Bringing blockchain to manufacturing
Blockchain technology is largely associated with the financial industry, with Bitcoin and other currencies quick to embrace it, but it has strong potential in other industries, such as manufacturing.
In simple terms, blockchain technology is 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.
"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," Baird explained.
Blockchain technology can provide a number of 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.
Baird believes 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.
"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," he said. "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."
One of the big problems that Australian companies face when they export products is the risk of counterfeiting, which affects a wide range of products from wine to baby formula. Combining blockchain technology and IoT in packaging can help prevent this from happening, which is particularly important for trusted products such as baby formula.
"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."
He said if the packaging arrives and can communicate that it hasn't been tampered with, then consumers can trust it is the same product from the manufacturer. This would help prevent the damage counterfeiting can cause to a company's reputation and its bottom line, both in the short and long term.
As well as proving provenance and authenticity, Baird predicts that blockchain will be used as a way of marketing a product. Manufacturers will soon add the option for packaging to be scanned by consumers with their smartphone as a way to check that it's a legitimate product, and to provide more product information, Baird suggested.
"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," he said.
Find out more about how blockchain provides transparency to a company's supply chain at the AUSPACK Business and Industry Conference on 26–27 March at the Melbourne Convention and Exhibition Centre.
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