Anheuser-Busch InBev joins new IBM blockchain
IBM and blockchain consultancy Chainyard have unveiled a new permissioned blockchain-based network designed to improve supplier validation, onboarding and life cycle information management.
Along with IBM, Anheuser-Busch InBev, GlaxoSmithKline, Lenovo, Nokia, Schneider Electric and Vodafone are founding participants in the Trust Your Supplier network.
David Post, managing director of Blockchain Ventures at IBM, said food businesses and manufacturers could use this technology to “reduce your supply chain risk, improve your process efficiency in terms of how you’re engaging with your supply base” and “for an additional way to get value out of blockchain initiatives that you might already have”.
By 2023, blockchain will support the global movement and tracking of $2 trillion of goods and services annually, according to technology research firm Gartner Inc.
Traditional methods of managing suppliers often involve cumbersome manual processes, which make it difficult 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 decentralised approach and an immutable audit trail built on blockchain, Trust Your Supplier is designed to eliminate manual time-consuming processes and help reduce the risk of fraud and errors, ultimately creating frictionless connectivity across supply chains.
“We are establishing for the first time a portable corporate identity that you can use if you’re a buyer or a supplier to do business with other organisations,” said Post.
“We realised that the process of supplier onboarding and validation by and large has a lot of room for improvement,” he added. “If you look across the supplier information required by Fortune 500 buyers for any given supplier, about 80% of that information is common. Despite that, suppliers have to constantly prove and re-prove their identity. That is not the best use of anyone’s time or resources. So we’ve created a blockchain network which creates a digital passport for suppliers so they can then permission their information – whether that’s certification, risk ratings, basic corporate documentation – to any other buyer on the network.”
Trust Your Supplier creates a digital passport for supplier identity on the blockchain network that allows suppliers to share information with any permissioned buyer on the network. This should help reduce the time and cost associated with qualifying, validating and managing new suppliers while creating new 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 Trust Your Supplier 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. The IBM Supply Chain Business Network can connect to Trust Your Supplier using open industry programming interfaces for access to existing verified supplier information.
Enhance and protect your brand
Post said that the technology allows companies to tap into consumer trends to enhance and protect their brands.
One of the third-party validators, for example, is Ecovadis, a UK-based software company that produces sustainability ratings to help procurement teams monitor the CSR/ESG Practices in the supply chain.
“So from a brand enhancer perspective it really allows you a lot of information about how your supply chain is performing from a sustainability perspective,” noted Post. Similarly, from a risk reduction perspective “if you have all of the information about your suppliers on areas that could potentially be a reputation risk, you have a much better chance of identifying them before they get into the news.”
He added companies using the network, which is free for early adopters, do not have to worry about a huge carbon footprint. "There's no big energy usage associated with this because the point is not to mine cryptocurrencies, it's to establish and monitor supplier identity," he explained.
Complementing the existing IBM Food Network
The Trust Your Supplier initiative can augment the existing IBM Food Trust project, which uses blockchain technology to improve visibility and traceability within the food chain, said Post.
"This network will effectively augment things that the food trust is doing because it is basically one step downstream. If you’re able to more effectively establish supplier identity in a more standardised type of fashion it then allows you to benefit even more from the capabilities the Food Trust has built out. I view this network as being an identity-layer which will improve not only business prophesies but also serve as the underlying information source for other types of initiatives going on within the food supply chain.”
IBM has over 18,500 suppliers around the world and will begin using the Trust Your Supplier network initially onboarding 4,000 of its own North American suppliers over the next few months. IBM Procurement projects a 70 to 80% reduction in the cycle time to onboard new suppliers, with a potential 50% reduction in administrative costs within its own business.
The Trust Your Supplier network is currently in limited availability with existing participants with plans for commercial availability later in Quarter 3 of 2019. It is built on the IBM Blockchain Platform hosted on the IBM Cloud.
