Blockchain in the industry: use cases

//Blockchain in the industry: use cases

Introduction

If we imagine that we were back in 1995, could we have imagined the changes we were going to experience in the next 24 years?

It was going to be a very complicated task but not very different from what happens today with the Internet of Value, which is based on the Blockchain. However, we do not know if its impact will be less, equal or even greater in the world.

It was going to be a very complicated task but not very different from what happens today with the Internet of Value, which is based on the Blockchain. However, we do not know if its impact will be less, equal or even greater in the world….

We are in the prolegomena of the Fourth Industrial Revolution. The digitization and cooperative coordination of the productive units are going to suppose a new milestone in the industrial development, as in the past the three previous disruptive changes supposed it: the steam engine, the electricity and the advanced automation of the manufacturing process.

In the coming years, production processes must be able to manufacture thousands of different configurations of a product and produce small lots at very competitive prices. The demand is increasingly more sophisticated and requires more intelligent and personalized products so the entire value chain must adapt to this new paradigm.

 

In order to face this challenge, intelligent factories must automate both their internal and external processes, minimizing the cost of all those processes and indirect costs that make unit production more expensive.

That is why they should have the ability to communicate and coordinate with the outside in order to offer automatically, recognize a new order, verify your payment, launch the production automatically and even coordinate the logistics of product delivery. Therefore, it could be said that Industry 4.0 is composed of intelligent factories that, due to their high degree of connectivity and automation, are capable of maintaining a very high level of self-management. Even being able to attend the manufacturing of orders automatically or semiautomatically and thus offer competitive prices as those relating to mass production.

Blockchain en la Industria 4.0

De forma genérica los beneficios que aporta esta tecnología se pueden resumir en:

  • Streamlines operations in the supply chain.
  • Guarantees the transparency and integrity of the data
  • Increase data availability
  • Reduce financial and operational costs
  • Simplify system integration
  • Generate new business opportunities

Blockchain is the ideal technology to make a qualitative leap in the cooperative coordination of all industrial processes, but especially in those complex processes in which different organizations intervene and require a reliable system for coordinating them. Blockchain could automate the processes, transactions and relationships between different parts of the value chain and production processes. The chain of blocks becomes the element of trust between the parties, automating many processes that today are done manually.

Blockchain allows coordinating small and medium-sized local actors to execute productive processes of small lots, even unitary, at prices as competitive as the large batches related to mass production. It will also allow production to be brought closer to demand, as was done in previous periods, which will favor the creation of local employment.

Cooperative coordination through the use of information technologies is the essence of Industry 4.0. That is what will allow us to achieve the objectives we mentioned, and Blockchain is the secret ingredient that will make it possible to create a reliable system for all the parties involved in the industrial process.

The first phase in which many of the Spanish industries are today is the connection of the network of industrial operations to the corporate network, and even the internet, in order to exploit the data and be more efficient. Thanks to the exploitation of these data, factories can improve their predictive maintenance, save energy, optimize the organization of production, etc. The most advanced companies that have already connected their operational systems and are exploiting their data are starting the next phase, which consists of the interconnection of the intelligent factory with the outside world. The objective, in this case, is the intelligent coordination and cooperation with other actors in the value chain.

 

 

In Spain we can find companies embarked in the first phase and others that, once passed the same, are already building the bases of the second and begin to prepare the first interoperability pilots for the coming months. However, for the second phase there is great uncertainty and distrust, and it is precisely at this point where technologies such as Blockchain can definitely promote the deployment of Industry 4.0.

Industry 4.0 will be formed by intelligent factories capable of making decisions, self-managing and coordinating with the rest of the value chain (customers, suppliers, logistics, etc.). In order to make this objective a reality, it is necessary to have a secure, decentralized and trustworthy communications vehicle, both internally – in the factory itself – and externally. Both the smart factories at a high level, as well as the components and systems within the factory, must be coordinated to make decisions based on the existing information on said communication buses. The Blockchain technology is ideal to create a communications bus -private or public- in which all the parties (factories, suppliers, systems, RTUs, PLCs, etc.) can trust and must be unalterable.

In fact, the use of blockchain opens a new type of economy in which the devices themselves through M2M communications (Machine to Machine) will be able to reach agreements for the supply of raw materials, parts, maintenance, energy, delegation and coordination of the production or even logistics. These agreements will be reflected in Smart Contracts and their payment will be executed automatically when the conditions established in these contracts are met. In this way, the intermediation of third parties in transactions is avoided.

We are about to enter the economy of things, thanks to the symbiosis of the internet of things and blockchain.

 

Casos de uso de Blockchain en el proceso productivo de la Industria 4.0

1.      Autenticación e integridad de datos en dispositivos industriales

Blockchain se postula como una de las posibles soluciones al reto de la identidad de los dispositivos IoT, y en particular de IIoT (Industrial IoT), pues a diferencia de las soluciones centralizadas tradicionales ofrece una gestión de identidad descentralizada. De hecho, la descentralización de la identidad es una de las fortalezas de esta tecnología. En blockchain se puede verificar la identidad de dichos dispositivos sin depender de una autoridad de certificación centralizada (Certification Authority, CA) difícil de gestionar y que puede convertirse en un punto único de fallo del sistema. Además, en la actualidad las soluciones industriales requieren del despliegue de una CA por cada fabricante industrial o del uso de una CA de fabricante que la industria no gestiona directamente, lo que provoca no sólo una gran dependencia de sus proveedores, sino también incertidumbre y falta de control.

La descentralización de la blockchain, por tanto, puede suponer una ventaja importante en el paradigma IIoT, pues gracias a las características intrínsecas de esta tecnología será posible registrar la actividad de cada sensor/actuador en la red industrial y garantizar así la integridad de los datos generados por la IIoT, sin miedo a la manipulación de registros y sus consecuencias. Cabe señalar también que el registro inalterable de los valores de la IIoT mediante tecnologías blockchain puede ser muy útil para el análisis forense de cualquier incidente que afecte a una infraestructura crítica, como el sector energético o las industrias químicas. En los últimos años han surgido diferentes normativas para la identificación y protección de estas infraestructuras críticas que así lo aconsejan.

2.      Transacciones M2M en la blockchain

La fábrica inteligente del futuro estará compuesta por dispositivos IIoT y/o por módulos de fabricación conectados entre sí y que funcionarán de forma autogestionada o autosuficiente. De esta forma, y mediante el uso de tecnologías como la blockchain, surgirá una nueva economía en la que los propios dispositivos, mediante comunicaciones M2M, serán capaces de llegar a acuerdos de suministro de materias primas, piezas, mantenimiento, energía y delegación/ coordinación de la producción, e incluso también logísticos, que quedarán reflejados en los Smart Contracts y cuyo pago se ejecutará automáticamente cuando se cumplan las condiciones establecidas en el contrato. La intermediación de terceros en las transacciones, incluso la interacción humana, se verá así disminuida en gran medida. En este sentido, ya se están realizando los primeros micropagos piloto basados en la blockchain, por ejemplo, entre coches y puntos de recarga o autopistas, entre trenes y los pasajeros directamente sin tener que sacar previamente un billete, etc.

3.      Los marketplaces industriales y la blockchain

Automatizar y agilizar ciertos procesos actuales es la condición básica para que la fabricación inteligente pueda llegar a producir lotes unitarios en el mismo rango de precios que los ofertados por la fabricación de grandes volúmenes de la actualidad. Entre esos procesos se hallan la recepción y confección de ofertas, las órdenes de fabricación, la gestión logística o los pagos de cada uno de esos minúsculos lotes de fabricación. De no ser así, los costes indirectos que se deberán amortizar por cada lote unitario podrían superar el coste de fabricación del propio producto, como ocurre en la actualidad.

Se hace necesario, por tanto, automatizar estas transacciones y para ello no sirven los actuales portales web de proveedores, en los que los clientes realizan pedidos y luego son atendidos de forma manual, ni tampoco los intermediarios que ofrecen servicios, tan habituales hoy en la nueva economía digital.

Gracias a Blockchain se puede llevar a cabo la desintermediación del proceso productivo, de forma que las fábricas puedan recibir las peticiones desde un portal descentralizado y fabricar lotes pequeños o incluso unitarios. El acercamiento físico entre el ente productivo y el lugar de destino final del producto se ve de este modo propiciado, lo que repercute también en la reducción de costes logísticos y, a su vez, facilita que la fabricación pueda ser realizada por pequeñas pymes locales, que cooperan de forma coordinada para ofrecer este servicio de fabricación integral. Y esa plataforma descentralizada es posible gracias a la blockchain. Un Smart Contract cerrará automáticamente el acuerdo con la mejor oferta sin necesidad de intervención de ninguna de las partes. La manera más eficaz de implementar la tecnología es mediante  plataformas de blockchain as a service, así se abaratan y se optimizan los costes.

Cases of use of Blockchain in the productive process of Industry 4.0

1. Authentication and data integrity in industrial devices

Blockchain is postulated as one of the possible solutions to the challenge of the identity of the IoT devices, and in particular of IIoT (Industrial IoT), because unlike traditional centralized solutions it offers a decentralized identity management. In fact, the decentralization of identity is one of the strengths of this technology. In blockchain you can verify the identity of these devices without depending on a centralized certification authority (Certification Authority, CA) difficult to manage and that can become a single point of system failure. In addition, currently industrial solutions require the deployment of a CA for each industrial manufacturer or the use of a manufacturer CA that the industry does not directly manage, which causes not only a great dependence on its suppliers, but also uncertainty and lack of control.

The decentralization of the blockchain, therefore, can be an important advantage in the IIoT paradigm, because thanks to the intrinsic characteristics of this technology it will be possible to register the activity of each sensor / actuator in the industrial network and guarantee the integrity of the data generated by the IIoT, without fear of manipulation of records and their consequences. It should also be noted that the inalterable registration of the IIoT values ​​through blockchain technologies can be very useful for the forensic analysis of any incident that affects a critical infrastructure, such as the energy sector or the chemical industries. In recent years, different regulations have emerged for the identification and protection of these critical infrastructures that so advise.

2. M2M transactions in the blockchain

The intelligent factory of the future will be composed of IIoT devices and / or manufacturing modules connected to each other and that will operate in a self-managed or self-sufficient way. In this way, and through the use of technologies such as the blockchain, a new economy will emerge in which the devices themselves, through M2M communications, will be able to reach agreements on the supply of raw materials, parts, maintenance, energy and delegation / coordination of production, and even logistics, which will be reflected in the Smart Contracts and whose payment will be automatically executed when the conditions established in the contract are met. The intermediation of third parties in transactions, including human interaction, will thus be greatly diminished. In this sense, the first pilot micro-payments based on the blockchain are already being carried out, for example, between cars and charging points or motorways, between trains and passengers directly without having to previously take out a ticket, etc.

3. The industrial marketplaces and the blockchain

Automating and streamlining certain current processes is the basic condition for intelligent manufacturing to be able to produce unit batches in the same price range as those offered by the manufacture of large volumes currently. Among these processes are the receipt and preparation of offers, manufacturing orders, logistics management or payments of each of these tiny manufacturing lots. Otherwise, the indirect costs that should be amortized for each unit lot could exceed the cost of manufacturing the product itself, as is currently the case.

It is necessary, therefore, to automate these transactions and for this the current web portals of suppliers do not work, in which the clients place orders and then they are attended manually, nor the intermediaries that offer services, so usual today in the new digital economy

Thanks to Blockchain it is possible to carry out the disintermediation of the production process, so that the factories can receive the requests from a decentralized portal and manufacture small or even unitary lots. The physical approach between the productive entity and the place of final destination of the product is thus favored, which also affects the reduction of logistics costs and, in turn, facilitates manufacturing can be done by small local SMEs, who cooperate in a coordinated way to offer this integral manufacturing service. And that decentralized platform is possible thanks to the blockchain. A Smart Contract will automatically close the agreement with the best offer without the intervention of any of the parties. The most effective way to implement the technology is through blockchain as a service platforms, thus reducing costs and optimizing costs.

16 April, 2019
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