Mercedes-Benz is piloting a blockchain to monitor sustainability across their supply chain.
This blockchain will deal with sustainability issues that are part of its suppliers’ contracts. Contract obligations include working condition, human rights, environmental protection, safety, and business ethics.
The blockchain will provide transparency throughout the entire supply chain on issues of sustainability. If a sub-supplier deviates from one of the standards, it should become visible in the blockchain.
This post is based on the CIPS Supply Management article, Mercedes Tests Blockchain to Improve Supply Chain Transparency, by Will Green, February 25, 2019. Image source: Shutterstock / NicoElNino
1. Why use blockchain for sustainability?
Guidance: Blockchain allows an efficient mechanism to track various sustainability issues, such as those articulated in the Mercedes-Benz supplier contracts. It will now be possible to quickly trace parts back through the blockchain to determine if sustainability criteria have been successfully meet. It will also allow other members of the supply chain to see the sustainability efforts of other supply chain members, without sharing competitive information.
2. What problems do blockchains present for sustainable operations?
Guidance: Probably one of the biggest issues is the acceptance of the system by the entire supply chain. The current lack of a standardized blockchain impacts this acceptance. Another issue includes the availability of the technology—both hardware and software.