Driving Supply Chain Compliance Forward With Blockchain
In the first tenth of a second of a front-end crash, your bumper deforms. In the next instant, your hood crumples. Airbags explode open. Your seat belt stretches to slow your body down. In less than a second, you and the car have stopped moving forward. You snap back hard into your seat. It’s a violent, jarring moment.
It’s no wonder we expect stringent safety standards for our vehicles — we want to be as safe as possible in a crash. A front-end collision safety standard is just one of many that auto manufacturers must meet to sell a car to consumers.
These compliance standards affect more than the vehicle as a whole. They affect each individual part. The headlights and their component parts. The passenger cage and its component parts. The radiator and its component parts. One regulation can affect hundreds of parts from dozens of suppliers, all at different levels of the supply chain.
Vehicles also meet more than safety standards. There are environmental regulations as well. Proving a single model meets all standards requires tracking thousands of pieces of information from many sources.
And that’s only for the regulations that exist today. More are coming, including standards for cybersecurity and vehicle and parts recycling. Automakers must keep up with ever-evolving standards to remain in compliance. Add in many car models across multiple countries, and you’re tracking millions of compliance documents.
Until recently, the only way to keep track of the supply chain was through databases and paper trails. Keeping up with compliance documentation was an onerous, time-consuming task. Automakers and suppliers had little visibility into the layers of component compliance. They also had no way to share this information across the supply chain to regulators or consumers.
That all changed when Renault Group moved its supply chain documentation to blockchain — and invited the rest of the auto industry to join in. Blockchain first appeared in finance, whilst respecting the ownership of the data items, the blockchain allows real-time networked transactions that are secure since there is no risk of falsification.
Shifting Into Gear
Over the past few years, Renault has invested heavily in its digital transformation. One specific focus has been made on blockchain technology. Supply chains are an excellent use case for this technology, and the vast supply chain ecosystem of auto manufacturing is no different.
In 2018, Odile Panciatici, Vice President of Blockchain Projects at Renault, saw new European regulations on the horizon. These stricter regulations would come with shorter response timeframes. She knew using blockchain to manage the supply chain could provide real-time certification of compliance to partners, customers and regulators. “Instead of spending time trading files, emails, calls, we have real-time exchanges, we have transparency, and we have increased reactivity, all of which benefit our customers” comments Panciatic.
The distributed ledger technology makes it possible to share and track information across various users. Permissions control access and visibility, so each party maintains confidentiality of its data. And users and transactions are verified and preserved by the blockchain. This creates a network of trust between participants, even if they don’t know one another.
It also speeds up information sharing and creates greater efficiencies. Efficiencies that Panciatici wanted to share throughout the automotive industry — even among competitors. “That’s the point of blockchain projects,” says Panciatici. “The value is not for one entity. The value is for each member of the ecosystem.”
Panciatici contacted IBM, which has a long-standing relationship with Renault. After a design session with Renault and other industry participants, IBM developed a solution using its IBM Blockchain and Hyperledger Fabric. That solution became the basis of the eXtended Compliance End-to-End Distributed (XCEED) blockchain project. XCEED certifies compliance of all vehicle components, from design through production, to aftersales. Renault tested the project at its Douai plant. XCEED archived over one million documents at 500 transactions per second.
After the pilot project proved its value, Renault and its partners selected IBM Blockchain Services as their technology partner to roll out the XCEED solution. As of mid 2021, Renault, Faurecia, Simoldes, Knauf Industries and Coskunoz had launched the project.
With XCEED, suppliers and automakers share compliance information across a trusted network. The sharing is automated and accurate. Participants no longer spend time processing compliance paperwork, allowing them to focus on other tasks. Data discrepancies, which used to take hours of research to resolve, are essentially eliminated now.
“Instead of spending time in linear exchanges — trading files, emails, calls — we have a direct common tool that everybody shares,” says Panciatici. “We have real-time exchanges, we have transparency, and we have increased reactivity, all of which benefit our customers.”
Customers have authentication that their car meets environmental and safety regulations. And regulators have transparent, up-to-date, accurate data on compliance.
For more information: www.ibm.com