Blockchain Technology for Car Manufacturing
One of the most promising applications of Blockchain technology is supply-chain management, a 20 billion dollar market expected to grow to 40B by 2027 (Statista, 2022; GlobeNewswire, 2022).
Size of the global supply chain management market worldwide from 2020 to 2026 (in billion U.S. dollars). Source: Statista
Blockchain technology is simply an excellent tool for adding transparency, automating processes, and reducing settlement costs. One of the biggest advantages of implementing blockchain in supply chain management is bringing down the cost, wastage, and time of the entire production cycle.
In general, blockchain technology can be a powerful tool to address end-to-end traceability, and speed product delivery, coordination, and financing. Imagine all the inventory data mistakes, double payments, or missing shipments that are almost impossible to detect in real-time: even after detecting a problem, it is extremely difficult to define its source, as companies could engage in thousands of transactions per day. Having a record of all activities and sharing the data with stakeholders in real-time can result in a more cost-efficient solution compared to an ERP system (Gaur and Gaiha, 2020).
For a few years, many car manufacturing companies have been exploring the opportunities blockchain technology can offer regarding the efficiency and transparency of processes. BMW, Mercedes-Benz, and General Motors are no exception. Every day, car manufacturers process millions of transactions that entail excessive paperwork, constantly increasing transaction fees, lack of transparency, and cybersecurity risks. That is why blockchain is so appealing.
When building cars, manufacturers face complex networks of suppliers and intermediaries. BMW, for instance, tackles 3 issues: cross-organizational processes, the dependency on paper and email, and ultimately the trust in processes, products, and services by supporting the development and implementation of blockchain in its supply chain.
In the case of Mercedez-Benz, using blockchain technology to track CO2 emissions within the cobalt supply chain supports the arduous effort to reach a carbon-neutral car offering by 2039. What is more interesting, General Motors has applied for a patent that links blockchain with mapping in pursuit of an efficient autonomous car.
“Sensors will be used to evaluate and characterize the area around the motor vehicle, and a discrepancy detector will be used to identify differences in the surroundings compared to a known navigation map based on information received from one or more sensors. The differences will then be transmitted to a blockchain map network.“ – Forbes, 2020
What can Blockchain do for car manufacturing?
Create a unified platform to easily track down and pay for vehicle parts, manufactured vehicles, and related services.
Create a digital database system that is immune to accidental data loss or deletion. Most manufacturing systems are paper-based.
Enable the deployment of a blockchain-based supply chain management system to process payments and track movements of raw materials and vehicle parts.
Add transparency and traceability to the business (movement of goods and finances).
Enhance the company’s current system with a blockchain-based service or feature.
Leverage blockchain data storage to make sure no critical records are lost.
Improve value calculations.
Automate some of the agreements using smart contracts.
Integrate the blockchain with the Internet of Things (IoT) to store data and implement an enhanced valuation of assets.
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