Written By: Mubarak A R, Technical Solutions Leader – Hi-Tech vertical at QuEST Global.
Statistics from recent research states that the business value-add of Blockchain technology will grow more than $176B by 2025, and then exceed $3.1T by 2030. With the advent of the Fourth Industrial Revolution, organizations have been looking for ways to improve their operating models by modernizing technological infrastructure. They are trying to gauge the role of emerging technologies and adopt them in their business to be able to sustain innovation.
The champions of Internet-of-Things (IoT) are currently experimenting with electronic transactions in complex applications, which typically involve interactions between a variety of systems and devices, including smart objects and machines deployed in industrial settings and supply chains. Evidently, the networks of peer-to-peer transactions can provide the scalability, security, reliability and transparency needed in Industrial IoT applications that involve not only thousands of devices within a plant, but also across the entire supply chain network.
Enter Blockchain, the technology that supports such secure and reliable transactions. It is a scalable and secure distributed ledger, which enables logging information (including full history) of the transactions involved. Moreover, it provides the means for auditing “smart contracts” i.e. the rules that govern the peer-to-peer transactions. This technology can be used to ensure reliable transactions between systems and smart machines engaging in maintenance or supply chain interactions.
Blockchain technology has the potential to radically transform businesses across various sectors, it is believed widely. Industries involving supply chain and manufacturing operations are already undergoing transformation with blockchain effects. Universal constraints of these industries, including geographical, regulatory and various other political conflicts have resulted in adding complexity to their operations, specifically in areas like documentation. However, adoption of blockchain technology can help organizations in businesses like supply chain and manufacturing to manage their process documentation and execution better. In fact, it helps simplify the entire operational processes with immutable ledger, data security, and need-based access of information.
Can Blockchain Optimize Maintenance?
The potentiality of blockchain technology can be manifested best in the maintenance sector. In fact, it is estimated that by 2023, 30% of manufacturing companies with more than $5B in revenue will have implemented Industry 4.0 pilot projects using blockchain, up from less than 5% today.
The visibility blockchain has provided into each area of maintenance, from enabling product (device) details, linking product to supplier, initiating annual services, executing service requests, capturing service records and generating invoice, is impeccable. It can therefore, enable an entirely new business model for maintenance. With the evolving market situations, and prevailing competition, the focus of Original Equipment Manufacturers (OEMs) is shifting from selling products to ensuring maintenance and even smooth operations.
In this scenario, blockchain acts as a decentralized ledger providing a unified source of data, clear audit trail and consistency across the supply and maintenance process. It enables organizations to trace problems with a specific product, component or material manufacturer, ensure safety, improve service and decrease the cost of maintenance. Blockchain for maintenance also ensures that critical information of device & its service details are kept securely in a distributed ledger. If there is an increased trust among parties, blockchain helps buyers to have a clear information of his purchase and chances of fraud between manufacturing and selling is eliminated. In future, it can even be extended to incorporate service payment workflow.
Blockchain as a decentralized ledger, also helps in maintenance of rules. Instead of storing and mining status of assets it is also possible to store the rules that drive asset maintenance, in line with the industrial processes. Over-the-air (OTA) firmware updates, which are common in IoT devices with wireless capabilities, face the threat of hacks, since physical access may not be needed in such cases. Most of these frameworks use a centralized architecture to update a potentially large number of devices, thus enlarging the threat landscape. Alternatively, a blockchain framework with smart contracts can be leveraged to protect the integrity of the firmware update process. Such systems can be employed in smart cities or scenarios with a large number of devices and service providers where nodes are authenticated, communications protected, and update conditions specified and enforced through smart contracts.
Building Value in Maintenance Services
“Blockchain and IoT will revolutionize product safety, track-and-traceability, warranty management, Maintenance, Repair & Overhaul (MRO), and lead to new usage-based business models for smart, connected products,” mentions Louis Columbus in a recent article. There are several drivers that prompt the adoption of blockchain in the maintenance services sector. Here are a few:
Value from Data Models
Data gets fragmented between organizations, especially when retained in isolated systems. Hence, gradually it starts losing its verifiability and value. Without the implementation of blockchain technology, the receiving organization must trust the value of the data received. However, with blockchain, the parties involved are able to share real-time data, along with the history and modifications to the same.
There are organizations that manage and even maintain on-site or central data systems. The risk of human errors or force majeures always looms large over them, posing the critical threat of destroying the data permanently. Blockchain creates a highly resilient network with multiple shared copies of the data, thus eliminating the risk of an isolated attack.
Enhanced Incident Response Rate
Blockchain technology, with its distributed ledger capability, allows all designated parties to view data in real-time. With such transparency, organizations are at a better position to identify opportunities, improve decision-making, and track-and-trace the outcome of those decisions.
Lower Business Risk
Trust is a word that is being challenged at every checkpoint in the digital world. In fact, organizations are finding it increasingly difficult to verify basic essentials. Blockchain helps enable, and even automates ‘trust’ through cryptographically securing information and providing transparency to the trail of data.
It can be concluded that blockchain therefore becomes a permanent record for all transactions performed by various participants. There looms a transparency of information shared, along with data access provided to the appropriate participants in the ecosystem, hence high data privacy. Once written, actions cannot be changed in the blockchain process, therefore allowing efficient auditability and making it governance friendly.
Roadblocks to Blockchain
While blockchain technology has definitely brought up several advantages in various industries, its decentralized nature also brings in some disadvantages:
The Extreme Hype
Though Blockchain as a technology can be seen as a great opportunity and a transformation enabler, the unrealistic expectations set on it remains a significant challenge. Recent surveys have proved that the Return on Investment (ROI) on organizations’ businesses before implementing blockchain was more compared to the ‘after’ scenario.
Another downside of this technology is that once data has been added to the system it becomes very difficult to modify it. While stability is one of its advantages, it can always act as a destructive agent too. Changing the internal data or code becomes a very demanding task, and often requires harder work.
According to comparative studies, it is far more challenging to undertake the implementation of blockchain solution as part of an existing digital transformation project. The reason being the capital already spent on a legacy technology. Hence, organizations mostly opt for alternative digital solutions with better returns over shorter period of time.
Partnering to Harness Blockchain
The much decentralized nature of blockchain marks the transformation from an isolated approach to end-to-end value-chain integration within fragmented and complex environments. However, the rapid adoption of blockchain also brings along new settings and models of operation to run the system. It becomes imperative for organizations to opt for a sustainable strategy while adopting blockchain and enabling operational excellence, so that they continue to serve customers without compromising on quality and excellence.
By joining hands with strategic and thinking partners who can help synergize blockchain to manage the trust and security for your maintenance workflow, you can ensure better returns and position your organization to scale and grow for the future. If you think such win-win partnerships are a thing of the future, think again! Solutions like MainChain are already demonstrating the maintenance workflow of tomorrow, leveraging blockchain.
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