Automotive supply chain meets blockchain for revolutionary transformation The automotive supply chain is incredibly complex, consisting of numerous types of parts, suppliers, dealers, distributors, regulatory agencies and much more. This complexity hinders efficiency and locks down valuable resources in sub-optimal roles. In automotive sector, ERP and manufacturing systems that generate extensive vehicle data must communicate with hundreds of systems downstream, which rely on data feeds to perform their functions. Complex automotive IT landscape means that the business processes are less agile and can take years to change. Blockchain can simplify all this as it enforces a single source of truth in real-time, drastically reducing the risk of two systems having conflicting information. Blockchain for value and business logic As system complexity is reduced, automotive manufacturers and dealers can react faster to market demands to release new products or optimize operational efficiency in the supply chain. As a result, importers and dealers will benefit from the value of reduced lead times for build-to-stock and build-to-order vehicles, which they in turn can pass on to their customers. Blockchain based supply chain would improve just-in-time logistics, enable greater transparency and reduce erroneous orders. Blockchain technology could be applied to below phases of a supply chain:
Product inception and development Product distribution and financing Product retail Product recycling and aftermarket
Information shielding, in which factual information is distorted to maintain competitive advantage, deflect responsibility or simply hide poor performance is more common and pervasive than we think. Blockchain can simplify all this. Supply chain visibility solutions can hold the integrity of provenance of the vehicle. IoT in blockchain for profound transparency Internet of Things (IoT) will bring heightened transparency to the automotive supply chain. Every machine cycle and tool will be recorded with a time stamp and saved to the cloud, ensuring zero discretion in reporting the facts. IoT will generate transparent data at the source of production, while blockchain will keep the data from being tampered. No more shielding of information. By combining IoT, blockchain and physically unclonable function (PUF), business managers can empower cost-accounting and procurement teams across the industry. Enabler for autonomous cars Blockchain may serve as key enabler for autonomous cars by facilitating commerce between cars and other devices in scalable architectures with repeatable outcomes. Blockchain creates a shared ledger between parts distributors, automotive OEMs, dealerships, insurance providers and other stakeholders and provides the ability to the parts and equipment within a vehicle to automatically sense their own needs. For instance, a car could advise the driver about the need for repair or contact the nearby suppliers for replacement parts and authenticate the proper technician. Blockhain in automotive financing Typical auto financing involves multiple verification steps to which blockchain can be implemented for efficiency gains. These include anti money laundering (AML) regulations, scoring and classifying risks, know your customer (KYC) compliance, investigating stakeholders’ legal structures, etc. Last year, Indian automotive OEM Mahindra created a blockchain incubator focused on the automotive financing use cases.
Blockchain industry activity Porsche became the first company in the industry to test and implement blockchain into their systems. Apple, Google, Amazon and Microsoft are already making the move into connected cars. Thirty companies including Ford, BMW, General Motors, Renault, IBM, Bosch and Context Labs have gathered together to form the Mobility Open Blockchain Initiative (MOBI) to explore blockchain use and study how the technology can be used in global transportation in less expensive and safer ways, ranging from autonomous payments to ridesharing. The MOBI working group is headed by the car industry veteran Chris Ballinger. Industry consortia is up for blockchain We are seeing industry consortia emerge as critical catalysts in the blockchain space with industry leaders accelerating their own efforts. Broader the adoption of this disruptive technological wave, the greater the value and efficiency. Getting your private business blockchain If you are in need of a blockchain solution for your automotive supply chain, you can contact the experts of Group50 business consultancy who have extensive expertise in developing industry specific blockchain solutions for SMEs and enterprise level organizations.