A decade after Satoshi Nakamoto pitched the idea of blockchain – the underlying technology behind the success of bitcoin – the platform continues to be harnessed by big name corporations to streamline operations. Even though mass adoption seems to be years away, plenty of establishments in this day and age continue to resort to blockchain to solve tracking issues.
At the Forbes CIO Summit in Half Moon Bay, California, Frank Xiong, Oracle’s group vice president of blockchain product development foretold that “My projection is that between 50% and 60% of companies will use blockchain in the next few years,”.
The premier software manufacturer has hundreds of customers utilizing its blockchain platform to keep a check on their items in order to validate their provenance. For example, plenty of consumers use Oracle’s blockchain platform to make sure whether the Italian olive oil they purchased was actually made in Italy or not.
In fact, well-reputed food suppliers, such as Bellucci, in an attempt to ensure the provenance of their edibles are resorting to blockchain technology. By employing blockchain, the brand has successfully been able to guarantee their product’s journey to the shelf. The process to determine the provenance of a product has become as easy as entering the lot number of a bottle into an app and determining the origin of the product right back to the farm the vegetables were reaped in.
Xiong went on and claimed that “We’re past the stage that blockchain can cure everything, so people are becoming more realistic about what’s good for their business model,”.
Blockchain is basically a distributed ledger which enables members to share duplicate copies of the same data on multiple devices. When it initially incepted, it was used to power cryptocurrency but now the technology is receiving equal numbers of hype for the ability it provides to companies to track and monitor goods that pass through a slew of channels. In fact, blockchain’s most endearing allure is that it flexes business value in manufacturing. This happens when blockchain magnifies each area of the manufacturing department, starting from the procurement of materials till the floor operations. In addition to that, the backbone of any manufacturing business is its supply chain. By monitoring transactions, the efficiency of a business’s supply chain is improved by a tenfold. In addition to keeping an eye on their products, manufacturers will also be able to enhance the quality of their products and improve the accuracy of the commodities they deliver, in turn being able to sell more and bringing in more profit for the business.
There have been plenty of studies conducted which aim to study the impact of blockchain in industries. The main pointers from a study conducted by Capgemini Research Institute’s on whether or not blockchain holds the path to a new era of supply chain transparency and trust, are given below:
- The average recall cost for products which adds up to $8M can be avoided by using a blockchain platform to track and locate products.
In its study, Capgemini found out that in 2017 alone, there were as much as 456 food recalls in just the United States which cost an enormous amount of $3.5B. With the general ledger structure provided by blockchain, real-time audit is enabled which averts a manufacturing company to incur such big losses on product recalls.
- Blockchain enables cost saving, enhancement in traceability and provision of transparency.
In this same study, it was found out that blockchain saves the cost of a manufacturing business by 89%, supports transparency by 79% and enables traceability by 81%. In addition to that, businesses can expect an increase in revenue of approximately 57%, risk reduction by 50% and the provision of new businesses by 44%. While there are several areas blockchain aids in, the factor that has the utmost importance to businesses is track-and-traceability like we discussed above.
- Currently, manufacturers have the most apt deployments of blockchain available surpassing all the other industries.
While blockchain deployment is ubiquitous in the manufacturing industry, it continues to be still nascent in the rest of the fields, with 91% of the industry having only proof-of-concept. In contrast, 6% of manufacturers have at-scale implementations presently.
- The fusion of IoT and blockchain in supply chain amplifies originality, trust, compliance, to product and contractual requirements while decreasing replication.
While shipping highly sensitive goods of regulated industries such as Aerospace and Defense, Consumer Packaged Goods, medical instruments or pharmaceuticals, the fusion of blockchain technology with IoT will enable the suppliers with real-time data on the environment of the shipping containers, breach-proof storage, every storage box’s geographical location and whether or not there have been any alterations in the temperature or air quality. With blockchain and IoT, as soon as the sensor notices a fluctuation in the temperature, it sends over that information to the concerned department, so that the responsible person can intervene to tackle the chances of perishable goods going bad and becoming of no use to the seller and the consumer.
- Capgemini discovered that 13% of manufacturers are Pacesetters and they have either already deployed blockchain or have a test project running in one of the sites
Most Pacesetters believe that the hype surrounding blockchain is not without a reason. Therefore, as much as 60% of Pacesetters rely on blockchain to collaborate with their partners. Impressed by the results they got from their initial investment, it is predicted that Pacesetters, in the coming years will increase their investment by 30%. They lead early stage experimenters and all implementers on three core dimensions of organizational readiness. These contain end-to-end clarity across functions, comprehensive supportive processes, and accessibility of the apt talent to succeed.
Blockchain’s disruptive capabilities are no longer hidden, and the trust Frank Xiong showed on blockchain with his speech goes to show what influential people feel about the robust technology. Banking, finance and manufacturing are the sectors that have widely accepted the technology but it is only a matter of time establishments from sectors all around the globe embrace it with open arms and take their business to the next level.