Achieving Automation through Blockchain Smart Contracts
Organizations involved in the supply chain market share the same logic and data. This enables manufacturing companies to automate time-sensitive processes and avoid costly dispute resolutions
Fremont, CA: With the coronavirus pandemic spreading fear across the globe, manufacturing processes have become increasingly sophisticated in a global marketplace. The increasing number of moving parts has made it difficult to reliably and efficiently track actions and data along the supply chain. Blockchain-enabled smart contracts provide transparency and ensure everyone along the supply chain follows the same set of agreed-upon rules. Organizations involved in the supply chain market share the same logic and data. This enables manufacturing companies to automate time-sensitive processes and avoid costly dispute resolutions. A recent study by Gartner predicted that 30 percent of manufacturing companies with more than USD 5 billion in revenue would have invested in blockchain-powered projects by 2023.
Implementing blockchain technology and data infrastructure to convert processes into smart contracts can be challenging, especially for companies that fail to hit the USD 5 billion mark. In addition, the fear of failure after making substantial investments can be a significant deterrent. However, most manufacturers fail to understand the investment costs are covered for in terms of time and money saved through smart contracts.
At its core, blockchain boasts of transparency and trust, and smart contracts play a crucial role in providing these benefits. Smart contracts rely on one version of data as to what is happening, or has happened, and record the results of the contract, such as funds being transferred in exchange for using a piece of equipment. From a business context, blockchain-based smart contracts make it possible to avoid disputes.
Organizations that do not leverage smart contacts need to maintain separate systems that encode business rules with slight differences. Also, the data that they use may vary from the data other companies use, making it even harder to reconcile any issues. These differences lead to disputes that require significant time and effort to resolve. Smart contracts facilitate automation and data standards that allow manufacturers to consider different ways to conduct business with partners along their supply chain. The partnership can be based on performance or quality in ways that would have been impossible to implement without the use of blockchain and smart contracts.
