Blockchain in Manufacturing Market Size, Share & Trends Analysis Report By Applications (Supply Chain Tracking , Process Transformation , Asset Sharing , Track and Trace, Warranty Management , Others), By End-Users (Automotive , Consumer Electronics , Healthcare , Food and Beverages , Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global blockchain in manufacturing market size was valued at USD 101.10 million in 2023. It is estimated to reach USD 12,511.98 million by 2032, growing at a CAGR of 70.9% during the forecast period (2024–2032). The global market for blockchain in manufacturing is anticipated to expand over the projection period due to the need for enhanced transparency in the manufacturing sector. As more industries recognize the importance of transparency in the supply chain, blockchain adoption is expected to continue growing as a key enabler of more efficient, resilient, and sustainable supply chains. Moreover, introducing novel solutions that integrate blockchain technology in the manufacturing sector is anticipated to create opportunities for market growth. 

Blockchain technology is a system that uses a decentralized and distributed ledger to record transactions securely across a network of computers. This method ensures transparency and immutability. The core principle underlying blockchain is to establish an immutable information ledger upheld by a distributed network of computers (nodes) rather than a solitary centralized entity. The manufacturing business is being transformed by blockchain technology, which improves openness, trust, and efficiency in supply networks. Manufacturers are progressively embracing blockchain technology to optimize operations, enhance visibility into supply chains, and monitor assets with unparalleled accuracy.

Highlights

• North America is the highest shareholder in the global market

Market Dynamics

Global Blockchain in Manufacturing Market Drivers

Enhanced Supply Chain Transparency

Blockchain facilitates secure and reliable sharing of information and streamlining of processes, even between different organizations and countries. Blockchain technology significantly improves supply chain transparency through its capacity to maintain immutable records, decentralization, traceability, smart contract automation, collaboration, and consumer trust. The growing recognition of the benefits of supply chain transparency is expected to drive a continuous uptake of blockchain technology as a vital enabler of improved resilience, efficiency, and sustainability in supply chains.

Tracing the origin of components and manufactured goods also enhances vulnerable supply chains and trading connections. Companies can acquire provenance information for each component in a product by utilizing an unchangeable asset register driven by IBM Blockchain. Hence, the global market expansion is expected to be propelled by the increased need for improved supply chain transparency from various end-user industries.

Enhanced Security

The demand for enhanced security drives the growth of blockchain technology in manufacturing. Blockchain offers a reliable and decentralized platform for securely storing, managing, and transferring sensitive data and transactions along the supply chain. The blockchain functions as a distributed network of nodes, where each node retains a duplicate of the ledger. The decentralization process eradicates any singular vulnerabilities and minimizes the likelihood of data breaches or cyberattacks.

Moreover, blockchain utilizes cryptographic methods to ensure the security of data and transactions. The blockchain consists of a sequence of linked, cryptographically related blocks, each of which contains a cryptographic hash of the previous block. This cryptographic hash algorithm guarantees the integrity of the data kept on the blockchain, rendering it highly arduous for malicious actors to modify or manipulate the information without being detected. Therefore, including these characteristics of blockchain technology improves manufacturing sector security, stimulating global market growth.

Global Blockchain in Manufacturing Market Restraints

Lack of Clarity Regarding Regulations

A significant impediment to the expansion of the blockchain in the manufacturing market is the lack of specific regulations to govern the utilization of blockchain technology. Blockchain technology is utilized to establish a distributed ledger with known members who have been pre-defined and obtained the necessary KYC certifications, unlike Bitcoins.

Moreover, the need for a financial institution to initiate and verify transactions is no longer required due to factors such as enhanced transparency, a verifiable transaction record, reduced infrastructure expenses, and minimal counterparty risks. However, authorities and policymakers express apprehension over blockchain technology on a supranational, international, and national scale. The ongoing discussion concerns registering blockchain applications under regulatory frameworks designed for commissions, such as those applicable to clearing or transfer agencies. There is significant uncertainty surrounding integrating this technology into federal securities regulations.

Global Blockchain in Manufacturing Market Opportunities

Launch of New Solutions

The market players are introducing novel solutions integrated with blockchain technology in manufacturing to enhance supply chain traceability and transparency. For instance, in November 2022, Clarins introduced a new platform called T.R.U.S.T., which utilizes blockchain technology to offer clear transparency into sourcing ingredients and their products' production process. The platform provides comprehensive transparency regarding the ingredients used in product formulas and the manufacturing process. Blockchain technology is utilized for the secure storage and transmission of information, devoid of a centralized control system.

Additionally, in March 2022, the London Bullion Market Association (LBMA) and the World Gold Council (WGC) declared their collaboration to establish a global system for ensuring gold bars' authenticity, traceability, and origin. This system will be built on blockchain technology developed by companies such as Xedras and Peer Ledger. The ledger will record and monitor gold bars at every step of the production and distribution process, encompassing mining, vaulting, and acquisition by jewelry producers. Such factors create opportunities for market expansion.

Regional Analysis

North America Dominates the Global Market

Based on region, the global blockchain in manufacturing market is bifurcated into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa. 

North America is the highest global blockchain in manufacturing market shareholder and is expected to expand substantially during the forecast period. Manufacturers are actively exploring blockchain solutions in North America to enhance supply chain visibility, reduce fraud, and improve traceability. Prominent entities in the region comprise IBM, Microsoft, and Oracle, propelling the regional market's growth. Moreover, the manufacturing industry in North America is benefiting from the utilization of innovative techniques and technical breakthroughs in the sector. Based on a survey conducted by Cushman & Wakefield, the manufacturing industry in the region heavily depends on the U.S. economy, contributing roughly 82% of the region's economic output.

Furthermore, the United States collaborates with Mexico and Canada, contributing to over 80% of each country's total exports. Canada saw significant advantages from the North American Free Trade Agreement (NAFTA) due to the tax exemptions and waivers. This allowed the country to increase its exports in various sectors, including energy, motor cars and components, industrial machinery, airplanes, telecommunications equipment, and electronics. The region's manufacturing sector is expected to encounter numerous operational challenges as it expands, presenting a favorable opportunity for disruptive technologies to secure a substantial portion of the market. This is expected to bolster the implementation of blockchain technology in North America's industrial industry.

Moreover, in August 2019, the U.S. Air Force partnered with SIMBA Chain, a blockchain as a service (BaaS) firm, to improve security in additive manufacturing. The collaboration is a component of the force's BASECAMP initiative, which utilizes blockchain technology to manage the supply chain of additive manufacturing parts. BASECAMP will utilize the SIMBA Chain platform to showcase a blockchain methodology for registering and monitoring 3D printed components throughout their lifespan. This is expected to enhance the growth of the regional market.

The Asia-Pacific region is experiencing the rapid implementation of blockchain technology in manufacturing. Nations such as China, Japan, and South Korea are actively investing in research and development, encouraging innovation, and facilitating the adoption of blockchain across diverse industries. Moreover, the governments of these nations are also implementing measures to encourage the adoption of blockchain technology in the manufacturing sector. For instance, the Shanghai government released a series of instructions to encourage the adoption of blockchain technology, the digital yuan, and the metaverse in various businesses inside the city, such as automobile manufacturing, commodity trading, and e-commerce platforms.

Furthermore, the decision made by China's largest metropolis aligns with the country's expressed objective to prioritize the implementation of blockchain technology to enhance cost-effectiveness in many industries. The Shanghai report, named "Guidelines on the High-Quality Development of Manufacturing Internet Service Platforms," identifies blockchain as one of the fundamental technologies for manufacturing Internet service platforms, alongside artificial intelligence (AI), big data, the Internet of Things (IoT), and the mobile web. The guidelines continue Shanghai's release of its three-year development plan for local manufacturing industries in June 2023, which incorporated blockchain technologies. Therefore, these elements contribute to the expansion of the regional market.

Segmental Analysis

The global blockchain in manufacturing market is segmented by application and end-user.

Based on application, the global blockchain in manufacturing market is bifurcated into supply chain tracking, process transformation, asset sharing, track and trace, warranty management, and others. 

In the manufacturing cycle, supply chain tracking is crucial as it is primarily linked with the customers. Blockchain enables tracking movement in the supply chain and providing trusted, automated transactions without the need for third parties, which promotes efficiency and agility. It provides real-time data. Supply chain tracking reduces costs, improves the timely delivery of goods, reduces wastage, and enables new financial models, eliminating the middlemen.

Several local and notable manufacturers are increasingly adopting blockchain in their supply chain to curb the surging unavoidable costs. In 2017, SyncFab Co., a regional supply-chain management and business-to-business procurement platform for precision parts production in the US, undertook a campaign called 'Utility Token Sale' to launch 'ERC20 Ethereum MFG' token and utilize blockchain technology to accomplish better operational efficiency on the distribution network.

Based on the end-user, the global blockchain in manufacturing market is segmented into automotive, consumer electronics, healthcare, food and beverages, and other end-users.

The introduction of concepts such as autonomous cars and smart cities brought about fundamental changes in the present business models of operations in the automotive industry. For instance, Auto financing, one of the principal operations areas, will positively impact blockchain technology. According to a study conducted by the IBM Corporation in 2018, approximately 62% of automotive executives are convinced that blockchain will be a disruptive technology establishing grounds in the automotive industry.

Moreover, it has been reported that approximately 54% of the prominent automotive industry pioneers, including Ford, Volkswagen, and Mahindra, have expressed their intention to deploy a commercial blockchain network on a large scale within the next three years. Such a scenario hints at money-spinning opportunities for the automotive manufacturing sector in the blockchain manufacturing market.

Impact of covid-19

People's lives and companies were affected by the COVID-19 outbreak worldwide. During the COVID-19 outbreak, delivery service companies confront several obstacles. Due to the tight restrictions, more people are purchasing online. In response, e-commerce and online retail & grocery enterprises faced a big issue in delivering groceries on time. By assigning delivery executives optimal routes, route optimization software helped to reduce vehicle idling time and enhance delivery executive productivity, therefore promoting the route optimization software business during the pandemic crisis.

Recent Developments

• June 2023- Fujitsu introduced blockchain collaboration technology to develop Web3 services.
• June 2023- Finboot, a technology company headquartered in Cardiff, Wales, announced a collaboration with CRDC Global, a building materials company based in San Jose, Costa Rica. Finboot will utilize its blockchain technology to enhance the transparency, efficiency, and sustainability of CRDC's Resin8 production processes in this collaboration.