Monday, 13 July 2020

Mercedes tests blockchain to improve supply chain transparency

Mercedes-Benz is to pilot blockchain technology with the potential to “fundamentally revolutionise our procurement processes”.

The carmaker has developed a blockchain prototype containing contract clauses, including around sustainability requirements, which can be viewed by all participants in the supply chain.

The system, which makes use of blockchain’s secure distributed ledger technology, also offers opportunities to track and trace components and raw materials.

Sabine Angermann, head of purchasing and supplier quality for raw materials and strategy at Mercedes-Benz Cars, said: “The transmission of contracts to each member of the supply chain is the prerequisite of cooperation with our suppliers, especially in terms of sustainability and ethical conduct. The blockchain prototype opens up completely new ways to make purchasing processes simpler and safer.”

Mercedes and software company Icertis teamed up to create “a consistent documentation of contracts in the supply chain”. The carmaker said it “requires its direct suppliers to vigorously pass on and control standards and contractual obligations with regard to working conditions, human rights, environmental protection, safety, business ethics and compliance within the supply chain”.

It said the prototype “allows a transparent mapping and understanding of this tranmission across the entire supply chain”. “Should one of the sub-suppliers deviate from the contractual obligations, this becomes visible in the blockchain, similar to a secure accounting system,” said Mercedes.

“Acceptance by suppliers and partners is now being tested in a pilot project and feedback is being obtained.

“Consistently establishing blockchain technology with all suppliers in the respective supply chain is a fundamental requirement for the achievement of the goal: close cooperation for more sustainability.”

Wilko Stark, member of the Divisional Board of Management Mercedes-Benz Cars, Procurement and Supplier Quality, said: “Blockchain technology has the potential to fundamentally revolutionise our procurement processes, and could affect nearly the entire value chain.

“Global supply chains are becoming increasingly complex. With our blockchain prototype, we are in the first step testing one of diverse possible applications with the aim of increasing transparency beyond our direct suppliers.”

Separately, Mercedes and BMW have announced a series of joint ventures to invest €1bn in developing car-sharing, ride-hailing, parking, charging and multimodal transport services.

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