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Distributed Manufacturing: Next in line for blockchain innovation

Blockchain has already disrupted business processes in the financial sector, and is poised to impact companies across industries.

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By: Jagmeet Singh

Blockchain has already disrupted business processes in the financial sector, and is poised to impact companies across industries. Because the technology can provide an immutable digital record of contractual interactions and transactions across an ecosystem, we believe that manufacturing is likely next in line.

Blockchain is a mutually shared ledger of all transactions in a given transactional relationship. Combined with its consensus mechanisms and use of public key infrastructure (PKI) to verify and authenticate all changes made to the ledger, blockchain can enable the network itself to ensure trust among participants. The result: a whole new way to support distributed manufacturing across the value chain.

The Importance of Trust

Consider, for example, the ways in which blockchain can simplify how trust is developed within a manufacturing ecosystem. In the traditional manufacturing world, parties transacting with each other spend considerable time and money on establishing external mechanisms to ensure trust, in the form of contracts, service-level agreements, quality checks, inspections, audits, scanning, escrows and regulatory compliance reviews, to name a few. As the number of parties increases, so does the complexity. Reconciling separate ledgers, enforcing contracts, ensuring supply chain transparency and protecting intellectual property when multiple entities are involved are all laborious and burdensome processes, prone to error and vulnerable to fraud.

Related: Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating Processes across the Value Chain

Research shows that companies that build a culture of trust can fuel stronger performance by enabling departments to interact better and perform better across multiple dimensions. Establishing trust betweencontracted parties has similar positive effects. All these measures, however, amount to a costly “trust tax.”

For participants in a blockchain network – product designers, production shops, 3-D printers, logistics partners, sales and customer service  – that tax is greatly reduced. A secure, distributed ledger infrastructure accessible to multiple parties enables a new level of real-time transparency and efficiency for transactions involving the transfer of anything of value – whether that means ideas, money or ownership.

In our recent global study that included 281 manufacturing professionals, in fact, “trust” was a top driver for blockchain adoption.

Distributed Manufacturing Next in Line for Blockchain Innovation

Ensuring Transparency, Security, Auditability

Blockchain ledgers are:

  • Shared: Separate entities share a common source of truth.
  • Distributed: Blockchain relies on peer-to-peer collaboration, with no central ownership.
  • Secure: Cryptographic algorithms verify, authenticate and secure transactions.
  • Time-sequenced: Data is written consecutively and is time-stamped.
  • Immutable: Once written on the blockchain, data cannot be changed, tampered with or deleted.

Through smart contracts with supply chain partners on the blockchain network – programmed agreements that are independently verifiable and automatically executed when predefined conditions are met – companies can minimize human intervention and ensure performance transparency, transaction certainty and auditability.

[Download]: Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating Processes across the Value Chain

Within industries and even across interlocked, tiered manufacturing sectors, distributed ledger systems allow companies to develop new, platform-based process flows. A user might execute a smart contract for a custom-configured order, for example, combining designs from multiple sources. The encrypted design data would be recorded on the shared platform; materials and services could be autonomously sourced; and a shared factory could produce the customized product. Payments, including royalties to designers, would be issued when the product is delivered. A record of all transactions, from design selection to payment, remains on the blockchain.

A Rising Tide Lifts All Boats

Blockchain technology thus enables distributed manufacturing, offering participants unprecedented opportunities to develop new product and service lines, create new customer segments, enter new markets and find new ways to use and share assets:

  • Through supply chain transparency. All parties transact on a common platform, gaining real-time visibility into processes in the value chain, and simplifying materials sourcing and the interaction of design, manufacturers and other service providers. Supply chain processes, including payments and trade finance, can be streamlined and automated using smart contracts.
  • Through digital product memories. Immutable records of asset provenance, materials, production data, ownership and other data ensure authenticity and minimize transaction risk.
  • Through secure digital intellectual property. Parties to a transaction can be assured that their intellectual property is protected. Using blockchain to manage a contracted production run from a 3-D printer of ceramic components, for example, would allow a manufacturer to encrypt proprietary 3-D print files from end to end while creating an immutable history of the transaction. Similarly, escrows and royalty accounting would protect designers and other owners of IP.

There are many more circumstances in which adopting blockchain technology can deliver value. Participants can slash inventory costs and service times. They can eliminate reconciliation, and automate and speed financial and process flows. They can reduce manual interventions and reduce fraud. And they can create new ways to extend the lifecycle of products and optimize the use of assets.

What’s Next? Evaluating Readiness

As manufacturers move toward a shared and distributed model, business leaders can consider four questions when evaluating readiness:

  1. Where in the value chain, internally and externally, are we paying the highest “trust tax” in terms of excess cost, effort or lack of agility?
  2. How would the availability of a digital product memory drive value for our company, our customers and our business partners?
  3. Which types of partners, in what geographies and with what expertise, could we work with if transaction costs and efforts were lower?
  4. Which information assets (e.g., manufacturing, maintenance, operational and usage data) about our products could we monetize if there were a secure way to do so?

A blockchain-enabled, collaborative database is optimal for ensuring agreement between all participants in a value chain. It’s time for manufacturers to examine the implications for their business model. Organizations that gain hands-on experience with blockchain technology thorugh pilot projects will have an advantage as consortia start to form, and will be better equipped to lead the effort and make key decisions around structure and governance, prepare for the corresponding cultural shift, build skills and capabilities, and understand how it will impact business strategy going forward.

Get in the blocks. The race starts now.

[Download]: Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating Processes across the Value Chain

Olesya Gorbunova, a Senior Consultant in Cognizant’s Blockchain & Distributed Ledger Practice, contributed to this blog.

This article originally appeared on the Digitally Cognizant Blog

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Manufacturing

Tesla wants its factory workers to wear futuristic augmented reality glasses on the assembly line

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  • Tesla patent filings reveal plans for augmented reality glasses to assist with manufacturing.
  • Factory employees has previously used Google Glass in its factory as recently as 2016.

Tesla‘s Model 3 might have “biblical simplicity” according to one Wall Street analyst, but building any car still involves hundreds of nuts, bolts, and welds.

To cut down on the number of fit and finish issues — like the “significant inconsistencies” found by UBS— Tesla employees on the assembly line could soon use augmented reality glasses similar to Google Glass to help with car production, according to new patent filings.

Last week, Tesla filed two augmented reality patents that outline a futuristic vision for the relationship between humans and robots when it comes to manufacturing. The “smart glasses” would double as safety glasses, and would help workers identify places for joints, spot welds, and more, the filings say.

Here’s how it works:

Tesla/USPTO

And here’s the specific technical jargon outlining the invention (emphasis ours):

The AR device captures a live view of an object of interest, for example, a view of one or more automotive parts. The AR device determines the location of the device as well as the location and type of the object of interest. For example, the AR device identifies that the object of interest is a right hand front shock tower of a vehicle. The AR device then overlays data corresponding to features of the object of interest, such as mechanical joints, interfaces with other parts, thickness of e-coating, etc. on top of the view of the object of interest. Examples of the joint features include spot welds, self-pierced rivets, laser welds, structural adhesive, and sealers, among others. As the user moves around the object, the view of the object from the perspective of the AR device and the overlaid data of the detected features adjust accordingly.

As Electrek points out, Tesla has previously been employing Google Glass Enterprise as early as 2016, though it’s not clear how long it was in use.

Tesla has a tricky relationship with robotics in its factory. In April, CEO Elon Musk admitted its Fremont, California factory had relied too heavily on automated processes. Those comments, to CBS This Morning, came after criticism from a Bernstein analyst who said “We believe Tesla has been too ambitious with automation on the Model 3 line.”

Still, the company seems to be hoping for a more harmonious relationship between human and machine this time around.

“Applying computer vision and augmented reality tools to the manufacturing process can significantly increase the speed and efficiency related to manufacturing and in particular to the manufacturing of automobile parts and vehicles,” the patent application reads.

 

This article was originally published on Business Insider. Copyright 2018.

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Manufacturing

Dow Chemical envisions the future of manufacturing

Dow Chemical, one of the world’s biggest chemical producers, is taking a leadership role in the digital transformation of its industry.

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Despite its foundation in the pure science of chemistry, the chemicals manufacturing industry doesn’t exactly conjure high-tech images when people think of what goes into making chemical products.

And yet, the chemicals industry is poised to be the poster child for the very high-tech Industry 4.0 revolution, which takes existing manufacturing processes, and infuses them with digital DNA, thanks to the IIoT.

Dow Chemical, one of the world’s biggest chemical producers, is already taking a leadership role in the digital transformation of its industry. “We have significant amounts of data from our instrumentation and process sensors to use with the new analytics and deep-learning technologies,” Billy Bardin, Dow’s Global Operations Technology Center director, told Chemical Engineering.

Related: Stepping into Digital with IOT – 14 Cases

Dow, like many other chemical companies, has been using sensor tech for decades, but the IIoT represents an entirely new model for how data from these sensors becomes part of the company’s end-to-end process. Not only does the IIoT offer optimization of the production process, it can improve efficiency, while reducing both energy consumption, and operational cost.

Safety — a key consideration given the stakes — can also be improved. Many chemical producers, including Dow, are still manufacturing at facilities that date back 50 years or more. Modernizing these plants is a constant effort, but with the advent of the IIoT, gains in situational awareness accompany the gains in efficiency and productivity.

[Download] Stepping into Digital with IOT – 14 Cases

Recently, the company enlisted the help of Schneider Electric to digitize its Carrollton, KY processing plant, giving teams better data visibility for pumps, valves and motors. The roadmap also includes the addition of Schneider’s HART devices to enable operations and maintenance teams to remotely view equipment health or thresholds for valves in order to manage them better, according to Automation World. The improvements in preventative maintenance this data enables are key to better employee safety, as well as protecting the environment.

Better efficiency, cost savings, and greater safety? Strong arguments for better chemistry through digitization.

[Download] Stepping into Digital with IOT – 14 Cases

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Manufacturing

Blockchain can reduce supply chain risks

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In the world of modern businesses, supply chains are becoming increasingly complex and such complexity increases as supply chains cross multiple countries and involve multiple interfaces with third parties. To address this, many are turning to blockchain.

According to Supply Chain Management Review, upstream are the suppliers who create goods and services used in a company’s own operations, such as raw components or materials. The downstream supply chain efficiently distributes a company’s products or services to its customers. Each stage, both upstream and downstream, needs to be proactively managed to minimize quality, financial, confidentiality, operational, reputational and legal risks.

Mounting supply chain challenges for businesses

The challenge faced in the modern, interconnected world is the growing complexity of supply chains. This complexity presents risks, and these include goods falling outside of required storage parameters and the risk of contamination or counterfeiting. It is incumbent upon the manufacturer to perform a risk assessment, which can involve:

  • Understanding which products are transported and to where.
  • Breaking the transportation chain into steps.
  • Assessing each step from sender to recipient. Consider what will happen should delays arise at any stage of the transport route.
  • Assessing for how long the cargo remains at each step.
  • Assessing effectiveness of anti-counterfeiting measures and how these can be assessed? Such as by using anti-tamper proof locks or seals.
  • Considering environmental conditions at each step (this may need to extend to seasonality).
  • Understanding the impact of temperature and humidity.
  • Understanding the suitability of the container.
  • Understanding the impact of shock and vibration on the goods and the packaging. For example, how robust is the packaging? Have drop and rotation tests been performed?

Blockchain offers innovative solution

Many companies are now seeking to address these risks with blockchain technology. In terms of addressing supply chain risks, blockchain enables the transmission of data and information to all users of the supply chain network on a real-time basis. This means that when goods move from point A to point B, all of those in the supply chain are made aware at the same time. Should a change occur, such as a switch to a different distributor every actor is made aware and the system can be configured so that each party would need to agree such a change.

A second benefit is with the secure transmission of correct information between the users of the supply chain network. The cryptographic nature of this builds in security into the information exchange. A third example is with a bridge to the Internet of Things and devices like radio-frequency identification( RFID) transmitters. This is a technology whereby digital data encoded in RFID tags or smart labels are securely and digitally captured by a reader via radio waves. Blockchain can be especially handy in linking physical goods to serial numbers, bar codes, digital tags like RFID.

Based on these benefits, some distributors are searching for ways to leverage blockchain innovations to increase profits and strengthen relationships across the supply chain.

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