Bosch Nexo Case Study: Blockchain Powered Nutrunner

Photo by Goh Rhy Yan on Unsplash

If you were to think about the various things that are powered by blockchain, a manual nutrunner would probably not be the first thing to cross your mind. Don’t be fooled though, the most innovative things often come from very specific and applicable use cases.

Key takeaways:

  • ZkSystems has built a blockchain* solution for the Wi-Fi enabled nutrunner on top of ZkSystems blockchain protocol
  • Blockchain is used for smart-contract-empowered quality management
  • Among other benefits, it supports predictive maintenance; which can lead to 40% cost savings (McKinsey Global Institute)
You haven’t heard about blockchain yet? Here’s a very brief explanation.

Bosch Nexo Wi-Fi enabled nutrunner

Cordless nutrunner Nexo made by Bosch Rexroth (Source: Bosch Rexroth)

Nexo is a smart tool used in manufacturing. It features measuring electronics and Wi-Fi connectivity. Its electronics are integrated directly in the nutrunner. You don’t have to run any additional hardware to access your measurements. This nutrunner is mainly used in automotive OEM (original equipment manufacturing) — the car you are driving may be built with Nexo.

Why does a nutrunner need a blockchain?

Let’s just stick to our car manufacturer example. The Bosch Nexo nutrunner is used in the OEM process and can send data to ZkSystems’ blockchain via a smart contract*. This is critical when production of accident-critical car parts is involved (e.g., the brakes or steering wheel). In these cases, it’s very important to identify and detect any problems during production.

What’s a smart contract? A smart contract is not to be confused with a legal definition of a contract. It rather describes a computer protocol running on a blockchain network. These protocols follow basic if-then rules: if ‘x’ happens, then execute ‘y’.

This is where the blockchain comes into play. Contrary to a regular database, you can’t tamper with data in the blockchain. It provides you with a reliable log of every single transaction which was ever sent to the blockchain.

Amine Ünal, CTO and Co-Founder of the ZkSystems blockchain

Some of the benefits of a tamper-proof ledger in car manufacturing include:

  • Provenance along the whole production process
    In case of an incident in the manufacturing process, blockchain helps identifying the liable party. It can also clarify which parties did not cause the accident. By using a Rexroth nutrunner and storing the data on a blockchain, our car manufacturer can prove that the tool was used correctly. It doesn’t even matter whether a human or a robot has used the tool; the data would have the same reliability.
  • Reduced insurance costs.
    As usual with provenance use cases, it can be further used for providing highly relevant insurance data and reducing insurance costs. PwC estimates a blockchain enabled $5 - $10 billion savings opportunity for the reinsurers.
  • Automated quality management. 
    Being able to store the whole history for each manufactured part empowers automated quality management solutions. According to a McKinsey Global Institute study, IoT-enabled predictive maintenance can reduce costs by up to 40%.
  • Streamlined production data.
    A decentralized ledger facilitates the documentation process. Instead of all the data going onto the cloud or database in bulk, we can have a structured data set for every car part.
  • Proof of production & pay-per-use.
    A blockchain-based proof of production could enable new business cases, e.g. a pay-per-use functionality. This way every stakeholder would know how much was produced by Nexo for him or her in particular.

How does it work?

ZkSystems has implemented a smart contract (see the explanation of smart contract above) that can process the data from the Nexo nutrunner. In this particular case, a smart contract defines the rules for processing the data. But where would this data be stored?

The first option is to store the data on the cloud or database. Because most suppliers and manufacturers today are not ready to store the data on blockchain and share it with everyone else in the chain, we can leave it on regular databases. This means the data will be hashed* onto ZkSystems’ blockchain. If there’s a question about liability, the manufacturer can be asked to reveal the data for particular cars. Now that the data is well organized and sorted in advance according to each car, we can find this data more easily without having to do additional labor. If there is an accident, every party involved in the manufacturing process will share the data about a particular car. To make sure that the data has not been manipulated, we will need to compare hashes*. If they fit, it ensures the data is valid and tamper-proof. This is also a great strategy to ensure GDPR compliance. ZkSystems is part of DIN standard norm about GDPR in blockchain, which ZkSystems’ CEO Diana Rees is co-authoring together with other key players, experts and lawyers in Germany.

What is a hash? The term ‘hash’ defines a data structure. You can translate any data into a hash, which will be stored in a specific pattern. One example of a hash is the SHA-256 which is always 256 bits or 64 digits long. It doesn’t matter if you translate a single “Hello world!” or the whole text of War and Peace into SHA-256 — it will produce a unique 64 digits which only represent the specific information you have hashed. Try it yourself. There is no means to backtrack which information was hashed, except for hashing the very same information and comparing the hashes. This way you can store a unique ‘fingerprint’ of a data set on the blockchain, without actually storing the data itself.

The second option is to store the data on the chain. That was the case in our specific Nexo project. This is possible due to the ZkSystems’ blockchain scalability (up to 10.000 transactions without central authority) and its direct integration in enterprise frameworks. It’s built from scratch for enterprise IoT environments and is used by Bosch, Telefonica and other global leaders.

According to the McKinsey Global Institute, the potential economic value of the IoT will be in a range of $4 to $11 trillion dollars. ZkSystems is providing enterprises with the right technology to tap into this market.

Meet us at the Bosch Connected World

Last year’s Bosch ConnectedExperience (Source: Pixabay, © Geralt)

You can discover the pre-implemented version of this use case live in action during the Bosch ConnectedExperience, Europe’s largest IoT hackathon for corporations and one of the world’s most remarkable IoT hackathons. Over three days, backend and frontend developers, product owners, product managers, UX experts, and innovators will meet to explore the future shaping connected products, apps, and services.

ZkSystems is taking part at the Manufacturing Hack Challenge with industry leaders like Bosch Connected Industry, Bosch Rexroth and Microsoft Azure. In addition to our Nexo use case, you will get exclusive insights into the following use cases:

  • Pay-per-use models for connected machines
    Pay-per-use is a very important trend for the developing economy of autonomous machines. It produces 30% higher revenues, enables servitization of machines and more.
  • Incentives and gamification
    One of the greatest advantages of blockchain is that it can provide incentives for its users. For example, prices which are based on electricity usage and pegged to the saved kWh.
  • Smart Factory as a service.
    The future of Smart Factories are production lines which can be shared between many different manufacturers. Mass customization will enable manufacturers to share the same production line for a huge variety of use cases.
  • Digital twin 
    A digital copy of the physical items on the blockchain can enable a gapless history of all the data structured and identified for each and every tool.

Among some of the most remarkable innovations at the Bosch ConnectedExperience you will also discover the Nexeed Production Performance Manager, the Industry 4.0 software solution for systematic production improvement. The Production Performance Manager enables the development of Industry 4.0 applications by harmonizing production data, extracting customized information from this data and applying production knowledge automatically.

We are looking forward to meeting you in person at the Bosch ConnectedExperience and getting your input on the future of the machine economy. You are also welcome to drop us a line at