Supply chains have been a target niche for industry improvements for a while. Tracking materials, workforce, inventory, and finished materials helped companies worldwide streamline their operations. Blockchain can help speed up the process of data gathering and supply monitoring via a shared database.
Gartner Inc. states that blockchain could play a major role in the monitoring and shipping of transactions worldwide shipping, and may reach tracking of goods and services of over $2 trillion in value on a year-to-year basis by 2023.
Alongside IBM, other tech giants such as Lenovo, Vodafone, and Schneider Electric will also take part in the “Trust Your Supplier” blockchain network. IBM also partners with Chainyard, blockchain research, and development companies to provide technology and build the system. The tech giants are uploading their supply information to help achieve faster adoption and network expansion.
The traditional methods of gathering supply data often include manual data input and cumbersome validation processes. Tracking documents such as ISO standard certificates, tax certificates, bank account info, and internal rules often rely on e-mail or phone calls, which can be streamlined using blockchain.
The decentralized network also brings a layer of security, while eliminating manual data input, thus – reducing the risk of errors and data manipulation.
“Virtually every big company stumbled on the cumbersome process of validating a new supplier,” Marie Wieck, general manager in IBM Blockchains stated.
“When we transfer this process to a blockchain network, we give other supply chain users access to real-time data, and the validation process happens within the chain,” Wieck added.
Wieck also stated that IBM expects 70-80% time reduction for new supplier approvals, as well as 50% cut on administrative costs.
With a large-scale organization like IBM – interacting with over 18,500 suppliers worldwide – the company takes its time to push everybody on the blockchain. An initial group of 4,000 suppliers will join the network over the next couple of months. The commercial release is scheduled for Q3 of 2019.