Mercedes-Benz Cars and Icertis, a leading provider of enterprise contract management solutions in the cloud, have formed a strategic partnership 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. The blockchain prototype allows a transparent mapping and understanding across the entire supply chain. If one of the sub-suppliers deviate from the contractual obligations, this becomes visible within the ledger.
Mercedes-Benz Cars and Icertis have successfully deployed and programmed a prototype. Acceptance by suppliers and partners is now being tested in a pilot project, awaiting feedback.
"Blockchain technology has the potential to fundamentally revolutionize 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," Wilko Stark, member of the Divisional Board of Management Mercedes-Benz Cars, Procurement and Supplier Quality says.
The placement of contract clauses in the blockchain, creating a sustainable transaction book. The disclosure and confirmation of the Daimler sustainability requirements can be retracted by all participants in the supply chain, ensuring that global procurement and contractual practices meet requirements. The prototype creates trust in the integrity of the supply chain by disclosing sustainability-related information, without revealing competition relevant information.
"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," says Sabine Angermann, head of purchasing and supplier quality for raw materials and strategy at Mercedes-Benz Cars.