Blockchain Is One Emerging Technology Manufacturers Should Embrace
Tesla, Amazon, and Netflix are all companies that occupy unique and varied positions in the global economy. Yet they all share one very important characteristic: They have a relentless obsession with staying on top of technological advances that can improve efficiency, productivity, and, ultimately, profitability.
That perpetual pursuit of technological advances is just one reason they all landed top spots on Forbes’ list of the most innovative companies in the world last year—it’s also a good explanation for why each of the companies is a household name and why many investors and consumers expect them to continually do impactful things.
The cultural DNA of these companies—encouraging innovation and embracing new technologies—is one that manufacturers would do well to follow, particularly in the realm of customer communication and operations. To be sure, it would be a dramatic departure from the norm. In the past, the manufacturing industry has relied on human intuition, siloed sectors of data, and middlemen to manage customer expectations.
It’s actually a testament to the diligence and skillful work of manufacturers that they have managed to perform so admirably and reliably served customers so well. But emerging technologies have the potential to unlock business operations for manufacturers, if only they are utilized. One significant emerging technology that could elevate the operations, trust, and performance of manufacturers is blockchain, a term that has been hard to avoid in the years since the cryptocurrency Bitcoin emerged.
Leaders Are Already Thinking About Blockchain’s Impact
Though its early illicit uses in weapons sales and money laundering gave blockchain technology a mixed reputation, it has quickly become an object of interest—and investment—by mainstream corporations, and governments believe it will be transformational. In fact, a survey at the 2015 World Economic Forum found that the assembly of corporate executives and policymakers believed that 10 percent of the globe’s GDP would involve blockchain by 2027. Additionally, a Deloitte survey of 308 senior U.S. executives reported that 28 percent had already invested at least $5 million in the development of blockchain technology.
So what is it, and how could blockchain improve the prospects of manufacturers? In its simplest terms, blockchain is a distributed ledger, or spreadsheet. Once information is entered into each cell, or block, that block is locked and then becomes uneditable. This is what makes blockchain technology appealing in industries where goods change hands or there is a chain of custody to be verified.
Already, manufacturers have joined companies in industries such as financial services and energy to examine how blockchain can provide a competitive advantage. Here are a few possibilities.
Improved Transparency and Trust
The very architecture of blockchain helps explain why it generates such intense interest. Because blockchain is distributed, no one person owns the database or information—a sharp departure from so many other databases that are centrally controlled. This means that the transactions that take place via blockchain technology are out in the open and vetted by a literal world of participants. This transparency makes it nearly impossible to commit fraud.
In the business world, and especially for manufacturers, this networked verification of transactions between the customer and manufacturers eliminates the possibility of misunderstandings and increases trust. The use of blockchain can improve manufacturer’s efficiency by eliminating time and resources that once had to be devoted to tracking down information about customer orders and other data. This frees up time for manufacturers to work more closely with customers to identify and solve their biggest challenges.
Better Supply Chains
One of the most significant (and expensive) task manufacturers face is getting their products to customers. In some cases, this involves shipping containers across oceans and through customs. When blockchain is paired with location-based technologies, it gives customers and manufacturers a clear view of where in the supply chain an order is. This visibility also means that customers know not only when their order will arrive but also that they will receive the right products. This is good for customers, but it also is good for manufacturers because it decreases the frequency of returns and reorders. There is also the possibility of improved efficiency on the actual factory floor via machine-to-machine blockchain transactions. Blockchain-enabled robots can increase productivity by monitoring parts and placing orders when supply gets low, minimizing or eliminating parts-related delays.
Applying blockchain technology in order to improve visibility and security and to streamline supply chains is reason enough for manufacturers to take a close look. But like so many other emerging technologies, blockchain is in its relative infancy, meaning that there are other potential applications few are even pondering yet—though they might become mainstream in a short amount of time.
For example, combining the visibility of blockchain technology with the Internet of Things (IoT) and predictive analytics could allow manufacturers to help their customers identify equipment that is showing signs of failure before it actually breaks. This can save customers significant expense, including extended downtime. The potential of blockchain and other emerging technologies to improve the efficiency and profitability of manufacturers requires one quality that has nothing to do with technology: the willingness to innovate.
Mickey Patton is president and CEO of Clear C2, the leading CRM for manufacturing companies. Patton joined Clear C2 in 1998 and has extensive knowledge of how manufacturers can use technology to streamline and maximize their customer relationships throughout the most complex sales cycles and ecosystems.