Mercedes Benz looks to blockchain tech for complex supply chains

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It seems like the automotive industry is dipping into blockchain technology to achieve more transparency in its supply chains. The latest convert is Mercedes Benz, who have formed a partnership with Icertis for the joint development and implementation of blockchain technology in their supply chain.

According to Wilko Stark, who is a Member of the Divisional Board of Management at Mercedes Benz, blockchain technology has massive potential to completely revolutionise the procurement process for the company.

“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 transparancy beyond our direct suppliers,” Stark said.

Sabine Angermann who is Head of Purchasing and Supplier Quality for Raw Materials and Strategy at Mercedes-Benz Cars also waxed lyrical about the potential of blockchain in the supply chain:

“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.”

Icertis is described as a leading provider of enterprise contract management systems in the cloud. Interestingly its product, which runs on a blockchain, allows a transparent mapping and understanding of transmission across the entire supply chain. The system also allows Mercedes Benz to enforce and pass on working conditions, human rights, environmental protection and business ethics and compliance within the supply chain. The project is currently being tested and the relevant feedback is also being obtained.

The intuitive and user-friendly operation of the blockchain service platform is significant for the success of the project. Only then the company can help its suppliers to easily get started with the new technology, and attract the necessary users. Consistently establishing blockchain technology with all suppliers in the respective supply chain is a fundamental requirement for the achievement of the goal which is close cooperation for more sustainability.

Another application is the traceability of components and raw materials. Complex supply chains can be disclosed, the origin of which can be traced across the partners involved. The effectiveness of a blockchain depends on the quality of the data and the level of digitisation. For this purpose, Mercedes-Benz Cars will cooperate in partnership with its suppliers.