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Distributed Manufacturing: Next in line for blockchain innovation

Blockchain has already disrupted business processes in the financial sector, and is poised to impact companies across industries.

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By: Jagmeet Singh

Blockchain has already disrupted business processes in the financial sector, and is poised to impact companies across industries. Because the technology can provide an immutable digital record of contractual interactions and transactions across an ecosystem, we believe that manufacturing is likely next in line.

Blockchain is a mutually shared ledger of all transactions in a given transactional relationship. Combined with its consensus mechanisms and use of public key infrastructure (PKI) to verify and authenticate all changes made to the ledger, blockchain can enable the network itself to ensure trust among participants. The result: a whole new way to support distributed manufacturing across the value chain.

The Importance of Trust

Consider, for example, the ways in which blockchain can simplify how trust is developed within a manufacturing ecosystem. In the traditional manufacturing world, parties transacting with each other spend considerable time and money on establishing external mechanisms to ensure trust, in the form of contracts, service-level agreements, quality checks, inspections, audits, scanning, escrows and regulatory compliance reviews, to name a few. As the number of parties increases, so does the complexity. Reconciling separate ledgers, enforcing contracts, ensuring supply chain transparency and protecting intellectual property when multiple entities are involved are all laborious and burdensome processes, prone to error and vulnerable to fraud.

Related: Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating Processes across the Value Chain

Research shows that companies that build a culture of trust can fuel stronger performance by enabling departments to interact better and perform better across multiple dimensions. Establishing trust betweencontracted parties has similar positive effects. All these measures, however, amount to a costly “trust tax.”

For participants in a blockchain network – product designers, production shops, 3-D printers, logistics partners, sales and customer service  – that tax is greatly reduced. A secure, distributed ledger infrastructure accessible to multiple parties enables a new level of real-time transparency and efficiency for transactions involving the transfer of anything of value – whether that means ideas, money or ownership.

In our recent global study that included 281 manufacturing professionals, in fact, “trust” was a top driver for blockchain adoption.

Distributed Manufacturing Next in Line for Blockchain Innovation

Ensuring Transparency, Security, Auditability

Blockchain ledgers are:

  • Shared: Separate entities share a common source of truth.
  • Distributed: Blockchain relies on peer-to-peer collaboration, with no central ownership.
  • Secure: Cryptographic algorithms verify, authenticate and secure transactions.
  • Time-sequenced: Data is written consecutively and is time-stamped.
  • Immutable: Once written on the blockchain, data cannot be changed, tampered with or deleted.

Through smart contracts with supply chain partners on the blockchain network – programmed agreements that are independently verifiable and automatically executed when predefined conditions are met – companies can minimize human intervention and ensure performance transparency, transaction certainty and auditability.

[Download]: Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating Processes across the Value Chain

Within industries and even across interlocked, tiered manufacturing sectors, distributed ledger systems allow companies to develop new, platform-based process flows. A user might execute a smart contract for a custom-configured order, for example, combining designs from multiple sources. The encrypted design data would be recorded on the shared platform; materials and services could be autonomously sourced; and a shared factory could produce the customized product. Payments, including royalties to designers, would be issued when the product is delivered. A record of all transactions, from design selection to payment, remains on the blockchain.

A Rising Tide Lifts All Boats

Blockchain technology thus enables distributed manufacturing, offering participants unprecedented opportunities to develop new product and service lines, create new customer segments, enter new markets and find new ways to use and share assets:

  • Through supply chain transparency. All parties transact on a common platform, gaining real-time visibility into processes in the value chain, and simplifying materials sourcing and the interaction of design, manufacturers and other service providers. Supply chain processes, including payments and trade finance, can be streamlined and automated using smart contracts.
  • Through digital product memories. Immutable records of asset provenance, materials, production data, ownership and other data ensure authenticity and minimize transaction risk.
  • Through secure digital intellectual property. Parties to a transaction can be assured that their intellectual property is protected. Using blockchain to manage a contracted production run from a 3-D printer of ceramic components, for example, would allow a manufacturer to encrypt proprietary 3-D print files from end to end while creating an immutable history of the transaction. Similarly, escrows and royalty accounting would protect designers and other owners of IP.

There are many more circumstances in which adopting blockchain technology can deliver value. Participants can slash inventory costs and service times. They can eliminate reconciliation, and automate and speed financial and process flows. They can reduce manual interventions and reduce fraud. And they can create new ways to extend the lifecycle of products and optimize the use of assets.

What’s Next? Evaluating Readiness

As manufacturers move toward a shared and distributed model, business leaders can consider four questions when evaluating readiness:

  1. Where in the value chain, internally and externally, are we paying the highest “trust tax” in terms of excess cost, effort or lack of agility?
  2. How would the availability of a digital product memory drive value for our company, our customers and our business partners?
  3. Which types of partners, in what geographies and with what expertise, could we work with if transaction costs and efforts were lower?
  4. Which information assets (e.g., manufacturing, maintenance, operational and usage data) about our products could we monetize if there were a secure way to do so?

A blockchain-enabled, collaborative database is optimal for ensuring agreement between all participants in a value chain. It’s time for manufacturers to examine the implications for their business model. Organizations that gain hands-on experience with blockchain technology thorugh pilot projects will have an advantage as consortia start to form, and will be better equipped to lead the effort and make key decisions around structure and governance, prepare for the corresponding cultural shift, build skills and capabilities, and understand how it will impact business strategy going forward.

Get in the blocks. The race starts now.

[Download]: Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating Processes across the Value Chain

Olesya Gorbunova, a Senior Consultant in Cognizant’s Blockchain & Distributed Ledger Practice, contributed to this blog.

This article originally appeared on the Digitally Cognizant Blog

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Using innovation and technology for climate change-related challenges

How will tech consumers respond to challenges created by climate change? Ericsson’s report reveals ten trends that show increased reliance on digital innovation.

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Responding to the challenges caused by changes to our climate, people are increasingly turning to technology and innovation for solutions.  

Ericsson’s recent report, 10 Hot Consumer Trends: Life in a Climate-Impacted Future, released on January 16, 2023, shows how consumers are impacted and how they’re responding. 

The report covers ten emerging trends along with statistics, revealing how technology use is shifting because of climate change. 

The Overall Picture

Despite societal changes expected to take place in the next decade, people will continue to go to school, earn incomes, take care of loved ones, and find time to fit in some fun. Increasingly, they will rely on connected digital devices to adapt to coming changes while trying to maintain normalcy in their daily lives.   

Key Statistics

Consulting with 15,145 early adopters of digital assistants, VR (virtual reality), and AR (augmented reality) technology across 30 cities worldwide, Ericsson uncovered these statistics. 

  • 59% believe technological innovation is necessary to solve coming challenges
  • 63% worry about higher costs of living
  • 54% feel global warming will directly impact their day-to-day lives
  • 68% would plan their days based on reducing energy costs
  • 45% would use personalized weather warning systems
  • 72% believe AI will help plan commutes and work tasks to reduce carbon footprints
  • 46% plan to capture clean rainwater with smart water catchers 
  • 65% see energy becoming a form of currency
  • 73% envision using AR glasses to go on virtual trips 

Ten Trends

One: Cutting Costs

As prices for daily necessities rise, consumers will use digital services to cut costs. Personal electricity consumption monitors will help reduce household energy consumption. Digital recipe assistants will monitor food prices and suggest balanced, economical meals. 

Two: Relying on the Internet

Demand for Internet reliance will grow to stay connected with family, friends, school, and work. Consumers will expect secure communications services. The Internet will become vital for accessing information during weather events. 

Three: Optimizing Schedules

Energy availability – not time – will be considered to optimize activity schedules. Energy costs will be prioritized over time efficiency. 

Four: Depending on AI

Using AI for increased safety will become commonplace, with people turning to AI for real-time advice in extreme weather. AI services will be used for green technology investing for financial security. 

Five: Changing Work Routines

Working from home at least part-time will continue, with digital services used to schedule workdays. Flex schedules can distribute energy use across regions to avoid sharp peaks of electricity consumption. 

Six: Using Smart Water Services

To prevent water scarcity and reduce costs, intelligent water catchers on roofs and balconies will capture clean rainwater. Built-in sensors at home will monitor water consumption. 

Seven: Turning Energy into Currency

Consumers will switch to renewable energy sources, and power-saving technologies will grow in demand. Early adopters see opportunities to make money by generating their own electricity. 

Eight: Shopping Digitally

Buying digital products will increase while buying physical goods will decrease. Hobbies, toys, games, and pastimes will go online. AI that questions unnecessary purchases will be used. 

Nine: Travelling Virtually

VR will be used to travel without leaving home. Realistic nature experiences of hiking in a forest or rowing on a lake can be recreated in living rooms.

Ten: Protecting Against Cheaters

Some consumers will try to bypass environmental restrictions by hacking the system and tapping into neighbors’ reserves. People will need to secure their water and electricity supplies to protect themselves from being hacked. 

Read Ericsson’s full report

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OpenAI, creator of ChatGPT, casts spell on Microsoft

OpenAI is the topic of conversation across multiple industries, and Microsoft is betting big on it.

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Greg Brockman, co-founder and chairman of OpenAI, says that a paid version of ChatGPT is in the works
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The hottest startup in Silicon Valley right now is OpenAI, the Microsoft-backed developer of ChatGPT, a much-hyped chatbot that can write a poem, college essay or even a line of software code.

Tesla tycoon Elon Musk was an early investor in OpenAI and Microsoft is reported to be in talks to up an initial investment of $1 billion to $10 billion in a goal to challenge Google’s world-dominating search engine.

If agreed, the cash injection by the Windows-maker would value OpenAI at a whopping $29 billion, making it a rare tech-world success when major players such as Amazon, Meta and Twitter are cutting costs and laying off staff.

“Microsoft is clearly being aggressive on this front and not going to be left behind on what could be a potential game-changing AI investment,” said analyst Dan Ives of Wedbush Securities.

Before the release of ChatGPT, OpenAI had wowed tech geeks with Dall-E 2, a software that creates digital images with a simple instruction.

Microsoft, which makes no secret of its AI ambitions, has integrated Dall-E 2 into several of its applications and now, according to a report in Bloomberg, the tech giant wants to graft ChatGPT to its Bing search engine to take on Google.

Since ChatGPT was introduced in November, the prowess of this chatbot has aroused the curiosity and fascination of internet users.

It is capable of formulating detailed and human-like answers on a wide range of subjects in a few seconds, raising fears that it is vulnerable to misuse by school cheats or for disinformation.

‘Not cheap’

The dizzying success is due in part to OpenAI’s clever marketing strategy in which it made its research accessible to non-experts, said AI specialist Robb Wilson, founder of OneReach.ai, a software company.

“Having this technology available to technologists was one thing. Offering it in a chat user interface and allowing non-developers to start playing with it ignited a conversation,” he said.

Founded in late 2015, OpenAI is led by Sam Altman, a 37-year-old entrepreneur and former president of startup incubator Y Combinator.

The company has counted on the financial support of prestigious contributors from the start, including LinkedIn co-founder Reid Hoffman, investor Peter Thiel and Musk.

The multi-billionaire served on OpenAI’s board until 2018, but left to focus on Tesla, the electric vehicle company.

The startup also relies on a team of computer scientists and researchers led by Ilya Sutskever, a former Google executive who specializes in machine learning.

OpenAI, which did not respond to AFP’s inquiries, had about 200 employees by 2021, according to a query made directly on ChatGPT.

For now, despite the excitement generated by ChatGPT, the company has yet to find a path to financial independence.

Founded as a nonprofit, the startup became a “capped for-profit” company in 2019 to attract more investors and this week co-founder Greg Brockman said that a paid version of ChatGPT was in the works.

The search for funding seems necessary for a company with exorbitant expenses.

In a Twitter exchange with Musk in early December, Altman acknowledged that each conversation on ChatGPT costs OpenAI several US cents.

According to estimates by Tom Goldstein, an associate professor in the University of Maryland’s computer science department, the company is shelling out $100,000 a day for its bot, or about $3 million a month.

Partnering with Microsoft, which provides the startup with its remote computing services, could cut costs, but “either way, it’s not cheap,” Goldstein said.

“Some say it’s wasteful to pour these kinds of resources… into a demo,” he added.

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Three stories from Canada’s tech landscape

An event series for Black entrepreneurs, Indigenous innovation, and a Canadian-made, one-of-a-kind EV.

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Ongoing reports of an overall slowdown — including layoffs — in Canada’s tech ecosystem have been happening for much of the latter half of 2022. Funding took a bit of a tumble, amid stock market slumps, inflation, and a looming recession.

That said, there are still plenty of entrepreneurs, tech leaders, and innovators across Canada making serious moves. Here are three such stories.

Celebrating Black founders and tech leaders

Black tech entrepreneurs in Alberta are getting the change to pitch their businesses to investors and connect with fellow founders, thanks to a new events series from Innovate Calgary.

The series, called Black Founders in Tech, started in November out of the University of Calgary’s business incubator, with seven founders making their pitches. Prior to their pitch, participants were matched with a mentor and coach to help with preparation.

As Innovate Calgary’s Jerome Morgan explained to CBC, “We listened to BIPOC [Black, Indigenous and people of colour] founders, and they said, ‘We want to be celebrated and not just be a corner of the innovation ecosystem.’”

“In [the] industry there aren’t that many colourful faces all in one room and it was pretty cool,” added pitch finalist Sean Hervo. “You could feel the love and energy in there. We were high-fiving and cheering each other on.”

Learn more about the event series from CBC

Canada’s first Indigenous-owned bioenergy facility

NorSask Forest Products, a bioenergy plant owned by The Meadow Lake Tribal Council (comprising nine First Nations in northwestern Saskatchewan), is turning wood waste into heat and power.

After 50 years of the sawmill burning its wood waste — a practice that has largely been abandoned or banned in most of the country — the bioenergy centre works in a closed-loop system. As Tina Rasmussen, chief business officer for MLTC and a member of the Flying Dust First Nation explained to CBC, such a system allows for the use of 100% of the tree. Air pollution control devices help remove particulates and break down pollutants into ash. 

The facility generates 8.3 megawatts of power, able to power approximately 5,000 homes. 

Dig deeper into the story from CBC

Showcasing Canada’s EV and manufacturing potential at CES

The Consumer Electronics Show is one of the biggest tech events in the world, and a unique piece of Canadian tech was on showcase.
Project Arrow is a concept vehicle by The Automotive Parts Manufacturers’ Association of Canada. It’s made of materials from 50 Canadian parts suppliers, built to show the auto sector’s ability to manufacture EVs and to answer Prime Minister Justin Trudeau’s call for zero-emissions by 2050. The Arrow is the first original, full-build, zero-emission concept vehicle.

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