Chain Off The Old Block: The Changing Supply Chain + Blockchain

As smart factories start to appear that introduce Industry 4.0 technologies into manufacturing, the slow batch-transfer operations of traditional enterprise resource planning (ERP) systems will become antiquated and eventually disappear, along with many communication bottlenecks, poor insight into shop floor operations, and manual operation of disparate systems that do not connect. In the emerging new world of supply chain logistics, ERP systems will incorporate Internet-of-Things (IoT) capabilities that create a totally integrated manufacturing environment of real-time processing throughout operations that update one another instantly, rather than taking hours, reaching the ultimate process goal of “the single version of the truth.”

Real-Time ERP: Moving Toward the Single Version of the Truth
Browser-based ERP systems are now emerging with integrated MES and CRM applications written in native code that utilize the same logic and run on a single database to achieve a real-time manufacturing environment that better utilizes shop floor data, improves operational efficiency and maximizes profitability for small to mid-sized shops.

Welcome to the New Era of IoT in the Supply Chain
Because shops use and produce tremendous amounts of data, they must work with their ERP supplier to carefully define their key performance indicators and tailor their system to utilize the relevant data that is most important in improving their operating environment.

Can IoT be the Competitive Differentiator? Well, that Depends
Deploying an IoT plan is not as simple as flipping a switch. Often, several systems are required in order to achieve the specific results desired. However, there is one factor that is common to all successful initiatives.

Another IoT technology being introduced by the new world of supply chain logistics is blockchain, a digital ledger that records cryptocurrency transactions and securely logs each set of transactions as blocks and chains that are distributed over a large network of computers, rather than just one, to protect the data and decentralize control. For example, REGO-FIX® Tool Corporation (Whitestown, IN) already accepts bitcoin cryptocurrency as payment for purchases of their high precision Swiss-made tooling products.¹ With this innovation, a tooling manufacturer has extended forward-thinking business practices beyond just their products, moving further into their customer relationships. Checks, credit cards and ACH continue to be offered as payment options, with bitcoin added to offer an additional convenience and to simplify payment processes for their global customer base: Their customers enter an invoice number online to receive a QR code that enables them to pay an invoice through Coinbase, a digital currency exchange with headquarters in San Francisco, CA – moving the fundamental transaction from the payor’s bitcoin wallet on a peer-to-peer network, with no need for a central bank or administrator.¹

Momentum for cryptocurrencies based on blockchain technology is building: Ohio is the first state to accept bitcoin for tax bills.² Ohio businesses can go to the website OhioCrypto.com and register to pay everything from cigarette sales taxes to employee withholding taxes with bitcoin. Eventually, this initiative will expand to individual filers. Ohio filers technically send their tax payments to payments processor BitPay (Atlanta, GA), which then converts the bitcoin to dollars for the state treasurer’s office. Arizona, Georgia and Illinois have also considered bitcoin for taxes.² Blockchain and a rival digital technology called the Tangle are both in the early stages of development, but both are showing future potential in manufacturing applications.

References

1. 1. “REGO-FIX Accepts Bitcoin Payments,” Fabricating & Metalworking, September 18, 2018, www.fabricatingandmetalworking.com.
   2. “In Ohio, Firms Can Pay Tax with Bitcoin,” Paul Verga, The Wall Street Journal, November 26, 2018, www.wsj.com.

Other online innovations are being introduced by this emerging new world of supply chain logistics so that manufacturers can intelligently streamline procurement and production, with more flexibility in a real-time environment, including:

Innovative Online Tool Shortens the Supply Chain for Used Machine Tools
Just like pricing a used car on Kelley Blue Book, machine shops can quickly and easily determine the market value of their used equipment for free with the Price Guide Tool from CNC Machines.

A New Manufacturer-Dealer Business Model Optimizes the Supply Chain
The Dealer Network Portal from Epicor allows manufacturers who sell or service products through dealers to more easily quote orders, manage sales, track inventories, manage warranties and recalls, provide dealer self-service to their account history from their ERP system, and enable customers to automate and streamline their dealer activity.

Streamlining the Internal Supply Chain for Job Shops
Small and mid-sized make-to-order manufacturers can use KeyedIn Manufacturing 5.06 for ERP to further streamline key business processes, maximize their limited resources and be well-positioned for growth.

Creating an Industry 4.0 Supply Chain for Sheet Metal Fabricators
Manufacturers with an existing ERP or sales order processing system can transfer data into and out of cloud-based software from Lantek or expand their system using Lantek software for quotation and CRM capabilities, highly accurate costings, Expert CADCAM intelligence, stock management, documentation and invoicing, and control of multi-site operations.