Use case - Automobile Industry

Complexity of Modern Automobile Sourcing

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 Traditional Automobile Supply Chain
● Modern manufacturing is extremely interdependent and relies on sourcing parts from all
over the world.

● However, due to lack of transparency, OEMs have very limited visibility over the raw
material that they use beyond tier 1&2 suppliers.

● Since there is no industry-wide sourcing platform, OEMs cannot access supplier’s

historical information and reviews.

● No way to access information about supply and demand of raw materials leading to
short-sighted sourcing decisions

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 Blockchain Based Sourcing Platform
● Strategic sourcing is an institutional procurement process that continuously improves the purchasing
activities of a company.

● Purchasing Platform would enable transfer of value and interaction amongst all tier level suppliers
and OEMs along the automotive value chain

● Sourcing and Purchasing platforms would facilitate the buying, selling, and reselling of all types of
raw material and car parts.

● Smart contracts can be used to ensure timely delivery and maintain quality.

● For instance, smart contracts can be used to automatically charge a penalty to the supplier prior to
delivery in case of delays.

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 Traditional Automobile Supply Chain

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 Blockchain Automobile Supply Chain

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 Blockchain in Automobile Supply Chain
● The main stakeholders in the automobile supply chain are the tier 1 and 2 suppliers along with the
original equipment manufacturers (OEM) and dealerships who sell the automobiles.

● All of these stakeholders can benefit from a shared industry-wide sourcing and purchasing platform
based on blockchains by:
○ Accessing provenance information on raw materials
○ Buying and selling raw materials at their disposal
○ Holding suppliers accountable for quality of the delivered goods

● The platform would help increase visibility beyond tier-2 suppliers for OEMs

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