Future Innovation in the Block Value Chain

Blockchain meets supply chain. But what impact might this have?




The value chain future is at our doorstep. It’s a completely new approach to supply chains, logistics, transport, mobility, and – more importantly – services business models.

And it's bringing truly decentralized autonomous taxis, at a touch of a button in an app, paid automatically with a stable coin, and the value distributed accordingly in microtransactions throughout the complete supply chain. This exact scenario might still sound sci-fi, but it’s also likely to be the normality in a few years.

What is certain is that these kinds of disruptions in value chains are already happening, not just with sustainable technologies, but with disruptive innovation added to the mix.

The future is clear: technological innovations like blockchain will transform mobility, energy consumption, communication networks, and create new business models we never imagined. Rapidly changing value chains will transform how we innovate and how value is distributed fairly. Dynamic markets in global industries and an era of regulatory uncertainty will make investing and value chain planning more complex. The future always looms large. So how do successful disruptive innovators plan for an automotive roadmap that makes sense?

Blockchain

It is clear to us that automotive leaders and early adopters in blockchain are making important advances in key areas, identifying and expanding on what works as we put distributed ledger technology to work in more ways, and in more parts of their value chains.

Best practices have been emerging. No one can predict the exact shape and trajectory of how blockchain will impact automotive value chains in the future. But use-cases have been providing a clearer view than ever of exactly how key elements are combining today to create future value with blockchain at its foundations. Blockchain as a foundation framework is crucial to create a strategic pathway and exponential success for the application of new services and business models, well beyond the premise of vehicle ownership.

Puzzles

If you’ve ever assembled a large automotive supply chain jigsaw puzzle, you know that for most of the time it takes to put it together, it looks like an incoherent mess. Small supplier sections, made up of only a few connected pieces, sit isolated from one another, slowly gaining size as you find pieces here and there.

But eventually, the momentum shifts towards a global supply chain and the glacial pace turns into a race to the finish – large chunks of the supplier puzzle are united quickly, and it all snaps into shape. That’s exactly how the automotive industry should assemble value puzzles, slowly morphing production into strategic value roadmaps that make sense as complete lifecycles.

When examining potential scenarios in automotive supply chains across multiple markets focused on value, it is clear to see that we are on the verge of a momentum shift. Critical parts of the block value chain puzzle – frameworks, protocols, capabilities, processes and more – are being assembled in different parts of businesses, in different markets, addressing different challenges and services.

Critical Mass

We are rapidly approaching a critical mass moment in automotive, with the entire picture fast coming into view. The responses of many automotive leaders show a level of enthusiasm and blockchain-focused activity that point to an explosion of distributed adoption just around the corner, even as gaps in capabilities and strategy are revealed.

Already, a huge percentage of the organizations have either deployed blockchain-based technology or are in the process of doing so. Blockchain provides the perfect supply chain base for service value involving many automotive players.
Peel away the hype, and the big question is how blockchain will contribute to solving real supply chain problems. The answer is already here with proven success in automotive. One of the secrets is to have a framework ensuring fair value distribution among everyone in the chain.

Early trials have provided encouraging results for a promising technology that is still widely considered to be in its early stages in the automotive industry. As we’ve seen with many other leaps in technology over the years, greater familiarity is likely to lead to greater trust, especially in consortium automotive blockchains.

Block Value Chains

As block value chains mature as a core enabling technology, we anticipate that some of the most exciting supply chain developments will occur at the intersection of product and service; for example, when you combine a vehicle and several mobility modules.

Expect to see breakout developments from such combinations, which may signal growing maturity in this space and which will foster new business opportunities and new sets of best practices to master. New waves of decentralized service providers will give established players a run for their money, providing a balanced and fair ecosystem.

There’s significant momentum behind block value chain technology, leaving little doubt that it is poised to emerge as a transformative force in automotive. The real question is how we manage this progress – personally, culturally, societally, within businesses, governments and at an enterprise level.

History is replete with examples of supply chain technologies that bolted in front of the structures and processes on which we typically rely to get more value from them while keeping risk in check. As a result, automotive leaders struggled to play catch-up, as these technologies continued their forward march.

Take Action

For automotive organizations that are sitting on the sidelines, waiting to see whether blockchain will fulfill its value chain promise or merely flame out as yet another overhyped technology development, our work across many verticals, offers strong evidence that it is here to stay and flourish.

In fact, value chain use-cases made an even stronger case for automotive than we had ever anticipated. We have deployed it in more ways, across more parts of the industry, than ever expected, and are supporting these capabilities with increasingly mature development and frameworks. For those who are taking a wait-and-see approach to disruptive innovation in block value chains, it is time to move more aggressively – or be left behind – forever!

The automotive supply chain is not dead, but long live the new automotive block value chain!

  • This article was provided by Antonio Ferreira, the CEO and Head of Innovation at TechHQ. For more information about the topics raised here, check out the TechHQ website, https://www.techhq.io/
  • Would you like to contribute to Automotive IQ? This article was submitted via our 'Become a Contributor' section. Hit the link for more information.

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IQPC Gesellschaft für Management Konferenzen mbH
Adresse: Friedrichstrasse 94, 10117 Berlin
Telefonnummer: 030 20913 -274
Fax: 49 (0) 30 20 913 240
Email Adresse: info@iqpc.de
Registereintragungen: Amtsgericht Charlottenburg HRB 76720
Umsatzsteuer- Indentifikationsnummer DE210454451
Geschäftsführung: Silke Klaudat, Richard A. Worden, Michael R. Worden