Blockchain Prototype For Sustainable Supply Chains Developed By Mercedes-Benz

Blockchain, News | February 26, 2019 By:

Luxury automobile brand Mercedes-Benz has partnered with enterprise contract management solutions provider Icertis to jointly develop and implement blockchain technology in the supply chain.

Mercedes-Benz, a division of German car manufacturer Daimler AG, has announced a blockchain prototype that it claims will bring more transparency in complex supply chains. Developed and programmed by Mercedes-Benz and a number of Icertis experts, the blockchain prototype was created for consistent documentation of contracts in the supply chain.

“Daimler 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,” Mercedes-Benz said. “The Blockchain prototype allows a transparent mapping and understanding of this transmission 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.”

Sabine Angermann, Head of Purchasing and Supplier Quality for Raw Materials and Strategy at Mercedes-Benz Cars, said that the transmission of contracts to each member of the supply chain is the prerequisite of cooperation with their suppliers, especially in terms of sustainability and ethical conduct.

“The blockchain prototype opens up completely new ways to make purchasing processes simpler and safer,” Angermann said.

According to Mercedes-Benz, a pilot project is currently being conducted to test acceptance by suppliers and partners. The companies are also planning to apply the prototype for the traceability of components and raw materials.

“Complex supply chains can be disclosed, the origin of which can be traced across the partners involved,” Mercedes-Benz said. “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.”

Wilko Stark, Member of the Divisional Board of Management Mercedes-Benz Cars, said that blockchain technology has the potential to fundamentally revolutionize their procurement processes, and could affect nearly the entire value chain.

“Global supply chains are becoming increasingly complex,” Stark said. “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.”

Daimler, a member of Linux Foundation’s Hyperledger Project, has already been using blockchain technology in other domains. In 2017, Daimler AG, in partnership with Landesbank Baden-Württemberg (LBBW), used the technology to execute a €100 million financial transaction. Last year, the firm created its own cryptocurrency called MobiCoin to reward drivers for environmentally-friendly driving habits.