IBM recently announced the creation of a blockchain-based network that aims to simplify the complex process of supply chain management. Supply chain management is a complex process that entails overseeing the flow of services and goods. This includes tracking movement, inventory, storage of raw materials, and the delivery of finished goods.
About the New Blockchain
The project has been dubbed Trust Your Supplier. Besides IBM, other participants in the project include Lenovo, Nokia, Vodafone, Cisco, and Schneider Electric. The firm in charge of creating technology to build this network is Chainyard. The solution will be created using the IBM blockchain platform. Other companies taking part in this project will provide supplier data to the network and contribute their expertise to help this project grow.
Why Time is Ripe for this Solution
Existing methods used in supply chain management are usually complex and time-consuming. This makes it easy to verify with certainty all documents and identities. The data includes bank details, ISO certification, tax certificates, and much more.
With the use of the blockchain, which is immutable and leaves a permanent trail, it will cut down processing time and eliminate human error. Besides that, it will reduce the risk of fraud. Additionally, it could help eliminate counterfeit goods from the world market.
Any company that relies on an efficient supply chain for its business understands how crucial on-boarding and validation can be. With all processes being moved into the blockchain, much of the burden will move into the blockchain. It will also be possible to share information in real-time, which will make it even harder for fraudsters to thrive.
A senior official at IBM estimated that this project could reduce the time it takes to onboard goods by as much as 80 percent. Besides that, it could to a reduction in administrative costs of up to 50 percent within IBM.
Today, IBM works with about 18,5000 suppliers globally. According to IBM, they will start using this blockchain network for its suppliers. Initially, the company will onboard 4000 suppliers in North America in the coming few months. It will offer limited availability to its partners and will launch commercial in Q3 2019.
The Supply Chain is the Perfect Use Case for the Blockchain
One expert in the blockchain world sees supply chains as being the perfect use case for distributed ledger technology. By on-boarding various partners, it ensures this information is visible to all participants. This data could be banks details or compliance details. By instantly availing the data to each node, it will ensure that the repetitive process of sending data is no longer needed. Visionary Financial had previously talked about potential of blockchain in food supply chain as well.
According to IBM, the Fortune 500 companies on-boarding their suppliers will be the governance board for this network. The main benefit that users will get is that instead of waiting for an annual or quarterly update, they can get updated information instantly. On this network, a buyer will be able to request access to information on a supplier. Once they have it, they can compare it with third party data before on-boarding them.