In the early stages of a project with the U.S. Navy and Boeing, blockchain is reducing costly paperwork by 40 percent and cutting scrap waste by 15 percent, SIMBA Chain CEO Joel Neidig said. The Navy was looking for immediate traceability of individual plane components and automation of the ordering process and blockchain delivered.
After a few years of mostly hype, blockchain is starting to deliver and prove its value in manufacturing, particularly in aerospace and defense and within additive manufacturing, proponents said.
One previous issue limiting broader implementation—the slowness of blockchain—has improved, Neidig said.
Avalanche, a new blockchain platform launched in 2020, can process up to 4,500 transactions per second, compared with 30 on other blockchain platforms, he said.
Challenges remain, especially in terms of adoption of other technologies needed to work with blockchain.
Blockchain enables continuous, automated, transparent communication, as opposed to the back and forth of email, Neidig said.
“Before blockchain, it’s been all email, sending spreadsheets back and forth that could be manipulated and modified,” he said. “Or, if somebody was on vacation, the spreadsheet could sit in somebody’s email inbox. We’re bringing them into this new, completely synchronized and automated system. Instead of tracking manually, all digital workflows are codified in the block-chain ledger.”
For example, blockchain paired with SIMBA (SIMplifying Blockchain Applications) Chain now allows the Navy to immediately trace any component going into the tail hook of a plane, he said.
In the case of the Navy’s F18 made by Boeing, 40 percent of the cost has been paperwork—and that paperwork can be cut in half by using blockchain, Neidig said.
In addition, up to 20 percent of materials and parts had to be scrapped, in some cases because of a lack of traceability, he said.
“If they’re replacing the pin part of the assembly and they don’t have the heat code from the forge the pin came from, they don’t know who to call,” he said. They have to throw the new pin away. We’re providing that traceability in real time between the Navy and Boeing. It’s a common pain point across all supply chains.”
A helping hand at the ready
Additionally, blockchain working with smart contracts can alert organizations when to order needed parts, or automatically order those parts, based on the known amount of time it takes those parts to be delivered, Neidig said.
In the case of supply chain disruptions, smart contracts in blockchain can alert organizations to a problem before it occurs, he said. The military might learn in advance, for example, that the only supplier for a needed component is about to be hit by a hurricane.
“Blockchain will give us the foresight to solve so many issues,” Neidig said. “If we could have seen what Covid was going to do in America, we could have done some things differently. We waited too long. We realized how fragile we are.”
In additive manufacturing, blockchain can authenticate and verify, for example, that a CAD file needed for a replacement part on an airplane has been transferred securely, Aerofied VP David Rampton said.
Post production, blockchain also can verify that the printed part matches the spec-ifications, said Rampton, who is also managing director of aerospace and defense for The Provenance Chain Network.
“A lot of companies are investing in digital engineering,” he said. “Blockchain authenticates that the additive manufacturing file you intended to send is the file received with no corruption, no manipulation from start to finish.”
‘An early warning system’
Blockchain does not prevent tampering. But it does make it immediately clear when any manipulation or corruption takes place, nScrypt CEO Ken Church said.
“Remember, this is not trying to make a better non-hackable approach,” he said. “Blockchain is not about encryption. You’re still going to encrypt the data. People are still going to try to fight their way in. But if a file is hacked, it’s transparent.
“We know when something is wrong. We know someone is working their way in. This is about file transfer. We can move something of digital value from here to there. I can’t see inside the encrypted file, but I can see that things are moving. If it doesn’t move, we know why it didn’t move. If it moves somewhere else, we can know where it went. We get a real-time alert.”
“It’s basically an early warning system,” Neidig said.
“Everybody talks about the natural fit between blockchain and 3D printing,” Church said. NScrypt has not implemented blockchain yet but plans to in response to customer demands that nScrypt, which makes 3D printing systems, guarantee that printing files will always remain secure.
“We’re not big enough to be able to police that,” he said. “We simply cannot.”
But with blockchain, the customer could specify that files could be released only to certain of its clients—and if files somehow were released elsewhere, nScrypt’s customer would immediately know and could take action right away, Church said.
“Blockchain is a very sophisticated way to ensure only the right people gain access,” he said. “If somebody does hack a file, it’s a very sophisticated way to know. We need our customers to be in line with this, as well. We’d like to see our customers embrace this more than they have.”
Helping manage supply chain risk
The U.S. Air Force is using blockchain paired with SIMBA Chain for supply chain risk management—to verify that conflict minerals and counterfeit electronics aren’t used during the manufacturing process, Neidig said.
In all of these use cases, blockchain provides visibility and transparency. But each entity still controls its own content.
SIMBA Chain provides middleware for organizations to use blockchain. There is no need to know coding or programming, he said. “We’re blockchain for the 99 percent.”
Smart inventory method needed
To fully integrate blockchain, manufacturers need on the input side a smart inventory method, such as RFID tags and QR codes to capture the data that goes into blockchain, Rampton said.
On the output side, companies need a software platform to visualize and represent what happened on the blockchain. That technology is not always present or adopted, he said.
“It’s not just the evolution and adoption of the blockchain technology,” Rampton said. “It’s also the adopting of the enabling technology that supports the blockchain. The adoption of the other technologies has to happen in parallel.”
Variety isn’t always a good thing
Another challenge is differing blockchain technologies, he said.
Large manufacturers using blockchain likely require their suppliers to use the same technology, which could become cost prohibitive for some suppliers.
SIMBA Chain addresses and solves this issue because its blockchain applications integrate with any blockchain, Neidig said.
If you have 15 different customers and you had to maintain a blockchain ecosystem for each one of them, the cost for you to maintain your customer support becomes prohibitive,” Rampton said. The ideal scenario would be for a third party to create a blockchain tool that all suppliers would adopt.
Time to plan blockchain strategy
Looking ahead, every manufacturer will need to be on blockchain, Neidig said, comparing blockchain to the need to adopt email in the early 1990s, establish a web presence in the early 2000s and establish a social media presence in 2010.
Online will no longer be good enough, he said.
“You’re going to need a digital asset blockchain strategy,” Neidig said. “This is how commerce is going to be enacted in this immutable, non-reputable way. Everybody is going to have an on-chain presence as we move forward.”
CASE STUDY: How 2 painful work weeks could have been reduced to 1 hour
When David Rampton managed supply chain for Raytheon in the late 2000s, there was an industrywide Government-Industry Data Exchange Program (GIDEP) alert regarding bad titanium, requiring manufacturers to verify if and where they used the titanium in question and, if so, put together a mitigation plan.
He was part of a team of three people who worked 12-hour days over two weeks to resolve the issue.
“We had to comb through tens of thousands of line items, components for sale, manually find components with titanium, then find the purchase order tied to those parts, then separate the records from the suppliers, find the raw material certification, find the four-digit code tied to the GIDEP alert, and certify we were free and clear of the bad titanium,” said Rampton, now a VP at Aerofied.
“With blockchain, you would have an answer in under an hour,” he added. “Even if you don’t have a perfectly deployed blockchain solution, you can pinpoint which supplier where you need to spend your resources as opposed to deploying resources on every supplier. A blockchain solution saves a lot of time and money, provides accuracy and makes it much easier to validate material traceability and points of origin.”