The latest industrial supply chain to embrace blockchain technology is targeting the additive manufacturing industry, otherwise known as large-scale 3D printing. Cubichain Technologies and CalRAM LLC. recently made a joint announcement that they have successfully demonstrated the deployment of a blockchain network to track aircraft parts from design, through printing, all the way to certification and sales.
The primary purpose for their blockchain is to fight counterfeiters. It has become clear over the last few years that 3D printing parts of any kind is problematic because counterfeiters can easily print the same parts on the same equipment. All they need is the part file, a 3D blueprint that can be shared as easily as a word document. Not only does the act of counterfeiting cut into profits, but it can harm reputation, and in some cases even put lives at risk when sub-par materials are used.
The demonstration proved, according to the announcement, that the Cubichain technology can easily identify part files which have been tampered with by recognizing the “difference in a single data bit” in the binary part file.
“Cubichain wants to define an industry standard for manufacturing data security and elimination of counterfeit parts worldwide. What we accomplished today provides the proof-of-concept for a much larger closed-loop solution currently being developed.”
- Dr. Kenneth Newell, co-founder of Cubichain Technologies
An April 2016 study from the Organization for Economic Co-operation and Development (OECD) and the European Union Intellectual Property Office (EU-IPO) addressed the size of the global counterfeit products market. Trade in both tangible counterfeits and pirated goods has risen throughout the last decade, and fakes are now estimated to be worth about US$461 billion, or roughly 2.5 percent of the total world GDP.
The U.S. Customs and Border Protection agency estimated that counterfeiting is expected to become a US$1.7 trillion “threat to world economies.” The agency reported confiscating 325% more counterfeit goods between 2002 and 2012 than in any previous decade.
In one infamous case, a few US military disasters involving $2.00 counterfeit parts led the U.S. Defense Logistics Agency (DLA) to discover that the U.S. defense supply chain is filled with counterfeit electronic parts. The outcome of the DLA’s finding, in 2012, was for the agency to mandate that certain electronic parts would be marked with unique ink, that contains DNA signatures, to make it easy to spot the fakes.
There are many other methods to marking a material as unique besides DNA ink. As the European Communities Trade Mark Association (ECTA) reported last year, there are various other methods, including micro laser engraving, quantum dots, magnetic inks. They’re all compatible with the additive manufacturing 3D print process. No matter how 3D printed items are marked, however, the problem of tracking them well still existed.
“Both additive manufacturing and blockchain networks are disruptive technologies…combining the two will undoubtedly revolutionize the future of manufacturing.”
- Shane Collins, Director Additive Manufacturing Programs for CalRAM
The Cubichain demonstration used a titanium 3D printed aerospace part. The part file was sent to the printer and verified using Cubichain’s network, and converted to a fixed-size alphanumeric string, or hash. The hash was encrypted along with the part’s serial number.
CalRAM then integrated the hash into their own MultiChain private blockchain platform during the printing cycle. The blockchain “demonstrates a significantly higher level of transparency,” explained Cubichain, “enabling anyone within the network to access the data.”
MultiChain is a customizable ledger based on Bitcoin. It holds more data than the bitcoin blockchain while remaining permissioned. It can also use the Bitcoin blockchain to ensure immutability of all the data held on it. The announcement states that embedding information into a Bitcoin transaction is a major merit and advantage.
The team feels that the capability to create an immutable supply chain to help solve their counterfeiting problems is “uniquely within reach of the Additive Manufacturing industry.”
“ We see the greatest threats to additive manufacturing as cyber-physical hacking and counterfeiting…the deployment of a blockchain can combat both. It’s very exciting technology.”
- Shane Collins, Director Additive Manufacturing Programs for CalRAM
Outside of the industrial 3D printing industry, several other companies are already well established in the blockchain-enhanced global supply chain game. Some target a very specific niche product line, while others hope to document every product sold on the planet.
Everledger started out attempting to track Diamonds, from the mine to end user, exposing those sourced from conflict zones. The resource could be used by insurance companies to greatly reduce insurance fraud. BlockVerify has a similar business objective, but covers prescription drugs, luxury items, and electronics. Ascribe certifies and tokenizes the ownership of digital artwork and other digital items, or what they call “original digital prints.”
Wave’s primary consideration is cargo shipping containers. Their platform is aimed at the International cargo freight world, targeting the old Bills of Lading system. A blockchain-based approach can save both money and time with the dinosaur of a system.
Skuchain focuses on supply chain finance, especially creative solutions using Smart Contracts. The startup is also attempting to unlock “hundreds of Billions of dollars,” locked up in Letters of Credit and “other arcane and extortionate methods of prefunding global trade,” according to Skuchain VP Travis Giggy.
At the other end of the spectrum companies like Colu hope to be used for any conceivable purpose, including intellectual property, licenses, Car ownership, coupons, music rights, crypto-securities, to name a few. The startup operates as an open-source, DIY tracking service, offering a smartphone app and an API.
Provenance is a traditional product supply-line solution aiming at grocery stores. The service is also designed to track as many product types as possible, remaining flexible but highly functional. The solution focuses on end-user reporting more than other, to a point where customers in a supermarket will be able to scan a Provenance QR-code and know the item’s history from source to shelf.
The Hyperledger project is likely the largest and most well-connected blockchain project that has indicated it will work with supply chains, but it hasn’t said much about the sector so far, and has yet to release any code in that direction.
Venture Capital investments are widely available for these startups, although the amounts vary widely as well. Other types of help are available too. Last July, Barclay’s bank ran a startup accelerator in Africa, specifically targeting supply chains.
With the global supply chain market size valued at roughly US$40 Trillion, it’s no wonder big banks are also experimenting with this technology for similar purposes. Bank of America and Mizuho have recently announced similar projects, and there are also many smaller startups vying for market share.