From regulatory compliance to invoicing dilemmas, businesses are dealing with some major headaches – and turning to blockchain for a cure. Among these businesses are automakers harnessing blockchain technology.
In May 2021, French automaker Renault announced it had created a new blockchain solution to ensure European auto industry components are in compliance with new regulations that impact the entire automotive supply chain from start to finish. Known as Compliance End-to-End Distributed (XCEED), the solution tracks the compliance of thousands of vehicle components as they are assembled in real time, Just Auto reported. XCEED was developed by a consortium encompassing automotive suppliers Faurecia, Knauf Industries, Simoldes, and Coskunöz, in association with IBM.
These are not the only European automakers harnessing blockchain. Mercedes-Benz plans to develop a blockchain solution that will help trace harmful emissions. Volvo is using blockchain to track cobalt in its battery supply chain for use in electric vehicles. Additionally, BMW will work with Amazon (AWS) on solutions to boost operational performance and supply chain transparency. The company’s PartChain Platform uses certain AWS services as well as open-source blockchain management tools to better track parts and raw materials across the supply chain.
Blockchain Helps Walmart Canada Shrink Invoice Discrepancies from 70% to 1%
Retail giant Walmart Canada is now using blockchain technology to create an automated system that manages invoices from and payments to its 70 third-party freight carriers in order to prevent payment disputes.
Formerly, the retailer depended on numerous information systems between itself and its carriers. Not only did this hinder communication, it also meant that the company needed to manually handle dispute resolutions– a problem that wasted time and labor.
The company’s blockchain solution, DL Freight, regularly collects data along every point of the network. From the carrier’s tender offer to the proof of delivery and payment approval, all of the data is automatically processed in real-time and is easily accessible to all involved parties. With this new blockchain solution in place, no more than 1% of the company’s invoices contain discrepancies now, compared to 70% previously.
DL Freight’s success is largely due to how Walmart Canada implemented the technology. According to Harvard Business Review, some essential lessons from the company’s blockchain adoption are:
- It obtained views from all major stakeholders:
Getting perspective from all parties involved ensured the solution worked for everyone.
- It considered all pros and cons of adopting private vs public blockchain:
Whereas public blockchain networks can provide a more streamlined solution without the need for restrictions and intermediaries, a private network can be better for businesses since it provides more privacy and access restrictions, making the network more secure.
- It ensured all parties involved were in agreement over rules:
Since every company has its own unique “fixed and variable processes and costs,” it was vital that all parties agree prior to implementation.
- It embedded automated “checks and balances” into the blockchain:
This prevented mistakes and helped the company spot areas where it could make improvements.
As supply chains and regulations become more stringent and complex, more organizations will turn to blockchain as a solution. Is your organization ready to adopt this revolutionary technology?
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Vitasek, Kate, Bayliss, John, Owen, Loudon, and Srivastava, Neeraj. (5 January 2022). How Walmart Canada Uses Blockchain to Solve Supply-Chain Challenges. Harvard Business Review.
Duke, Sam. (6 May 2021). OEMs look to blockchain solutions for compliance and parts performance. Just Auto.