Deutsche Telekom subsidiary T-Systems and Commerzbank are jointly developing a solution to automate supply chains with the associated finance. The two companies have already been exploring a project for more than six months. The new solution uses a combination of technologies such as AI, IoT, 5G and blockchain. Logistics firm Nagel Group is the pilot customer.
A key objective of the project is to automate billing and payments in the supply chain to provide the foundation for a supply chain finance network for manufacturers, their suppliers and logistics firms.
Goods transported from the warehouse using logistics firms are tracked using IoT, and blockchain smart contracts trigger various events such as delivery notes and automated payments.
Commerzbank says that the coronavirus pandemic highlighted the poor linkage between physical supply chains and the related financial flows. Hence there’s a need to automate the management of inventory and invoices.
“Supply chains are changing rapidly due to digital connectivity and integrated financial solutions,” says Dr Jörg Oliveri del Castillo-Schulz, COO of Commerzbank. “As part of our cooperation with T-Systems, we are developing scalable solutions so that our customers can make their complex supply chains more efficient, resilient and productive.”
For the project, Commerzbank is working with DLT experts from the Fraunhofer Institute.
Neither company is a stranger to blockchain. Consistent with this initiative, Commerzbank is particularly interested in blockchain for trade finance. It was amongst the first banks to go live on the Marco Polo network and more recently joined Contour. In a report last year, Commerzbank explored the potential for integrating IoT devices with smart contracts, as in the T-Systems project. Other areas of interest include blockchain-based payments, collateral management, and the bank has applied for a digital asset custody license.
Meanwhile, T-Systems’ MMS subsidiary is the most focused on blockchain, including enterprise and public blockchains. It is one of the few corporates to run staking nodes for multiple public blockchains.