IBM and Chinese conglomerate Sichuan Hejia have launched the Yijian Blockchain Technology Application System, a blockchain-based, supply chain financial services platform for pharmaceutical procurement.
“IBM offers an enterprise-grade blockchain platform built on the Hyperledger Fabric that helps clients define and develop new industry use cases,” said Gregor Pillen, Managing Partner, IBM Greater China Group Global Business Services. “We have a deep understanding of various industries and leading technologies that we use to help resolve enterprise clients’ business challenges while finding growth opportunities so that they can help contribute to China’s economic transformation.”
The blockchain-based platform is expected to deal with the financing problems that pharmaceutical retailers face. Underdeveloped credit system and a lack of established credit evaluation and risk control hinder small and medium-sized retailers in China to raise funds. It can also be hard for them to get loans from traditional financial institutions without sound credit records and collateral to meet financing standards.
In general, the aim of the Yijian Blockchain Technology Application System is to reduce the turnover time of funds on both sides of the supply chain, provide more information for banks, and enable them granting access to funding for small and medium pharmaceutical retailers.
The possibility to track drugs through the supply chain and encrypt trading records can allow for the authenticity of transactions. In turn, this minimizes the credit risk profiled by financing institutions and shortens the payment period possibly to the first or next trading day.
Leng Tianhui, board chairman of Hejia, said: “The launch of the supply chain financial services platform marks a milestone for the cooperation between Hejia and IBM on the innovative application of blockchain technology. In the future, the platform will expand to include more industries to provide participating companies and financial institutions with transparent and efficient financing services built on blockchain-based innovation in a business model that will contribute to China’s economic development.”
Hejia unveils ambitious plans to expand the platform to include multiple pharmaceutical retailers, hospitals and banks in July.
Dr Shen Xiaowei, director of IBM Research – China, CTO of IBM Greater China Group, said: “Blockchain can fundamentally transform businesses by eliminating inefficiencies, speeding up transactions and enabling innovative new business models. The Yijian Blockchain Technology Application System we’ve built with Hejia is a great showcase of this capability. We look forward to continued collaboration with Hejia to apply this technology to other industry use cases.”
The development of the Yijian Blockchain Technology Application System also marks the successful business transformation of Hejia. The partnership between IBM and Hejia provided insights from the analysis of the supply chain finance industry and the financing conditions facing pharmaceutical retailers.