Manufacturers and their buyers are set to benefit from a Blockchain platform designed to slash costs, save time and strengthen smaller businesses.
An established technology company is using Blockchain to dismantle barriers to entry for manufacturing firms and their buyers, with a new platform billed as “the way forward into the Industrial Revolution 4.0.”
SyncFab, which launched in Silicon Valley five years ago, is working with the US Department of Energy’s Clean Energy Smart Manufacturing Innovation Initiative and the cities of San Leandro, San Francisco and Oakland. The team believes smart technology will help smaller manufacturers with minimal marketing budgets who struggle to gain free exposure on search engines- allowing them to bid for more contracts and showcase their capabilities with ease.
Meanwhile, purchasers looking for precision parts have a greater chance of finding a provider who is local to them. Expenses also tumble because the procurement process, where brokers, agents and inefficient software cost time and money, is streamlined dramatically. SyncFab argues that local sourcing lowers the minimum number of parts that a buyer needs to commit to while creating a more responsible and eco-conscious supply chain at the same time.
At the heart of this Smart Manufacturing Blockchain is the MFG Token, a utility token which doubles up as a payment method and a reward mechanism for manufacturers who participate in auctions quickly, offer competitive rates and maintain production records on the Blockchain.
Perks for purchasers
SyncFab is targeting forward-looking companies who want to reduce their overheads and invest in smart technologies within the Industrial Internet of Things (IoT for short.)
Although hundreds of millions of dollars have been invested in modernization, this expenditure has mostly been restricted to large multinational companies, and until now, smaller businesses have been at risk of falling behind. With the industry projected to reach a value of $4 tln by as early as 2025 according to consulting firm McKinsey.
The SyncFab platform aims to help purchasers of all sizes slash their procurement costs, as their request for quotations (RFQs) would be matched with manufacturers who have the technical expertise, machinery and capacity to make their product. This is achieved by comparing the buyer’s product criteria with the order histories and earlier product designs of potential candidates. The company believes Blockchain also paves the way for greater transparency, enabling changes in product specifications and material requirements to be communicated in real time, eradicating costly mistakes and delays.
SyncFab’s whitepaper cites a report into cyber risks by Deloitte, in which executives said the biggest threat facing their business is the theft of intellectual property. The technology company believes its platform can assuage these fears by encrypting these assets on the Blockchain using top security protocols, affording protection to users who don’t have the budget for specialized cybersecurity staff.
Merits for manufacturers
In addition to rewards in the form of MFG Tokens for fast bids, SyncFab says its platform will allow manufacturers to focus on what they do best: production. This is because they receive upfront investment from purchasers after successful bids, and they need to spend less time looking into the background of their customers before commencing a project.
Auction listings on SyncFab include details of the purchaser’s budget, providing guidance to the manufacturer. Sometimes, the buyer will also add a “tolerance amount” to indicate what they would be prepared to pay beyond this. Although bidders would be automatically excluded from a race if their quote was too high, SyncFab does give manufacturers the chance to revise such offers making it easier to understand boundaries, achieve compromise and win business with a would-be client.
Token sale underway
SyncFab’s sale of MFG Tokens is scheduled to run through until March 15, 2018. Those who purchase the MFG before March 11 would be eligible for a five percent bonus, the company states.
SyncFab has successfully reached it’s soft cap of 15,000 ETH and has a hard cap of 33,000 ETH for its token sale. If this is achieved, additional deliverables in future would include a live data feed to manufacturing suppliers, allowing updates about the progress of an order to be sent to purchasers in real time through the Blockchain.
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Author: Connor Blenkinsop