PLANPORT AIR Supply chain 2.0 | Web 3.0 | Unique and Practical Blockchain use case| First product: Procurement and sourcing network
May 15
The killer application for the Blockchain tech and Planport (part 1)
Overview of planport Network applications
1)Enterprise buying side
2) Supplier portal side
3) Trade finance marketplace
The world of business is a highly dynamic one, changing from one form to another throughout history. This is the world of ultimate competition as every business, big or small tries to outdo its competitors to stay ahead, maintain market share, or for new ones, disrupt the status quo to carve out their niche. With such fierce competition that does not forgive laxity and wasting of resources, it has become a tradition for businesses to find every single way to cut their costs and maximise their profits. Even the big multinationals are not left out. Every single one of them is busy trying to be able to report good quarterly earnings. As for small businesses, maintaining high profitability, and importantly making sure every dollar spent is maximised and has a high return on investment, is a matter of life and death.
Now, up until 2018, the supply chain and procurement industry remain one of those areas businesses face the most significant challenges which seem intractable.
And if a publication by Harvard Business Review titled “No business is an Island” is to go by- (which is, by all means, true in every case) then, no matter how big or small a company or organisation might be, it still relies on others for their services, expertise, and products to survive. The exchange can only take place when a working supply chain is in place. And the supply chain cannot be complete without a functioning procurement system.
Procurement is undoubtedly essential in the supply chain system. Companies spend more than 75% of their revenue on this part of the supply chain.
Although this rich industry spans over trillions of dollars in market share, the whole process is marred with painful and expensive experiences capable of dissolving a company if not adequately managed.
The common problems that currently cause all the unfortunate experiences in the procurement industry include legacy systems, manual processes, disorganised contracts, inefficient B2B remittance, zero incentive mechanism and rigid organisational silos, high and fraudulent invoice discounting mechanisms.
Blockchain + supply chain and the Planport network
State of the art cryptography means the Blockchain doesn’t need a central authority to manage data transactions based on the fact that Blockchain provides a distributed digital ledger technology that cannot be hacked or manipulated.
The Blockchain technology holds enormous potential for the supply chain industry, with networks and applications like Planport, IBM Blockchain pushing for the overall ecosystem to adopt the Blockchain technology. This is an area where Blockchain will undoubtedly flourish and become mainstream with real-world use cases being a central point.
Smart contracts
The Ethereum blockchain-based distributed computing platform has been making great strides in the Blockchain space with smart contracts being one of its most significant innovations. ERC standards Identity (ERC725), Loans (ERC1068), Digital collectible products(ERC721), Tokens (ERC20), Deleware Corp (ERC884) standards are pushing the Ethereum blockchain to new levels which will be an essential part of the supply chain problem-solving process within Planport.
Smart contracts for Trade finance marketplace means a network that uses the blockchain ledger can verify the invoice and make sure that invoices are not duplicated for multi-financing and other fraudulent activities. (see below)
Contract management
Smart contract will help to eradicate problems with current contract life cycle in the supply chain
The smart contracts allow the creation of multi-party terms and agreements that can self-execute when different conditions are met in the procurement process and eventually have a fully decentralised procure-to-pay process which will dramatically change the supply chain management process currently marred with contract disputes among other notable problems.
The challenge of Reconciliation
For consumers, execution of payments is at the point of sale, but in the B2B world, business payments mostly take place weeks or months after delivery of goods and services. This creates a problematic vacuum between the funds released and the information that is around the payment. This same issue is affecting cash-flow.
This vacuum is created due to a likely mismatch between the data and payment. When this happens, suppliers cannot easily reconcile their payments which directly impacts on their collection timing and receivables metrics. Suppliers then must contact their buyers for payment information and status to get to the bottom of the remittance data or post-payment invoice disputes.
This is the reason why suppliers, most of the time, refuse to be paid electronically because paper checks make a better option but they come with limited and no advance visibility into the coming payments.
Planport’s contract management
Smart contracts will automatically execute pre-determined payments when projects and agreed terms are completed in the procure to pay life-cycle with all the data available within.
Utility Tokens
Tokens will unlock many areas of the supply chain, from farmers and suppliers to supply chain experts. The supply chain experts will add real value to the process, making sure everything is correctly incentivised and can generate different revenue streams. The supply chain is more like a chain of people who are working on their own, where values are locked away because no incentive mechanism exists today.
Example of Decentralised utility tokens how they can shape the future of the supply chain industry that is built of trust and mutual benefit.
1)Decentralising Firm based consultancy
One of the features of the Planport network is the On-Demand Consultancy. This means that the current system of having consultants advice enterprises on different aspects of procurement is done within the PlanPort system on a pay-per-use model instead of months of contracts and huge fees that need be locked in in the traditional pattern. Procurement heads will easily connect with experts in the different categories, needs, and transact without any hassles as is typical of procurement advising firms. This means there are no substantial upfront investments or long terms contracts, and users can scale it up or down, or even turn it off as simple as users can turn it on.
2)Fairer Return: incentive mechanism
Suppliers want to monetize their ideas. The internal works and contributions suppliers are bringing to the table for enterprises are all promoted whenever an incentive is in place.
Currently, there is no mechanism to solve this issue, so ideas and improvements that could change how organisations work and drive for a better outcome are locked away. The Plan token is designed for this purpose.
Planport token use case example: incentive mechanism
3)Security Deposit and Staking
Port Tokens can be staked for proposals issuing, submitting new proposals, launching an RFP, and launching contracts. The number of tokens required to stake can be designed dynamically depending on the number of projects, the value of the project and other factors like reputation and rating of the entity.
Traceability and visibility
One of the Blockchain core values is that an entity can’t manipulate data as they wish. This is a valuable feature that Blockchain will bring to the supply chain to ensure authenticity and traceability throughout the procurement lifecycle. The result is greater value to users. Audit trails of goods that are verifiable, supplier verification and the authenticity of credentials, qualifications and other necessary documents will no longer be fraudulently presented in the supply chain process.
Planport Trade finance marketplace
1.1 Working capital solutions
One of the problem that suppliers face today is dealing with fees as high as 20% on their receivables due to third party organisations, at the same time there is also a problem of duplication of invoices and fraud within the $3 trillion worth industry. The blockchain technology eliminates the need to have a middleman to verify and execute invoices and allows borderless trade finance marketplace where Sellers and Funders meet with trust and mutual benefit. Businesses can also Control their organisation’s trade finance operations using the transparent and intuitive financial dashboard.
Planport: Product One Example
The core design behind the Planport first product is its core idea of creating a single, feature-filled platform that touches and solves all the problems that the procurement departments face on a daily basis. At the heart of this platform is a seamless RFI, RFQ, and RFP solutions portal that is made intuitive and utterly transparent unlike the very manual and fragmented process that currently exist with spreadsheets, emails, and very inefficient payment systems. On a single platform, and with little or no hassle, a company can issue RFXs, invite suppliers and run a simple reverse auction that cut their cost down, accept and conduct business with zero inefficiency and minimal waste of time or resources. In effect, they save millions and build a strategic relationship in the process.
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Supply chain 2.0 | Web 3.0 | Unique and Practical Blockchain use case| First product: Procurement and sourcing network
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