TradeIX: Blockchain-Enabled Trade Finance in Global Supply Chains
(4 pages of text)
In February 2014, Global 3PL, one of the largest logistics companies in the world, announced an ambitious expansion strategy. In accordance with that plan, the company struck an agreement in 2017 with TradeIX Limited (TradeIX) to optimize its working capital management. TradeIX was a start-up based in Dublin, Ireland that offered blockchain technology solutions to help companies manage trade finance more efficiently, especially in the area of accounts receivable. However, the potential for improvement in the realm of trade finance was heavily restricted by a complex network of suppliers and an organizational structure of silos for data flow. Global 3PL was therefore working on a pilot project with TradeIX, using its Marco Polo platform, to connect with insurance and banking services through a secure network. The process enabled full transparency of all financing transactions in the accounts receivable process. Despite the success of the pilot project, the efficiency of the Marco Polo platform had to be assessed on a technological and strategic level. Determining if the platform could prove to be a long-term sustainable solution for full operation across Global 3PL’s global trade finance system landscape was critical.
This case is intended for graduate-level courses in business management and in accounting and finance, with little or no previous knowledge of blockchain technology. The case is also suitable for an introduction to blockchain technology in courses on Industry 4.0, data management, and process optimization. Students are asked to analyze challenges and evaluate proposed solutions for the field of trade finance. In their analysis, students cover the key topics of trade finance, working capital management, supply chain management, data management, process optimization, and blockchain technology. After working through the case and assignment questions, students will be able to
- establish a basic understanding of the functionality of blockchain technology in trade finance;
- evaluate the strengths and weaknesses of blockchain technology in trade finance; and
- understand and assess the possible use case of blockchain technology in trade finance and supply chains.
Finance and Insurance
Germany; Ireland; United Kingdom, Small, 2017
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