Automobile Companies Leverage Blockchain for Optimized Supply Management
The supply chain industry is at the forefront of the blockchain revolution, utilizing the superior database management of the technology to streamline back-end processes. Tesla and BMW are the latest to join the movement, as the two companies use blockchain solutions to cut costs and improve the speed of shipments, per Forbes, April 15, 2020.
Cost Management and Verification of Supply Chains
Tesla and BMW are two of the largest automotive manufacturers in the world. By signaling their intent to use blockchain, they provide an extra layer of legitimacy to solutions that improve existing infrastructure using blockchain.
In order to improve the speed of receiving shipments, Tesla signed up to be beneficiary of a product that uses the Hyperledger Fabric to minimize paperwork and hasten the movement of goods. The program, CargoSmart, dramatically improved the speed of shipment by automating pick up, applications, and final release mechanisms.
BMW, on the other hand, is not a beneficiary of third-party blockchain protocols but has built its own product, dubbed “PartChain”. Andreas Wendt, a member of BMW’s board who presides over purchasing and supply chain offered the following insight to Forbes:
“This move is designed to take the digitalisation of purchasing at the BMW Group to the next level. Our vision is to create an open platform that will allow data within supply chains to be exchanged and shared safely and anonymised across the industry.“
PartChain aims to track the movement of auto parts, right from the time the metal is mined till the time it is fit into a particular vehicle. The network will operate with end-to-end transparency.
Blockchain Beyond Financial Services
The advent of cryptocurrency as a means of improving existing financial primitives cements the narrative that blockchain primarily disrupts the finance industry. But this doesn’t mean other sectors don’t stand to benefit.
At this point, the scope for cost management has been highlighted as the most promising result of supply chain driven initiatives. In a time of diminishing demand, corporations will take every penny of potential cost savings they can muster.