How does Blockchain Contribute to the So-Called Industry 4.0

Flávia Sales
November 7, 2022

Blockchain and Industry 4.0 are buzzwords around start-ups as well as established industries for some time. They are more than buzzwords now - both are real business solutions that have the potential to drive efficiencies, cost savings and increased profits. Here we take a closer look at how blockchain technology is helping to the development of Industry 4.0.

What is Industry 4.0? Put simply Industry 4.0 is the digitisation of manufacturing.  

The term Industry 4.0 is actually not new! Representatives of different industries coined it in 2011 during the Hanover Fair in Germany. Two years later, the German Government adopted “Industry 4.0” as the name for its strategic initiative to revolutionise manufacturing across Germany.

Industry 4.0 is shorthand the “fourth industrial revolution.

The Fourth Industrial Revolution is the current and developing environment in which disruptive technologies and trends such as the Internet of Things (IoT), robotics, virtual reality (VR) and artificial intelligence (AI) are changing the way modern people live and work.  

Industry 4.0 / The Fourth Industrial Revolution will drive an integration of digital technologies into manufacturing. The approach of combining new technologies with engineering best practices, is resulting in “smart factories”.

Smart factories use robotics, sensors, and sophisticated software to collect and analyse data that becomes the basis of the leadership team’s decision-making. Applying technologies in this way does not negate human experience however. This technology supplements human experience with data from all aspects of the manufacturing process.

Cross-referencing this information with insights from enterprise resource planning (ERP) platforms, supply chain information, as well as customer service feedback creates a multi-layered picture for company decision makers. The smart factories approach puts an end to silos of information by connecting departments and delivering greater visibility across the organisation.


What Technologies are Driving Industry 4.0?

Apart from the blockchain, the main technologies driving industry 4.0 are artificial intelligence (AI), the Internet of Things (IoT), autonomous robotics, additive manufacturing and cloud computing. Some of these technologies, like AI, started life several decades ago. Today, significant advances in computing and the development of digital technologies are enabling them to influence all aspects of our professional and personal lives.

Artificial intelligence (AI) refers to a form of intelligence shown by machines - particularly  computers. Whilst researchers previously thought of AI as a technology that is mimicking human intelligence, current definitions tend to stress a computer’s ability to make rational n responses to various situations and inputs. Machine learning is a key part of AI and another technology driving industry 4.0. Machine learning is the capacity of machines such as computers to learn and refine how they apply algorithms without human intervention.

The IoT is integral to the progress of Industry 4.0 from a theoretical concept into reality. The term refers to devices with the processing power and capability of exchanging data with each other. The IoT also includes the technology that makes connections and the exchange of data between devices possible.

Autonomous robotics and additive manufacturing are likely to have the most visible impact on industry 4.0. Additive manufacturing uses technologies like 3-D printing to minimise the cost and time it takes to produce a prototype of a new product or start manufacturing. Autonomous robotics refers to a scenario in which machines learn to interact with each other. For manufacturing, that would mean introducing previously unidentified efficiencies into the production process.

Cloud computing has revolutionised how companies and organisations think about and run their IT resources and departments. A few years ago, supporting large IT demands meant maintaining large servers, providing storage, hosting databases and installing networking capability with physical cables. Cloud computing has made it possible for all these resources to be delivered via the internet.

The last of the main technologies driving Industry 4.0 is the blockchain. Blockchain is changing how organisations and individuals store data. Rather than keeping the information in one single place, blockchain is a decentralised ledger or database that stores data off-site. Once created, a record can no longer be altered or removed. Information is stored in blocks. As blocks fill up, they are sealed and connected to the previous block, creating a blockchain.  

None of these exciting technologies, that are driving Industry 4.0 have been developed in isolation.  r. And despite their individual benefits when they are used together they collectively drive huge efficiencies and advances.  .


Bringing Blockchain Technology into Industry 4.0

The concept of industry 4.0 is aiming to change the way the world produces things, looking for faster, more efficient manufacturing. Blockchain technology can help underpin  this fourth revolution by creating a transparent record of production processes that can be accessed from anywhere. The blockchain also opens up a real-time communications channel that can be shared by manufacturers around the globe.

As a result, implementing changes, updating algorithms and manufacturing processes become far more straightforward. Because of its secure ledger or database, the blockchain enables manufacturers to manage intellectual property rights and store proprietary product information safely. It also helps  the creation of global supply chains, - a key issue facing all economies across the world at the moment.


Applications of Blockchain in Industry 4.0: a Review

Blockchain gained notoriety as a tool to facilitate secure transactions of cryptocurrency. Whilst the technology continues to transform the financial sector, other applications are also gaining ground:

·   Manufacturing data protection

·   Resolution of quality issues

·   Supply chain development

This is not an exhaustive list - just the  most pertinent examples of blockchain applications for the benefit of Industry 4.0.


1. Manufacturing Data Protection

As businesses (and individuals) worldwide are producing more data, data protection has become a key concern.  In the manufacturing sector, companies need to secure the integrity of commercial data whilst also sharing it with the appropriate partners.

Blockchain provides the ideal vehicle to support sharing between a specific group of people whilst limiting unwanted access through encryption. Sensitive, valuable data is protected from potential cyberattacks. Encryption also makes blockchain safer for the transfer of information than many alternatives.

In addition, permanently retained records are ideal for avoiding disputes about copyright,  distribution rights and delivery timings for products and processes.


2. Resolution of Quality Issues

Product recalls and dealing with other quality issues are normal parts of manufacturing. Blockchain technology makes recalls more efficient. Because permanent digital purchase records exist, manufacturers can recall faulty products in a targeted manner.

Rather than asking thousands of customers to return a product, manufacturers can identify problems more specifically and resolve them by working with specific customers. Permanent records of manufacturing processes make it easier to identify quality issues  and resolve them quickly too.

Blockchain also helps drive recycling rates up by showing which parts can be recycled and how.  In this way blockchain is driving the circular economy.  


3. Supply Chain Development

Supply chain bottlenecks have made headlines for the past few years. As blockchain applications evolve, they will allow companies to predict and prevent bottlenecks through real-time updates and greater control of in-house processes and activities.

In many cases, blockchain technology will be implemented jointly with an organisation’s existing ERP platforms and strengthen them.


Why should blockchain be implemented to support Industry 4.0?

Blockchain technology and Industry 4.0 continue to evolve. As these technologies develop, new applications will become apparent. Neither is looking to replace human intelligence and expertise in manufacturing. The goal of Industry 4.0 is to improve the way the world produces goods through technology.

Blockchain technology is ideally placed to support companies looking to embrace digital transformation and become Industry 4.0 leaders.