IBM and partners form blockchain supply chain network
August 21, 2019
IBM has formed the Trust Your Supplier (TYS) blockchain supply chain network with partners Anheuser-Busch InBev, Chainyard, Cisco, Glaxo Smith Kline, Lenovo, Nokia, Schneider Electric and Vodafone.
The blockchain network is designed to improve supplier qualification, validation, on-boarding and life cycle information management.
IBM's industry expertise and North Carolina-based Chainyard's product capabilities building on IBM’s blockchain platform have brought this to market.
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 throughout the lifecycle of a supplier. By using a decentralised approach and an immutable audit trail built on blockchain, TYS is designed to eliminate manual time-consuming processes and help reduce the risk of fraud and errors, ultimately creating frictionless connectivity across supply chains.
By 2023, blockchain will support the global movement and tracking of $2tn of goods and services annually, according to technology research firm Gartner.
"Blockchain has the ability to completely transform how companies on-board and manage their supplier network for the future," said Renee Ure, chief supply chain officer for Lenovo's data centre group. "Through Trust Your Supplier, both buyers and suppliers will the see the procurement benefits of blockchain through reductions in cost, complexity and speed."
TYS creates a digital passport for supplier identity on the blockchain network that allows suppliers to share information with any permissioned buyer on the network. Blockchain ensures a permissioned-based data-sharing network. This should help reduce the time and cost associated with qualifying, validating and managing new suppliers while creating business opportunities among suppliers and buyers.
Third-party validators, such as Dun & Bradstreet, Ecovadis and RapidRatings, provide outside verification or audit capabilities directly on the network.
The TYS blockchain network can also connect existing procurement business networks by relaying necessary supplier data required for exchanging purchase orders and invoices, without the need for suppliers to enter it in multiple different networks and automating on-boarding process to those networks.
IBM’s supply chain business network can connect to TYS using open industry programming interfaces for access to existing verified supplier information.
"Working with IBM and Chainyard on this blockchain initiative represents a great opportunity for Nokia to further enhance our suppliers' experience and optimise the on-boarding process," said Sanjay Mehta, vice president for procurement at Nokia. "Using the latest technology to address a classical challenge will be of benefit for everyone, and further increase the speed of using innovations."
IBM has more than 18,500 suppliers around the world and will begin using the TYS network initially on-boarding 4000 of its own North American suppliers over the next few months. IBM Procurement projects a 70 to 80 per cent reduction in the cycle time to on-board new suppliers, with a potential halving of administrative costs within its own business.
The TYS network is currently in limited availability with existing participants with plans for commercial availability later in 2019. TYS is built on the IBM blockchain platform hosted on the IBM cloud.