BMW Group Embraces Blockchain For Supply Chain

Asia Blockchain Review
April 6, 2020

Automotive manufacturers are always on the cutting edge when it comes to utilizing new technologies that can drive performance and efficiency gains. So, it is no surprise that the BMW Group is using innovative digital technologies to optimize its processes. Blockchain is now being used in the purchasing cycle to ensure the traceability of components and raw materials in multi-stage international supply chains. “In 2019, we conducted a successful pilot project for purchasing front lights. This year, we want to expand the project to a large number of other suppliers,” said Andreas Wendt, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network.

 

Managing Complexity

Supply chains in the automotive industry’s international networks are highly complex and ensuring transparency within the system can be a real uphill task. The BMW Group started the PartChain project to ensure seamless tracking of the components and provide immediate data transparency in complex supply chains for all partners involved going forward. “PartChain enables tamper-proof and consistently verifiable collection and transaction of data in our supply chain,” said Wendt. 2019 the pilot project focused solely on part tracking. In the long term, the BMW Group also expects the project to enable complete traceability of critical raw materials – all the way from mine to smelter. Wendt: “This move is designed to take the digitalisation of purchasing at the BMW Group to the next level. Our vision is to create an open platform that will allow data within supply chains to be exchanged and shared safely and anonymously across the industry.”

The Cloud Is Here

Wendt explains that PartChain uses Cloud technologies (e.g. Amazon Web Services, Microsoft Azure) in addition to Blockchain solutions. This allows the origin of the components to be tracked between all partners without any risk of manipulation. The 2019 pilot project already involved two of the BMW Group’s total 31 plants as well as three locations of the supplier, Automotive Lighting. The platform is expected to be rolled out to about ten suppliers. BMW had also initiated a consortium called the Mobility Open Blockchain Initiative (MOBI) in 2018, which brings together 120 companies from the automotive, mobility and technology sectors. The Mobility Open Blockchain Initiative (MOBI) is working with BMW, Ford, GM, Groupe Renault, Honda, and other major automakers to develop a multi-stakeholder Proof of Concept (PoC) for a blockchain-based Vehicle Identity (VID). In September last year, MOBI members launched an important joint initiative to test implementation of the first VID standard, released earlier this year, taking a critical step towards the new economy of movement with blockchain.

It’s All About Trust

“Creating a trusted digital identity for a vehicle unlocks the potential for a mobility payments network, including: V2V/V2X transactions, electric vehicle to grid integration, usage-based services, fleet operations, congestion pricing, carbon footprint management, and more,” said MOBI CEO Chris Ballinger.  “We are delighted that a large segment of the industry is partnering with MOBI to build the foundation to prove existence, manage access control, confirm product definition and ownership history, and track events in the life of a vehicle.” For the uninitiated, MOBI is a nonprofit smart mobility consortium working with forward thinking companies, governments, and NGOs to make mobility services more efficient, affordable, greener, safer, and less congested by promoting standards and accelerating the adoption of blockchain, distributed ledger, and related technologies in the mobility industry.

Source: BMW


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