Blockchain technology, the distributed system used for cryptocurrencies, is making its way into the automobile sector. Emphasizing the automobile community’s awareness, VeChain CEO Sunny Lu officially confirmed the partnership between BMW and VeChain on 26 Feb 2018. VeChain or VeChain Thor, provides blockchain technology as a supply chain enhancement platform. The technology is used to develop a trust-free, transparent and distributed business ecosystem for information transfer. This partnership is allowing blockchain technology to spread to other prominent sectors.
VeChain may aid BMW’s supply chain
Leading companies in the automobile industry, like BMW, are seeking the help of blockchain technology providers like VeChain Thor to optimize their business transactions. Though the exact nature of the partnership between VeChain and BMW is not confirmed, it is speculated than BMW will utilize blockchain technology to manage the brand’s enormous supply chain.
Uses of blockchain technology in supply chain management
The blockchain technology is a digital database that is tamper-proof and quick. The technology is decentralized and records all transfers within the database. In a supply chain, blockchain technology will minutely document every product transfer, creating a history of transactions and tracking product movement. As a result, time delays, human errors and service costs are greatly reduced in the production and sales cycle, from manufacture to the end customer.
Payment gateways for the automobile industry
In an expensive sector like the automobile industry, blockchain technology will secure huge amounts of payments involved in production and supply. As a trustworthy digital ledger, the platform will eliminate the need for a third party in financial transactions. The technology will accurately track shipments and time-stamp any updates, for e.g. the delivery from a vendor, so that payments to all parties involved is made without delay.
Blockchain technology in supply stages
Blockchain technology can simplify the key aspects of an automobile industry’s business domain:
- Placing orders for parts from around the world
- Initiating payments for parts and services
- Verifying shipment details
- Authenticating the quality of parts before payment
- Monitoring manufacture and assembly stages
- Customer purchases, insurance and so on.
The full extent of blockchain technology is still being unearthed. With such an optimized technology at large, BMW is right to approach blockchain technology companies like VeChain Thor to develop their business and make their processes more efficient.