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Supply chain management involves overseeing the flow of goods
and services, such as tracking the movement and storage of raw
materials, inventory, and finished goods. It has been identified
as one area that can benefit from blockchain technology, a
shared database maintained by a network of computers connected
to the internet.
Technology research firm Gartner Inc said by 2023, blockchain
will support the global movement and tracking of $2 trillion of
goods and services annually.
The new blockchain network is called Trust Your Supplier and
alongside IBM, the other founding participants were
Anheuser-Busch InBev, Cisco, GlaxoSmithKline, Lenovo, Nokia,
Schneider Electric and Vodafone.
Chainyard, a blockchain specialist firm, is providing the
technology and building the network using IBM's blockchain
platform. The other companies, meanwhile, are putting their
supplier data onto the network and contributing their expertise
to expand the network.
Traditional methods of managing suppliers often involve
cumbersome manual processes, which make it difficult to verify
identities and track documents such as ISO certifications, bank
account information, tax certifications, and certificates of
insurance, IBM said.
By using a decentralized approach and an immutable audit trail
built on blockchain, the company said the new network would
eliminate manual time consuming processes and help reduce the
risk of fraud and errors.
"The validation and onboarding of new suppliers is a critical
pain point for virtually any company that relies on a robust
supply chain to conduct business," Marie Wieck, general manager
for IBM Blockchain, said in an email to Reuters.
"By moving this process onto the blockchain, we're taking much
of that burden and shifting it to the network, where it can be
shared in real-time more securely and efficiently."
Wieck said IBM's own procurement organization projects a 70 to
80 percent reduction in the time it takes to get new suppliers
onboard and an estimated 50 percent reduction in administrative
costs within its own business.
IBM has 18,500 suppliers around the world and said it will begin
using the Trust Your Supplier network, initially bringing
onboard 4,000 of its own North American suppliers over the next
few months. The blockchain has limited availability with
existing participants and is scheduled to be commercially
launched in the third quarter of 2019.
(Reporting by Gertrude Chavez-Dreyfuss; editing by Grant McCool)
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