Last week, Chainyard and IBM announced their collaboration on a blockchain network. This network, called Trust Your Network, is meant to improve supplier qualification, validation, onboarding, and life cycle information management. It also serves the purpose of reducing risk of fraud and errors, which then creates continuous connectivity across supply chains. It enables businesses to store information in a decentralized and secure database on the cloud, which cannot be tampered with, thus building trust in the chain. Chainyard, a blockchain specialist firm is providing the technology and building the network using IBM's blockchain platform.
Prior to blockchain, managing suppliers was a very difficult and time consuming process. The validation of identities and documents such as ISO certifications, bank account information, tax certifications, and certificates of insurance through the lifecycle of a supplier was not an easy task. Blockchain can be applied to several supply chain processes and allows for a secure collaboration for contracts and preventing counterfeit products. The main uses of blockchain are for transparency, verification, and risk mitigation. The time stamps increase transparency in the bidding process, smart contracts allow for the verification of transactions prior to their execution, and the possibility of money laundering decreases due to visibility of untampered data in the ledger.
Trust Your Network assigns its suppliers a digital passport. It then allows those suppliers to share information with the permissioned buyers who are on the network. By the suppliers sharing their information, is saves time for companies conducting research on potential suppliers. This generates more business between suppliers and buyers. Blockchain also connects existing procurement business networks by relaying necessary supplier data required for exchanging Purchase Orders and invoices without having to enter it into multiple networks and then automating onboarding processes to those networks. Companies who share the same goal of IBM and are alongside them in solving challenges related to supplier information management are Anheuser-Busch InBev, Cisco, GlaxoSmithKline, Lenovo, Nokia, Schneider Electric, and Vodafone. These companies taking part in blockchain, upload their suppliers data and expertise onto the network, which in turn expands it. Gartner Inc. has estimated that by 2023, blockchain will support the global movement and tracking of $2 trillion of goods and services annually.
Although blockchain is in its early stages and has some kinks to work out, such as the rules and regulations it will follow and the standardization of it across different countries, it has significant potential. The advantages of blockchain are its cost savings and its ability to increase transparency and traceability. Going forward, blockchain is something that we will definitely hear more of.