IBM and Chainyard Create New Blockchain Network To Simplify Supply Chain Management For Enterprises
IBM and blockchain consulting firm, Chainyard, have joined forces to create a new blockchain network designed to simplify supply chain management for enterprises. Today the two firms announced the launch of the “Trust Your Supplier” (TYS) network, a system built on the IBM Blockchain platform that is designed to improve supplier qualification, validation, onboarding and life cycle information management.
“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,” David Post, Managing Director, IBM Blockchain Ventures, told me. “By moving this process onto the blockchain, we’re taking much of that burden and shifting it to the network, where it can be done more securely and efficiently. This will enable companies across a vast range of industries to recoup substantial time and resources.”
IBM currently works with over 18,500 suppliers globally and will begin using the Trust Your Supplier network during the next few months, initially onboarding 4,000 of its own North American suppliers. Leading enterprises have already signed on to work alongside IBM across the TYS network to solve challenges related to supplier information management. These companies include Anheuser-Busch InBev, GlaxoSmithKline, Lenovo, Nokia, Schneider Electric and Vodafone.
“Blockchain has the ability to completely transform how companies onboard and manage their supplier network for the future,” said Renee Ure, Chief Supply Chain Officer for Lenovo’s Data Center Group. “Through Trust Your Supplier, both buyers and suppliers will the see the procurement benefits of blockchain through reductions in cost, complexity and speed.”
IBM procurement projects a 70 to 80 percent reduction in the cycle time to onboard new suppliers, with a potential 50 percent reduction in administrative costs within its own business.
Blockchain: Creating A Digital Identity For Suppliers
According to Gartner, blockchain will support the global movement and tracking of $2 trillion worth of goods and services annually by 2023. This is because traditional methods of managing suppliers often involve cumbersome manual processes, making it difficult for companies to verify identities and track documents like ISO certifications, bank account information, tax certifications, and certificates of insurance.
One of the primary benefits a blockchain-based network can ensure is the creation of a permissioned-based data-sharing ecosystem. Applying blockchain technology to supply chain management allows for an immutable audit trail, creating frictionless connectivity across supply chains, while reducing the risk of fraud and errors.
Specifically, the Trust Your Supplier network works by creating a digital passport for supplier identity on the blockchain, allowing companies to share information with any permissioned buyer on the network. This will help reduce the time and cost associated with qualifying, validating and managing new suppliers.
“Working with IBM and Chainyard on this blockchain initiative represents a great opportunity for Nokia to further enhance our suppliers’ experience and optimize the onboarding process,” said Sanjay Mehta, Vice President Procurement, Nokia. “Using the latest technology to address a classical challenge will be of benefit for everyone, and further increase the speed of using innovative solutions.”
New business opportunities among both suppliers and buyers is created here as well, since third-party validators, such as Dun & Bradstreet, Ecovadis and RapidRatings, provide outside verification or audit capabilities directly on the network.
Moreover, the IBM Supply Chain Business Network can connect to the Trust Your Supplier blockchain using open industry programming interfaces for access to existing verified supplier information. This means that the TYS network can connect existing procurement business networks by relaying necessary supplier data required for exchanging purchase orders and invoices. In turn, suppliers on the TYS network no longer need to enter this information in multiple different systems.
According to IBM, the Trust Your Supplier network is currently in limited availability with existing participants. The company has plans for commercial availability in Quarter 3 of 2019.