IBM moves to support blockchain-based industrial supply chain solutions

22nd February 2019 By: Schalk Burger - Creamer Media Senior Contributing Editor

IBM moves to support blockchain-based industrial  supply chain solutions

GERHARD DINHOF The solutions provide easy access for all parties in the supply chain and instant sharing of verified information

Information technology multinational IBM is working with a wide range of industrial and commercial companies and organisations to develop blockchain-based industrial supply chain systems that enhance a range of value chain functions, including visibility, accuracy and supply-chain efficiencies, says IBM South Africa senior architect blockchain lead Gerhard Dinhof.

It has developed a blockchain-based global trade solution with Denmark-based shipping multinational Maersk, which involves more than 100 organisations, including more than 40 port and terminal operators worldwide.

IBM is also developing a global mining and metals supply chain solution with mining technology organisation MineHub Technologies. Mining companies Goldcorp, ING Bank, Kutcho Copper, Ocean Partners and Wheaton Precious Metals are collaborating on the industrywide approach to enhance efficiency.

Additionally, it has developed a responsible sourcing and mineral supply chain solution with automotive manufacturer Ford Motor Company, Democratic Republic of Congo miner Huayou Cobalt, Korean battery subsidiary LG Chem and responsible sourcing supply chain firm RCS Global.

“Work is expected to be extended beyond cobalt into other battery metals and raw materials, including minerals such as tantalum, tin, tungsten and gold, which are sometimes called conflict minerals, as well as rare earths. Focus industries for the solution include automotive, aerospace and defence, and consumer electronics,” says Dinhof.

There are also plans for a governance board representing members across these industries to help ensure the platform’s growth, functionality and commitment to democratic principles.

An industrial blockchain aims to create a common platform for supply chain information and addresses the problem of limited data sharing in current supply chains, which puts accurate tracing and quality measures at risk, says Dinhof.

Additionally, blockchain addresses the challenge of who must take responsibility for security and operation, because solutions can be built as a federated system using companies’ existing data centres or can be deployed onto multicloud systems as the participants require.

Further, each “block” in the chain can be encrypted to protect data and restrict access to permitted users, while the specific data that must be contained within each block to improve supply chain operations can also be decided on by participants.

This means that sensitive information can be protected even in an environment that facilitates information sharing, and there is limited data storage required for these systems, he explains.

“While the promise of blockchain is immense, we are focusing on specific, niche use cases for blockchain to demonstrate value and work through any technical issues,” says Dinhof.

The solutions allow parties of all sizes and roles in the supply chain easy access, including original-equipment manufacturers and their supply chain partners.

Industrial blockchain projects are typically deployed alongside existing supply chain management systems, facilitate instant sharing of verified information and act as authorative sources of information.

Dinhof adds that it can help companies and regulators, as data captured for each step in the value chain can readily be shared with regulators but the extent to which sensitive information is shared is limited.

Additionally, detailed, incremental records on a blockchain ensure that inspectors and regulators can readily verify as compliant or flag as noncompliant sites and processes during inspections.

“Blockchain is read-only and offers probably the most complete view of data across all participants. Having data accessible in this way could completely change the way audits are done, including provision for more real-time information for regulators,” he adds.

IBM also has an active partnership with open-source organisation the Linux Foundation. IBM donated its initial blockchain code after it realised the solutions are best suited for use in an open-source manner, which was used to create Hyperledger Fabric, on which the solutions are based.