Streamlining an Automotive Supply Chain with Blockchain

Description

An automotive conglomerate turned to Altoros to develop a blockchain platform that minimizes risk and tracks the provenance of vehicles’ spare parts in the manufacturing supply chain.

Brief results of the collaboration:

• The dispute resolution time for warranty cases was reduced from three weeks to two days.
• Warranty costs were reduced by 7%.
• Spare parts suppliers gained a 3–5% increase in financial flexibility.
• The efficiency of an end-to-end supply process increased from 380 man-hours to 59 man-hours (by 6.4x).
• Data access granted to government agencies provided an increase in trust for the whole chain.

The customer

The company is an automotive conglomerate operating globally. The organization focuses on delivering solutions that can improve its supply chain. This includes eliminating counterparty risks and tracking shipments across the supply chain.

The need

The customer wanted to develop a blockchain-based platform for a supply chain that would enable buyers and sellers of automotive parts to track shipments. The solution had to automate time-consuming processes, such as invoice and discount reconciliation, which usually take up to 15–25 days. To mitigate risks, the system should allow for verifying the transported goods by government agencies. Finally, the platform needed to provide factor agencies with an opportunity to bid on invoices.

The challenges

Under the project, the team at Altoros had to address the following issues:

• It was important for all the counterparties to have a single transparent view of the supply chain where each transaction is recorded.
• Available blockchain frameworks, such as Hyperledger and Ethereum, do not allow for storing certain file formats (e.g., JPG, PNG, or PDF) out of the box. It was crucial to enable the system to support such format types to store suppliers’ packing lists, transporters’ bills of lading, etc.
• As some of the shipping documents may contain sensitive information, the solution needed to feature role-based access to confidential data.

The solution

Engineers at Altoros delivered a blockchain-based platform that uses distributed time-stamping to track automotive parts as they move across the supply chain. The platform was built upon Hyperledger Fabric, which provides a single channel for all counterparties.

By using IPFS, our developers enabled a distributed storage of different file formats. Additionally, this technology running in parallel with Hyperledger Fabric eliminated the need to store copies of all the documents on each node.

With a customized implementation of Identity Mixer, developers at Altoros made it possible to manage which counterparties have access to the documents stored in IPFS. Furthermore, Identity Mixer enabled counterparties to verify confidential documents.

To ensure security, the Altoros team developed an external certificate authority, which generates ECDSA-256 keys on the user side, preventing transfer of private keys between nodes/users.

The outcome

Partnering with Altoros, the customer developed a solution that integrates blockchain in the supply chain in order to track spare car components from suppliers to buyers. The solution reduced dispute resolution time for warranty cases from 3 weeks to 2 days, while also cutting warranty costs by 7%. The efficiency of the end-to-end supply process increased from 380 man-hours to 59 man-hours. With the blockchain solution, spare part suppliers also gained a 3–5% increase in financial flexibility.