- Category: Blockchain Supply Chain
The automotive industry is moving quickly towards an era of intense change. In fact, the future of this industry will be starkly different from that of today and will soon be more than just an industry about vehicles. However, the current industry landscape is exposed to certain challenges such as counterfeiting, lack of transparency, inefficient recall management and more. These challenges have pushed businesses to fine-tune their supply chain strategies and operations, as an optimized supply chain can prove to be a critical element that can set businesses (automakers) apart from their competitors.
A robust technology that can do away the pain points of automotive industry is something what businesses require to remain ahead of the curve. One such disruptive technology that will have a significant impact on auto industry’s supply chain is ‘Blockchain’ – A distributed, decentralized and shared ledger technology.
Listed below are some of the benefits of using Blockchain for streamlining the automotive industry.
- Parts Provenance: Duplicate auto parts frequently get into the supply chain. As a result, they often fail as soon as they are installed. This causes damage to the manufacturers, as well as suppliers. While the conventional tracking system has helped automakers deal with this fraudulence to a certain extent, yet counterfeit parts have always managed to make their way into the supply chain. Blockchain allows the creation of a unique ID for each part, along with immutable timestamps i.e. the time since when the part is developed. To ensure authenticity protection, these tags that link to the Blockchain can be set into the parts.
- Vehicle Tracking: Yet another thing that plagues the automotive supply chain is the unethical practice of selling a showroom vehicle by the car dealer without reporting the sale to the bank that had sanctioned a loan for the same. The money laundered in the process is used by the dealer as a capital to conduit suppliers and payroll. While the Bank can take appropriate action against the dealer if it catches on such incidences, but it usually fails to do so as the vehicle is sold legally, and the financing is already spent, leaving banks with no option. To deal with such issues, transparent access to data is required. Blockchain removes all the asymmetry in information and provides instant transparency.
- Inbound Plant Logistics: Ensuring timely distribution of deliverables is essential for ensuring efficiency and transparency across the supply chain. Consequently, manufacturers must co-ordinate effectively with other participants of the inbound chain to provide timely delivery of parts. A blockchain powered system coupled with IoT sensors can provide permissioned supply chain participants with accurate and transparent view of the product quantity, status, and other essential information regarding it. This would help OEM plant manufacturers to plan their production schedule more precisely, improve traceability and streamline the flow of goods. Furthermore, suppliers would be able to optimize inventory, reduce the incidences of lost or wrong order besides reducing cost of warehousing.
- Securing Car Applications: The car applications available enable users to accomplish several things such as car sharing, route sharing, remote monitoring etc. The accomplishment of these things relies on information or data shared by users. However, data security isn’t assured with the current system. By storing data on a Blockchain, data security can be ensured due to distributed and immutable nature of Blockchain.
- Insurance Processing: In an era of multi-partner supply ecosystem, an auto company works with multiple insurance companies for managing auto insurance. Automotive OEM’s can potentially use Blockchain Technology and Smart Contracts to streamline the entire process for asset transfer and management including auto loans, auto registration and auto insurance.
The automotive industry has become a primary source of revenue, stability and national pride in several nations. By leveraging Blockchain Technology and AI/ML, automakers can do away with the inefficiencies of the conventional system by increasing transparency, streamlining processes while providing stakeholders and companies with a host of value-added services.
Sofocle Technologies – A prominent name in the Blockchain space offers sofoChain – A robust Blockchain supply chain solution that can address the inefficiencies of automotive industry supply chain. To know more about sofoChain solution, drop us an E-mail at Success@Sofocle.com or Contact Us.