Along with other innovative emerging innovations, Blockchain is being actively promoted in many business fields. Still, the perception of this latest business method has some large holes. The article highlights the potential of Blockchain supply chain solutions development for the automotive industry, technology’s mechanics and strength, and what it could mean for the supply chain C-suite.
Put simply, the blockchain technology has provided the foundation of a new type of internet by enabling digital data to be transmitted but not replicated. Picture a Google spreadsheet which is shared thousands of times over a computer network for a better representation of the protocol. Further, imagine that this network is built to update this spreadsheet periodically, and you have a clear idea of what is blockchain. Additionally, add characteristics of blockchain to that spreadsheet, like an immutable ledger, consensus mechanism, cryptographic encryption, and more. It makes it an ingenious invention that, if used as the underlying infrastructure, can revamp the entire automotive supply chain.
As blockchain is implemented to speed up administrative processes in supply chains, the additional costs incurred in the system are automatically minimized, thus maintaining transaction protection. Eliminating the supply chain middlemen and intermediaries reduces the risks of fraud, duplicates the commodity, and also saves money. Payments may be handled inside the supply chain by customers and suppliers using cryptocurrencies instead of customers and suppliers, rather than depending on EDI. It would also increase productivity and reduce the chance of missing goods with correct record keeping.
Trusting with multiple participants in complex supply chains is crucial for smooth operations. For example, if a manufacturer sells his goods with suppliers, he/she should be able to rely on them for upholding safety standards at the factory. Also, trust plays a key role when it comes to regulatory compliances such as custom enforcers. Blockchain’s irreversible role in the supply chain is well-designed to avoid tampering with and confidence building. The blockchain avoids the threats that come with centrally controlled data by storing data through its network.
Its infrastructure lacks central vulnerability factors which can be abused by computer hackers. The internet today has security concerns common to us. To secure our identity and properties online, we all rely on the “Username / Password” scheme. Protection mechanisms used by blockchains use encryption technology.
The public and private ‘keys’ are the reason for this. A ‘public key’ (a long, randomly generated string of numbers) on the blockchain is a user’s address. Cryptocurrencies that are sent over the network are registered as corresponding to that account. The ‘private key’ is just like a code that provides access to its owner’s digital properties. After the data has been stored on the blockchain it is incorruptible. If this is valid, it would also entail the safeguarding of the private key by printing it out and making what is called a paper wallet to secure digital properties.
Automotive supply chain managers can use blockchain to multiple supply chain problems, like keeping complex databases and monitoring products and services. A far less corruptible and better-automated alternative to centralized databases is another advantage.
In the field of monitoring and testing products and services, a blockchain-based automotive supply chain management system allows for accurate record-keeping and monitoring of provenance as product information can be accessed via embedded sensors and RFID tags.
Blockchain may trace the past of a commodity right from its origin to where it is in the present time. Also, this form of exact provenance monitoring can be used to detect fraud in any part of the supply chain.
The car supply chain is a highly dynamic and big field with numerous participants, ranging from parts suppliers, producers to sellers. Delivering real customer value includes a review of existing infrastructure and business processes, as well as solutions that respect protection, confidentiality, and authorization permissions. Blockchain can prove an ideal solution. Blockchain can be used by automotive manufacturers to protect their brands against counterfeit goods and to build customer-centered business models.
Falsified goods pose a critical concern for car manufacturers in the automobile industry. It also puts the global demand for counterfeit spare parts at several billion dollars. Such goods may find their way through the supply chain either directly or through suppliers from the OEM and the aftermarket. Fraudulent replacement parts are not reliable because they have often deteriorated quality standards and frequently appear to malfunction, which inevitably causes disappointment to end-users, causing them to revoke their brand faith. Introducing blockchain technology for counterfeit goods is proving to be dramatically beneficial as it enables replacement parts to be accurately identified and digitally represented. Digital spare parts recognition provides clarity to the framework, which can be exchanged between different network members.
Inbound logistics and blockchain-based manufacturing powered by blockchain smart contract solutions will make the automotive supply chain more efficient. The analysis of individual components of an inbound supply chain is currently complex and vulnerable to errors.
For the successful functioning of the supply chain, coordination between multi-tier suppliers, third-party logistics, and transportation companies through the manufacturing facility is required. By using blockchain, businesses can ensure the availability of accurate and real-time information from various parties. Individuals concerned should verify the status, quantity, and position of individual pieces.
The outbound supply chain is likewise a complex network consisting of producers, suppliers, importers, and dealers. These participants also don’t have a shared model of data sharing that makes it hard for them to share information. A decentralized blockchain-based framework can boost accessibility and accountability, ensuring quicker transactions and shorter periods of settlement.
By 2023, Gartner forecasts that blockchain will enable global movement and annual monitoring of 2 trillion dollars of products and services. But this growth is unlikely to occur without the support of integrated IoT platforms. By integrating IoT’s real-time tracking and decentralized distributed ledger blockchain, track-and-trace precision, as well as scalability, become more efficient, improving the efficiency of the automotive supply chain.
Both innovations together further improve the dynamic relationships within the supply chain for automobiles. While this sounds good, further study is required to decide precisely how these activities take place. There are incoming logistics and outbound delivery in every supply chain. These words apply to the selection of a product’s components and how the finished product reaches end consumers.
The rapid pace of advances in blockchain technology means blockchain could offer a solution to many of the problems facing the industry today within one to two years. We expect to see the tipping point within the next five years, with industry-wide acceptance on the wholesale. To realize potential benefits, companies need to analyze their strategic priorities, determine which blockchain technologies are most appropriate for them, and how to invest.