IBM recently announced the launch of Trust Your Supplier (TYS), a blockchain network geared for the improvement of supply chain management.
What is supply chain management?
Supply chain management (SCM) deals with the flow of goods and services. SCM oversees the storage and inventory of raw materials. It also tracks the production, shipment, and distribution of products.
In essence, a supply chain manager will deal with the logistics of the supply chain:
- The plan or strategy
- The source (raw material/ service)
- Delivery and logistics
- The return system for unwanted or defective products.
By monitoring the supply chain, a supply chain manager can improve efficiency, quality and productivity in the operations side. In a cost standpoint, this entails minimal shortages and optimum costs.
Who are involved in the blockchain network?
Other founding participants in the Trust Your Supplier network are the following companies:
- Anheuser-Busch InBev
- Schneider Electric
How will blockchain improve supply chain management?
Blockchain in SCM will further lower down costs, offer a speed up in operation, and a reduction in the complexity of the supply chain.
The primary way TYS will help companies is by acting as a digital passport for supplier identity.
Currently, supplier onboarding and validation is point-to-point. According to Reuters report, 80% of the information a supplier needs to provide is common across the Fortune 500 companies.
Putting these things together, we end up with a repetitive process of identity validation every time a supplier transacts with a new buyer. For every validation process, there are multiple documents which need to be verified and tracked, including:
- ISO certifications
- bank account information
- tax certifications
- certificates of insurance
Needless to say, these redundancies cost a lot of time and money. TYS simplifies everything by doing the gruntwork.
The validation and tracking processes are moved in the blockchain where information can be shared in a more secure and efficient manner.
Right now, TYS has limited availability. It is set to be commercially launched by the third quarter of this year.
Our humans need coffee too! Your support is highly appreciated, thank you!