Blockchain technology is the missing link in the success of digital manufacturing. Because the manufacturing industry is constantly changing, it can be difficult to foresee future demands in production. The implementation of blockchain technology into business operations across several industries is likely to grow to reach $176 billion by 2025. By 2030, it is expected to exceed $3.1 trillion.
Sharing important data across many parties in a secure manner will alter the future of the manufacturing industry for the better. Blockchain technology is going to help improve this process. Continue reading to learn why you need blockchain for manufacturing and how Tomerlin-ERP can help you.
What Is Blockchain Technology?
Blockchain technology emerged as a recordkeeping technology for Bitcoin. It is a peer-to-peer distributed ledger that contains a database. The ledger facilitates the recording of transactions and tracking of assets over a business’s network. It can be accessed over the web on several computers by several employees at any given time.
The blockchain network is governed by the rules set forth by the manufacturing staff of your company. The information of each transaction is compiled into a block. The “blocks” are then linked together to create a “chain” of information.
Each sequential block of information is relevant to the one that came before it in the chain. Each block holds a series of transactions from a specific period. The blocks create this chain that displays all the transactions recorded from day one.
Every computer with blockchain software can see all the added data to the chain. Due to its decentralized manner, the data is not easily lost. It can survive power outages, computer damages, and political uncertainty.
How Does the Blockchain Technology Work?
Blockchain technology is made up of three different components:
- Cryptographic keys
- Network & digital ledger
- Computer software to store transactions/records
Two cryptographic keys are in play during the blockchain process: public and private keys. The public key is used to receive payments. It gives the operator access to the transaction history. The private key is used to access the funds. It provides the user with access that they need to execute new transactions.
The two keys work together to create a digital identity (digital signature). It allows for the authorization and control of these transactions. The authorized deals are then certified with a mathematical verification. This makes it an ideal system for securing sensitive information.
Blockchain technology delivers a system where data is:
- Shareable
- Tamperproof
- Private
- Comprehensive
Blockchain technology will improve manufacturing operations with your existing ERP software in place.
The technology operates with miners and nodes. Miners are the individuals who are running the blockchain software. The miner that finds the next block in the chain gets rewarded. The nodes refer to the computers hosting the blockchain software. Nodes work in sequence to find the next block on the chain.
New blocks are writing recent transactions on a routine. Mining links the blocks on the chain while the nodes confirm the new blocks. When everything checks out, the node computer updates the information on the other computers.
Benefits of Blockchain Technology
Deploying blockchain technology helps to improve efficiency within the software. Everyone who has access to the database will add new information to the system. Even though many computers have access to the program, the entire system is still secure. The system doesn’t allow force updates. It is not very easy to alter the transactions once they get added.
As with all automated systems, you will see a decrease in the number of errors often made in your manufacturing records. Your records will always contain up-to-date and accurate information. While there is a chance that the system might go down, these records will be more accurate when you switch to automation.
Blockchain technology has the potential to be the perfect addition to any manufacturers looking to go paperless.
You no longer trust an external company with your most sensitive information. Using blockchain, your company will remove the need for trusting intermediary companies. It promotes a trust-less peer-to-peer transaction process. It eliminates having to wait around for authorization from third-party intermediaries.
How Can It Aid in Manufacturing?
Blockchain technology is gaining traction in the manufacturing industry. Over the next several years, it will become a common practice among manufacturers.
Several popular manufacturers have already incorporated blockchain into their manufacturing operations. Ford, Toyota, and Volkswagen are among car manufacturers that use the software. Pfizer, Unilever, Merck are among consumer goods manufacturers. In electronics manufacturing, you will find that Foxconn and Samsung already use the software.
Current problems in the manufacturing industry that may be affecting you might include:
- Errors in inventory/ inventory mismanagement
- Networking holdups
- Issues in increasing ROI
- Dealing with counterfeit or low-quality materials
- Lacking efficiency
- An inability to forecast future demands
Manufacturing companies are complex. They need digital connectivity and accessibility to function correctly. When you deploy blockchain technology, you incorporate a solution that will revolutionize every aspect of manufacturing, including product safety, warranty management, and MRO (Maintenance, Repair, and Overhaul).
This blockchain technology increases invisibility among suppliers, material sourcing and procurement, and production floor operations. It can audit the supply chain. It increases transparency, detects and prevents poor quality products, and tracks maintenance in real-time. It helps to improve manufacturing efficiency, prevents system failures, and improves material sourcing.
Audit Supply Chain Management
The supply chain is the foundation of any manufacturing company. Blockchain technology helps with supply chain efficiency. It encourages order accuracy, quality products, and traceability throughout the production process. Because of this, manufacturers are more likely to:
- Meet delivery deadlines
- Improve the quality of products
- Sell more high-quality products
A typical product recall costs upwards of $8 million. The need for recalling products is avoidable with the integration of blockchain technology into your supply chain management software. It allows your Manufacturing Operations Manager to have better insight into the production process.
The current lack of auditing within your company might make it impossible to track the quality of the product during every stage of production. With the Audit Supply Chain, the effects are continuously monitored for quality at every step.
Have Other Industries Implemented Blockchain?
In addition to manufacturing, several industries have already implemented blockchain technology into their operations. In banking, individuals without connections to a financial institution can access financial services via blockchain technology. Most banks are creating their blockchain technology to become more efficient and secure.
Online data storage utilizes blockchain technology to remove possible failure points for safer online data storage. Cloud storage generally tends to be centralized. With blockchain, it’s decentralized to prevent any problems that might arise when losing valuable data.
Blockchain technology has extended to voting to make elections more transparent and, as a result, fairer than they have ever been before. This is excellent news for future generations.
How Can Tomerlin-ERP Help?
As a business consulting firm, we can help businesses learn how to manage all aspects of business software. Tomerlin-ERP specializes in Epicor® ERP software. Our staff has years of experience installing, maintaining, or training ERP software. We can incorporate blockchain technology into your existing ERP system.
When you hire us as your project manager for your manufacturing company, you can count on us to prepare, plan, design, validate, and deploy every service every step of the way.
Our training programs consist of:
- Live classroom training
- Live remote training
- Webinars
The type of training you choose will depend on your company’s level of expertise with the ERP software. Remote training and webinars are excellent for those who have a basic understanding of the software and need to brush up on operations. Live classroom training is ideal for individuals who have no idea how the system works and need to see it in action.
Install Blockchain in Manufacturing Today
The sooner you install blockchain into your manufacturing operations, the sooner you will be able to:
- Save money
- Become more efficient
- Have a secured database for your companies sensitive information
Contact Tomerlin-ERP today to learn how blockchain can be incorporated into your existing ERP software. We can’t wait to work with you on this project.