How Blockchain Can Slash the Manufacturing "Trust Tax"

How Blockchain
Can Slash the
Manufacturing
“Trust Tax”
Blockchain-enabled smart contracts, distributed ledgers and immutable cryptographic
records are poised to reduce production costs, drive greater operational efficiencies, and
unleash new business opportunities for manufacturers worldwide.

2 | How Blockchain Can Slash the Manufacturing “Trust Tax”
Without trust, value chains – particularly those
that support global manufacturing – would not
exist. However, that trust has been historically
difficult, and costly, to establish.
Trusted suppliers are thoughtfully selected
and managed, as well as monitored and certified
for quality, reliability and consistency. Regula-
tors demand certifications and audits to ensure
that best practices are followed, and companies
such as Intertek conduct inspections and pro-
vide quality certifications. At the end of the val-
ue chain, customers purchase products because
they trust the quality of the brand, which is the
key differentiator for many companies.
The immense volumes of data generated
by global supply chains – if properly mined –
can help to verify the trustworthiness of the
manufacturing processes and resulting prod-
ucts. However, the process requires numerous
manual interventions and the involvement of
many parties.
Providing such assurances in today’s
manufacturing world imposes a hidden (and
growing) “trust tax” on worldwide supply chain
participants (see QuickTake, on page 4). From
the use of “conflict-free” raw materials, to Six
Sigma manufacturing practices, to Independent
Standards Organization (ISO) certifications,
to the validity of purchase orders – the work
of verifying all these characteristics requires
reams of paperwork, endless e-mails and phone
calls, and costly site visits and audits. These
cumbersome activities reduce productivity and
efficiency throughout the economy, making it
more expensive, complex and time-consuming
for customers and suppliers to find and do busi-
ness with one another.
We believe there is a simpler, less costly
and more efficient way to establish trust in
manufacturing value chains, using blockchain,
a software-based distributed ledger system
maintained on multiple computing nodes (see
glossary, page 17). This white paper demon-
strates how blockchain technology and think-
ing can slash the “trust tax,” starting with
newly formed distributed manufacturing value
chains, and reveals how businesses can use a
blockchain-based approach to more effectively
orchestrate global supply chains.
Executive
Summary

We believe there is a simpler, less costly
and more efficient way to establish trust in
manufacturing value chains, using blockchain,
a software-based distributed ledger system
maintained on multiple computing nodes.
How Blockchain Can Slash the Manufacturing “Trust Tax” | 3

SEEING BLOCKCHAIN THROUGH
A MANUFACTURING LENS
The “trust tax” imposes particular costs on
newly formed distributed manufacturing models,
such as 3-D printing. 3-D printing allows design-
ers and inventors to create new products any-
where and produce them by shipping the design
files to a remote printing facility. This model
allows businesses to effectively “borrow” part of
a factory (in the form of a 3-D printing facility)
on-demand, when and for how long they need it.
Blockchain can greatly ease the deploy-
ment of such distributed 3-D manufacturing val-
ue chains, as it offers low-cost, distributed and
assured integrity for contracts, product histo-
ries, production processes and more. The tech-
nology also enables the use of smart contracts
to automatically locate the most appropriate
printer (based on attributes such as availability,
price, quality and location) and automatically
negotiate terms, such as price, quality level
and delivery date. Finally, blockchain enables
the creation of secure digital product memo-
ries – immutable records of everything from the
source of the raw materials used, to where and
how they were manufactured, to their mainte-
nance and recall histories.
When 3-D printing and blockchain are
combined, these capabilities could result in the
following advancements in manufacturing:
• Boost innovation and economic develop-
ment by enabling entrepreneurs in even
remote areas to monetize their ideas.
• Slash inventory costs and service times
by enabling companies to print parts on a
just-in-time basis.
• Automate trade finance processes via
smart contracts from inside the supply
chain.
• Speed the flow (and reduce the cost) of
new products.
• Create new market opportunities and
increase market efficiencies by facilitat-
ing mass customization of products and
smaller production runs.
• Monetize local overcapacities globally by
trading manufacturing flexibilities.
To demonstrate how low-cost, block-
chain-based distributed trust could facilitate the
3-D printing supply chain, Cognizant partnered
with innogy (a subsidiary of RWE, a leading Euro-
pean energy and utility company) and EOS GmbH
Electro Optical Systems (a leader in industrial
3-D printing) to develop a prototype of a block-
chain-based shared 3-D printing factory (see
QuickTake, page 6, and Figure 1, page 9).
The pilot uses blockchain technology to
protect print files that describe high-value,
Blockchain enables the creation of secure
digital product memories – immutable
records of everything from the source of the
raw materials used, to where and how they
were manufactured, to their maintenance
and recall histories.

Creating Trust in the
Diamond Trade
QUICKTAKE
The business hopes to make money by providing
blockchain-based verification of the value and
history of individual diamonds for everyone from
diamond owners to insurance companies and law
enforcement, according to its website.
Jewels are high-value, portable items that can
be easily stolen or sold with no trustworthy re-
cord of their actual source or owner. Every year,
insurers pay more than £100 million in claims
related to jewelry theft, according to UK-based
startup Everledger.
1
Everledger is attempting to solve this
problem with a “permanent blockchain-based
ledger for the certification of diamonds and re-
lated transaction histories.” The business hopes
to make money by providing blockchain-based
verification of the value and history of individu-
al diamonds for everyone from diamond owners
to insurance companies and law enforcement,
according to its website. As of early 2016, the
company claims to have registered close to a
million diamonds, with each stone’s unique iden-
tity calculated from 40 data points about it.
The company also says it is working to
use blockchain to reduce the fraud associated
with current paper-based processes for keep-
ing “blood diamonds” (those mined in conflict
zones) out of the market. Everledger plans to
develop a similar database to combat fraud in
the fine arts market.

Making Cufflinks
on the Blockchain
QUICKTAKE
Using our proposed 3-D
printing platform, we have
designed and produced
cufflinks in titanium with a
unique ID and digital prod-
uct memory. The process of
printing a seemingly simple product using a 3-D
printer shows how the combination of progres-
sive thinking and new technologies can drive
agile, lower cost manufacturing models. Here’s
how it works:
• To execute a print order, any 3-D printing
service or 3-D printer can be borrowed,
on-demand.
• Designers will need to register their
designs on the blockchain; they will
automatically receive royalties once an
order is received for a product they have
designed. Our proof of concept demon-
strates how to secure IP and automate
royalty accounting.
• The digital product memory provides
information about the material used
(titanium), as well as many other design
elements and owners. We have demon-
strated, in a powerful way, how supply
chain transparency can be easily estab-
lished on an immutable record and how
product provenance becomes authentic
and trusted if its metadata resides on the
blockchain.
• Normally, buying a larger lot of cufflinks
from another country could require
significant time and effort to orchestrate
trade finance processes and document
processing (e.g , dealing with documents
such as letters of credit, shipping
documents, purchase orders, bills of
lading). We demonstrated how this infor-
mation, if stored on a secure, immutable
record on a blockchain, can eliminate most
of the checking and verification processes
in trade finance.
• Mass customization is also enabled, as
each cufflink includes a serial number in
its design, printed on the side.
• Each cufflink box is tagged to a QR
code, which connects the cufflink’s
identity to its digital product memory
(in this case, the tagging solution is not
fully secure because a secure tag is not
physically connected with the cufflink).

high-margin, precision-manufactured parts,
such as components in jet engines or power
generation equipment. Such parts can command
purchase prices that are hundreds or thousands
of times higher than their printing cost due to
the engineering and development effort required
to create a 3-D design file. These design files are
the crown jewels of 3-D manufacturing value
chains, and must be extremely well-protected
against theft or tampering when shared among a
global network of printing facilities.
The solution will provide end-to-end
encryption to protect 3-D print files, all the way
from their creation by a designer to their trans-
mission and use at a 3-D printer. Blockchain-en-
abled smart contracts will allow these files to
automatically negotiate pricing and other terms
and conditions with customers, as well as with
local 3-D printers and logistics services providers
without the need for a middleman. It will also
ensure the execution of secure crypto-payments
to the owners of the file, as well as royalty
payments to designers and other intellectual
property owners.
The blockchain will provide a unique digital
product memory for not only the product itself
but also each part of the product, including the
materials used in production and all the quality,
design and printing process data. Importantly,
it will also hold information on the product’s
ownership, provenance, authenticity, purchase
price and the currency used. All of this informa-
tion can be protected with crypto-conditions that
allow multiple supply chain partners to verify the
authenticity and security of a message.
The digital product memory would serve as
the digital representation of the physical world
and would contain a full “story” describing every
physical product manufactured and traded. This
representation could be used to significantly
increase manufacturing productivity and product
quality. It would also dramatically reduce the
cost of tracking for warranty, maintenance and
recycling purposes.
The solution will ultimately result in soft-
ware-defined manufacturing, as the print file
“becomes” the business. The print file would
contain not only secure intellectual property but
also the ability to negotiate terms and condi-
tions, make payments and provide immutable
documentation and authenticity for each part.
BLOCKCHAIN: BUSTING THE
“TRUST TAX”
The need for trust imposes uncertainty, cost
and delay, even in “virtual” value chains such
as those that enable 3-D printing. First, there is
the need for inventors or designers to protect
their designs during and after the journey to the
The solution will ultimately result in the
print file “becoming” the business. The print
file would contain not only secure intellectual
property but also the ability to negotiate
terms and conditions, make payments and
provide immutable documentation and
authenticity for each part.

remote printing location. Then, there is the need
to protect the associated parameters required to
calibrate and operate each 3-D printer to ensure
it can print the actual product to the specifica-
tions and precision required.
Customers also require multiple assuranc-
es: that the correct original design has been
referenced, the right raw materials were used in
the creation of the part, the 3-D printer worked
correctly, and the part was shipped and received
on time. As in any supply chain, all partners must
have assurance of payment and the ability to hold
business partners accountable. Finally, manufac-
turing partners need immutable records that vali-
date and verify the ownership of their intellectual
property, such as their proprietary manufacturing
methods, as it moves along the value chain.
Blockchain technology can reduce the need
for expensive third parties, such as banks, escrow
agents, lawyers and even internal accounting
functions to measure, minimize or manage risk. It
can also reduce the need for, and cost of, the mid-
dle managers who now control such information.
In their place, smart contracts will automatically
manage trade finance payment terms (such as
letters of credit) and negotiate price, terms and
conditions. Digital product memories maintained
on the blockchain and connected to validated IoT
devices along the supply chain will provide secure
proof of everything from manufacturing process-
es to quality controls. Further, blockchain-based
Public Key Infrastructure (PKI) encryption can
protect sensitive intellectual property. These tech-
nologies will allow the creation of “trust factories”
– decentralized institutions and organizations that
provide trust at a far lower cost than traditional
providers.
Blockchain can also provide the scalability
required for “mass customization,” which drives
sales by better meeting consumers’ needs for
specific functions or styles. Mass customization
also creates more efficient markets by making it
easier to produce small production runs of unique
products. Smart contracts make it easier and
quicker for buyers and sellers to find and trust
each other and agree on terms. New manufac-
turing models such as 3-D printing eliminate the
delays and costs of the tooling and production
setup that once had to be spread across massive
production runs. The combination of blockchain
technology and 3-D printing allows organizations
to quickly and easily reconfigure virtual supply
chains and enable and scale a model of global
micro-manufacturing. Manufacturing flexibilities
in production schedules can be tokenized and
traded to ensure better resource utilization.
NEW BUSINESS MODELS
TAKE ROOT
Even greater than the near-term advantages of
lower transaction costs and increased agility,
blockchain will transform manufacturing by
These technologies will allow the creation
of “trust factories” – decentralized
institutions and organizations that
provide trust at a far lower cost than
traditional providers.

creating entirely new business models. Tradi-
tional value chains will be deconstructed as
more players will be able to flexibly plug in and
out of the manufacturing process, such as “bor-
rowing” parts of a factory on short notice for
only as much production capacity as they need
at a given time. Further, niche players such as
micro-factories or small 3-D print service pro-
viders will be able to expand their markets and
serve more customers.
Examples of these new models include:
• Marketplaces for designers to publish
their work in the form of 3-D files.
Designers will also be able to receive
micro-royalties (much like composers in the
music world) whenever their designs are
used.
• Marketplaces enabling access to, and
analysis of, digital product memories.
These marketplaces will provide customers
with reliable data about the materials and
processes used in their products’ manu-
facturing plants, as well as manufacturing
location and dates. Insights from such
data can dramatically reduce the cost of
activities such as quality control, regulatory
compliance and warranty or recall actions.
While any supply chain partner can access
some of this data, skilled partners may
be able to analyze it and provide busi-
ness-boosting insights more quickly and
cost-effectively.
Such insights could include the optimum
combination of raw materials for 3-D print-
ing, the speed or sequence with which the
materials are printed in layers, or which
components, printed with materials or meth-
ods, worked best in various applications.
• “Asset-less” or “asset-light” enterprises
that provide value-add in areas such as
product design and marketing, supply
chain orchestration or smart, data-driv-
en manufacturing rather than physical
THE SHARED AUTONOMOUS FACTORY MODEL
Source: innogy/Cognizant
Customers Materials
Inbound
Logistics
Designs/
Designers
BLOCKCHAIN/SMART CONTRACTS
Shared
Factory DAO Tagging Outbound Logistics
• User configures
order.
• Unique product
ID and “bill of
process” is
created.
Autonomously
sourced material
and services
through
smart
contracts.
• Product produced
in shared factory.
• Product lifecycle
data stored in
digital product
memory.
Product is
packaged &
stored for
shipping.
• Encrypted design
data on shared
platform.
• Royalty
accounting
for designers.
Product is
tagged with
unique
product ID
on crypto
chip/QRC.
B B B B B
B
B
B
BBB B BBB B
Product is
shipped &
tracked by
telematics.
B
Figure 1

product manufacturing. As manufacturing
becomes “smarter” through more sensors,
real-time connectivity in the plant and the
use of deep data, new business models are
emerging that deal only with manufacturing
data and selling it to “dumb factories.” For
these business models, access to a secure
data-sharing infrastructure will be key.
• Hyper-specialized players that invest
only the time and capital required to be
the best at what they do. Such businesses
will hand off other tasks to entities further
up or down the value chain through block-
chain-enabled smart contracts. They might,
for example, specialize only in manufac-
turing or in one step of the manufacturing
process (such as chip packaging vs. chip
fabrication). Other specialties might include
extraction of raw materials or quality
control of work in progress (see QuickTake,
next page).
• Cloud-based, “software-defined” man-
ufacturing in which customers don’t
need to know where products are made.
Software (in the form of smart contracts)
would find and finalize agreements with
whichever partner offers the best com-
bination of cost, terms and conditions,
delivery dates and quality. The knowledge
of everything from where to source raw
materials, to the best manufacturers, to the
location of goods in transit and payment
will be stored in reliable, trusted blockchains
and continuously updated by business rules
contained in smart contracts. The resulting
transactions will be analyzed for efficiency
and legitimacy through fit-for-purpose
algorithms.
• Brokers of data generated along the
value chain. Such data could range from
production yields for various production
processes or combinations of raw materials,
to best practices for maintenance or
customer support.
• Marketplaces for crowd-sourced product
optimization services. Crowd-based data
will become trusted data on a blockchain;
further, the emergence of reputation
engines built on blockchain technology will
drive qualified, crowd-based product and
service optimization. These engines could
also be combined with prediction markets
(e.g., a market based on predicting the
first-year sales numbers for a new product).
The knowledge of everything from
where to source raw materials, to the
best manufacturers, to the location of
goods in transit and payment will be
stored in reliable, trusted blockchains and
continuously updated by business rules
contained in smart contracts.

Pioneering
Asset-Light
Manufacturing
QUICKTAKE
One example of asset-light manufacturing in the
pre-blockchain world is Li & Fung, an $18.8 bil-
lion global supply chain manager. The business
does no manufacturing itself but instead man-
ages a network of more than 15,000 suppliers in
more than 40 markets. Through this network, Li
& Fung provides services such as product devel-
opment and costing, factory compliance, order
processing, manufacturing control and logistics.
Its core asset is its continuously updated knowl-
edge of market conditions, its process architec-
ture and the performance of its suppliers. In this
way, Li & Fung monetizes its intelligence and its
process infrastructure or “protocol.”
Consider, however, if the company applied
blockchain thinking and technology to its
asset-light approach. By putting its source data
from a multitude of suppliers onto an open,
decentralized and encrypted platform (e.g.,
a blockchain) and encoding its commercial
agreements and supplier deals into smart
contracts, the company could supercharge its
business model by embracing new types of
manufacturing initiatives that connect various
players throughout the global supply chain. Li &
Fung’s cost base could be reduced substantially
in this scenario, which could increase profitability
in the short term. In the longer term, supply
chain transparency would create informed,
autonomous customers and end consumers
who would ask for lower prices.

The Projected Impact
of the Software-defined
Manufacturing Era
QUICKTAKE
It’s difficult to predict winners and losers in the
early days of blockchain-enabled manufacturing
value chains. But it is not too soon to project how
existing geographies, industry players and groups
of workers might be affected.
Potential Winners
In the blockchain economy, companies with
demonstrably better products and business and
manufacturing processes will be best positioned to
win. That is because the improved access to infor-
mation will help customers and business partners
identify and choose the real champions. Other
potential winners include:
• Product and service providers in geogra-
phies with weak rule of law and intellec-
tual property. Blockchains will allow these
businesses to participate in manufacturing
value chains by providing cost-effective
trust even in the absence of strong govern-
mental institutions.
• Smaller product designers, raw material
suppliers and service providers that
otherwise find it too expensive or time-con-
suming to ensure trust with worldwide
customers.
• Aggregators and sellers of block-
chain-protecteddataonmanufacturing or
operations that can help manufacturers and
customers maximize the value of products
produced within blockchain value chains.
• Service providers for decentralized
autonomous manufacturingorganizations
enabled by blockchain.Such services could
include shipping, financing and 3-D printing.
Potential Losers
The losers in the blockchain economy will be any
supply chain member with higher hidden costs
and inefficiencies or lower quality related to tra-
ditional, cumbersome, opaque trust mechanisms.
Other potential losers include:
• All intermediary business services,
including e-commerce aggregators that
match buyers and sellers.
• Lower-skilled workers, both on the
assembly line and in supporting clerical jobs,
as blockchain and new technologies such as
3-D printing automate routine assembly and
tracking of products and contracts.
• Higher-skilled workers, such as buyers,
accountants, vendor managers, auditors
and lawyers, as blockchain technology
automates complex negotiations, tracking
and verification processes.
• The authority of financial, auditing and
related institutions as payment assurance
moves to the blockchain.

A WORK IN PROGRESS
Blockchain technology, thinking and skill sets are
still in development. Early adopters will face the
following issues and implications:
• Security: A public blockchain for smart
contracts would represent the fundamental
standard infrastructure for the “Internet of
value.” It would need to be completely safe
and unhackable for the next 30 years at
least. However, highly publicized incidents,
such as the hack of the blockchain-based
Ethereum digital currency platform,2
raise
important concerns about blockchain
security. Established vendors and small
startups are investing significant time and
effort in resolving such concerns. Until
these security issues are fully addressed,
the majority of blockchains will likely
be private, invitation-only ecosystems
governed by a discrete set of stakeholders,
such as a company, organization, country
or consortium of companies or even an
entire industry.
• Maturity: Two key issues of blockchain
include the cost and effort required by
the consensus mechanisms (the so-called
“proof of work/stake” that assures the
integrity of data and transactions), and
the ability to handle very large transac-
tion volumes. We are confident the open-
source blockchain community will develop
the required solutions for many of these
issues, such as scalable blockchain-based
databases. Another outstanding issue is
the fact that cryptocurrencies and smart
contracts can, unlike physical currency,
potentially disappear without a central
trusted party that can be held accountable.
Startups are said to be addressing this
issue with blockchains that also have a
physical representation.
• Links to legacy systems: Significant effort
may be required to build the interfaces
needed between new cryptocurrencies and
legacy systems. As organizations wait for
de facto standards to emerge, they may
want to begin with small initiatives focused
on niche products and markets to better
understand the technologies, opportunities
and challenges.
• The need to use blockchain in conjunction
with other decentralized solutions (e.g.,
IPFS, or the InterPlanetary File System,
and the BigchainDB scalable blockchain
database). Doing so can provide a proto-
col-like layer that processes transactions
with other work being done off the chain.
• The skills gap: Startups and estab-
As organizations wait for de facto standards
to emerge, they may want to begin with
small initiatives focused on niche products
and markets to better understand the
technologies, opportunities and challenges.

lished players alike will find they lack the
necessary skilled personnel to execute
blockchain efforts at scale. High-demand
skills will include cryptographers to develop
secure smart contracts, consultants who
understand the business implications of
blockchain, and technology architects who
can use and integrate blockchain technolo-
gies and tools.
• Corporate culture obstacles: Internal
blockchain evangelists will be challenged to
convince large, conservative and slow-mov-
ing enterprises to move at the speed of
digital. Their small and medium-size com-
petitors will be the first to implement new
systems and business models.
• The need to prove trust: Even as
blockchain eliminates the need for some
traditional “trust” providers, it poses a
challenge as organizations move their trust
from individuals, organizations or the legal
system to mathematical algorithms they
don’t understand. This lack of understand-
ing could slow implementation until such
solutions prove themselves in practice. The
providers of blockchain technology may
need to offer some type of “bonding” or
insurance against loss, much like what banks
provide to deposit-holders if their accounts
are hacked.
• User interface design: Gateways will be
needed to onboard ordinary companies
and individuals into the machine-to-
machine (M2M) or blockchain economy and
provide a high-quality end-user experience
built around a human-centered design
philosophy. (Learn more about UX design in
our white paper “How Design Thinking
Can Power Creative Problem-Solving,
Drive Change and Deliver Value.”)
Given the significant investment
made by leading players we are confident
that blockchain will soon demonstrate
its ability to eliminate the trust tax.

BLOCKCHAIN’S NEXT STEPS
While no one would recommend moving to
blockchain overnight, it’s essential to begin
experimenting now by funding targeted proofs
of concept to explore where and how blockchain
thinking and technology could deliver transfor-
mative benefits.
Key questions to help focus preliminary
efforts include:
• Where in the value chain – both internally
and externally – is my organization paying
the highest “trust tax” in terms of excess
cost, effort or lack of agility?
• Which types of partners, in what geog-
raphies and expertise areas, could my
company benefit from working with, if
only the transactional costs and efforts
were lower?
• Which information assets (such as man-
ufacturing, maintenance, operational
data, usage information, warranty, etc.)
about my organization’s products could
we monetize if there were a secure way to
do so?
• How could access to blockchain-enabled
markets, such as trading of surplus energy
or other products, help my business?
• How would the availability of a digital
product memory drive value for us, our
customers and our business partners?
• What are some comparatively low-volume,
high-value products for which the secure
capture and transmission of digital
product memory would deliver significant
benefit to the manufacturer or customer?
Examples might include parts (such as a
fuel injector in an aircraft engine) whose
secure digital product memory about its
efficiency over the life of the engine could
lead to improved manufacturing or main-
tenance procedures that far outweigh the
cost of the part.
• How can my organization optimize internal
processes (e.g., order to cash) by replacing
manual processes with blockchain-enabled
smart contracts?
LOOKING FORWARD
All the elements required to deliver block-
chain-enabled “distributed trust” supply chains
are not yet in place. But given the significant
investment made by leading players – and the
scope of potential benefits of initial implemen-
tations that are expected to reach the market
by early 2017 – we are confident that blockchain
will soon demonstrate its ability to eliminate the
trust tax.
Manufacturing enterprises that wait for
blockchain to become mainstream will potential-
ly lose the first-mover advantage. We recom-
mend that manufacturers aggressively proceed
It’s essential to begin experimenting now
by funding targeted proofs of concept
to explore where and how blockchain
thinking and technology could deliver
transformative benefits.

with proofs of concept in selected areas such
as 3-D printing, where the benefits of low-cost
distributed trust are a particularly good match
for the benefits of blockchain.
In this spirit, we suggest that manufactur-
ers focus on proofs of concept or prototypes
where the key feature of the blockchain (the
immutability of the data, for example) can be
implemented immediately to add value at little
to no risk, such as on a private blockchain within
a single enterprise. As we know, employees
within a single company don’t necessarily trust
each other or information from their peers.
Our experience reveals that such infor-
mation-sharing has a direct implication on
overall bottom-line success. Using blockchain
as a trusted database, or “single version of the
truth,” to enable such sharing can deliver signif-
icant benefits with minimal cost and delay.
Note: The proof of concept detailed in this
whitepaper is called “Genesis of Things.” It is a
trusted, encrypted and open platform for the
entire 3-D printing supply chain. Its intellectual
property scales globally and stays protected.
Each printed product has its own ID and digi-
tal product memory. Supply chain processes
including trade finance are automated. Every
product has a story: where it came from; how it
was made; and how it is used. With Genesis of
Things, the story is now revealed for all to know.
FOOTNOTES
1 Everledger website: http://www.everledger.io/.
2 Justin O’Connell, “Ethereum Insiders Believe the DAO
Hack Was an Inside Job, Claims Source,” Cryptocoin
News, July 27, 2016, https://www.cryptocoinsnews.
com/source-ethereum-insiders-believe-dao-hack-in-
side-job/.

APPENDIX
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Systems,” Acatech, March 2015, http://
www.acatech.de/de/publikationen/
empfehlungen/acatech/detail/artikel/
living-in-a-networked-world-integrat-
ed-research-agenda-cyber-physical-sys-
tems-agendacps.html.
• Prof. Wolfgang Wahlster, “From Smart
Product to Smart Service,“ presenta-
tion at Empolis Executive Forum, Berlin,
April 2014, https://www.youtube.com/
watch?v=igBDttFup5c.
• Ian Allison, “Blockchain Plus 3-D Print-
ing Equals ‘Smart Manufacturing’ and
Ethereum You Can Touch,” International
Business Times, Oct. 11, 2016, http://
www.ibtimes.co.uk/blockchain-plus-3d-
printing-equals-smart-manufacturing-
ethereum-you-can-touch-1585747.
• Carsten Stöcker and Burkhard Blech-
schmidt, “Genesis of Things: 3-D
Printers on Blockchain,“ Meetup.
com, http://www.meetup.com/de-DE/
ethereum/events/234464403/?even-
tId=234464403&chapter_analytics_
code=UA-46327287-2.
GLOSSARY
• Blockchain: A series of encrypted
databases connected by the Internet that
ensure the integrity and security of data,
such as financial transactions.
• Digital product memory: A secure,
immutable, software-based record of
important facts that customers want
to know about a product, from raw
materials, to manufacturing location, to
service history.
• Decentralized autonomous organization
(DAO): An organization that uses smart
contracts and whose financial records
and business rules are maintained on a
blockchain.
• Smart contract: Blockchain-based
software that can automatically find
business partners, negotiate terms and
finalize transactions.
• Software-defined manufacturing:
A form of manufacturing in which not
only product designs and specifications
but also manufacturing processes and
financial transactions are stored and
executed as code.
• Trust tax: The price all players in the
manufacturing process pay to ensure
the quality, integrity and authenticity
of products, or the protection of their
financial or intellectual property rights.
• Value chain: The steps a product
undergoes in its transformation from raw
materials to finished goods.

ABOUT THE AUTHORS
BURKHARD BLECHSCHMIDT
SENIOR DIRECTOR
CARSTEN STÖCKER
MACHINE ECONOMY INNOVATION LIGHTHOUSE LEAD
INNOGY SE
Dr. Carsten Stöcker is the Machine Economy Innovation Lighthouse Lead at innogy SE, and a
co-founder of “Genesis of Things.” He is a physicist by training with a Ph.D. from University of
Aachen. He also serves as a Council Member of Global Future Network for the World Economic
Forum. Prior to joining innogy SE, Dr. Stöcker worked for the German Aerospace Center (DLR) and
Accenture GmbH. He can be reached at Carsten.Stoecker@innogy.com | Linkedin: https://www.linke-
din.com/in/carsten-stoecker-1145871.
Burkhard Blechschmidt is a leader in Digital Strategy & Transformation and CIO Advisory at Cog-
nizant Business Consulting. He has over 25 years of experience in consulting mainly Fortune 500
companies across industries. He is currently focused on exploring blockchain and IoT-based busi-
ness innovations in manufacturing, logistics, mobility and communications. Working with a group of
innovation partners, he is co-founder of “Genesis of Things,” a blockchain-based platform initiative
for 3-D printing, including a digital product memory. He can be reached at Burkhard.Blechschmidt@
cognizant.com | Linkedin: https://www.linkedin.com/in/bblechschmidt.

How Blockchain Can Slash the Manufacturing "Trust Tax"

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ABOUT COGNIZANT
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process outsourcing services, dedicated to helping the
world’s leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction,
technology innovation, deep industry and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 100
development and delivery centers worldwide and approximately 217,700 employees as of March 31, 2015, Cognizant is a member of the NASDAQ-100, the S&P
500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world.
Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.
World Headquarters
500 Frank W. Burr Blvd.
Teaneck, NJ 07666 USA
Phone: +1 201 801 0233
Fax: +1 201 801 0243
Toll Free: +1 888 937 3277
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD England
Phone: +44 (0) 20 7297 7600
Fax: +44 (0) 20 7121 0102
India Operations Headquarters
#5/535 Old Mahabalipuram Road
Okkiyam Pettai, Thoraipakkam
Chennai, 600 096 India
Phone: +91 (0) 44 4209 6000
Fax: +91 (0) 44 4209 6060
© Copyright 2015, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means,electronic,
mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice.
All other trademarks mentioned herein are the property of their respective owners.
ABOUT INNOGY
innogy SE is an European energy company. With its three business areas of Renewables, Grid & Infrastructure as well as Retail, it
addresses the requirements of a modern, decarbonised, decentralised and digital world. The focus of innogy SE’s activities is on
offering existing and potential customers innovative and sustainable products and services which enable them to use energy more
efficiently and improve their quality of life. Visit us online at www.innogy.com.
LET’S TALK
Are you ready to leverage cloud for your business?
To learn more about Cognizant Cloud Steps
Transformation Framework, contact us today at
inquiry@cognizant.com.
World Headquarters
500 Frank W. Burr Blvd.
Teaneck, NJ 07666 USA
Phone: +1 201 801 0233
Fax: +1 201 801 0243
Toll Free: +1 888 937 3277
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD England
Phone: +44 (0) 20 7297 7600
Fax: +44 (0) 20 7121 0102
India Operations Headquarters
#5/535 Old Mahabalipuram Road
Okkiyam Pettai, Thoraipakkam
Chennai, 600 096 India
Phone: +91 (0) 44 4209 6000
Fax: +91 (0) 44 4209 6060
ABOUT COGNIZANT
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process services, dedicated
to helping the world’s leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant
combines a passion for client satisfaction, technology innovation, deep industry and business process expertise, and a glob-
al, collaborative workforce that embodies the future of work. With over 100 development and delivery centers worldwide and
approximately 244,300 employees as of June 30, 2016, Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes
Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world.
© Copyright 2016, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system,
transmitted in any form or by any means,electronic, mechanical, photocopying, recording, or otherwise, without the express
written permission from Cognizant. The information contained herein is subject to change without notice.
All other trademarks mentioned herein are the property of their respective owners. Codex 2279

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