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Application of Blockchain Technology in the Manufacturing Industry


btcmanager.com 22 June 2022 08:31, UTC
Reading time: ~5 m

Blockchain technology is an open, shared ledger system that makes transaction authentication very safe and reliable. As materials, goods, components, and funds move through the manufacturing supply chain, blockchain technology can be used to make the process more transparent, scalable, and secure. 

Potential Roles of the Blockchain in the Manufacturing Industry

Manufacturers are working on blockchain implementations that might help them improve operations, gain more visibility into supply networks, and track assets with unparalleled precision. Blockchain has the ability to change the way organizations create, manufacture, and scale their goods. Also, it is changing how companies relate because it makes it easier for competitors who have to work together in the same ecosystems to trust each other.

Blockchain can increase openness and accountability at every step of the industrial value chain, from getting the raw materials to delivering the final product. In this short review, we shall look at the different ways the manufacturing industry can leverage blockchain in its processes.

Supply Chain Management

All manufacturing businesses are based on supply chains. Most of them can use the blockchain’s distributed database structure and block-based framework to categorize value-exchange transactions to make them more efficient. By scaling supplier time delivery, product quality, and track-and-traceability, manufacturers can better meet delivery schedules, enhance product quality, and start selling more.

Transparency in the supply chain is very important for manufacturers. Food companies have to follow the “one up, one back” stipulation, which means they have to keep track of where food comes from and where it goes. With blockchain, they can keep track of shipping information, storage temperatures, and the expiration dates of their produce. In this way, food companies can determine precisely what batch of produce has gone bad and recall it before it reaches the customer.

Car manufacturers also have to keep track of their suppliers all the way to the customers who buy their vehicles. Using blockchain technology, automakers can give each car part a unique identifier. This makes it easier for them to find problems faster and figure out what caused them.

Warranty Management and Counterfeit Protection 

It’s vital for manufacturers to have smooth warranty management processes to not only stop fraud and keep costs low but also to give customers a great experience. Companies face many problems, from false claims and fake goods to misconceptions about warranty coverage. 

The manufacturing industry loses billions of dollars due to fraudulent warranty claims. One study estimated that the cost could be as high as $2.61 billion yearly. 

When manufacturers have to deal with fraudulent warranty claims, it often costs them more money because it uses up their resources. But with blockchain, businesses can check the information about a product by creating an unchangeable record that can’t be counterfeited. This can cut down on the number of false claims handled by a manufacturer and improve the process for customers with genuine claims.

It is also possible to recoup lost money and protect a company’s reputation by registering each product on the blockchain registry with a unique identity and key properties. This lets the product be scanned at every step, from when it is made until it is sold, to ensure it is real.

Preventative Maintenance

Manufacturers who want to get the most out of their uptime can use business analytics and tools like the Internet of Things (IoT) to discover operational issues before equipment breaks down. Blockchain can enhance this process by adding another layer of visibility and accountability, making it easier to get the right parts to the right place at the right time. Using blockchain, maintenance work orders could also be sent securely to different service vendors, and the best match can then be chosen automatically depending on location, expertise, and availability.

To make it easier to hire outsourced maintenance, manufacturers can add service contracts and installation records for each of their equipment to a blockchain. The blockchain can then make it possible for scheduled maintenance and payments to be made automatically. 

An item that needs to be fixed can send out a service request and create a smart contract for the work. The blockchain record can also include information about a machine’s maintenance history that can’t be changed. Such applications will make machinery more reliable and make it easier to track its wear and tear. 

Regulatory Compliance

The immutability of blockchain technology means that it is uniquely suited to act as a document of proof, a record of ownership, or proof of process. As such, the technology can be used to keep track of the steps required in policing highly-regulated manufacturing environments such as food production, pharmaceuticals, and hazardous materials. 

Recording actions and outputs on a blockchain will create an immutable audit trail for regulatory authorities to efficiently and reliably verify compliance.

Additionally, regulators can get near-real-time access to manufacturers’ data, allowing them to be more proactive in their work. 


Manufacturing has always been seen as a sector resistant to change. But technologies like blockchain, artificial intelligence (AI), and machine learning (ML) are slowly revolutionizing the industry. By providing a secure, unchangeable, and transparent distributed ledger, blockchain can help improve processes, cut costs, and enhance the manufacturing ecosystem as a whole.

As blockchain technology gets better, it will help manufacturers overcome some of the issues that have kept them from using other next-generation technologies and new business models on a much larger scale. Because of blockchain, manufacturers will be able to improve efficiency by working together and sharing data across secure networks.

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