Preface – This post is part of the Blockchain Basics series.

Introduction

Many ERP solutions have started implementing blockchain solutions to make their system more secure and business friendly. In this article we will try to explore more about the connections of  ERP Modules with Blockchain.

Supply Chain Management (SCM) and Blockchain

If we want to learn about ERP Modules with Blockchain then we should start with Supply/Value Chain. Here we have two scenarios where we face problems:

1. Today, before blockchain, in the old way of supply chain, all different partners have their own database and their own information. It means a customer has their own database; manufacturer has their own database and the retail seller too has their own database. If we have two databases, it will be two versions of truth. This scenario leads to conflict sometimes e.g. I ordered a thousand mobile phones, but I received 950. Which database will be true one? Of course, mine is true. But other one will also say that his data is true. So, there we have a problem.
2. If we have a supply chain like this, as mentioned in below diagram. The supply goes from sub supplier to supplier, supplier to the producer and so on. They all must take keep margin for variations. The sub supplier must produce little more to be on secure side, the supplier orders little more to be on secure side and have backup. And this scenario continues till end. It means, if the customer changes something, it will cause enormous cost all the way down till the sub supplier in the supply chain because there are so many different owners of the information for all the steps. They don’t really know each other. What they only know is their immediate  neighbor.

The solution that blockchain provides in this scenario is by becoming a single source of truth. All the nodes will have only one connection to the block chain as per below image, which means all the participants will have access to relevant information in real time.

Customer Relationship Management (CRM) and Blockchain

If we take a scenario of general business customer relationship management which starts with a contract, followed by order, payment and delivery. The data flow between customer and seller happens multiple times and it too faces the same problem as faced in supply chain management above. In this case too, we can lock down the records in a blockchain and expose only relative data to relative users. The same thing is represented in the image below:

Other modules of ERP share same problems and hence, we can solve this issue by utilizing blockchain.