Enterprise blockchain automotive industry is starting to thrive
Enterprise blockchain automotive industry is entering a bloom with the enthusiastic participation of many companies with new initiatives.
The behemoth automotive industry is always one of the leaders in developing and adopting new technologies in their products to achieve automation and convenience.
In addition to other emerging technologies such as AI, IoT, blockchain is a technology that attracts much interest from businesses in the great-value industry. Automotive companies with critical objectives of designing, developing, marketing, manufacturing, and selling are applying blockchain to gain more added values. Enterprise blockchain automotive industry is entering a new powerful change.
Enterprise blockchain applications in the automotive industry
Car production is costly due to the sophisticated participation of many manufacturers, suppliers, and service companies. Spare parts and products being traded and transported between many such parties create a large volume of transactions, requiring a robust information management system. This system has to perform transaction execution and traceability to benefit the businesses.
Accordingly, the implication of blockchain to take advantage of the ability to store data securely and transparently of this distributed ledger in the operation of the automotive industry is diverse.
Based on the characteristics of the industry and implication purposes, the blockchain initiatives in automotive are made of 3 categories (according to Deloitte) with some highlight practical enterprise blockchain applications:
- Verification and process improvement solutions:
Verification is vital to the vast automotive industry. Blockchain-based Digital ID solutions integrated with other technologies (AI, IoT) give a unique identity to each party on the network and each device. As a result, many problems in the industry have found their answers.
- Provenance and verify parts solution has excellent benefits for manufacturers, service centres, vehicle warranties and even customers for traceability of parts in terms of production time/location, and used raw materials.
- Destination trace solution tracks the status and location of materials, parts or products during transit to the destination. This solution is suitable for logistics companies and suppliers who want to control their product journey strictly.
- Know your supplier solution emphasises the effectiveness of mutual understanding between suppliers in the automotive supply chain. Each party on the chain will own a copy record of information about members (manufactures, suppliers, related service companies). With this reliable record, parties raise the chance to find their suitable partners, embrace more market information, and improve partnership effectiveness.
- Targeted recall solution:
The old recall process is complicated and time-consuming with high costs. Blockchain helps manufacturers to track defective parts and to issue specific recalls or service bulletin easier because the information of those particular devices is available and trustworthy.
- Vehicle management and incentives:
- Ride-sharing and on-demand mobility services:
Expert estimates ride-sharing valuation will reach $285 billion by 2030, showing a vast demand for the activity. Blockchain smart contracts is the solution to this demand. The blockchain ride-sharing system can perform as the current ride-sharing model like Uber.
But a third party like Uber won’t keep the payment. Instead, the business logic will process the payment and store it in the blockchain. Then, once conditions are met, the terms will be enforced, the amount will go to the correct beneficiary account. The solution helps to reduce the role of the 3rd party intermediary involved in financial operations, helping to reduce costs per trip. At the same time, the system helps protect the interests of the participants because the process is fully automatic and not interfered by sudden human intention.
- Finance and insurance:
- Insurance contracts solution: Car companies, insurance companies and customers will use the vehicle information to create automatic insurance contracts. The needed information on vehicle conditions such as speeding, mileage, damages and other events will be available in the blockchain database for the automatic claim calculation and execution process.
Major car manufacturers such as Toyota, BMW, Volvo, Ford, Renault are all developing solutions around blockchain technology in many different aspects of the production and business process.
Their goal is to increase competitive advantage in the industry. First, they can shorten the time to bring products to the market. Second, they will gain an increase in the quality of each part and product, thereby reducing recalls, warranty and repairing costs due to manufacturer errors; as well as more efficient inventory management and production planning.
Although we started the blockchain initiative game later than our competitors, akaChain also has promising blockchain automotive supply chain projects that allow quick deployment with affordable cost to the automotive businesses. Learn more about our use case.
akaChain is backed by FPT Software, a globally leading technology, and IT services provider. It is an end-to-end, permissioned, multi-chain network based on the Hyperledger Fabric. Since Establishment in September 2018, akaChain’s product has assisted many enterprises, from SMEs to Fortune 500 firms, to transform with distributed ledger technology. The company provides a broad range of permissioned blockchain-based products and services in multiple sectors, including retail, supply chain, banking and finance, insurance, shopping mall management, etc. to transform with its distributed ledger technology. For more information, please visit https://blog.akachain.io/.
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