{"id":4640,"date":"2018-07-16T14:40:51","date_gmt":"2018-07-16T18:40:51","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=4640"},"modified":"2026-02-12T05:21:09","modified_gmt":"2026-02-12T10:21:09","slug":"blockchain-revamp-manufacturing","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/blockchain-revamp-manufacturing\/","title":{"rendered":"How blockchain can revamp the manufacturing industry"},"content":{"rendered":"
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\n\t\t\t\t\t\t\tTechnology & Innovation<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t
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\n\t\t\t\t\t\tHow blockchain can revamp the manufacturing industry\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

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The blockchain is one of those technical terms that invites a lot of attention, hype, and funding. The decentralized open-source ledger that drives the bitcoin cryptocurrency, blockchain can record transactions between two parties in a verifiable and permanent way \u2013 providing a near-real-time and indelible record that\u2019s replicated among participants.<\/p>\n\n\n\n

A good way to visualize blockchain<\/a> is to compare it to software such as Google Docs. With Google Docs, multiple users can simultaneously access and edit a single document. With blockchain, you have a distributed ledger \u2013 one set of data replicated in multiple locations. Unlike a Google Doc, you can only add to the ledger rather than change previous entries.<\/p>\n\n\n\n

Instead of having one Google document accessible by many, blockchain is where you would have multiple Google docs replicated on many servers, where additions to one document automatically authenticate and update others.<\/p>\n\n\n\n

Why is blockchain important to businesses?<\/h2>\n\n\n\n

Blockchain has the potential to help any industry that deals with transactional data. Transactions, especially in industries such as finance, can be complex and time-consuming. Blockchain can replace this paradigm with an alternative that is transparent, verifiable and tamper-proof.<\/p>\n\n\n\n

A blockchain is a database stored in multiple locations that can maintain increasing records (or blocks) which are timestamped and linked to previous blocks in a way which cannot be undone. It\u2019s a method of recording data \u2013 anything that needs recording and verified as happened. Once data has been recorded, it cannot be changed, only added to, and updated on the entire network.<\/p>\n\n\n\n

Dr. David Galindo, a senior lecturer at the University of Birmingham and cryptography expert, spells it out like this to the Guardian<\/a>: \u201cBlockchain has the potential to replace mediators who are present today in multiple industries to provide transparency and accountability, such as banks for financial transactions, universities for verifying academic certificates or music companies to reward music creators.\u201d<\/p>\n\n\n\n

Businesses such as Airbus and Daimler AG have joined collaborative groups like the Hyperledger project, an open source collaborative group set up to advance cross-industry blockchain technology, by working with companies including IBM.<\/p>\n\n\n\n

Blockchain technology in manufacturing<\/h2>\n\n\n\n

For manufacturers, much attention on blockchain centers around how it can work for supply chains. In modern manufacturing, the supply chain can work across multiple organizations and countries, which can make it difficult to chase individual events or find solutions to increase efficiency.<\/p>\n\n\n\n

Most company information flows through a supply chain<\/a> characterized by communication with little or no agreement on data taxonomy, or even a uniform way of recording, storing and exchanging data.<\/p>\n\n\n\n

The blockchain has the potential to create smarter and more secure supply chains, tracking the journey of a product through a clear and solid audit trail, with real-time visibility.<\/p>\n\n\n\n

For example, you could track materials and determine where they arrived, who received and handled them, as well as how and when they were transported to the next stage. All recorded as blockchain \u201cblocks\u201d.<\/p>\n\n\n\n

Greg Cline, head of research for Aberdeen Group\u2019s Manufacturing, Product Innovation and Engineering practices, says: \u201cMany manufacturers are very excited about blockchain\u2019s potential ability to verify goods moving through the manufacturing supply chain.<\/p>\n\n\n\n

\u201cThe highly transactional and often multi-step and nature of business process services means that the potential applications of blockchain in manufacturing are significant.\u201d<\/p>\n\n\n\n

Here are some opportunities for supply chain visibility.<\/p>\n\n\n\n