Blockchain is more than the technology behind cryptocurrencies: it’s a way for members of a business ecosystem to securely and transparently execute critical transactions. Because blockchain can be adapted to many uses, it can also manage multiple steps and relationships across an entire stream of interactions, such as various pain points throughout manufacturing, distribution, sales, and finance and accounting.
We expect that in five to ten years, blockchain technology will transform nearly everything about the way we do business. Right now, it’s a time for investigation and investment, which is why groups such as MOBI (Mobility Open Blockchain Initiative) have emerged. A nonprofit initiative formed by a consortium of automotive manufacturers and suppliers, MOBI contends blockchain could be used to verify vehicle identity and vehicle maintenance history, when combined with other technologies, such as IoT and AI.
Blockchain for fleet management
The need for transparent and verifiable vehicle history records is a larger matter than perhaps it may first appear: According to the National Highway Traffic Safety Administration, more than 450,000 vehicles are sold each year with false odometer readings. This crime costs American car buyers more than $1 billion annually. With blockchain, fleet managers could track their vehicles to see how they are being used. Not only could they monitor their cars more efficiently, they could also pay for fuel and regular maintenance in a more straightforward manner.
At a more granular level, each item in the automotive supply chain could be tracked via blockchain, when combined with other technologies, such as IoT. Manufacturers would be able to track and trace the content of each product to its respective suppliers and sources of raw materials all the way down the supply chain. This could produce numerous benefits throughout the product lifecycle, such as:
- Tracking hazardous materials and conflict minerals: a critical function in protecting public health as well as preventing future liability.
- Tracking parts and materials: this is extremely important for managing and handling warranty and recall situations, allowing the manufacturers to address these cases with a much higher degree of accuracy and timeliness resulting in improved safety and cost savings.
- Streamlining the warranty processes: a huge benefit in facilitating the verification of claims and making secure payments. Also importing for ensuring raw goods are ethically sourced (some materials, such as cobalt, can be problematic).
As the materials move further down the funnel, manufacturers, dealers and repair shops could be assured that all parts in every vehicle are genuine — stopping the growing problem of counterfeit parts entering the supply chain. You don’t need to be an auto expert to understand that the use of counterfeit parts could have catastrophic outcomes. Blockchain technology can protect against the use of such parts, significantly improving the reliability and safety of critical equipment and products across the auto industry. The same capability will also play a significant role in the verification of authentic parts in the aerospace industry and will help transform the maintenance, repair and overhaul (MRO) function within aerospace and defense.
Blockchain for mobility services
Blockchain will also be a critical technology behind the rapidly growing field of mobility, which is a key focus area for MOBI. We’ll see many use cases for applying blockchain in mobility enabled by advanced sensors and vehicle-to-infrastructure (V2I) technologies capable of detecting and identifying cars, guiding them to the best parking location, and automatically paying for parking from digital wallets or credit cards linked to their identity. Models such as this would guarantee 100% compliance and payment accuracy with no manual patrolling required.
Into the future
We’re excited about the potential of blockchain within the automotive industry. And though there are many opportunities on the horizon, there is still a great deal to learn and many requirements around standardization needed for ultimate success. We’ll continue the conversation with our clients as new technology applications unfold and share key learnings here as we speed into the future of mobility together.
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