Mercedes-Benz And Icertis To Launch Blockchain Prototype For Supply Chain Contracts Documentation
Mercedes-Benz Partner With Icertis To Launch Blockchain Prototype For Supply Chain Contracts Documentation
Mercedes-Benz Partner with Icertis to Launch Blockchain Prototype for Supply Chain Contracts Documentation
Mercedes-Benz, the highly-reputed car manufacturer, owned by Daimler AG, has joined forces with Icertis, a software company providing contract management enterprise software to businesses, according to a press release on February 25, 2019.
Mercedes Joins The Blockchain Technology Movement
In a bid to foster more transparency in its supply chain, Daimler AG's Mercedes-Benz has announced its collaboration with Icertis, for joint development and implementation of blockchain technology in the supply chain.
Per sources close to the matter, Daimler, the parent company of Mercedes-Benz requires its direct suppliers to maintain high standards and contractual obligations as regards working conditions, human rights, environmental protection, safety, business ethics and compliance in their supply chain.
Against that backdrop, Mercedes-Benz Cars and Icertis have developed and programmed a blockchain prototype that would be responsible for ensuring that participants in the supply chain operations in accordance with the contractual obligations.
In essence, if any of the suppliers deviate from the contractual agreement and obligations, the change would be reflected in the distributed ledger, as obtainable with secure accounting systems.
Blockchain Technology to Transform Mercedes-Benz Processes
At a time when distributed ledger technology (DLT) is fast gaining grounds in a vast array of industries across the globe, including fintech and healthcare, Wilko Stark, Member of the Divisional Board of Management at Mercedes-Benz Cars, says he firmly believes that the nascent technology would enhance the firm's entire value chain.
In his words:
“DLT has the potential to revolutionize our procurement processes fundamentally, and could positively affect our entire value chain. Global supply chains are becoming quite complex. With our blockchain prototype, we are in the first step testing one of many possible applications with the aim of increasing transparency beyond our direct suppliers.”
Blockchain Technology Making Life Easier
Accordingly, the team has also hinted that the placement of contract clauses in the distributed ledger makes it easier for all participants in the supply chain to retrace the Daimler sustainability requirements, ensuring that global procurement and contractual practices meet the high standards of Daimler AG.
“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, declared Sabine Angermann, Head of Purchasing and Supplier Quality for Raw materials and Strategy at Mercedes-Benz Cars.
Specifically, the firm also plans to use blockchain technology for tracing components and raw materials used in manufacturing cars.
Though blockchain technology is still nascent, it's worth noting that Daimler is one of the firms that strongly believes in the capabilities of DLT.