Blockchain and the automotive industry - what have we learned so far?
Many associate blockchain technology with cryptocurrencies like Bitcoin. But an increasing number of industries beyond the financial world are exploring its potential. A blockchain is essentially a decentralized way to securely share data across a distributed network of business partners. It creates a trusted system for validating exchanges of information or services between people or companies who share a common goal. Each block or transaction is time stamped and stored across the entire network and cannot be changed once it has been added to the chain. Permissions to look at and edit blocks are coded into the system and data is encrypted making the chain highly secure. Everyone sees the same record of information from the moment it’s created through every consequent transaction.
The use of blockchains has expanded from high value financial transactions into other areas where trusted systems are important, such as supply chain and transportation. Think of a sealed container holding thousands of different goods that needs to move through customs. A blockchain can provide a simple, secure and trusted way to validate contents, origin, journey, etc.
This year Faurecia began its first blockchain project with one of our global OEMs and suppliers. We chose to test our proof of concept in a live program management environment to see how a blockchain could help streamline processes. A typical global program involves a huge amount of communication and coordination with multiple internal and external parties. For example, collaborating on new product designs, ensuring parts conform to latest specs or ensuring suppliers or technology providers deliver to just-in-time production schedules.
What have we learned? Over the past three months, we’ve seen how to better structure our interactions to move faster and be more efficient. The blockchain enables us to communicate and share information more effectively. In addition to speed, it puts those three important Ts - trust, traceability, transparency into the supply chain. When everyone has the same information at the same time it facilitates decision-making and validation processes. We now plan to expand this first demonstrator into procurement in order to develop a complete blockchain.
Blockchain technology is a hot topic for our industry, which is made up of a large ecosystem of players who design, manufacture and distribute vehicles, as well as car-related services from selling, financing, insurance to maintenance. The speed and flexibility of blockchain is perfect for the pace of today’s digital economy and an open innovation culture. For Faurecia that means it’s easy to add new technology partners into the chain as they come onboard a project, or to code in smart contracts with measurable conditions when we develop new data-driven offers such as wellbeing or eco-driving applications
With the advent of connected cars, autonomous vehicles and shared mobility, blockchain technology could underpin many new automotive applications. We’re following with interest different use cases already being explored such as digital car (and maintenance) history, parts authentication, vehicle tracking to ride sharing. Analysts predict that blockchain could be the most significant new technology of our age (bigger than the internet!). At Faurecia, we’re embracing the opportunity to transform our ways of working.