K
Kathleen Martin
Guest
Blockchain in Supply Chain: Article 9
Subscription-based services, embraced by the software industry as an alternative to traditional models of selling product, provide a steady income stream to providers. Software-as-a-Service, along with the related Platform-as-a-Service, Network-as-a-Service, and Infrastructure-as-a-Service models, provide benefits to customers by shifting maintenance responsibilities to the vendor and exchanging large capital expenses for lower subscription fees.
What is a Machine-as-a-Service Model?
Following in the footsteps of the software industry, capital equipment manufacturers are beginning to adopt Machine-as-a-Service ("MaaS") models, providing manufacturing equipment such as Computerized Numerical Control ("CNC") machines or automated manufacturing systems on a subscription basis.
Unlike a traditional leasing model with a fixed monthly or weekly payment, customers may make MaaS subscription payments based on usage or outcome, such as monthly payments based on the number of units produced.1 For example, in addition to conventional air compressor sales, Kaeser Compressors, Inc. now offers a MaaS compressed air service with a subscription fee for a fixed amount of compressed air.2 The equipment manufacturer takes on additional risk with the possibility that client needs and corresponding revenue may decline but may find a much broader market of willing customers, particularly for the newest or most advanced machines that would be very expensive outright purchases.
Blockchain for Asset Tracking
Asset tracking is crucial for running a successful MaaS-based business. Vendors may collect operational data from manufacturing machines, including hours of operation, units produced, and operating efficiency statistics or faults and use the data for both pricing calculations and maintenance purposes (such as identifying when preventative maintenance operations should occur). Blockchain may collect this data directly at the machine through integrated sensors to provide the parties with an immutable operational record. By utilizing blockchain technology, both the vendor and user can feel confident that operational numbers are accurate and secure.3
In some instances, companies may use smart contracts based on data recorded to the blockchain to automatically execute arranged payments as manufacturing thresholds are reached. For example, SteamChain's Secure Transaction Engine for Automated Machinery ("STEAM") uses blockchain technology to generate tamper-free performance records that are accessible by both end users and vendors, and to execute payment transactions in real time.4 Pearson Packaging Systems uses STEAM to provide packing machines under a MaaS model, with clients providing payments per erected, sealed, or palletized case via smart contracts.5 By using blockchain for recording case counts and executing payment, the parties benefit from decreased human errors and increased transparency.
Automated Maintenance Requests via Smart Contracts
Companies can use smart contracts to automatically schedule maintenance for deployed MaaS machines. Because updated data and statistics for each machine are recorded to the blockchain ledger, companies can automatically monitor the performance of each machine. If efficiency degrades or other faults occur, a smart contract can dynamically generate a service request. For fee-based service agreements, smart contracts can also automatically process payments.6
A blockchain ledger provides a permanent and immutable record of maintenance history for the machine, which potential purchasers may find valuable when the vendor sells used capital equipment. Because each maintenance record is written to the ledger with a timestamp and that timestamp is encoded into each subsequent block, a bad actor would have difficulty faking records in case of missed maintenance windows.7
Continue reading: https://www.foley.com/en/insights/publications/2022/01/blockchain-capital-equipment-maas-model?utm_source=Mondaq
Subscription-based services, embraced by the software industry as an alternative to traditional models of selling product, provide a steady income stream to providers. Software-as-a-Service, along with the related Platform-as-a-Service, Network-as-a-Service, and Infrastructure-as-a-Service models, provide benefits to customers by shifting maintenance responsibilities to the vendor and exchanging large capital expenses for lower subscription fees.
What is a Machine-as-a-Service Model?
Following in the footsteps of the software industry, capital equipment manufacturers are beginning to adopt Machine-as-a-Service ("MaaS") models, providing manufacturing equipment such as Computerized Numerical Control ("CNC") machines or automated manufacturing systems on a subscription basis.
Unlike a traditional leasing model with a fixed monthly or weekly payment, customers may make MaaS subscription payments based on usage or outcome, such as monthly payments based on the number of units produced.1 For example, in addition to conventional air compressor sales, Kaeser Compressors, Inc. now offers a MaaS compressed air service with a subscription fee for a fixed amount of compressed air.2 The equipment manufacturer takes on additional risk with the possibility that client needs and corresponding revenue may decline but may find a much broader market of willing customers, particularly for the newest or most advanced machines that would be very expensive outright purchases.
Blockchain for Asset Tracking
Asset tracking is crucial for running a successful MaaS-based business. Vendors may collect operational data from manufacturing machines, including hours of operation, units produced, and operating efficiency statistics or faults and use the data for both pricing calculations and maintenance purposes (such as identifying when preventative maintenance operations should occur). Blockchain may collect this data directly at the machine through integrated sensors to provide the parties with an immutable operational record. By utilizing blockchain technology, both the vendor and user can feel confident that operational numbers are accurate and secure.3
In some instances, companies may use smart contracts based on data recorded to the blockchain to automatically execute arranged payments as manufacturing thresholds are reached. For example, SteamChain's Secure Transaction Engine for Automated Machinery ("STEAM") uses blockchain technology to generate tamper-free performance records that are accessible by both end users and vendors, and to execute payment transactions in real time.4 Pearson Packaging Systems uses STEAM to provide packing machines under a MaaS model, with clients providing payments per erected, sealed, or palletized case via smart contracts.5 By using blockchain for recording case counts and executing payment, the parties benefit from decreased human errors and increased transparency.
Automated Maintenance Requests via Smart Contracts
Companies can use smart contracts to automatically schedule maintenance for deployed MaaS machines. Because updated data and statistics for each machine are recorded to the blockchain ledger, companies can automatically monitor the performance of each machine. If efficiency degrades or other faults occur, a smart contract can dynamically generate a service request. For fee-based service agreements, smart contracts can also automatically process payments.6
A blockchain ledger provides a permanent and immutable record of maintenance history for the machine, which potential purchasers may find valuable when the vendor sells used capital equipment. Because each maintenance record is written to the ledger with a timestamp and that timestamp is encoded into each subsequent block, a bad actor would have difficulty faking records in case of missed maintenance windows.7
Continue reading: https://www.foley.com/en/insights/publications/2022/01/blockchain-capital-equipment-maas-model?utm_source=Mondaq
