How can Blockchain technology provide benefits to the Automotive industry?
With the emergence of Electric and Autonomous vehicles the automotive industry needs to adopt a more integrated and consumer focussed approach.
Features of blockchain:
1. Near real time: Enabling almost instant settlement of recorded transactions.
2. Reliable & available: There are multiple participants who share information and a common consensus. It therefore has no single point of failure.
3. Transparent: Information and transactions can be shared with participants of the network. Improving communication, innovation but also creating enhanced efficiency and lower OPEX costs.
4. Digital: Any asset or documentation can be expressed and referenced.
As automative executives explore the application of blockchain (it is reported that over 45% of executives are considering investing sums greater than $5m in development) then there needs to be a clear rationale. Multiple uses of this technology can be specifically applied to the automotive industry:
1. Consumer behaviour and expectations are changing: Increase in e-mobility and on-demand services mean there is an increased willingness to share data and utilise technology to do this in a safe and secure manner.
2. Supply chains are often disjointed and fragmented. This can result in delays and customer dissatisfaction. Difficulties in tracking and verifying components can also be a key issues (Blockchain stores data an an immutable platform and tracks data from source).
3. Whilst car utilisation is relatively low the cost of insurance as an overhead is fixed. Utilising data sharing through an immutable platform could see a move towards on demand insurance payment. this reduces consumer cost.
Adoption of such technology delivers multiple benefits especially in a world that has changing consumer focus with ESG a major consideration and overall purchase experience being a major factor. Adoption leads to benefits in:
KYS (Know Your Supplier)
Provenance, tracking and verification of parts
Enhanced, connected supply chain
Targeted recalls when required
Focussing and delivering this leads to an improved customer experience and therefore achieves a major goals including reduced cost, enhanced efficiency, enhanced ESG credentials & brand loyalty.