Two new business partnerships have sprung up to introduce blockchain software into the global supply chain.
In the first case, electronics manufacturer Foxconn and peer-to-peer lending outlet Dianrong – both headquartered in China – have joined forces to launch what they claim to be the first-ever blockchain tool specifically for supply chain finance (SCF).
Launched under the brand Chained Finance, the platform aims to make it easier for China’s 40 million SMEs to access SCF, while providing multinational users with enhanced transparency and visibility within their SCF transactions.
In a recent proof-of-concept exercise, the tool secured $6.5m of funds for a cross-section of supply chain players in the SME segment.
Dianrong CEO Soul Htite said: “Blockchain is revolutionising the finance industry and offers seamless solutions to any company operating and financing complicated supply chains.
“The complexity and scale of SCF has posed major challenges in ensuring adequate funding and efficient operations.”
With that in mind, he added, “Chained Finance creates a unique ecosystem that will provide supply chains with easier access to funding at competitive rates. In return, supply chain operators will gain greater visibility of their suppliers and the many layers of finance embedded in the process.
“By using the Chained Finance platform, every payment, every supply chain transaction, can be more transparent, manageable and easily authenticated.”
Meanwhile, to address inefficiencies in the more tangible aspects of the global supply chain, IBM has teamed with shipping giant Maersk on a blockchain solution for tracking the progress of vessels and containers.
In a statement, the partners noted that 90% of goods in global trade are carried by the ocean-going shipping industry every year.
Furthermore, Maersk found in its own research three years ago that just a simple shipment of refrigerated goods from East Africa to Europe can go through as many as 30 people and organisations, with those stages comprising more than 200 different interactions and communications.
As such, the partners plan to work with shippers, freight forwarders, ocean carriers, ports and customs authorities to build a new, digital solution for global trade.
Expected to go into production later this year, the tool has the scope to significantly reduce the cost and complexity of trading by using blockchain technology to establish transparency among relevant parties.
Maersk and IBM want the solution to help reduce fraud, errors and waste, slash the time that products spend in the transit and shipping process, and improve inventory management.
Maersk chief digital officer Ibrahim Gokcen said: “As a global integrator of container logistics with the ambition to digitise global trade, we are excited about this cooperation and its potential to bring substantial efficiency and productivity gains to global supply chains.
“The projects we are doing with IBM aim to explore a disruptive technology such as blockchain to solve real customer problems and create new innovative business models for the entire industry.”
He added: “We expect the solutions we are working on will not only reduce the cost of goods for consumers, but also make global trade more accessible to a much larger number of players from both emerging and developed countries.”