IBM, the global technology giant has unveiled a blockchain supply chain platform in collaboration with Chainyard, a blockchain start-up. This new IBM blockchain supply chain platform will address the supplier management challenges, and several large enterprises have already joined this platform.
The new platform once again highlights the potentially high value that blockchain can deliver in supply chain management. The fact that it focuses on the complex supplier management function is interesting too since it signifies that businesses are now ready to unlock even greater value from the blockchain technology.
The supply chain is crucial for businesses, and researches show that 79% of businesses with an efficient supply chain grow their business faster than their peers with a sub-optimal supply chain. Supply chain management is complex though, and supplier management is one of the more complex functionalities in this domain.
Supplier management is all about finding the right providers from whom businesses can buy product and services, and deliver value to their customers. Naturally, robust supplier management is crucial for growing your business, improving your profitability, and managing your risks.
There are several challenges with supplier management, e.g.:
- It’s often hard to source the right supplier, moreover, the communication between businesses and suppliers are often broken.
- Complying with regulations can be hard, furthermore, the supplier management process lacks visibility and consistency.
- Managing supplier and product data can be hard, and the overall process is costly.
Businesses are turning to blockchain to address these challenges, and let’s understand why.
Why the new IBM blockchain supply chain platform matters
Blockchain can address the supplier management challenges with its decentralization, transparency, security, and smart contracts. This technology can add significant value to this key functionality, e.g.:
- It makes provenance tracking, establishing trust, and eliminating fraud easier.
- Improved inventory management and reduced paperwork help businesses cut cost.
IBM has worked with Chainyard, a blockchain start-up based in Morrisville, North Carolina, USA to create Trust Your Supplier (TYS), a blockchain supply chain platform. They have built it on the IBM Blockchain Platform, which uses Hyperledger Fabric, the popular enterprise blockchain framework.
TYS offers several advantages, e.g.:
- The platform eliminates redundant data collection processes, and it expedites the supplier onboarding process while improving the trust in the process.
- Buyers can get immediate access to higher-quality data at a lower cost while complying with the regulations. This mitigates their risks.
- Verifiers benefit from the transparency, audit trail, and improved visibility to the supplier management data.
This latest project is a key addition to IBM blockchain supply chain moves. The technology giant already has a blockchain supply chain solution to improve the Bill of Lading (BoL) process, moreover, the company has also worked with Maersk to improve shipping with the help of blockchain.
Will blockchain bring better times for buyers and suppliers?
The growing interest in blockchain supply chain solutions among enterprises is noticeable, e.g., Walmart has joined a blockchain project to combat counterfeit drugs, and Volkswagen is using the technology to source ethically mined Lead for its batteries. Exciting times might be ahead for supply chain management, thanks to blockchain!