IBM: Working on the Blockchain Gang
Security. Transparency. Efficiency. These buzzwords have circled the supply chain for years as consumers demand more responsible supply chains, forcing shippers and providers to explore new ways to make these terms reality.
Alongside these buzzwords, another word surfaces as a potential solution to many major concerns: blockchain. IBM aims to make this solution tangible for the global supply chain, and has begun building a proof-of-concept blockchain-based supply chain network after signing a memorandum of understanding with shipping line Pacific International Lines (PIL) and the Port Authority of Singapore (PSA).
Blockchain publishes all transactions to online ledgers easily accessible by every member in the network, forcing all stakeholders to be fully transparent about shipments and financial decisions, and reducing delays that occur while waiting for paperwork to be pushed back and forth between partners.
"The net result is faster, private, confidential, and auditable business-to-business interactions among suppliers, distributors, financial institutions, regulators, or anyone wishing to make a secure exchange," says Randy Walker, chairman and CEO of IBM Asia Pacific.
Stakeholders expect the project to eliminate a number of complicated problems that currently plague many supply chain operations. "Blockchain has the potential to reduce inefficiencies and gaps within the supply chain, promote more cost-efficient transactions, and facilitate continued growth in world trade," says Tan Chong Meng, CEO of PSA.
Data gathered from the project is expected to enable further blockchain-backed connections between supply chain partners throughout Southeast Asia. "We hope that the fruits of collaboration may in the long term enhance our support to Chongqing Connectivity Initiative projects, the Southern Corridor connecting Western China to Southeast Asia via Guangxi, as well as Southeast Asia trade corridors," says Teo Siong Seng, managing director of PIL
IBM's open source Hyperledger Fabric blockchain platform will power the solution, and it will be supported by researchers and experts from the company's Supply Chain Business Network and IBM Center for Blockchain Innovation in Singapore.
If IBM can successfully build the blockchain supply chain network project, it seems likely that the company could also develop solutions beyond Southeast Asia to help all interested international supply chain partners engage in fair and transparent commerce.