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Britain is the birthplace of the industrial revolution. The First Industrial Revolution used water and steam power to mechanise production. The Second used electrical power to create mass production and assembly lines. The Third industrial revolution used computers and robot automation to create more efficient production lines.Britain is the birthplace of the industrial revolution. The First Industrial Revolution used water and steam power to mechanise production. The Second used electrical power to create mass production and assembly lines. The Third industrial revolution used computers and robot automation to create more efficient production lines.Today, we stand on the edge of a new technological revolution that has the potential to fundamentally change the way we manufacture products, it will also have a profound impact on the way we live, work and communicate. It is known as the \u2018Fourth Industrial Revolution\u2019, or for short \u2018Industry 4.0\u2019. It is merging the lines between digital and physical entities to create Cyber Physical Systems.For any manufacturer, under and over estimating demand leads to lost revenues. The largest inefficiency in any manufacturing supply chain is its inability to react to changes.Despite investment manufacturers are still seeing widespread issues which include:\u2022 Outdated or unreachable technology\u2022 Supply chain transparency and trust\u2022 Unproductive centralised supply chains\u2022 Non-conformance management\u2022 Manufacturing closed loop process control\u2022 Constrained capacity planning\u2022 Lack of machine health monitoring\u2022 Energy efficient use of assetsIndustry 4.0 encompasses several technologies which include the Internet of Things (IoT), Big data and Artificial intelligence (AI). It is seen as a key enabler to combat these issues but only a small number of manufacturers are actually seeing the benefits.\xa0In short, Industry 4.0 is not delivering on its promises.One reason for this is that businesses are only focussing on individual aspects of the Industry 4.0 suite of technologies. As most of us are aware, there is rarely a one size fits all solution to any problem in the real world and this is no different. A combined technology approach is required, but with the addition of a couple new technologies called Blockchain (Distributed Ledger Technology) and Smart Contracts.What is Blockchain Technology?The mention of Blockchain for most of you will bring to mind Bitcoin, Cryptocurrencies and possibly even scams. It is important to distinguish between Blockchain and cryptocurrencies as they are not the same. Blockchain is the technology that sits behind Bitcoin and other cryptocurrencies and is what makes them decentralised, secure and unchangeable.It is true that the original objective of Blockchain technology was to facilitate trusted fiscal transactions between two parties without the necessity for a third party such as a bank to be involved. This enables faster and less expensive transactions. Due to the security and immutable nature of a Blockchain system it also has complete integrity as the transactions are verified by the system itself.Transactions on the Blockchain are stored and distributed across multiple nodes within the network. These transactions or records are very secure due to how the Blockchain works which makes this technology an ideal method of transparently and securely recording transactions and documents.\xa0As the data is held across shared nodes, the technology can be used to create and maintain a common and constantly updated \u201ctrusted\u201d database. This presents a multitude of potential applications for Blockchain outside of the financial sector , and in particular for the manufacturing industry.What is a Smart Contract?Smart contracts have the ability to use rule-based intelligence to perform functions. Blockchains support the construction of smart and trusted code that is embedded securely into the Blockchain. Participants can use this to specify terms, conditions and any other logic into their transactions, thus creating a smart contract.As an illustration of how a smart contract would work, take the example of an aerospace manufacturer issuing a smart contract onto a Blockchain marketplace that includes precise terms and conditions for a wing spar that is to be manufactured from a particular grade of Aluminium. Along with this they have included the exact component specifications with delivery and payment requirements.Any supplier on the Blockchain can bid for the contract as long as they have the correct quality credentials and machinery that is capable of manufacturing the component.\xa0If the delivery timescale is not satisfactory then the contract can automatically distribute the requirement across multiple qualified suppliers to achieve the required delivery date. Therefore, allowing buyers to dynamically scale the manufacturing system to meet their requirements.Once the Blockchain data has confirmed that the specifications of the smart contract have been fulfilled i.e. the parts have been delivered to the required quality standard and are on time, then the smart contract will execute the payment automatically. This will eliminate trust or compliance issues that may exist within the supply chain.How is this relevant to Manufacturing?With the advent of Industry 4.0 and Blockchain systems a transparent, decentralised platform is required that combines these technologies. This platform will enable interconnected supply chains and digital passport capabilities which will in turn eliminate barriers to entry for any size of manufacturer.Such a platform would disrupt the traditional manufacturing supply chain structure by engaging a transparent smart contract eco-system. This will enable a system to act autonomously, ordering tooling materials and making production decisions. This will eliminate the need for human interaction which is a bottleneck on today\u2019s infrastructure. Smart contracts can also be used to create an integrity mechanism between suppliers and buyers, eliminating the trust and compliance issues that exist today.Allowing machines to connect and interact with a Blockchain system creates multiple nodes which will be used to validate transactions and provide the required trust and integrity mechanism. The device will also allow machines to communicate with each other via the distributed ledger giving them the ability to make decisions and react to changes in load and capacity.\xa0The building of such a platform has the potential to resolve the complex problems of manufacturing systems with the following key supply chain revolutions.Dynamic Supply Chains with Full VisibilityThe entire supply chain should have information readily available in order for manufacturers, procurement and supply chain designers to enhance their processes and mitigate the risk of a supply chain failure.A Blockchain system will promote a transparent, visible supply chain which increases trust, effectiveness and productivity.Smart contracts have the ability to use rule-based intelligence to perform supply chain functions. Blockchains support the construction of smart and trusted code that is embedded securely into the system. Participants can use this to specify terms, conditions and any other logic into their transactions, thus creating a smart contract.\xa0Blockchain smart contracts can have the same level of detail as a traditional purchase order and quality accreditation do with the current methods but will have the added functionality of being able to perform tasks automatically, such as monitor capacity levels or negotiate prices.Commercial partners can monitor delivery times, quality status and costs in real-time and create, negotiate and complete transactions automatically.Combining this with Industry 4.0 smart devices will reduce costs and maximise efficiency by empowering machines to communicate with each other directly, (Machine to Machine, M2M), without a centralised control mechanism to slow them down. Production decisions will be made autonomously allowing factories to make quantum leaps in efficiency and flexibility.Facilities will also be able to easily scale their asset availability to meet changing demands. If the delivery timescale is not satisfactory then a smart contract can automatically distribute the requirement across multiple qualified suppliers to achieve the required delivery date. Therefore, allowing buyers to dynamically scale the manufacturing system to meet their requirements.How Much Capacity Does Your Factory Have?Capacity planning is essential to the success of any manufacturer. It is the process of determining the production capacity needed by a factory to meet the changing demands of its customers.The difference between the capacity of an organisation and the demands of its customers results in inefficiencies which manifest themselves in under-utilised resources or poor delivery performance. This is caused by unfulfilled deliveries leading to unhappy customers. The purpose of capacity planning is to minimise this disparity.Increasing the utilisation of the manufacturing systems capacity is accomplished by measuring the Overall Equipment Effectiveness, more commonly known as OEE. Currently in the majority of companies, OEE is collected manually which usually results in poor quality data, which in turn creates poor quality decisions. With the advent of the Industrial Internet of Things (IIoT), monitoring machine performance and environmental changes will become easier to analyse and identify opportunities for OEE improvements.\xa0Imagine being able to see (and project) capacity in real time. This will allow customers to scale their production requirements either up or down in seconds and see the effect on delivery dates immediately.Additionally, this means that an Artificial Intelligence (AI) system can use the data to plan the manufacture and routing of components based on manufacturers machining capability and capacity. This may result in one order being spread over several facilities or suppliers if delivery is required urgently for instance.Creating an innovative platform that combines AI, IoT, Blockchain systems and smart contracts will remove all resistance to a manufacturing system that can instantaneously scale to meet any production demands that are required.Manufacturing Data and System HealthBy monitoring the environmental and machine maintenance event data, machine learning algorithms can be applied to predict any maintenance issues that may arise. Combining this with an energy management system will allow the machinery to be utilised in the most efficient way possible. Feature inspection outcomes can also be combined to ensure that machine capability and quality is constantly improved and is not impacted by environmental factors.Blockchain Based Quality Systems - Digital PassportsBy digitising Manufacturing Quality systems using the Blockchain, it would be possible to create a registry and catalogue system for recording, tracking and monitoring any component across all supply chain members, effectively a digital passport. The advantages of a Blockchain digital passport are:\u2022 Immutable Blockchain based component digital passport\u2022 The consensus mechanism of distributed ledger system keeps it secure.\u2022 A tamper proof audit trail\u2022 Complete provenance of any componentConclusionManufacturing plants and factories around the world must rely on Blockchain, smart contracts and IoT to meet the rising global demand and transform the way we order, control quality, manufacture and deliver components.Blockchain and smart contract technology has the potential to radically disrupt the current manufacturing business model by enabling trust within the supply chains, streamlining processes and improving transactional security. But most of all it will digitise manufacturing data which can be utilised to increase the effectiveness of any manufacturing system.\xa0Better monitoring of machines, energy usage and adaptive control will allow suppliers to increase the productivity and flexibility of a single machine. Likewise, improved overall system performance and planning will result in producing more products on the same number of assets, therefore improving flexibility and productivity.Imagine being able to scale your manufacturing operation in the same way that cloud services such as Amazon Web Services and Microsoft Azure scale their capacity to meet or reduce demand on websites or eCommerce solutions in milliseconds.Although Blockchain and smart contract adoption is at an early stage, it will redefine the current manufacturing business model. The manufacturers that innovate will be the ones that emerge from the pack and reap the rewards.Intelligent, decentralised, adaptive engineering solutions are therefore essential for the future of manufacturing systems.About ManufactoryManufactory designs and creates advanced manufacturing solutions. The company was founded in 2018 to revolutionise manufacturing and supply chain technology, with the ultimate goal of enabling manufacturers to become more efficient through innovation and technology. For more information on Manufactory or to find out how your facility might benefit from a blockchain based solution, please visit https://manufactory.ai