EY Global Blockchain Summit

1. EY Global
Blockchain Summit
Blockchain-enabled contract supplier management:
Global CPG company – PoC implementation case study
New York, NY

2. Page 2 EY Global Blockchain Summit
Contract
manufacturer
Raw Material
supplier
Raw Material
supplier
Raw Material
supplier
Raw Material
supplier
Raw Material
supplier
Data exchange –
emails, Excel,
phone calls
Data exchange –
emails, Excel,
phone calls
Data exchange – emails,
Excel, phone calls
► Lack of transparency in data and business
transactions across the contract manufacturer
supplier network
► Delayed sharing of data and information
across stakeholders
► Burdensome reconciliation process for prices
and transactions
► Non-standardized data formats and
exchanges leading to multiple sources of truth
► Extensive audits to verify and reconcile
transactions across the network
Client
Key challenges
Global Manufacturing Company
Use case: client supply network challenges
Contract
manufacturer
Contract
manufacturer

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Initiation
process
Ongoing
operations
Price
verification
True-up
process
► Elimination of the challenging audit and reconciliation process
► Price sheet on the blockchain mitigating discrepancies of raw material prices
► Visibility of prices and transactions between contract manufacturer and suppliers
► Eliminating challenging price verification process and infrastructure
► Ability to verify each time that the price paid is the same price that was agreed
► Challenging audit and reconciliation process between client, CM and suppliers
► No standard way to issue price sheets for orders
► Discrepancies in updates to pricing of raw materials
► Difficulty confirming correct volume tier pricing for orders from CM
► Inability to confirm the price paid is the same that was agreed
Future state – blockchain solutionCurrent state
Key issues Key improvements
► Capturing the
value leakage
► Productivity
improvement in
the true-up
process
Initiation
process
Ongoing
operations
True-up
process
Blockchain enabled future state
Price
verification

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Solution demonstration video

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Immediate benefits Client CM Supplier
► Increased transparency in data and business
transactions
► One single version of the truth accessible
instantaneously
► Streamlined reconciliation process for prices and
transactions
► Simplified audits arounds price verification and
compliance
► Simplified true-up process
► Reduced value leakage due to price discrepancies
► Overall productivity increase across directed buy
process
Delivered value across procurement network

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Blockchain Considerations for the network
Security Privacy Scalability
Speed and
Performance
Governance
Interoperability Integration Data Integrity
The following eight considerations should be carefully thought out before any pilot and production-scale
blockchain implementation

7. Page 7 EY Global Blockchain Summit
PoC blockchain architecture
High level architecture
Web application layer
Blockchain interface (API)
Private Ethereum Blockchain
Client
node
CM
node
CM
node
Supplier
node
Supplier
node
Permissioning
smart contract
Price sheet
smart contract
Purchase order
smart contract
Invoicing smart
contract
Smart contract layer
Virtual machine layer
Company A user CM user CM user Supplier user Supplier user
Smart contract architecture
A Permissioning smart contracts are used to restrict the parties who are able to perform
certain actions.
Permissioning smart
contractA
Price sheet
smart contractB
Company A to CM
purchase order smart
contractC
CM to supplier
purchase order smart
contractC
CM to Company
A Invoice smart
contractD
Supplier to CM
Invoice smart
contractD
B The price sheet smart contract will act as a single, master price sheet which will be
collaborated on and maintained by all parties.
C The purchase order smart contract will act as a point-in-time snapshot of the price
sheet at the point of time when the purchase order is generated.
D The invoice smart contract will calculate the total bill of the components based on the
volume of the component ordered.

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Thank you!

9. Page 9 EY Global Blockchain Summit
Key contacts
Kartheek Solipuram
Manager – FSO Advisory
Ernst & Young LLP
Blockchain Lead Solution Architect
kartheek.solipuram@ey.com
Sharad Malhautra
Senior Manager, Digital Supply Chain & Operations
Ernst & Young LLP
SME – Enterprise Blockchain
sharad.malhautra@ey.com

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EYG no. 02526-183Gbl
1803-2618612
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This material has been prepared for general informational purposes only and is not
intended to be relied upon as accounting, tax or other professional advice. Please
refer to your advisors for specific advice.
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Disclaimer:
Views expressed in this presentation are those of the
speakers and do not necessarily represent the views of Ernst
& Young LLP.
This presentation is provided solely for the purpose of
enhancing knowledge on blockchain matters. It does not
provide blockchain advice to any organization because it does
not take into account any specific organization’s facts and
circumstances.