Combining Blockchain With Value Stream Mapping for Production Process Improvement

Introduction

Blockchain technology is a serviceable tool that can provide a lot of positive value to manufacturing systems. Blockchain solutions can seamlessly connect all production stations with secured, real-time, and transparency information that could help to significantly monitor and keep track production process. The blockchain solution could provide some remarkable benefits for manufacturing systems such as:

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  Operations management: status of raw materials, product movement, production rate, and other process parameters are known exactly for any type of item, at any location, and at any time. Blockchain provides the real-time status of all manufacturing stations with accurate and authentic data. Distributed ledger technology creates an ideal platform for managing every aspect of manufacturing operations.

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  Traceability solution: It is difficult for a large company to keep track of every transaction. Blockchain-based solutions can help to record everything in the process chain. With the help of RFID sensors and tags, the blockchain tool could allow the manager to trace back all product’s origins and from any transaction point of the manufacturing process such as materials traceability, counterfeit detection, historical versions of engineering designs, property tracking.

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  Product management: companies are often difficult to keep track of all items. It could create the chance for scams or low quality statistical data. A distributed ledger function of the blockchain would be the ideal environment for managing products in multiple locations. Data is shared safely and quickly to all participants for different purposes such as quality checking, production control, inventory management, etc.

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  Real-time management: the key power function of the blockchain is traceability and authentication. It means that blockchain can provide a real-time tracking solution for not only identifying product location but also updating the current status of the production process. Therefore, human errors and the process performance are continuously monitored for appropriate adjustments, if any.

Besides the benefits of blockchain implementation, the organization also faces some significant challenges such as scalability, user experience, energy efficiency, etc. Specifically, the application of blockchain in production system may include the following key challenges:

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  Scalability: one of the most significant challenges for blockchain is scalability. Traditional blockchains like Bitcoin and Ethereum can handle only a limited number of transactions per second. As more participants join the network, the transaction throughput can decrease, leading to slower transaction confirmation times and higher fees.

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  User experience: many blockchain applications struggle with user experience issues. Complex wallet management, long confirmation times, and the need for technical expertise can deter mainstream adoption.

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  Energy consumption: proof of work consensus mechanisms, as used in Bitcoin, can require substantial energy consumption. This raises concerns about environmental impact and sustainability. Transitioning to more energy-efficient mechanisms, like Proof of Stake, introduces its own set of challenges.

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  Adoption and education: blockchain technology is relatively new, and there's a lack of awareness and understanding among the general public. Achieving mass adoption requires not only technological solutions but also educational efforts to help users understand the benefits and risks.

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  Lack of standardization: the lack of industry-wide standards can lead to fragmentation and hinder interoperability between different blockchain implementations.