The term ‘decentralize’ has been around since about the 1800s and, historically, has been used to as a reference to government and the distribution and delegation of power. While, in some ways, the word has had a negative connotation in the past, today the term – and its meaning – is used to describe features of blockchain technology.
“Blockchains are politically decentralized (no one controls them) and architecturally decentralized (no infrastructural central point of failure) but they are logically centralized (there is one commonly agreed state and the system behaves like a single computer).” – Vitalik Buterin, co-founder of Ethereum
‘Decentralized’ has become synonymous with blockchain technology’s most compelling characteristics: one entity does not control it, it’s an open-sourced and peer-to-peer network, and it is secure by design.
Smart Distributed Manufacturing Systems
Where traditional manufacturing uses a single, centralized factory that outputs many identical products, distributed manufacturing embraces a process that works smarter and offers improved efficiencies.
Distributed manufacturing, also known as decentralized manufacturing or distributed production, utilizes a network of facilities that are spread out, often located nearer customers or relevant markets. This model of distributed manufacturing opens the door to Industry 4.0 when manufacturing sites become networks of production through connectivity.
Manufacturing sites that are connected offer the potential for improvement in production processes, shared 3D printing for rapid prototyping and smaller batches, customizable production, lower shipping costs, and improved supply chain processes.
Supply Chain Challenges
Manufacturer supply chains are a typically complex system of materials, requirements, people, and processes. By nature, supply chains can be cumbersome, dynamic, and complicated. These complexities aside, for any manufacturing plant, effectively planning and managing the supply chain is key to productivity and profitability.
With projected continued manufacturing growth, it is vital that manufacturers address the many supply chain challenges that may, otherwise, hamper success.
- High costs to source suppliers, parts, and components.
- Specialized and smaller organizations are disadvantaged against corporate-wide buying and supplier agreements.
- Demanding and pricey market for procurement brokers and sourcing agents.
- Risk dealing with unknown suppliers and time needed to vet reputable suppliers.
- High production quantity minimums to secure cost breaks even with the growth of specialized and customizable products.
- Lack of visibility into supplier capacity, logistics partners, and vulnerability
- Ongoing problem-solving required to keep supply chain on track and on budget.
- Inefficient processes add labor time and cost to the bottom line.
- Innovation and intellectual property is vulnerable to distant and unknown suppliers.
It’s Better with Blockchain
While it is mostly associated with cryptocurrency, blockchain technology is the underlying enabler for process improvements in a distributed manufacturing environment, including the supply chain.
In centralized manufacturing setups, supply chain relationships are only built over time and face-to-face. Trust is facilitated in the form of contracts, quality checks, audits, compliance reviews, and more. As the supply chain grows, so do the number of suppliers, documents, agreements, ledgers, and people. The result is increased complexity and exposed risk.
Distributed manufacturing supply chain processes that utilize blockchain technology enjoy not only increase speed, lower cost and reduced complexity, they benefit from an inherent trust. Using a distributed, digital ledger for supply chain operations delivers real-time transparency, transaction efficiency, and unmatched security for the transfer of anything of value – orders, money, ownership, and ideas.
The SyncFab Smart Manufacturing Blockchain supports supply chain upgrades using a blockchain-based platform that offers improved visibility and delivers secure management and insight into orders, state of goods, delivery, and invoicing.
SyncFab Smart Manufacturing Blockchain is the first, peer-to-peer blockchain network for manufacturers to compete and differentiate through improved supply chain and procurement processes.
Smart Manufacturing Blockchain is an easy-to-use, objective, and secure platform that delivers immediate trust among manufacturers and suppliers to do business. Learn more about how blockchain will transform your business, ahead of the competition.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.