Blockchain is one emerging technology making waves for its ability to drive competitive growth in manufacturing. By Paul Mylon.
Manufacturing companies already use various technologies to address operational and product complexity, From ERP or PLM to custom solutions. These investments have helped improve visibility and efficiency within their organisations and between major supply chain partners. Yet the challenges in managing extended enterprises beyond tier-one suppliers, to introduce and deliver on new value-added aftermarket services, and to do so while simultaneously managing costs, are testing existing technologies.
Blockchain offers manufacturers an intriguing value proposition to augment existing technology investments. It provides an immutable transactional record that maintains and records data in a way that allows multiple stakeholders to share access to it confidently and securely.
Blockchain, like many new technologies, is full of promise but is still in the early stages of development. As companies explore that promise, they should do so with a firm focus on identifying use cases that accomplish two objectives: demonstrating that blockchain can deliver business value; and highlighting the role it can play within an overall digital technology architecture. While blockchain’s general characteristics align with many challenges faced by the manufacturing industry, it should not be implemented for implementation’s sake. Like any new technology, it must deliver proven value.
The manufacturing industry is already moving forward in several areas. One area is tracking, where companies are targeting specific proof of concepts to ensure the correct individuals are certified to perform complex tasks, and the authenticity of all items in the supply chain is fully understood. Assisting with the reduction in counterfeit goods is another area where progress has been made, as blockchain significantly increases transparency of exchanges, helping to minimise fraudulent transactions and the potential catastrophic consequences of faulty parts.
Accenture has identified key steps toward industrialisation of blockchain. Beginning with the discovery of use cases and potential value, the journey should quickly move into the agile development of proofs of concept to test the business value and viability of blockchain for those cases. Ultimately, the objective is to scale validated proofs of concept.
Blockchain is designed to provide highly secure, auditable, and traceable data records across a distributed population. The manufacturing industry uses a geographically distributed supply chain that serves an equally distributed set of operators, all of whom value data traceability, auditability, and security.
Before embarking, companies should remember that blockchain is like any other technology investment: the business case comes first. It is also a component of overall digital transformation, not the transformation itself, and adoption of blockchain will hinge not just on the technology, but on the ecosystems of participants that use it. While the technology and standards are still maturing, manufacturing companies have a unique opportunity to prove the business value of blockchain systematically and set its place alongside other technologies in their digital strategies.
Blockchain is real and now is the time for companies to learn and prepare.
Paul Mylon leads Accenture’s Aerospace and Defence practice in Australia and New Zealand.