Global 3PL, a logistics company, partnered with TradeIX Limited to improve working capital management using their blockchain technology platform, Marco Polo. The successful pilot project demonstrated the potential for transparency and efficiency in the accounts receivable process. However, further assessment of its sustainability on a technological and strategic level was critical for full operation across Global 3PL's global trade finance system landscape.
Erik Hofmann, Maximilian Enthoven, Sara Fallegger
Harvard Business Review (W20650-PDF-ENG)
August 11, 2020
Case questions answered:
- The core technology of the Marco Polo platform described in the case is based on blockchain. Summarize what blockchain is and how it works. What is special about this new technology?
- The Marco Polo platform is based on a private and permissioned blockchain called R3 Corda. What are its benefits? What are its drawbacks? Are there blockchain variations that can overcome the drawbacks?
- Along with the flow of materials and goods, the flow of information and finance demands optimization within supply chain management. What were the key drivers that led Global 3PL to enhance its supply chain through BCT?
- Is the use of the BCT in finance justifiable, as discussed in the case? Does it present a long-term sustainable solution? Use the framework provided in the case to support your argument.
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TradeIX: Blockchain-Enabled Trade Finance in Global Supply Chains Case Answers
1.) The core technology of the Marco Polo platform described in the case is based on blockchain. Summarize what blockchain is and how it works. What is special about this new technology?
Blockchain is a digital ledger that is not centralized and tracks transactions among a number of machines. It works with a consensus method that enables all network users to concur on the ledger’s present state. Since the transactions are organized into blocks, the term “blockchain” was created.
Each block forms a chain that cannot be changed retrospectively without altering all succeeding blocks in the chain, making it tamper-proof. Each block carries a distinct cryptographic hash of the preceding block.
Consensus is a mechanism that network users, known as “nodes,” use to verify transactions, ensuring the legitimacy and integrity of the transactions.
Blockchain technology has the unique capacity to record transactions in a secure, transparent, and immutable manner without the need for a central authority or middleman.
This lowers the costs and time involved with conventionally intermediated transactions by enabling the secure, effective, and intermediary-free transfer of assets and recording of transactions.
Additionally, because there is no single point of failure and the network is immune to censorship and manipulation, the decentralized nature of blockchain offers greater security.
In conclusion, blockchain technology is a revolutionary method for organizing data and recording transactions. It provides a transparent and secure method for storing and transferring assets and has applications in a number of sectors like transportation, finance, and healthcare.
2.) The Marco Polo platform is based on a private and permissioned blockchain called R3 Corda. What are its benefits? What are its drawbacks? Are there blockchain variations that can overcome the drawbacks?
A private, permissioned blockchain created especially for applications in the financial services industry is the R3 Corda platform. It is a blockchain variant that promises…
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