20th October, 2024 
The manufacturing industry has been facing several challenges. With goods or products crossing multiple borders and changing carriers multiple times before reaching end-users, global supply chains have become complex. Such complexity has already led to less transparency, more risk of fraud, and inefficiencies that cost billions to businesses annually. The use of verifiable credentials in manufacturing can address these issues and their need seems very urgent because:
- A report states that supply chain disruptions cost companies an average of 6-10% of their annual revenue.
- McKinsey estimates that 10-30% of all trade documents contain errors or discrepancies, leading to delays and additional costs.
- Research by Zippia revealed that 69% of manufacturing companies lack full visibility into their supply chains.
These problems faced by the manufacturing industry have increased after the pandemic and geopolitical tensions. To fix vulnerabilities in traditional supply chain models, verifiable credentials (VCs) can be the best solution that is revolutionary.
Here, we will explain use cases of verifiable credentials in the manufacturing industry for supply chain traceability and how they are essential for the future.
What Are Verifiable Credentials?
Verifiable credentials are digital documents that contain cryptographically secure claims about an entity, whether it’s a person, organization, or product.
These credentials are based on the World Wide Web Consortium (W3C) standards. This ensures wide-scale adoption and interoperability across different systems.
When we talk about manufacturing and supply chain management, VCs can be used to create digital representations of traditional documents like certificates/documents of origin, bills of lading, and QA reports. These digital credentials can be instantly verified, reducing the risk of fraud and streamlining processes that once took days or weeks to complete.
Check: What Are the Most Common Use Cases for Verifiable Credentials for Logistics Companies?
Use Cases of Verifiable Credentials in Manufacturing Supply Chains
VCs can be used in manufacturing to address many challenges. Here are their use cases:
1. Product Authentication and Anti-Counterfeiting
Counterfeit goods cost the global economy an estimated $1.7 trillion to $4.5 trillion annually, with manufacturing being one of the hardest-hit sectors.
VCs can be used to create unique digital identities for products, which allow manufacturers, distributors, and consumers to verify the authenticity of goods at any point in the supply chain.
For example, a luxury watchmaker implements VCs for each timepiece they produce. Each watch is assigned a unique digital credential that contains information about its materials, craftsmanship, and origin. Retailers and customers can scan a QR code on the watch to instantly verify its authenticity. This reduces the risk of counterfeits entering the market.
2. Regulatory Compliance and Certifications
Manufacturers have to follow various complex regulations that vary by industry and jurisdiction. However, compliance with multiple regulations involves time-consuming paperwork and audits.
Verifiable credentials can digitize and streamline the certification process. In short, it makes it easier for manufacturers to prove compliance and for regulators to verify it.
An automotive parts manufacturer, for instance, uses VCs to manage their ISO 9001 quality management certification. The certification body issues a digital credential as a verifiable credential that the manufacturer can instantly share with OEMs and regulators.
Read: 6 Benefits of Supply Chain Transparency
3. Supply Chain Transparency and Ethical Sourcing
Consumers and regulators are increasingly demanding transparency in supply chains, particularly regarding ethical sourcing and sustainability practices. According to British Beauty Council, 86% of customers want information about ingredient supply chains from beauty brands.
VCs can create an immutable record of a product’s journey through the supply chain, including information about raw material sourcing, labor practices, and environmental impact.
A clothing manufacturer can implement VCs to track the sourcing of organic cotton. Each step of the process, from farm to finished garment, is recorded as a verifiable credential. Consumers can scan a QR code on the tag to check the entire supply chain.
4. Quality Assurance and Recalls
Product recalls can be costly and damaging to a brand’s reputation. Identifying and tracking affected products quickly is crucial.
The application of VCs can provide a granular level of traceability. It allows manufacturers to instantly identify and recall specific batches or individual products.
In a real-word application, a food company can implement verifiable credentials solution to track each batch of products. When a quality issue is detected, they can instantly identify which batches are affected and where they are in the supply chain.
5. Streamlined Customs and Border Processes
As we discussed in the introduction, international shipments face delays due to complex documentation requirements and manual verification processes frequently.
VCs can digitize and standardize customs documentation. This enables faster processing and reduces the risk of errors or fraud.
For example, an electronics manufacturer (MNC) can use verifiable credentials for all their shipping documentation. Customs officials can instantly verify the authenticity of the documents and the items in the shipment. This eventually reduces processing times from days to hours.
6. Supplier Onboarding and Management
The processes of managing and examining suppliers and risk-prone processes take a lot of time. It becomes even harder for large manufacturers that have complex supply networks.
Here, verifiable credentialing solutions can streamline supplier onboarding by providing instantly verifiable proof of qualifications, certifications, and past performance.
For example, an aerospace manufacturer can use a verifiable credential system for supplier management. Suppliers who have applied for the contract can present digital credentials as VCs to prove their certifications, quality standards, and performance history. This allows the manufacturer to quickly assess and onboard new suppliers with confidence.
Why Choose EveryCRED for Verifiable Credential Solutions in Manufacturing?
EveryCRED provides verifiable credential solutions. We offer a secure, flexible, and easy-to-integrate platform for manufacturing supply chains. With EveryCRED, companies can:
- Issue tamper-proof and instantly verifiable credentials for products, processes, and certifications for traceability
- Customize credential schemas to fit their specific industry and use case requirements
- Integrate seamlessly with existing systems and workflows through APIs
- Ensure data privacy and compliance with regulations like GDPR
- Provide a user-friendly experience for credential issuers, holders, and verifiers
We ensure the highest levels of security, transparency, and decentralization, enabling manufacturers to build trust and efficiency across their supply chains. To learn more about how EveryCRED can transform your manufacturing operations, contact our sales team.
