Impact of Blockchain on the Performance of the Manufacturing Industry

Impact of Blockchain on the Performance of the Manufacturing Industry
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Impact of Blockchain on the Performance of the Manufacturing Industry
Introduction
At present, Blockchain has created new and different business models. How will these business models be used to and affect the performance of firms? This essay will specifically discuss Blockchain technology impact on the performance of the manufacturing industry. This article aims to describe and analyze the positive impact of Blockchain on the physical manufacturing industry to arouse the attention and application of blockchain technology by manufacturers. In this essay, I will get the theories from several pieces of literature to support my opinion. The article will first discuss the current problems facing the manufacturing industry, explain the theory related to Blockchain, and finally, the theory and practical problems are combined to analyze.
Current problems in the manufacturing industry
In the B2C mode widely used in the manufacturing industry, many industry pain points hamper and affect the development of the manufacturing industry. In the Internet era, problems in 2C are greatly reduced because the logistics problem of goods from suppliers to consumers, which used to be the biggest problem, has been effectively solved with the rapid development of the Internet. However, the problem has not been well solved in the aspect of B. Asymmetric information, unshared resources, high transaction costs, and fragile core technologies are all the difficulties facing the manufacturing industry.
Since the whole industrial chain of suppliers, manufacturers, and distributors contains several ecosphere chains, this greatly increases the amount of accounting for band people's demand is more personalized, followed by more and more kinds of inventory, transport frequency is more and more. All these have caused huge workforce and management consumption for end B. However, there are many management ideas to solve the B-end problem. For example, the just-in-time production model of Toyota in Japan ensures the quantity of no inventory and solves part of the B-end problems, including reducing batch quantity, reducing inventory, and improving quality (McLachlin, 1997). Including the Internet of Things method that emerged later, although the emergence of these schemes has improved the efficiency of B-end work to a certain extent, problems still exist. For example, supply chain information is inconsistent with market environment information, there is no correspondence between goods and labels, and data cannot be tampered with.
Energy is a major requirement in most manufacturing processes. According to Akram et al., (2020), there are problems in energy usage due to the lack of transparency in activities like energy billing, trading, marketing, and creating and managing smart green systems. It is important to develop ways to help manage energy distribution and usage in the manufacturing process. The management technology would need to be clean, fast, and updated to ensure transparency and profitability of the manufacturing process.
The success of the manufacturing process relies on how the control and monitoring ability. Rathee et al., (2020) state that the traditional system responsible for overseeing manufacturing details, records, and workers' information is slow and time-consuming. The traditional system allows the manufacturing process and makes it difficult to trace or keep a rack of activities in the industry. An efficient system would play a greater role in making the system faster and efficient for use. This would be through making the communication process easier and reliable.
The manufacturing process is complex and requires, in some instances partnering with other manufacturers for services. The partnerships come in the form of cloud manufacturing which, according to Aghamohammadzadeh & Valilai (2020), makes manufacturing systems benefit from using the necessary resources through an approach that is cost-friendly and has a central decision-making mechanism. This, however, brings up the challenges as there are problems in combining different manufacturing resources since each comes with its technical and technological limitations.
Financing the manufacturing process is expensive and requires the help of financial institutions. This dependency becomes a problem when the financial institutions demand part of the profits to be realized. The problem in supply chain finance is challenging in the overall manufacturing process. To limit this, there is a need to create newer finance methods that bypass the institutions and link buyers and sellers directly without risks. Javaid et al., (2021) assert that by avoiding foreign and fiat currencies, the problems in financial transactions are excluded, and transactions for controlled supply can be done. The use of cryptocurrencies has been adopted and is being used to bypass the big demands by financial institutions to manufacturing processes.
Theory of Blockchain
Blockchain technology has seen a lot of public attention in the last few years. It is a new revolution in computing that has revolutionized information technology systems and diversified applications. "Blockchain is a novel application model that combines the uniqueness and innovation of computing technologies, such as distributed data storage, decentralized and independent peer-to-peer transactions, automatic and intelligent consensus mechanisms, a programmable smart contract, and dynamic encryption algorithms" (Lu, 2019). The technology allows for multiparty bilateral transactions by providing an environment that is distributed and decentralized. According to Lu (2019), the technology is a structure of chained data using blocks of data and information. It organizes them in chronological order, pu...