John Baird, CEO, Ultimo Digital Technologies
Blockchain’s potential impact on manufacturing
Blockchain technology has had a huge impact on the financial world, allowing the meteoric growth of cryptocurrencies that have unsettled the traditional banking system.
While Bitcoin and other currencies have been the first to really embrace blockchain, it’s a technology that has potential for all manner of industries, including manufacturing.
We spoke with John Baird from Ultimo Digital Technologies about the way blockchain is being, and can be, used in Australia.
What is blockchain technology?
Although we hear a lot about blockchain technology, it’s still a mystery for some people. In simple terms, it’s a way of sharing information without a middle man in a way that it cannot be changed, faked or deleted.
In the finance world, rather than making transactions through a bank so that there’s a record of money going from one person to another, blockchain allows people to pay each other directly while leaving a public record for all to see.
John explained, “It’s really a way for people to share information and trust that the information is correct. Blockchain is a way, particularly machine to machine, of being able to have one machine share information with another machine in a way they can both understand and they can both trust.”
The benefits of using blockchain
There are many ways that blockchain technology can provide benefits to those involved in manufacturing.
With smart packaging and blockchain, companies can share information in a trusted way, get their products to market quicker, monitor a product from manufacture to delivery, ensure quality throughout the process and avoid counterfeiting and theft, as well a host of options that we’re yet to think of.
John thinks that the first step for many companies will be to improve their lines of communication, both with suppliers and customers, to have a more open and trustworthy system in place.
He said, “For companies, what blockchain really translates to is being able to share information with the companies upstream and downstream in a way that they can trust and they can easily access.”
“Where it starts to change a business process is in terms of the information flow between you and your customers and you and your suppliers.”
How blockchain prevents counterfeiting
One of the big problems that Australian companies face when they export products is the risk of counterfeiting. From high-end products from our highly respected wine industry to our trusted products such as baby formula, there have been many cases of fakes, swindles and compromises. Combining blockchain technology and IoT in packaging can put a stop to this.
John gave an example of how baby formula could benefit from this. “If you could take all of your tins of baby powder and put them inside a smart box, so when you close that box, the box knows it’s been closed. The box can tell if it’s been opened, either along the seams or cutting it or slicing it or any way you can try and open a box.”
“If that box can tell when it’s been opened, and can tell me where it’s been opened, then I can put the baby powder in, seal the box and send it somewhere. If it gets to the other end and the packaging says ‘I have not been opened’ then you know what’s in there is what the manufacturer put in there.”
For companies, this has obvious advantages. Counterfeiting can have a huge impact on a company’s bottom line, both in the short- and long-term, as well as cause major damage to its reputation. For consumers to scan a box, a tin or a bottle and instantly see that it’s genuine and that the ingredients come from where they say they do is a major benefit.
The future of blockchain
Predicting how a technology will be used in the future is never an easy thing, but sometimes there are clear paths that experts can see that are just waiting to be explored. For John, it’s the idea that blockchain will be used for more than just proving provenance and authenticity, but as a way of marketing a product.
He said, “When you scan a bottle of wine, instead of just saying ‘Yes, this is genuine’ or ‘No, it isn’t’, you can start to say ‘This particular bottle of wine was made from grapes planted 20 years ago on the western side of the hill where the acidity of the soil…’ and connect to the person one-on-one with the product they’re holding in their hand.”
Find out more about how blockchain provides transparency to a company’s supply chain at the upcoming AUSPACK Business and Industry Conference.