Today Siam Cement Group (SCG) announced that its blockchain procurement platform has seen multiple successes over the last year. The Thailand-based firm launched the Procure-to-Pay solution nearly a year ago with Digital Ventures for secure, efficient processes in the building materials supply chain.
SCG, the country’s largest and oldest construction materials firm, oversees the trading of steel, cement, and piping among other supplies boasting $15.3 billion in 2018 revenue and thousands of partners worldwide. Its blockchain-based platform is currently used by 240 of them, built on R3’s Corda enterprise framework.
By storing and managing purchase orders on the system, the firm ensures data is secure and immutable for easy auditing and analysis. This additionally allows for efficient invoice verification and a lower risk of fraud.
Today SCG announced the blockchain solution has reduced the average procurement processing time from 70 minutes to 35 minutes. Plus, costs have been slashed by 70%.
The firm’s CFO, Thammasak Sethaudom, said: “The SCG’s adoption of blockchain technology as a digital procurement platform […] is a part of digital transformation through collaboration, […] to deliver new technologies that further increase operational efficiencies and speed.”
The platform’s success means that SCG plans to make it available to ten times more partners – up to 2400 by next year. It also aims to expand its use of blockchain to sales, collections, and data analysis.
After a year, what has SCG learned about the technology?
Thammasak stated: “Although the implementation of blockchain or other technologies can enhance efficiencies and accuracies in business operations, what organizations need to consider is the application to help generate reliable data.”
“Organizations that are new to these technologies should implement them with existing ecosystems, especially with partners who are familiar with such technology in order to adapt it faster and optimize budgeting. Essentially, the key is that learning and executing has to be fast,” he continued.
“The faster the organization moves, the more benefits we can reap from rapid technological progression and changes.”
Digital Ventures, a subsidiary of Siam Commercial Bank, developed the procurement blockchain with Accenture. It only took five months to build, thanks to the input of R3, claiming to be the first fully-integrated Procure-to-Pay system.
Several other organizations are using blockchain for procurement, especially in Asia. The Asian Development Bank is exploring an e-government blockchain procurement platform that would include a global database of suppliers. Another use is to ensure that public tenders are fair. In South Korea, a district of Seoul is experimenting with such a system, as is the defense department for arms procurement.