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Blockchain trendsetter in the enterprise space, IBM, have announced another blockchain network designed to improve supplier qualification, validation, onboarding, and life cycle information management.
In collaboration with Chainyard, the supplier supply chain known as Trust Your Supplier (TYS) looks to be an enticing prospect for major enterprises who are clamouring to drive this new, relevant, use-case for blockchain.
Anheuser-Busch InBev, GlaxoSmithKline, Lenovo, Nokia, Schneider Electric and Vodafone, all leaders in their respective fields of Tech, Telecom, Pharma, Beverage and Manufacturing Companies, are the founding members of this consortium, ready to reap the benefits of being part of this nascent technology.
IBM has become a driving force for the growth of blockchain technology, especially in an enterprise arena. This can be seen in other supply chain networks based on the blockchain they have gotten off the ground, such as Food Trust and Trade Lens.
Both these previous blockchain networks have attracted massive companies on the scale of Nestle, Walmart and Maersk to not only use the technology but help expand its possibility and reach. This has lead to successes in shipping and food tracking for the companies mentioned above, but also growth in blockchain application.
Now, still dealing with the supply chain, but concerning on-boarding suppliers, IBM is looking to advance the technology and use cases in this arena with huge enterprises excited to be a part of the journey.
A new use case
The common goal of TYS is to solve the challenges related to supplier information management. Traditional methods of managing suppliers often involve cumbersome manual processes, which make it challenging to verify identities and track documents like ISO certifications, bank account information, tax certifications, and certificates of insurance throughout the lifecycle of a supplier.
By using a decentralized approach and an immutable audit trail built on blockchain, TYS is designed to eliminate time-consuming manual processes and help reduce the risk of fraud and errors, which could ultimately create frictionless connectivity across supply chains.
David Post, Managing Director of IBM Blockchain Ventures, spoke to me about this new journey into the emerging technology, as well as IBM's growing reputation in the space.
"Drawing on IBM's depth and breadth of experience with over 500 blockchain engagements, we continue to refine and improve our approach to convening blockchain networks," said Post.
"The starting point for any blockchain network is a compelling initial use case, and supplier onboarding and validation is a well-recognized point for both Chief Procurement Officers and their suppliers alike."
"As a result of both our approach to network development and the strength of the use case, there has been strong enterprise interest in Trust Your Supplier, and we expect the network to scale rapidly."
Grabbing the chance to be involved
Indeed, Post alludes to part of the success they have had in not only pinpointing the compelling use-cases but also in on-boarding some of the biggest companies in their sectors.
Leena Taimi, Head of Procurement Operations and Strategy at Nokia, explained to me what entice them to be a foundational member of this new blockchain network.
"The potential to significantly speed up the supplier on-boarding process, as well as testing the potential use case for blockchain technology was a big attraction. Working with IBM was a massive benefit here given their experience in this area and the multiple partnerships they are engaged with."
Of course, these new consortia and advances in blockchain technology are coming at a time where most of these companies already have some internal blockchain process going on.
Nokia has been looking at blockchain technology around the business," added Taimi. "However, within the Procurement environment, this is the first real-world test of its capabilities. The opportunity to collaborate with like-minded companies in different sectors was also a benefit. There are things that we can learn and share to improve ways of doing business and engage professionally with our suppliers."
Lenovo also explained to me the advantages of being at the forefront of a better supplier onboarding system.
"Lenovo joined the TYS network to create transparency, security, and compliance upstream in our supply chain. This future program will enable us to onboard and manage our global supply chain in an optimized fashion," said Renee Ure, Chief Supply Chain Officer for Lenovo's Data Center Group.
They, like Nokia, have their internal blockchain systems on the go but understand the importance of being part of a collaborative effort.
"Lenovo is leveraging blockchain technology in our Buy/Sell process and Enterprise Asset Management. These networks are live today, as we continue to scope several additional use cases across the business," added Ure.
"In a blockchain network, efficiencies are gained as the ecosystem continues to scale. It is important to collaborate with other companies across industries to grow these network solutions and share best practices. Supply chain organizations, regardless of the sector in which they are operating, consist of similar processes and transactions that cross multiple entities."
Unmissable
It is becoming clear that an enterprise blockchain is no longer an option for enterprises, rather a necessity. However, unlike previous technological solutions which can be rolled out with ease across all sectors, blockchain requires a tiered approach when it comes to solution building.
As Ure and Taimi explain, working towards a blockchain solution internally will only get a company so far, blockchain and its open-source nature are leading companies to collaborate and work together to make the system more efficient.
Thus, when a trusted name like IBM pushes the envelope in one area, it is attractive for enterprises to join in to reap the benefits, but at the same time, grow the technology, its application, and use cases.
Enterprises that can successfully take advantage of the burgeoning blockchain space will be well placed down the line when their efficiencies are taken care off. It is not about picking up the technology as the latest buzzword; it is about making sure one does not miss out.
