honor Award winners were recently announced. These five manufacturing practitioners from industry and academia are being recognized for their high-level contributions to manufacturing production, research, education, scientific publications and service to SME.

The 2020 International Honor Award winners are:

  • Eli Whitney Productivity Award—Bert Lauwers, Prof. Dr. Ir., FSME, KU Leuven, Leuven, Belgium
  • Joseph A. Siegel Service Award—Cecil W. Schneider, FSME, PE, Lockheed Martin Aeronautics Co. (retired), Big Canoe, Ga.
  • SME Frederick W. Taylor Research Medal—Fuewen “Frank” Liou, PhD, Missouri University of Science and Technology, Rolla, Mo.
  • SME Education Award—Albert Shih, PhD, FSME, University of Michigan, Ann Arbor, Mich.
  • SME Gold Medal—Jian Cao, PhD, FSME, Northwestern University, Evanston, Ill.

SME is currently accepting nominations for the 2021 Interna-tional Honor Awards. The submission deadline is Aug. 1. Award and nomination information is available at sme.org/awards.

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