What if there was a way to improve the quality in the steel supply chain while still reducing costs? A revolutionary technology called blockchain makes this possible. This blog shows how this new technology is capable of making the entire steel supply chain more cost efficient.
What is blockchain technology and what does it mean for the steel industry?
Blockchain is a large register where transactions are recorded within an encrypted online environment. It is also sometimes compared to a general ledger. Within the steel industry, this technology can be used to increase the traceability of steel.
All pieces of steel produced by a manufacturer are then put in the register, after which they can be tracked at every step in the supply chain. The end user can then see exactly where the steel comes from, and what properties it has. The result is that projects are always provided with material that seamlessly matches the required quality, avoiding all kinds of risks.
6 important ways in which blockchain together with a platform and digital rulesets can reduce costs and increase quality.
The blockchain technology can be applied in various sectors, but is particularly interesting for the steel industry. Why is blockchain and platforms interesting for the steel industry? Below you can find the six most important reasons.
1. Digital collection of paper
In order to guarantee the quality of steel, papers are required. Currently PDF documents are being created with the verification of all data. Unfortunately, these types of documents are susceptible to fraud because they can be copied unlimitedly and end users are therefore never one hundred percent sure that these documents actually belong to the purchased products.
With blockchain technology, a manufacturer can create an amount of certificates that matches the actual number of products produced. Parties that come after that process can’t create new products. This keeps the supply chain free of fake and lower quality steel and reduces the risk of expensive failures.
2. Real time availability of data
Testing and checking the materials is a time consuming process. Laboratories, inspectors and third party witnesses should all be able to access all data instantly, to make the process of buying, selling and using the steel more efficient.
With blockchain technology it is possible to authenticate all data in real time. Not waiting days for reports from inspectors, but taking immediate action as soon as the quality has been checked.
3. Automatic verification
Each certificate of a piece of steel has its own code which is stored in the blockchain database. In every step of the supply chain it is possible to verify if this code still matches the product ordered and if it is 100% correct.
This happens by compliance by design instead of compliance by control, which means that it happens automatically when a certificate is created. . This automatic verification process prevents the use of pieces of steel that do not meet the quality requirements of the buyer.
4. Shorter down-time / faster delivery
Every step of the current supply chain takes time. Within one step alone, more than twenty processes may be required to approve the use of certain materials. These operations are carried out by people, so the next step in the production process depends on the working hours of those people.
Blockchain makes it possible to take immediate action and skip time-consuming processes. With this, a process of 60 minutes can be reduced to just 10 minutes. This applies to anyone who has to sign for something. Whether it is a document, test result or making a decision about a go/no go moment. The information is always available for the end customer in real time, which saves a lot of time, and therefore, money.
In addition, test results can be verified when a digital ruleset has been created, containing the minimum required properties for the required end product. This possibility is provided by the online platform on which all data is available in real time.
5. Reduction of human error
People are responsible for very important steps in the supply chain and the verification of products. This goes well nine times out of ten. But there are also people who don’t have their day, and therefore make mistakes.
These mistakes sometimes have enormous consequences for a project. Deliveries can be made too late, causing a project to grind to a halt, but the wrong material can also be delivered. By using digital certificates in a structured format, it is very easy and convenient to match them against the end customer’s digital rule sets. Since all these processes are completely automated, this greatly reduces the risk of a human error .
6. Less risk of failure
The worst thing that can happen with a project is the breaking of crucial material. In many projects there is no room for error. Everything has to be right, especially in the oil and gas industry. That is why blockchain technology is indispensable here, because it guarantees quality throughout the entire supply chain. As a result, the chance that faulty material is used is greatly reduced, making a disaster far less likely to occur.
The blockchain technology and its advantages mentioned in this blog are not only part of the future. They are already there. SteelTrace has used blockchain technology to provide the oil and gas industry with tools that make processes faster than ever, and ensure the quality of material at all times.
By reducing costly and time-consuming processes, costs are dramatically reduced. This provides the industry with indispensable technology that gives a better guarantee for the successful completion of a project.
Want to find out if SteelTrace can also assist your company in making the supply chain more efficient, so that quality is guaranteed while costs are being reduced? Contact us to find out.