How Blockchain Verifies Component Quality So You Don’t Have To

Jul 08, 2019

This article was originally published on LinkedIn.

The term “redundant testing” sounds like an effective quality assurance measure. In fact, it is: It has been used as a fault tolerance mechanism in many industries. However, in most of today’s supply chains, redundant quality testing takes time and effort, and often decreases testing performance.

Many products require components from a variety of suppliers. This amplifies the problems associated with redundancy. Yes, quality is paramount in each of those components and in most products overall, but redundant testing causes inefficiencies that waste time and resources.

If there were a way to eliminate the need for redundant tests, those inefficiencies would be gone. In many cases, blockchain is that way. The visibility that it gives you into your supply chain is the most effective first step in phasing out redundant quality testing without the risk of sacrificing the quality of your product.

Blockchain Transparency Enables Trust

Permissioned blockchain, the technology catalyst for Hyperledger Fabric, Quorum, R3 Corda, and other enterprise platforms, creates a network that automatically records transactions into an irrefutable and trusted record. Or in the case of manufacturing, it records every step in a product’s journey along the supply chain — and the journey of every component that goes into that product.

Permissioned blockchain, the technology catalyst for Hyperledger Fabric, Quorum, R3 Corda, and other enterprise platforms, creates a network that automatically records transactions into an irrefutable and trusted record. Or in the case of manufacturing, it records every step in a product’s journey along the supply chain — and the journey of every component that goes into that product.

Beyond compliance, blockchain sets the foundation for a level of trust that eliminates the need for redundant testing. Every component supplier along your supply chain can conduct their own rigorous testing. Their results, combined with a digital signature, can be recorded directly from their manufacturing equipment into the blockchain system greatly increasing trust in the results. This both ensures that the supplier can’t alter the results and gives you a glimpse into the testing process.

Because it increases visibility into the supply chain, blockchain is a boon to industries where audit and regulatory compliance are important. The system provides a verified historical record that can’t be altered. In addition, smart contracts can be used to audit all transactions for compliance instead of selecting samples and hoping they’re representative of all transactions.

Benefiting From Higher Quality Without Extra Testing

Integrating every supplier and stakeholder in your supply chain into a blockchain network is a guaranteed way to eliminate the need for retesting every component. Making the test data part of the goods receipt process, freeing up time is only one of the benefits you’ll realize.

1. Better testing performance

We know that because other tests should catch any component-level issues, redundant testing can decrease the performance of each test. By reducing redundant component-level testing, you can focus on improving your tests of finished goods. And because it reduces unexpected quality problems along with redundant tests, it also improves your margins. Better testing results in higher quality, which benefits product management, sales, manufacturing, and ultimately, consumers.

2. Earlier testing for every component

The motivation behind redundant testing is largely the fear of missing defects only to have to correct them later in the production cycle. The costs of late remediation can be exorbitant, yet you can avoid them if you can depend on your component manufacturers to test and certify their parts. With both the results and the certification recorded on the blockchain prior to delivery, every section of your business — and your customers — benefits from not having to rely on redundant testing.

3. Faster and easier production time

Detecting and addressing defects earlier in the production cycle is just one way that blockchain helps reduce production time and costs. This simultaneously eliminates time-consuming steps, making production faster and less expensive overall. Fewer steps — especially redundant testing — means fewer opportunities for variables to create production issues. Operations, product management, and sales especially benefit from having more streamlined processes.

4. Fewer processes to maintain

When production is streamlined and you have eliminated the need for redundant testing, quality assurance becomes a much easier activity to maintain. That’s especially true as products and processes change, suppliers come and go, and your supply chain evolves over time. The integration of blockchain and certified testing allows you to keep margins healthy, production efficient, and product quality high throughout any changes.

As with most of the benefits that come with a blockchain-enabled supply chain, the reduced need for redundant testing stems from the visibility and transparency to trusted data that the technology provides. To learn more about how blockchain can improve your supply chain process, download our whitepaper.

Post by Ramya Donekal

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