The Boston Consulting Group (BCG) has published a new report, Blockchain in the Factory of the Future. The Supply Chain Matters blog has reviewed this report and believes that manufacturing teams may find interest in the report’s concepts and observations. Blockchain and IoT Technology


Report Premise and Observations

The report authors define the factory of the future as data sharing across a complex internal and external network of machines, parts, products and value chain participants, including machinery providers and logistics companies. The report concludes that while blockchain technology is not a panacea, the technology and the factory are converging toward being a better match.

As blockchain technology matures: “..factory operations increasingly require data sharing and collaboration among complex networks of companies and machines. By forging trust and connections within these complex networks, blockchain can help manufacturers clear some hurdles that have impeded the full-scale deployment of other next general technologies and innovative business models.”

The report outlines and addresses five potential use case opportunities within proof-of-concept stages:

Protecting and Monetizing Critical Intellectual Property– Acknowledging that intellectual property protection (IPP) is a critical consideration in decisions about whether to produce internally or buy from a supplier, blockchain technology can support registration, existence and integrity  of IPP.

Simplifying and Safeguarding Quality Checks– including two examples from aircraft manufacturing related to tracking the provenance of components or creating an immutable ledger of all aircraft components and embedded software.

Advancing Machines as a Service–  namely, expanding the possibilities for enabling complex pay-per-use models for machinery, charging for equipment use.

Enabling Machine-Controlled Maintenance– supporting new machine maintenance approaches such as automating service agreements, facilitating outsourced maintenance and shorter maintenance times.

Enhancing Track and Trace– namely leveraging the technology to exchange data easily, accurately and securely across complex supply chains .


Finally, the report acknowledges that early generations of blockchain technology could not support industrial applications effectively owning to the limitations in network scability, interoperability and processing speed. Noted is that versions now under development leverage new consensus protocols that improve efficiency of verification and increase transaction speeds.

The report itself can be downloaded at this BCG web link.


Bob Ferrari

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