ERP and Cryptocurrency – How Blockchain Benefits Manufacturing Supply Chain

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If you’ve been keeping track of tech trends in recent years, chances are you have heard of “Cryptocurrency”. Such names like BitCoin and Dash have probably been overheard, and the notion of a digital or internet-based monetary transaction system may have been explained to you. However, a key component of how cryptocurrencies work (and what makes them so attractive) is Blockchain – and that aspect is becoming increasingly valuable to manufacturing supply chains.

What is Blockchain?

Blockchain is a Distributed Ledger Technology (DLT). Essentially, it is a collection of shared and synchronized digital data that is spread across multiple sites and locations. It also lacks a core administrator and centralized data center, which was one of the driving factors for creating a non-governed cryptocurrency in the first place. Blockchain is so revered because of its self-regulating nature; thousands of nodes within a peer-to-peer network check with each other to ensure the correct order of transactions is presented. When it comes to cryptocurrencies like Bitcoin, this ensures there is no “double dipping” with electronic funds; blockchain nodes track everything simultaneously to keep everyone honest. There are a lot of very technical specifics I’m leaving out, but this is a basic overview of what blockchain is.

How Can Blockchain Improve ERP and Manufacturing Supply Chain?

This is where things get (even more) interesting. As you are surely well aware, the manufacturing supply chain can be a deep and multifaceted well of confusion. Tracking all the parts and products and materials from start to finish, tracing them back to their vendor roots in the event of a problem, keeping tabs on all expenses and inventory – there’s a reason major manufacturers spend so much money on all-encompassing ERP software to help manage their growing, complex businesses.

Blockchain is starting to be implemented as a solution to this potential supply chain mess. With a shared digital ledger between a manufacturer and its vendors and suppliers, oversight and compliance can be improved exponentially. Tracing detailed information – everything from materials to problems – back to their source would be an automated and highly accurate process that would solve an ever expanding array of issues. Companies concerned with environmental sustainability could ensure their products meet the right standards along every step of the supply chain, and industries that fight to ensure their materials are sourced legally and without ethical violations can determine if this is actually the case. The best part is that blockchain is considered incredibly difficult to hack due to the nature of its cryptocurrency roots.

Everyone wants the same thing from supply chain management software; to maximize customer value and attain a competitive advantage. You want your supply chain to be asĀ  efficient and effective as possible, while keeping complexity to a minimum. As manufacturing and other industries have grown, so too has the various intricacies surrounding their own supply chains. The entire series of events from beginning to end of your product or parts creation and delivery is as integral to the success of your business as the actual purchasing of your wares. All of this is why improving the management of your supply chain is paramount, and why blockchain technology is being invested in with such interest; improve your supply chain visibility and tracking, improve your business.

The Future of ERP Supply (Block)Chain Management

Implementing blockchain within an ERP environment for supply chain management is still in its infancy. A few major software players have begun integrating their ERP offerings with blockchain to see how well it handles the biggest gripes of manufacturers, such as the tracking difficulties we mentioned above. Yet this seed of ingenuity is ripe for expansion, as interest in blockchain for ERP and manufacturing is growing steadily. The security, transparency, and reliability of this technology is of great benefit to those who struggle with supply chain management – and this benefit is becoming more and more apparent to those who need it. Keep your ear to the ground when it comes to ERP supply chain and blockchain; a revolutionary solution may be just around the corner.

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