Smart MFG was founded in 2013 and is a technology company headquartered in San Leandro, California. Smart MFG is the first peer-to-peer Industrial Internet of Things (IIoT) production blockchain for hardware manufacturing supply chains, using smart contracts to manage, organize, and track part production. MFG is an ERC20 token used to reward buyers, manufacturers, suppliers, and logistics service providers, which can be traded on the Smart MFG platform. Through smart contracts, MFG incentivizes manufacturers or buyers who place orders through Smart MFG.

Project Introduction

Smart MFG is a cloud-based, virtual supply chain e-commerce, IIoT machine learning, and data mobilization tech company. The purpose of Smart MFG is to provide local manufacturing services to buyers, with manufacturer selection based on their use of energy-efficient resources.

The platform allows buyers to make multiple competitive Request for Quotation (RFQ) requests based on insights into a manufacturers location, experience, material preferences, and processing capabilities, enabling effective cost-saving decisions. Through its portal, which can be accessed via any internet-connected computer from anywhere, buyers can reduce the time and costs associated with procuring part production, especially when compared to traditional procurement processes involving multiple online and offline solutions.

The platform enables buyers to submit multiple competitive RFQ requests based on insights into a manufacturers location, experience, material preferences, and processing capabilities, allowing them to make effective cost-saving decisions. Through its portal, which can be accessed via any internet-connected computer, buyers can reduce the time and costs associated with procuring part production, particularly when compared to traditional procurement processes involving multiple online and offline solutions.

Additionally, the technology automatically pushes real-time backend software updates for SyncFab, reducing the financial burden of maintaining locally hosted software. It provides users with on-demand, real-time, easy-to-use, and secure online cloud solutions to share files, improve communication, simplify procurement, and manage part inventories, helping users produce high-quality products.

For secure transactions and payments, the platform stores intellectual property and documents on Amazon Web Services (AWS) servers supported by top security protocols such as Single Sign-On (SSO), firewalls, and DDoS protection. All RFQs, IP, and transactional histories are conveniently accessible in real-time, helping users compare pricing or past demands to expedite the procurement process.

Project Highlights

Blockchain-Powered Supply Chain Management System

Blockchain, or distributed information technology, is the latest technology in many applications within the IIoT technology ecosystem. It is a transparent digital ledger containing encrypted information and programs across its distribution network. Blockchain is a shared database providing millions of linked blocks whose information is simultaneously verified and agreed upon by millions of computers in its consensus network. Anyone with an internet-connected computer can access it as a true record and proof of ownership, encrypted to its previous block controlled by a private key or contract code. As a result, hacking and altering stored data in the blockchain is considered extremely difficult because any changes will be detected and verified by the network.

Bitcoin was created in 2009 by an anonymous person or group known as Satoshi Nakamoto, as the first blockchain. Unlike the centralized approach of traditional accounting payment processors, it decentralizes information, making it difficult to add transactions to the ledger but relatively easy to verify and validate. The ledger identifies and rejects fraudulent transactions.

As the distributed ledger functionality of blockchain evolved, in 2015, a new type of blockchain called Ethereum was created. It allows anyone to create smart contracts and decentralized applications (DApps). DApps are primarily software or applications whose backend code runs on a peer-to-peer (P2P) decentralized blockchain network and interfaces with the frontend.

Smart contracts are code with arbitrary rules that control a set of digital assets. Essentially, they are encrypted blocks containing digital values that can only be unlocked and accessed when predetermined conditions are met, and anyone can create their own arbitrary rules for creating ownership, transaction formats, and state transition functions. These applications of smart contract technology will become key to standardizing a decentralized supply chain management ecosystem in all manufactured parts production.

Smart Manufacturing Blockchain Technology

Smart MFGs vision is to simplify supply chain management, ensure secure transactions, and protect all intellectual property, establishing a transparent procurement gateway within the industrial manufacturing industry. Since Smart MFG is a functional product with active users, we plan to realize our vision by integrating the current platform with innovative applications of smart contracts and blockchain technology in the development of a smart manufacturing blockchain. The implementation will fundamentally change SyncFabs current business model, decentralizing power between buyers and manufacturers in the industry (the evolution of the Smart MFG business model is further explained in Section 2.2.5).

Smart manufacturing blockchain technology is a record system containing customer or contact information, order history, machine capacity, designs, and intellectual property. In practice, within the decentralized ecosystem, buyers will be matched with manufacturers whose machine capabilities best fit their project standards, then procure parts production directly without intermediaries. All completed purchase orders will be recorded on the smart manufacturing blockchain to further establish user histories, providing a record of historical transactions to instill trust and confidence between buyers and manufacturers in completing orders.

Initially, the smart manufacturing blockchain will be a record system for all parts production orders, containing transactional records and information. The ultimate goal is to reduce costs and increase efficiency by eliminating middlemen and barriers to entry, such as brokers, outdated software, and inefficient processes. By doing so, we aim to connect innovators with manufacturers, smart machines, and factories within a transparent, decentralized supply chain management network.

Smart Contracts for Transparent Procurement Processes

The first iteration of the Smart MFG DApp will execute smart contracts on the blockchain to complement the existing Smart MFG procurement process, which has been tested and optimized over the past two years. It will transform the current Smart MFG parts procurement process into something more transparent and manageable. Each smart contract executed on the smart manufacturing blockchain will increase the credibility of buyer and manufacturer profiles, as successful production orders are recorded in the ledger system. Transaction records for each order are digital file trails on the distributed ledger, transparent to potential buyers.

Information such as RFQs, quotes, and intellectual property is encrypted and executed on smart contracts, then recorded on the blockchain, accessible only by those with assigned permissions, aiding manufacturers in recording, tracking, and monitoring assets.

Initially, the system will be partially decentralized – partial decentralization is due to the SyncFab layer established within the current procurement process acting as a reference or "broker" in transactions. After comprehensive testing and implementation of smart contracts to accommodate real-world business cases, the Smart MFG intermediary layer will be eliminated, making it a fully decentralized ecosystem.

Distributed Supply Chain Management System

Traditional economies of scale in manufacturing remain opaque, preserving privileged access to central asset managers, with the largest buyers monopolizing companies requiring high minimum orders and resource-rich intermediaries like brokers, platforms, and services. All these contain individual assets and isolated data sets requiring management across various mediums and platforms. These additional layers complicate the entire supply chain management process, increasing costs and reducing revenue. Implementing smart contracts will pave the way for a fully decentralized supply chain management ecosystem where innovators, suppliers, and manufacturers have more control over the success, quality, and delivery of their products. Through smart contracts and the smart manufacturing blockchain, we will decentralize the economies of scale in the production supply chain, making it more accessible, transparent, and profitable for all participants, shifting from the current mainstream B2B relatively isolated and monopolistic model to a peer-to-peer (P2P) ecosystem.

Evolving Business Model

In the decentralized supply chain management network, we will eliminate Smart MFGs transaction fees. Instead, we will introduce transaction costs levied on all final payments, with the percentage determined during development and after the concept proof of smart contracts. The concept proof of smart contracts refers to the smart contracts we will develop, then implement and test with buyers and manufacturers in a "real" procurement process. During this period, we will gain a better understanding of buyer needs and business cases to determine the appropriate amount.

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