Volvo Group is making progress in its blockchain project, exploring the potential of blockchain technology and cryptocurrency to improve supplier payments and supply chain management. This has been revealed by a senior company manager.
This project represents the company’s attempt to minimize complexities in the global supply chain through blockchain to improve the process of information exchange and payment from suppliers to transporters.
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Volvo Group Blockchain Focuses on Business Needs
According to Ivan Branco, who works with Volvo Group logistics in Belgium and is responsible for the management of information, artificial intelligence, and analytics, Volvo is designing its own cryptocurrency to use in payments to suppliers.
As per Branco, the decision by Volvo to use blockchain has nothing to do with its novelty as a technology. All projects start off with a problem in business that needs a better solution.
Branco stated that before they determine if there is any business benefit from blockchain, they first analyze the business need. Volvo holds the view that blockchain should help solve problems within the organization.
Branco further argued that many firms continue to equate blockchain technology only with cryptocurrencies, thereby creating unnecessary apprehension about its use. According to him, there are many more uses of blockchain technology, particularly in enhancing security and collaboration within supply chain management.
Volvo Group Launches Private Crypto Pilot
One of the most fascinating features about the Volvo Group blockchain project is that it has attempted to introduce its own digital currency into circulation.
According to Branco, Volvo used a private blockchain system in collaboration with some selected transport providers, where the transactions were done using a cryptocurrency.
The idea was to establish a closed system where the number of payment methods would be reduced, and the exchange of information would become easier within the supply chain.
Using a single currency rather than numerous systems for conducting transactions, the experiment utilized a digital currency for transactions. Blockchain technology enabled the transportation orders, along with other documents, to be recorded in one common database.
As claimed by Branco, this method will enable faster communication and minimize the complications associated with supply chain data management.
Volvo Group Eyes Blockchain for Supply Chains
According to the Volvo Group, there is a possibility that blockchain technology can improve supply chain activities by consolidating all transactions and logistics information in a single platform.
The firm indicates that the use of a shared ledger would enable the suppliers, carriers, and Volvo to have access to information in a way that minimizes manual procedures.
The fact that the private cryptocurrency is still being tested does not prevent Volvo from seeing it as a way to learn how the blockchain might help with the company’s future logistics work in case the technology becomes feasible.
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