Mercedes-Benz Cars develops blockchain prototype to enhance transparency of supply chains

German luxury carmaker Mercedes-Benz Cars has partnered with Icertis, a leading provider of enterprise contract management solutions in the cloud, to develop and implement blockchain technology in the supply chain.

In a press release dated February 25, Mercedes-Benz said that it has developed a blockchain prototype for bringing more transparency to complex supply chains.

"Blockchain technology has the potential to fundamentally revolutionize our procurement processes, and could affect nearly the entire value chain,” Wilko Stark, Member of the Divisional Board of Management Mercedes-Benz Cars, Purchasing and Supplier Quality, said.

“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.”

Mercedes-Benz’s parent company, 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 of this transmission across the entire supply chain. Should one of the sub-suppliers deviate from the contractual obligations, this becomes visible in the Blockchain, similar to a secure accounting system,” it explained.

According to the press release, the partnering companies are now testing the prototype’s acceptance by suppliers and partners in a pilot project. They are also interested to leverage blockchain technology for the traceability of components and raw materials.

Daimler, a member of Hyperledger, has been actively involved in the blockchain space for the past couple of years. In 2017, it used blockchain technology to execute a financial transaction in collaboration with Landesbank Baden-Württemberg (LBBW).