Manufacturers face a critical inflection point today, as the pressure to launch revenue-driving innovations collides with the need to boost the speed, scale, and simplicity of operations. Digital can help. However, according to Accenture research, most companies invest in digital in a piecemeal fashion. Only 13 percent of companies are exploiting digital for greater efficiency as well as new growth.1 It’s a tricky balancing act, and one of the big reasons manufacturers are embracing the concept of the digital factory. Leveraging multiple new technologies in innovative ways, the digital factory is poised to revolutionize the way a manufacturer manages production—driving significant operational improvements.

Blockchain can help make the digital factory more collaborative and secure—both key to the digital factory’s effectiveness. Blockchain is a unique distributed database that maintains data in a way that allows multiple stakeholders to confidently and securely share access to it. By using Blockchain, manufacturers can boost data security and integrity, reduce data reconciliation efforts, eliminate disputes, and enable automation and real-time transaction processing via smart contracts.

Blockchain is increasingly being adopted across industries. Accenture research found that one in four companies (27 percent) are currently piloting Blockchain with another 22 percent planning to pilot in the next year.2 So how could Blockchain work in practice?

One opportunity is additive manufacturing, which requires manufacturers to share 3D-model files with 3D-printing vendors and their 3D-printing machines—an act fraught with risk of intellectual property theft. With over half (51 percent) of the companies we surveyed either piloting 3D printing technologies or planning to pilot in the next year3, this is a growing problem. Blockchain can minimize this risk with its built-in multi-party security authentication. Furthermore, Blockchain can automatically identify and verify the 3D-printing vendor and its machines and underpin smart contracts that can maintain logs of 3D printing use-per-contracted quantity. An organization within the United States armed forces, and a U.S. manufacturer of flight control systems, have announced plans to apply Blockchain solutions in just this manner.

Blockchain can also enable the safe and secure communication of critical manufacturing operations data among field sensors and personnel, helping the operators make well-informed operational decisions. Blockchain can even play a part in securing the brokerage of manufacturing operations data, providing it as-a-Service to the marketplace. A leading telecommunications equipment maker has launched a Blockchain smart contract-based sensor network that will allow mobile network operators to capture, sell and bill for live environmental sensor data.

According to a recent Accenture and DHL report, Blockchain can help set up a digital twin of a physical asset.

Inventory traceability is a third area in which Blockchain can prove very helpful. Local, company, and industry regulations often require suppliers to certify a part’s origins. Blockchain can provide such provenance certification, which would make maintenance and repair of faulty parts easier, virtually eliminating counterfeit and rogue parts. This level of authentication is particularly important in fields like nuclear energy and aerospace, where sub-standard parts can have serious consequences. A leading engine manufacturer is working on developing Blockchain-based solutions to maintain such an encrypted audit trail to track parts. Equally applicable in a consumer foods context, a major retailer plans to use Blockchain to digitally track perishable food to reduce waste, improve contamination management and enhance the safety of food.

According to a recent Accenture and DHL report,4 Blockchain can help set up a digital twin of a physical asset. In auto manufacturing, Blockchain can connect new vehicles with their digital twins to keep an updated, secure, and accurate record of maintenance records and odometer readings—even when a vehicle changes owners’ hands. This way manufacturers can get critical feedback on performance and predict maintenance issues, helping them improve production quality and service vehicles more efficiently. A major French automaker is looking to achieve this objective by launching a Blockchain-based digitized car maintenance log prototype.

Blockchain can truly enable the digital factory and, in the process, transform manufacturing to spur significant growth, boost profitability, and increase sustainability. With a collaborative, secure digital factory in place, manufacturers can develop a trust-based relationship with all supply chain partners, promoting better supplier management, lower contract costs, an optimal demand-and-service model with enhanced regulatory compliance, improved security, and stronger reputational protection. This powerful digital ecosystem can help achieve heightened transparency and business accountability to form the basis for collaborative innovation and generate overall customer value.

Given its potential, manufacturers should look closely at where they can use Blockchain in the factory. Any process that requires significant collaboration, traceability, or strong security should be the top target areas for executives looking to make their company more agile, secure, competitive, and profitable.

1 Accenture, “Industry X.O: Combine and Conquer: Unlocking the Power of Digital,” 2017.

2 Accenture 2018 Technology Vision research.

3 Ibid.

4Blockchain in Logistics,” DHL Customer Solutions & Innovation, 2018.

Pardeep Sehgal

Managing Director – Accenture Strategy, Supply Chain, Operations & Sustainability Strategy


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