Can Blockchain Technology Drive Higher Profit Margins for Manufacturers?

Blockchain is frequently lauded as a groundbreaking and innovative technology that will change the world. In some ways, that's true. 

Unfortunately, many shy away from blockchain because it seems like it will be complicated to understand or integrate into an industry like manufacturing. You see, blockchain is only groundbreaking in how it does what it does, not in what it is.

In truth, blockchain is just a ledger - and that's something about which every business knows. Manufacturers deal with ledgers all the time, and not just financial. A bill of lading is part of a ledger. An inventory list is part of a ledger. A parts list is, too.

Embracing blockchain in manufacturing simply means shifting your mindset about what a ledger is or can be. A ledger is merely a record. Entries on a ledger can represent money or physical items. The blockchain can even illustrate concepts or a history of actions.  

It should come as no surprise then that using blockchain - an immutable and externally validated record with high transparency - can drive higher profit margins for manufacturers. Let's examine some of the ways this technology can increase revenue for your business.

Blockchain Benefits for Manufacturing Profits

Quality Control

Transparency and documentation across quality control procedures can be challenging to manage and share with customers who require it. Worse, validation of quality checks can be cumbersome and becomes complex the more parties need access to the records, whether that's to add process information or read it.

Automated quality checks can inscribe information directly to the blockchain, creating unquestionable documentation around quality control. Multiple permitted parties can view automated execution and data written to the blockchain and lower the requirement for inbound QC checks. That shortens the distance between receiving and production departments and speeds production.

IP Protection

If you own intellectual property, it's one of your business's most valuable assets - perhaps the most valuable. Striking a balance between protecting that IP and finding the most cost-effective way to develop the parts or components associated with it is important. Defending against an infringement on your intellectual property requires being able to prove ownership and licensing.

A blockchain service can register IP as part of the chain, establishing ownership and registering designs in an indisputable record. In the event of a patent dispute, the chain can verify the existence of the IP, registration, and so on. This protection can extend the value of your IP, as well, offering a way to license it without fear of someone else making a claim to it. 

The blockchain for IP has several applications:

• IP smart contracts
• Proof-of-ownership
• IP marketplace
• Unification of global patent and IP systems
• Version control

Supply Chain Transparency - Track and Trace

Supply chain transparency is a big topic. Even in terms of driving profit margins, it has multiple applications. Track-and-trace is just one of those applications. Increased traceability and visibility minimizes duplication and waste and simplifies contract compliance management. 

Supply chains can be complex and, with current supply chain issues, the ability to track the provenance of parts and materials and have an immutable digital record for the various participants is a significant benefit. Not only does it offer transparency - which breeds trust - but it makes it easier to onboard new supply chain participants.

When integrated with Internet of Things (IoT) devices, participants in the supply chain can validate that materials have been sourced according to agreements or even kept within proper environmental parameters. For instance, IoT thermometers could write periodic temperature readings to the blockchain to protect both the supplier and manufacturer if a food product requires that an ingredient be maintained between a specific temperature range during shipping.

Back Office Visibility and Action

Supply chain transparency offers another advantage to the business - operations and even sales can have a clearer view of product movement and development, allowing for more accurate inventory control and opportunities for sales teams.

With accurate and timely sourcing and production information, sales teams can connect customer demand with products and vice versa. For instance, combining Salesforce's Manufacturing Cloud with Einstein Analytics for Manufacturing can identify accounts that may be open to upsell and cross-sell opportunities. Integrating supply chain visibility with Salesforce's Blockchain Connect would give insights into product and inventory opportunities and the customers most likely to respond well to upsells of surplus. 

Adding Blockchain to Your Manufacturing Business

Adding blockchain to your business is more accessible than you may realize. Salesforce and many others have created blockchain applications that answer the needs of today's manufacturing businesses, addressing the pain points around sourcing, supply chain, billing, and more. Salesforce makes it easy to integrate these applications with tools like Blockchain Builder, Connect, Engage, and Manufacturing Cloud. The power of Salesforce applications and development can bring blockchain into your manufacturing business without massive transformation of your existing technology.

Six Consulting can help bridge the gap between your technology ecosystem and the world of blockchain leveraging your Salesforce implementation. Or, we can bring Salesforce into your organization to meet your business needs. Are you interested in learning more? Contact us today to schedule a conversation about how you can leverage new technologies quickly without abandoning your current systems and processes.