How Blockchain can improve production in 2019


  • The combination of blockchain and IoT will revolutionize product safety, traceability and traceability, warranty management, maintenance, repair and overhaul (MRO) and lead to new business models based on the use of intelligent products connected.
  • The business added value of the blockchain will grow to just over $ 176B by 2025, so it will exceed $ 3.1T by 2030 according to Gartner.
  • Typical product recalls cost $ 8 million and many could be avoided with improved track-and-traceability enabled by blockchain.
  • By 2023, 30% of manufacturing companies with revenues exceeding $ 5 billion will have implemented Industry 4.0 pilot projects using blockchain, compared to less than 5% today according to Gartner.

The biggest potential of Blockchain to deliver business value is in production. By increasing visibility in all areas of production from suppliers, strategic sourcing, procurement and supplier quality to manufacturing operations, including machine-level monitoring and support, blockchain can enable completely new production business models. Supply chains are the foundation of every manufacturing activity, able to use the Blockchain ledger structure and the block-based approach to aggregate value change transactions to improve supply chain efficiency. By improving the accuracy of the supplier order, product quality and traceability and traceability, manufacturers will be able to meet delivery dates, improve product quality and sell more.

A recent study by the Capgemini Research Institute, is the blockchain the key to a new era of transparency and trust in the supply chain? provide valuable information on how the blockchain can improve supply chain and production. A copy of the study is available here (PDF, 32 pp., Without opt-in). Capgemini interviewed 731 organizations globally about their existing and planned blockchain initiatives. The initial interviews produced 447 organizations that are currently experimenting with or implementing blockchain. Please refer to pages 25 and 26 of the study for further details regarding the methodology.

Key study suggestions include the following:

  • Typical the product recalls a cost of $ 8 million and many could be avoided with improved track-and-traceability enabled by blockchain. Capgemini discovered that last year there were only 456 recalls of food alone, costing almost $ 3.5 billion. The Blockchain general accounting structure provides a real-time audit trail for all transaction-protected transactions, making it ideal for auditing and regulatory compliance areas.

  • Gaining greater cost savings (89%), improving traceability (81%) and increasing transparency (79%) are the first three factors behind the manufacturer's blockchain investments today. Other drivers included the increase in revenues (57%), the reduction of risks (50%), the creation of new business opportunities (44%) and a greater incidence on the customer (38%). The following graph of the study illustrates the manufacturer's priorities for the blockchain. Capgemini believes that the improvement of traceability and traceability is a primary driver for all producers, in line with the broader trend of manufacturers that adopt software applications that today improve this function. This is understandable also in view of the fact that in 2019 further regulatory compliance requirements will be introduced and those producers competing in highly regulated sectors, including aerospace and defense, medical devices and pharmaceuticals, are exploring how blockchain can give them a competitive advantage now

  • Digital markets, monitoring of critical supply chain parameters, monitoring of the quality of components, prevention of counterfeit products and monitoring of asset maintenance are the five areas in which Capgemini expects that the blockchain will see the greatest adoption. Based on interviews with industry experts and startups, Capgemini found 24 cases of use of blockchains that are compared by level of adoption and complexity in the chart below. The use cases reflect the way in which contract management with suppliers is already emerging as one of the most popular blockchain use cases for manufacturing organizations today and accelerates as compliance becomes even more important in 2019 .

  • The manufacturers have the most scale-up implementations of blockchain today, bringing all the sectors included in the study. The adoption of Blockchain is still nascent in all sectors included in the study, with 6% of manufacturers having large-scale deployments today. The producers of customer products guide the drivers, with 15% actively[PurusingblockchaininlimitedscopetodayEirivenditoriseguonotutteleindustrieconil91%chehasoloprovediconcetto[PurusingblockchaininlimitedscopetodayAndretailerstrailallindustrieswith91%havingonlyproofsofconcept[purusingblockchaininlimitedscopetodayEirivenditoriseguonotutteleindustrieconil91%chehasoloprovediconcetto[purusingblockchaininlimitedscopetodayAndretailerstrailallindustrieswith91%havingonlyproofsofconcept

  • The combination of IoT and blockchain at the shipping container level in supply chains increases authenticity, transparency, compliance with product and contract requirements while reducing counterfeiting. In highly regulated sectors, including aerospace and defense (A & D), consumer goods (CPG), medical devices and pharma, the combination of IoT and blockchain provides real-time data on shipping container conditions, tampering, chronology of the locations of each shipment and if there have been changes in temperature and conditions of the product. Capgemini considers use cases in which a change in the temperature of a shipment measured by a sensor change sends notices regarding the contractual conformity of perishable meat and production, avoiding the potential for poor quality of the product and shipments refused once reached the destination.

  • Capgemini found that 13% of producers are Pacesetters and are implementing blockchain on a scale or have pilots in at least one site. Over 60% of Pacesetters believe that the blockchain is already transforming the way they collaborate with their partners. Encouraged by these results, the Pacesetters will increase their 30% blockchain investment over the next three years. Leaders of the initial phase and all implementers on three basic dimensions of organizational readiness are responsible. These include end-to-end visibility through features, detailed and defined support processes and the availability of the right talent to succeed.

  • The lack of a clear ROI, immature technology and regulatory challenges are the first three obstacles. Pacesetter class producers must face the accepted and started production blockchain initiatives. All implementations address these three challenges as well as having to overcome the lack of complementary IT systems in partner organizations. The following chart compares the barriers that all manufacturers face in obtaining blockchain projects implemented by the success of the manufacturers' adoption (Pacesetter, experimenters in the initial phase, all the implementers).

Source: Capgemini Research Institute, is the blockchain the key to a new era of transparency and trust in the supply chain? October 2018

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