When it comes to manufacturing traceability, process capabilities are perhaps the most critical area of investment and differentiation for Best-in-Class companies. Many manufacturers are excited about blockchain’s potential ability to verify goods moving through the manufacturing supply chain. In fact, the Best-in-Class are 50% more likely than All Others to build compliance and traceability into their production processes, making blockchain an excellent match. The highly transactional and often multi-step nature of business process services means that the potential applications of blockchain in manufacturing are practically endless.

Blockchain is an Industry 4.0 technology that is quite simply, an open, distributed ledger that can record transactions between two parties efficiently in a verifiable and permanent way. Blockchain is the second generation of the digital revolution that creates the “Internet of Value,” a way of building digital relationships that reshape the way we do business.

Blockchain elevates manufacturing traceability and transparency to a totally new level while improving process efficiencies and reducing costs. It can also help manage and audit transactions so that information can’t be changed by anyone in the transaction chain. It is tamper-proof and acts as a single source of truth in the chain of custody.

For manufacturers, the pressures that blockchain technology has the potential to address are staggering.

Figure 1: Blockchain Will Ease Compliance, Traceability, and Safety Pressures in Manufacturing

Traceability is key in tracking the flow of manufactured goods, helping to ensure compliance with both current and future regulations. It goes without saying that all firms are very interested in avoiding the high costs associated with product non-compliance. The capability to rapidly recall products is necessary, both to avoid these costs and to avoid interruptions in the supply chain. In the coming decade, blockchain will be instrumental in all these areas.

Examples of Blockchain in Manufacturing

Three examples of the potential blockchain holds for manufacturers include asset management, food product traceability, and pharmaceuticals traceability.

In day-to-day manufacturing operations, blockchain may prove incredibly useful in asset management and minimizing manufacturing downtime. Aberdeen envisions manufacturers deploying blockchain technology between their ERP system and parts suppliers, enabling IoT-connected machines to safely order replacement parts that arrive just in time for an engineer to install. Combined with predictive and prescriptive analytics, IoT-driven blockchain technology may eventually be the most automated, fail-safe way to keep the factory humming.

In the food industry, blockchain can increase traceability and food safety. Food shipments are trackable and digitally recorded from field, farm, or factory to broker, then distributor to store. At each checkpoint, a status is signed and logged via blockchain. The result is traceable information that can be pulled up in seconds in the event of a foodborne illness. Thus, blockchain can make it possible for the retailer to quickly and selectively recall affected products and pull them off the shelf.

In the pharmaceutical industry, blockchain technology helps ensure regulatory compliance and improves supply chain security. The Drug Supply Chain Security Act (DSCSA) requires the industry to adopt an “interoperable system” to track and trace prescription drugs across the supply chain, and the project is looking to prove that blockchain is the best technology to achieve this goal.

These are just three examples of how blockchain can improve manufacturing operations and supply chains. As you think about deploying this technology to improve manufacturing processes for yourself, look for:

• Pre-defined use-case blueprints and ready-to-use solutions

• Embedded blockchain technology in existing applications that adds permission-based transaction security

• Manufacturing applications that feature easy on-boarding for manufacturing supply chain partners



You can never have too much trust and traceability in manufacturing. Blockchain promises a new model for traceability, supply chain transparency, and auditability. It promises to radically simplify many business processes, reducing risk, and boosting transparency. As the dust settles and the benefits become clear, blockchain is definitely a technology that should be on every manufacturer’s planning horizon.

To learn more about the use of real-time traceability in manufacturing to eliminate waste and delight customers, click here.

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