Blockchain, primarily associated with cryptocurrencies like Bitcoin, is increasingly hitting the radar screens of manufacturers as a mechanism to enhance supply chain visibility or promote supplier coordination around mass customization. These externally focused applications seem to hold the most potential for blockchain, as experts see far less applicability for blockchain to enhance existing technologies used to integrate internal manufacturing and automation systems.

1. BLOCKCHAIN FOR
AUTOMATION
- by Sage Automation India

2. What is Blockchain?
Characterized as a distributed ledger technology, blockchain records transactions between
multiple parties in a way that is transparent, verifiable and immutable. Given that manufacturing
encompasses a series of transactional interactions, experts are putting stock in the potential
for blockchain to be a more efficient and trustworthy way for extended supplier ecosystems to
securely record and share information.
Blockchain’s ability to store data in unalterable blocks, coupled with its peer-to-peer, secure
record-keeping capabilities, establish an easy-to-follow audit trail that is vastly more effective
than traditional methods built around email, siloed systems and manual record keeping. At the
same time, blockchain promises to be far less susceptible to fraud, which is a growing problem
for manufacturers.

3. As with any fledgling innovation, however, manufacturers need to be circumspect about their
broader strategy and zero in on the applications where blockchain can have a meaningful—if
not fully disruptive—impact, Satyavolu says. “Blockchain has to be a broader part of a next-
generation manufacturing strategy—it can’t just be a technology you go for,” he cautions. “To
transform manufacturing with blockchain, it has to be part of a broader gambit to provide more
personalized products, to tap into a localized supply base, or to take advantage of IIoT. Those
are all imperatives that feed a strategy for blockchain.”

4. How will it help manufacturers?
One of the most anticipated use cases of blockchain is for
track and trace, to help manufacturers foster better visibility
and trusted relationships among their extended, global supply
chains. In addition to the ability to create and administer
smart contracts, blockchain provides an immutable record of
the chain of custody of goods, which can be leveraged in
numerous ways—from helping to prevent leakage and the
spread of counterfeit goods to tracking down at-risk suppliers
in the event of a part failure, and even creating transparency
and specificity around sourcing to build trust and demonstrate
that compliance regulations are being met.

5. Uses of blockchain:
With a blockchain approach, all quality-related transactions, hand-offs, and the chain of custody
for products are written into the blockchain and endorsed by all parties, and the resulting
records are tamper-proof. “So if there’s a quality issue and a company needs to do a recall, they
know exactly which item, which test case and which downstream product is affected,” Nainani
explains. “Today, companies do broad recalls and can’t identify what batch or supplier portfolio
is affected. That results in revenue loss and brand erosion.”

6. To help manufacturers get started with blockchain, Oracle has released a suite of business-
ready blockchain applications. They include end-to-end traceability of goods and transactions
in a supply chain to reduce delays and automate recordkeeping; lot lineage and provenance for
aiding in regulatory compliance, counterfeiting and targeted recalls; intelligent cold chain for
tracking and ensuring quality for refrigerated products in pharmaceutical and food and
beverage industries; and warranty and usage tracking to eliminate paper-based processes for
high-value assets.
“Providing a toolkit of components is not sufficient,” Nainani maintains. “It takes longer to
implement and get ROI, and manufacturers just want to get started quickly.”

7. Blockchain isn’t the integration layer that continuously passes data between systems, it can be
used to integrate critical data from enterprise-level systems such as enterprise resource
planning (ERP) or manufacturing execution systems (MES) into a blockchain pursuant to a
particular use case. Consider a new product that can’t be launched into production until the
proper product ID is initiated.
Instead of extracting that information from the ERP system or MES via manual processes,
manufacturers could create a system that automatically retrieves the right data, creates an ID,
writes it into the blockchain, and applies it to a part at the point of inception.
Though its customers can develop these capabilities using a toolkit approach, SAP will release
native blockchain versions of its core enterprise platforms this spring, which will facilitate such
integration right out of the box

8. Conclusion:
Internet-of-Things (IoT) has made ubiquitous computing a reality by extending Internet
connectivity in various applications deployed across the globe. IoT connect billions of objects
together for high speed data transfer especially in 5G-enabled industrial environment during
information collection and processing. Most of the issues such as access control mechanism,
time to fetch the data from different devices and protocols used may not be applicable for
future applications as these protocols are based upon a centralized architecture.
This centralized architecture may have a single point of failure along with the computational
overhead. So, there is a need for an efficient decentralized access control mechanism for
device-to-device (D2D) communication in various industrial sectors IoT-enabled industrial
automation.
This need will be fulfilled by blockchain.

9. SAGE AUTOMATION INDIA
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