Practical example and current challenges
- In extended supply chains, companies know their immediate upstream and downstream partners, and these partners are also familiar with their immediate interlocutors. However, full transparency in the supply chain beyond immediate relationships is difficult to provide. It causes disproportionately high total economic costs due to missing data sharing incentives resulting in numerous individual solutions lacking interoperability across industries and market participants hence limiting strategic supply chain management.
- Moreover, supply chains are embedded in a triangle formed by contracts, payments (and thus liquidity) and data. As data is a crucial component of a supply chain, it has a great value in this use case. The use case is based on an open, dynamic and evolving ecosystem where Gaia-X is both the infrastructure and the catalyst for the relevant parties (politics, service providers, software industry and users). It focuses on the need to be able to manage supply chain transparency as a prerequisite to enable capacity building and resilient supply chains.
- As a supply and service relationship gives rise to a payment obligation, the electronic bill of exchange (eBill) is experiencing a revival. In this use case, it has a special design feature that allows it to “flow” through the supply chain to ensure that each company involved receives its share of the proceeds. This technical solution also makes it possible for liquidity to reach all participants in the supply chain directly. The so-called “FLOW-bill” ensures that all participants in the supply chain receive their payments as soon as the main contractual partner is paid.
What added value does the "Gaia-X project" offer?
- Gaia-X provides the infrastructure to bring all relevant parties together. As this is very sensitive data, it is of utmost importance to ensure its control throughout the process. It is always the property of its author and may be released by Gaia-X to other participants in the course of contract execution. Data originators retain data sovereignty in each individual case and decide for themselves whether data should be released. The model is called “compliance as a profit centre”.
- Beyond that, the data semantics already exist and “Bill of Exchange” as well as promissory notes are specifically defined in legislation. Thus, the digital Bill of Exchange/promissory note can carry all the data from the entire supply chain that underlies a B2B transaction and must therefore only be integrated into Gaia-X.
- Gaia-X offers the possibility, to rebalance the liquidity asymmetry by pairing liquidity with data in order to provide incentives for the redesign of supply chains that ensure economic efficiency, transparency, resilience, capacity building, robustness and sustainability.
- Gaia-X can enable data from this use case to be combined with data from other technology/data-sets, such as RegTech, (Regulatory Technology) AgTech (Agriculture Technology), Industry 4.0, to turn regulatory compliance into a profit centre for small, medium and large businesses and to improve economic outcomes for people and communities.
Use Case Team
- Andreas Eisenreich – T-Systems International GmbH
- Jasper Bhaumick – UMa Soft GmbH
- Damian Crowe - Obillex Australia Pty. Ltd.