While the crypto market is firing up, its underlying technology, blockchain is also experiencing some progress. The tech giant IBM along with Chainyard, a blockchain company, has launched a blockchain network. The new blockchain project called Trust Your Supplier (TYS) was built to aid supply chain management. So far, the project has been quite successful in capturing the support of industry giants.
As TYS is functioning live, IBM’s latest blockchain project is not like other enterprise blockchain projects that die out before going live. The company hopes to reduce the time for on-boarding new suppliers by 70- to 80%. Furthermore, IBM also expects a 50% decrease in administrative costs within its own business.
In addition to IBM and Chainyard, companies such as Lenovo, Nokia, Anheuser-Busch InBev, Cisco, Schneider Electric, GlaxoSmithKline and Vodafone are the founding members of TYS. At the moment, only the current participants can utilize TYS. However, in the Q3 of 2019, the project could be launched commercially to make it available to more companies.
TYS, by creating a digital passport for supplier identity, allows suppliers to only share information with selected buyers on the blockchain network. TYS was made to improve the process of supplier onboarding. The process of supplier onboarding requires ISO certifications, bank account data, certificates of insurance and other information in order to approve the vendor or supplier.
A company only recognizes the vendor or supplier that passes through supplier onboarding before starting the business with the qualified supplier. That’s why TYS focuses primarily on reducing the cost and time needed to validate and manage new suppliers.
Apart from IBM’s supply chain blockchain project, there has been another supply chain development encompassing blockchain technology. Standard Chartered, a UK bank, successfully completed its first joint deep-tier supply chain financing transaction with Linklogis, a supply chain finance company based in China.
Back in February 2019, Standard Chartered and Linklogis signed a memorandum of understanding prior to their collaboration at that time. As a result of their collaboration, Digital Guangdong has been bestowed with transparency into its whole supply chain instead of direct suppliers only. Moreover, with the blockchain-based platform, an economical and more convenient way of accessing credit for upstream suppliers is provided to Digital Guangdong.
Due to a lack of visibility, financing deep tier suppliers becomes quite problematic for companies. As most supply chain businesses interact with top tier parties, financing becomes troublesome for small and medium-sized enterprises (SMEs). In addition to these concerns, a company may never see the entire picture of these SMEs and is compelled to go with top tier suppliers.
Therefore, complex problems arise for the low tier suppliers. This is where blockchain with distributed ledgers can be utilized to introduce transparency for every supplier connected to the blockchain network. Companies can make use of the blockchain adoption and evaluate deep tier suppliers as well before doing business with them. Chairman and CEO of Linklogis Charles Song elaborated his company’s vision to help SMEs. He said:
As a FinTech company, we believe closer collaboration with leading financial institutions like Standard Chartered will allow us to build innovative technological applications to solve the fundamental financing problems faced by SMEs.
Digital Guangdong is a very reputable company that has served for more than 700 digital government services and applications. The company has also processed over 200 million transactions for residents of Guangdong province. The blockchain-based supply chain system developed by Standard Chartered and LinkLogis is hoped to benefit Digital Guangdong remarkably in the future.
Blockchain technology was introduced to the world about a decade ago. It’s still considered to be in a nascent phase. However, it’s has been attracting the attention of industries and large companies. Unlike the adversaries of blockchain, Benjamin Dynkin, CEO of Atlas Cybersecurity, believes that blockchain would drive several industries and charm large players. While explaining use cases of blockchain to BlockPublisher, he said:
“Blockchain will be a key feature in countless industries. I believe that the use case has been defined and many large players in the space are developing blockchain solutions. I don’t think that there is a blockchain-based solution for every problem, but certainly, in cases where you need an immutable single source of truth that validates every transaction by definition, blockchain is the perfect solution (supply chain management, inventory, real estate, etc.)”
Many leaders of the industries such as Facebook have already entered the space and adopted the blockchain technology. It would be of interest to see how more companies and industry pioneers reach out to deploy blockchain.