IBM and the India-based multinational Mahindra Group have announced the development of a blockchain solution aimed at the supply chain. The project will be the first of its kind in India outside of the banking sector, with a mission to enhance security and transparency between supplier-to-manufacturer trade.
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IBM Teams up With Billion Dollar Mahindra Group to Enhance Supply Chain
The Mahindra Group is a large conglomerate holding company with operations in many markets including automotive, aerospace, construction equipment, agribusiness and more. The two companies’ proof-of-concept blockchain aims to enhance the supply chain through a distributed shared ledger. The protocol is a cloud-based application that creates a more efficient environment by improving trust, cutting costs and protecting data more securely.
“The Mahindra Group is pioneering the use of blockchain to disrupt its traditional businesses and drive future growth. We are actively looking at other applications across the Group in financial services, auto, mobility, and agritech,” said Anish Shah, Group President (Strategy), Mahindra Group.
This proof of concept represents a significant step forward in making blockchain, still a new technology, a more compelling and efficient supply chain solution for Mahindra Finance’s small and mid-sized enterprises loans business. Working with IBM, we will work to build, test, scale and refine this solution over time.
Blockchain Speeds up Supplier-to-Manufacturer Invoice Discount Processes
IBM says blockchain architecture can help Mahindra process settlements in real-time, giving the company more time to further develop products. Another aspect the blockchain will focus on is transforming the invoice discounting system.
The process bundles and sells invoices at a discount, and the distributed ledger mechanism facilitates the process faster. Traditionally supplier-to-manufacturer invoice discounting can be extremely slow, suffer from counterparty risk, and require many different books. With a shared distributed ledger, all parties can witness operations and settlements and human error is removed.
Mahindra, a US$17.8 billion multinational group based in Mumbai, India, is focused on driving markets and a more efficient supply chain. The conglomerate is no stranger to emerging technological innovation as it received the Financial Times ‘Boldness in Business’ award in the ‘Emerging Markets’ category in 2013.
Blockchain Will ‘Fundamentally Transform the Way Businesses Interact’
IBM is focused on helping push these blockchain projects further and has been offering consulting and services to businesses worldwide. With its open source offerings to the Hyperledger Project and IBM’s Bluemix cloud, the firm is dedicated to creating blockchain standards. The Mahindra partnership is just one of the many distributed ledger projects the company is working on.
“Blockchain is poised to revolutionize business like the Internet did, and IBM is at the forefront of the revolution. We offer a comprehensive enterprise-class blockchain solution that is secure, scalable and reliable,” explained Lula Mohanty, Managing Partner of IBM Global Business Services, IBM ISA.
The work with Mahindra has the potential to fundamentally transform the way businesses interact with one another and their customers and suppliers, and we’re confident that this engagement can be replicated not just in the finance industry but across other sectors as well.
What do you think about IBM and the Mahindra Group’s blockchain proof-of-concept? Let us know in the comments below.
Images courtesy of Shutterstock, and the Mahindra Group
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