Unleashing A New Digital Era At RPG

Blockchain technology has been gaining prominence among businesses globally. It is fast evolving as a trend, driving significant improvements and disruptions in every industry, be it banking, healthcare, education, finance, manufacturing or cybersecurity.

Simply put, Blockchain is a distributed ledger run by multiple nodes, none of which owns the platform. A significant advantage of this technology is that it is decentralised, permanent and secure. This makes it a powerful platform, where multiple parties can interact and upload data without worrying about getting defrauded.

A recently released report by Gartner estimated that the business value added by blockchain will grow to $3.1 trillion by 2030. As applications for blockchain and its acceptance grow, leaders from across industries have been customising and tailoring the technology to fit multiple use cases within their companies.

CEAT EMBARKS ON THE BLOCKCHAIN JOURNEY

RPG Group, with its diverse businesses and areas of work, has also embarked on an ambitious blockchain journey to bring greater efficiency and agility into its operations. CEAT, the group’s flagship tyre company, has recently adopted Blockchain to solve a recurring problem, effectively.

THE PROBLEM:

CEAT works with several entities for every shipment it imports to manufacture tyres. These entities include suppliers, the shipping line, port authorities, supplier banks, CEAT’s bank and customs authorities. There are often issues relating to trust, communication and traceability amongst each of these players that bring additional complexities to the shipment process. Additionally, in many instances, the shipment reaches the Indian port before the supplier has even couriered the relevant documents. As a result, CEAT pays demurrage charges to the authorities for a shipment that has arrived on time, but cannot be released.

An obvious solution would be to digitise this process. However, if not done properly, digitisation could bring new problems, such as:

• Lack of standardisation as each supplier uses their version of software tools and applications
• Non-inclusion of banks in this software ecosystem
• Inadequate means to ensure legitimacy, leading to mistrust

THE SOLUTION:

CEAT’s digital team decided to look elsewhere for solutions and embraced blockchain to tackle this problem once and for all.

After evaluating a few blockchain platforms, the Essdocs solution was chosen and onboarded. This platform leverages the openness and immutability of blockchain technology to establish trust among the parties. Moreover, since entries in blockchain are irreversible, banks were open to agree on a single source of truth to facilitate transactions on an electronic bill of lading.

IMPACT:

As a result of this intervention, the entire cycle is completed in four days instead of the conventional 10-15 days. Besides delivering the advantage of zero errors and saving time, this solution also saves paper, making the entire process greener. For the supplier, a typical courier shipment costs around $60, which has come down to a transaction cost of around $20 post the implementation of this solution.

Roopesh R, Senior Vice President – Procurement, CEAT, says, “CEAT has taken the big leap in leveraging Blockchain technology with the first such import transaction in the country. This move will help us ensure a safe, smooth and agile exchange of shipping documents, resulting in zero demurrage and detention, fewer disputes in transactions between the supplier and buyer, lower transaction costs of the courier, etc. We are also planning to deploy this solution horizontally in exports, which would further improve working capital management at the company.”

CEAT now plans to move to blockchain-based smart EBL (E-bill of Lading) for all vendors where it faces a similar problem. It is also making efforts to include custom authorities in this chain to further boost efficiency.

Samip Mutha, Head - Digital & Innovation, RPG Group, shares, “RPG's digital effort philosophy revolves around three pillars — Expand, Experiment and Explore. Early this year we had decided to experiment with blockchain as a technology. Successful implementation of the blockchain-based platform at CEAT for our EBL process has not just helped us build our confidence but also opened up a plethora of opportunities to expand this success and explore new blockchain opportunities.”

RPG continues to make significant inroads into this technology across its other companies. KEC, the flagship infra arm of the Group, has also carried out its first export transaction from India to its subsidiary in Dubai, deploying blockchain.

More recently, the Group organised a ‘Blockchain Day’ to onboard its companies to embark on their web3 journey. The Group’s digital team expects this event to further cull out key manifestations of blockchain within the RPG ecosystem and solve problems across finance, supply chain and manufacturing domains.

As one of the first Indian conglomerates to deploy Blockchain for imports, RPG has embarked on the journey to leverage cutting-edge technologies to solve core business problems. The impact delivered by this solution solidifies the Group's belief in getting exponential return on investment from digital interventions as it continues to drive many such industry-first solutions.