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Blockchain in Manufacturing Market


Semiconductor & Electronics
Information System & Analytics

The blockchain in manufacturing market is expected to be worth USD 30.0 million by 2020 and USD 566.2 million by 2025, growing at a CAGR of 80.0% from 2020 to 2025. Some of the major growth drivers for this market would be convergence of operational technology (OT) and information technology (IT); sudden rise in global blockchain-related patent filings; substantial upsurge in venture capital funding; demand for real-time data analyses, predictive maintenance, and visibility into business processes; and use of disruptive technologies such as AI, IOT, and blockchain in the manufacturing industry.

Among all applications, logistics and supply chain management applications are expected to account for the largest market share as well as the highest CAGR during the forecast period. Blockchain can support supply chain management by offering users reliable data management and visualization capabilities. Technology enabled supply chain can provide an intelligent, interconnected network that binds together multiple tiers of suppliers, manufacturers, service providers, distributors, and customers distributed across the globe; technologies like blockchain, AI, and IoT are helping traditional methods of supply chain management, product tracking, and inventory management evolve to handle present day complexities. For example, nearly 90% of goods in global trade annually are handled by the ocean shipping industry blockchain solutions would help manage and track the documents of tens of millions of shipping containers across the world by digitizing supply chains.

Energy & power and industrial sectors are expected to account for major shares of the overall blockchain in manufacturing market during the forecast period. Maintenance, inspection, fuel mix, ambient temperature, air quality, and material movement are major issues in the energy & power sector. Using blockchain along with AI and IoT can help solve such issues and predict possible issues that may arise in future. These technologies in energy plants comprise deep physics insights, engineering design knowledge, and new inspection technologies that provide a complete solution for predictive maintenance and machinery inspections. Grid Singularity is creating an open (permissioned) Internet-based decentralized energy data exchange platform. The ecosystem would enable forecasting for grid balancing (smart grid management); facilitate investment, trade of green certificates/certificates of origin, and eventually energy trade validation. Innovators from institutions such as Massachusetts Institute of Technology (US) and Cornell University (US) and companies such as IBM and Intel are trying to develop green blockchain innovations to address demand for blockchain that streamlines transactions of all sorts.

Blockchain in Manufacturing Market

Logistics and supply chain management, quality control and compliance, and business process optimization applications to drive market growth

Logistics and supply chain management

Logistics and supply chain management is vital for a lot of companies, particularly ones in the manufacturing industry. The objective of any smart supply chain management system is to reduce inventory costs to the minimum possible limit without affecting normal operations of an organization. Supply chain management covers everything from product development, sourcing, production, and logistics to coordination between these activities. Blockchain can support supply chain management by offering users reliable data management and visualization capabilities. Technology enabled supply chain can provide an intelligent, interconnected network that binds together multiple tiers of suppliers, manufacturers, service providers, distributors, and customers distributed across the globe; technologies like blockchain, AI, and IoT are helping traditional methods of supply chain management, product tracking, and inventory management evolve to handle present day complexities.

The supply chain ecosystem includes various components, such as legal, insurance, settlement, transport management, route planning, normative compliance, and fleet management, which require intermediaries. But with blockchain, intermediaries can be taken out of the equation to streamline the flow of supply chain operations; it also allows all transaction data across networks to be synchronized, enabling participants validate each other’s work. However, blockchain’s major advantage continues to be accountability and visibility: even with transaction volumes and respective data significantly high, each transaction can be accurately backtracked to its point of origin.

In 2017, IBM and Maersk tested the application of blockchain in logistics. In a proof-of-concept, the 2 companies demonstrated how blockchain can be used to track on-transit containers, and how supply chain stakeholders can benefit from accessing relevant, actionable information. In the future, other players like shippers, freight forwarders, ocean carriers, ports, and customs authorities are going to be included in the platform. By reducing paperwork, providing important information more rapidly, and preventing shipping fraud, IBM and Maersk hope to reduce logistics costs drastically.

Another start-up working on similar lines is Everledger that uses blockchain to register diamonds’ transaction history and ownership. In the future, the start-up wants to extend its solution’s applications to other goods.

Quality control and compliance

Quality governance and quality decision-making are important areas that need to be effectively addressed to build a sustainable quality culture within a firm. Blockchain can transform these functions by holding and providing data on provenance and quality, which are easily accessible to all parties. This would augment quality control and compliance by enabling granular and quick identification of sources of quality issues, helping companies reduce overall operational costs.

Business process optimization

Business process optimization offers mechanisms to monitor, manage, and improve organizational workflows. This provides companies an ideal opportunity to evaluate whether or not existing internal controls embedded in their business processes are performing as intended, and optimize a process by using previous recorded data and real-time data. Process optimization analyzes every critical step of a process and provides optimum solutions based on demand, error, maintenance, and consumption forecasts. In addition, it also enables companies to build connected applications (for equipment, processes, and systems) within their intranet.

The emergence of distributed and decentralized ledger technologies and the Internet of things (IoT) could be helpful in bolstering business process optimization tasks. Blockchain enables implementing collaborative business processes involving untrusted parties without needing a central authority: a process model comprising tasks performed by multiple parties can be coordinated via smart contracts operating on the blockchain.

Critical questions would be:

  • Where will all these developments take the industry in mid- to long-term?
  • Will the suppliers continue to explore new avenues for blockchain in manufacturing? 
  • What are the upcoming use cases for blockchain in manufacturing?

Key restraining factors for the market’s growth are uncertain regulatory landscape and absence of common set of standards. Lack of awareness about blockchain’s potential among manufacturers is as a major challenge for the growth of the market.

Some of the major companies operating in the blockchain in manufacturing market are NVIDIA Corporation (US), XAIN AG (Germany), CargoX (Slovenia), RIDDLE&CODE GMBH (Austria), Chronicled (US), LO3 Energy (US), Electron (UK), Filament (US), Grid Singularity (Germany), Shipchain (US), Microsoft Corporation (US), Advanced Micro Devices, Inc. (US), International Business Machines Corporation (US), Intel Corporation (US), Oracle Corporation (US), Factom (US), BigchainDB GmbH (Germany), Blockchain Foundry Inc. (Canada), Wipro Ltd. (India), Amazon.com, Inc. (US), Syncron International AB (Sweden), Electron (UK), ChromaWay AB (Sweden), Project Provenance Ltd (UK), Everledger Ltd. (UK), Supercomputing Systems AG (Switzerland), Storj Labs Inc. (US), and Cloud Technology Partners, Inc. (US).

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