Many people are aware of the blockchain and its role in cryptocurrencies, like Bitcoin; however, not many are aware that its potential scales beyond financial transactions. Even the automotive sector can benefit drastically from blockchain technology.
While the financial sector has leveraged blockchain for some years, automotive businesses are looking to benefit from the technology. The auto industry is undergoing digitization that will affect its operations and processes. The standard cruise control function has been transformed into self-driving cars that will also be able to communicate with each other and transmit data about road conditions and the directions they want to take. Vehicles would not just be a method of transportation since blockchain technology will ensure a technology revolution for a drastic change.
Automotive companies are now investing a huge amount of money in technology and Frost and Sullivan notes that businesses are expected to spend nearly $169 billion on new technology implementations by 2025, with 0.6% of investment to be reserved for blockchain tech.
Advantages in the Auto Industry
The automotive industry can take advantage of blockchain in various scenarios:
• Immutability with no modification possible for stored records
• Transparency with monitored transactions
• Permanence with operative public ledger and safe records
• No intermediation, only interaction with network members
• Higher speed of operations, than in central systems
• Data safety with absolutely no data loss
• Data security with encrypted records
Applications in Supply Chain Management and Verification
Blockchain allows funds transfer globally without the need for traditional banking methods. The amount transfer is directly organized between payer and payee. The technology allows for secure and rapid transactions in a matter of minutes. The advantage with the structure is in cost savings. On the other hand, any firm needs to be smart enough to not depend on bitcoin only.
When buying second-hand cars, customers do compromise on odometer data. One might have invested in a car with more miles than one could assess. By implementing blockchain, one can ensure the true version with information from the blockchain. In fact, one could check on mileage, accidents, repairs, or other data that could help customers to make the right choice.
Eliminates Counterfeit Car Parts
It’s hard to imagine the size of the fake car parts market. Nissan’s representatives reveal that it loses $60 million in UAE owing to counterfeit car parts.
Fortunately, the blockchain technology uses unique radio-frequency identification (RFID) tags to ensure proof of provenance for spare auto parts and even track a particular car location. Matthew Jones from IBM believes that automotive businesses will use blockchain to prove the quality of auto spare parts, reducing expenses related to recall activities.
Benefits shipping and cargo companies with communication
Blockchain stands to benefit shipping companies that still manage tremendous volume of communication between different transportation providers including customs brokers, ports, freight forwarders and warehouses.
Maersk, the global cargo shipper, recently partnered with IBM to leverage blockchain for better transparency in its supply chain, and ensure availability of shipment data accessible to all members at any time. The paperwork is automated including creation of agreements and contracts. The smart contracts help them in eliminating hundreds of point-to-point communications with supply chain members and helps in reviewing shipment information, including procurement and sending of submitted documents.
It is evident that technology can reduce delays and fraud, while saving millions of dollars on supply chain.
GTL Sweden AB, a 100% subsidiary of Gateway TechnoLabs Pvt Ltd, and is based out of Stockholm. Gateway is a 20+ years old Global software sourcing company with offices in 16 countries and development centers across 5 countries delivering to clients across 30+ countries. Apart from across the board IT services, we also differentiate ourselves with additional skills in Mobile applications and Multimedia capabilities.
GTL Sweden AB
131 54 Nacka,
Latest posts by Anamaya Dwivedi (see all)
- How Parts Accuracy was Achieved for 64130 Car Models in Europe - September 20, 2018
- Key Elements for Automotive Suppliers to Transform their Business Model - September 12, 2018
- How Blockchain is Revolutionizing Automotive Supply Chain! - August 13, 2018