Analyzing Blockchain Application in Aviation Maintenance,

Repair and Overhaul (MRO) Supply Chain

by

Chang Kock Shong

Bachelor of Electrical Engineering in Instrumentation & Control

and

Shaun Wong Kin Choy

Bachelor of Business (Hons) in Logistics & Supply Chain Management,

Submitted to the MIT Malaysia Supply Chain Management Program in Partial Fulfillment of
the Requirements for the Degree of

MASTER OF SCIENCE IN SUPPLY CHAIN MANAGEMENT

at the

MALAYSIA INSTITUTE FOR SUPPLY CHAIN INNOVATION

May 2021

All rights reserved.

The author hereby grants to MISI and MIT permission to reproduce and to distribute publicly
paper and electronic copies of this thesis document in whole or in part.

Signature of Author
Malaysia Institute for Supply Chain Innovation
May 28, 2021

Certified by
Dr. Debabrata Ghosh
Associate Professor
Malaysia Institute for Supply Chain Innovation
Thesis Supervisor

Accepted by
Prof. Dr. David Gonsalvez
CEO & Rector, Malaysia Institute for Supply Chain Innovation

1
 Analyzing Blockchain Application in Aviation Maintenance,
Repair and Overhaul (MRO) Supply Chain

by

Chang Kock Shong & Shaun Wong Kin Choy

Submitted to the Malaysia Institute for Supply Chain Innovation

on May 28, 2021
in partial fulfillment of the requirements for the
Degree of Master of Science in Supply Chain Management

ABSTRACT

The aviation MRO industry is the most complex industry that requires a high degree of quality
parts to meet airline safety, security and specification standards. The rapid growth in aviation
MRO Industry requires seamless technologies, capabilities to fast track critical parts, inventory
accuracy, parts quality, traceability, visibility and transparency from upstream to downstream
in the supply chain channel. Through the study of an aviation company in which Blockchain
implementation is ongoing, we enquire if Blockchain can provide the above mention
capabilities. The objective of this research is to analyze the benefits of Blockchain technology
integration into the aviation MRO industry, and examine its limitations.

Thesis Supervisor: Dr. Debabrata Ghosh

Title: Associate Professor

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 Acknowledgements

We would first like to thank for our thesis supervisor, Dr. Debabrata Ghosh for guiding us on
our thesis journey and Dr. David Gosalvez - CEO and Rector in Malaysia Institute for Supply
Chain Innovation (MISI), for providing a high standard supply chain program. The program
has broadened our insights in the world of supply chains, and helped us to think critically when
it comes to supply chain operations and strategies as well. We would also like to thank the
company that provided us access to first hand data through interviews. To our family and friends
as well, thank you for being a support through this journey.

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 Table of Contents

Table of Contents ........................................................................................................................4

1. Introduction........................................................................................................................10

1.1 Application of Blockchain Technology in the Aviation Engine MRO Supply Chain .....10

1.2 Aviation Industry and Its Growth ....................................................................................11

1.3 The Rise of Blockchain Technology ................................................................................12

1.4 Research Process Overview .............................................................................................13

2. Literature Review ..............................................................................................................15

2.1 Aviation Maintenance, Repair, and Overhaul (MRO) .....................................................16

2.2 Linking MRO Supply Chain and Blockchain Technology ..............................................17

3. Research Method ...............................................................................................................20

3.1 Research Setting ...............................................................................................................20

3.2 Data Collection Process ...................................................................................................22

3.2.1 Framing the questionnaire ........................................................................................22

3.2.2 Data collection sources .............................................................................................22

3.2.3 Qualitative interview ................................................................................................23

3.3 Data Transformation ........................................................................................................24

3.3.1 Qualitative data collected .........................................................................................24

3.3.2 Data Categorization ..................................................................................................24

3.4 Data Analysis ...................................................................................................................27

3.4.1 Qualitative data analysis ...........................................................................................27

3.4.2 Quantitative data analysis .........................................................................................27

4. Results / Findings...............................................................................................................28

4.1 Current State - Understanding the Information and Material Flow (Paper Flow) ...........28

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 4.2 Current State - Respondent’s Interview Findings ............................................................29

4.3 Current state - Understanding and Analysis of the Data ..................................................30

4.4 Blockchain Interview Outcome........................................................................................32

4.4.1 What are the issues of Supply Chain that Blockchain is trying to solve ..................33

4.4.2 What are the Blockchain capabilities and types .......................................................34

4.5 Future State – Applying Blockchain in the aviation MRO ..............................................36

4.6 Future State - Blockchain decentralized supply chain and regulatory compliance .........37

4.7 Additional Blockchain Information Supporting Research Sample ..................................38

4.7.1 Blockchain in Aviation (Goudarzi & Martin, 2018) ................................................38

4.7.2 Spec 2500 & Blockchain (Henderson, 2019) ...........................................................39

4.7.3 Secure Aircraft Maintenance Records Using Blockchain (SAMR) (Aleshi, 2018) .41

4.8 Simulation of Information Flow Concept Using Basic Blockchain ................................41

4.8.1 Scenario 1: Procurement Standpoint - Lack of information on part history

(Traceability) ............................................................................................................42

4.8.2 Scenario 2: Engineering Standpoint - Information Discrepancy (Immutability) .....44

4.8.3 Scenario 3: G Company part manufacturer – Live data tracking (transparency) .....47

5. Discussions ........................................................................................................................51

5.1 Is the Blockchain a Solution to the Supply Chain Problems Faced by the Aviation MRO
Industry?...........................................................................................................................51

5.2 Challenges of Implementing Blockchain .........................................................................52

5.2.1 Blockchain as an Aircraft Parts Database.................................................................52

5.2.2 Buy in from Regulatory Authorities .........................................................................54

5.2.3 Effects on Operations ...............................................................................................55

5.3 Future Research Possibilities ...........................................................................................55

5.3.1 Smart contracts .........................................................................................................56

5.3.2 Improved forecast accuracy ......................................................................................56

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 5.3.3 Automation of machines with smart contracts .........................................................56

5.4 Conclusion .......................................................................................................................57

6. References ..........................................................................................................................59

7. Appendix............................................................................................................................62

7.1 Appendix A - Data Collection Questions during the Interviews .....................................62

7.2 Appendix B – Table of Respondents ...............................................................................64

7.3 Appendix C – Aviation Engine MRO Supply Chain Respondents..................................65

7.4 Appendix D - Blockchain Respondents Responses .........................................................66

7.5 Appendix E – Individual Block Details for Simulation Scenario 1 .................................67

7.5.1 Block 1: Digital birth certificate created ..................................................................67

7.5.2 Block 2: New transaction records .............................................................................67

7.5.3 Block 3: Service records updated .............................................................................68

7.5.4 Block 4: All records are well maintained in Blockchain ..........................................68

7.5.5 Block 5: New owner able to validate the spare part immediately ............................68

7.6 Appendix F .......................................................................................................................69

7.6.1 Block 1: New spare part registered in Blockchain ...................................................69

7.6.2 Block 2: MRO company updated the routine maintenance records .........................69

7.6.3 Block 3: Next service records ...................................................................................70

7.6.4 Block 4: Identified previous records and repair required .........................................70

7.6.5 Block 5: Physical condition mis-match with records ...............................................70

7.6.6 Block 3: Introduced error block................................................................................71

7.7 Appendix G ......................................................................................................................72

7.7.1 Block 1: OEM register new spare part .....................................................................72

7.7.2 Block 2: MRO company updated information after conducted repair .....................72

7.7.3 Block 3: Spare part unable to repair .........................................................................72

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7.7.4 Block 4: Change of repair information .....................................................................73

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 List of Figures

Figure 1: Cost of Air Transport vs. Unique city pairs source from (Pearce, 2019) ..................12
Figure 2: Blockchain Technology Market Size source from (Grand View Research, 2019) ...13
Figure 3: Research process overview ........................................................................................14
Figure 4 - Data Framing, Collection, Categorization and Analysis Process .............................20
Figure 5: System Information Flow ..........................................................................................28
Figure 6: Physical Part Flow (Paper Flow) ...............................................................................29
Figure 7: Number of issues under each category ......................................................................29
Figure 8: Types of issues & counts ...........................................................................................32
Figure 9: The Divergence of Blockchain Type &Characteristics .............................................35
Figure 10: Blockchain Framework............................................................................................36
Figure 11: Types of Blockchain ................................................................................................38
Figure 12: Information Format & Transmission methods ........................................................39
Figure 13: "Owners" in the Blockchain and the types of data contributed. ..............................40
Figure 14: Information flow based on each block ....................................................................43
Figure 15: Information on the Blockchain is shared amongst the network ..............................44
Figure 16: Information in current flows is heavily reliant on the ARC ....................................45
Figure 17: ARC records in Blockchain .....................................................................................46
Figure 18: Information error in Blockchain ..............................................................................47
Figure 19: Blockchain replicated and distributed information .................................................48
Figure 20: Information in Blockchain .......................................................................................49
Figure 21: How error is triggered in Blockchain ......................................................................49
Figure 22: Is Blockchain the "Fit" ............................................................................................52
Figure 23: Existing IT landscape ..............................................................................................53
Figure 24: Blockchain Framework............................................................................................54

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 List of Tables

Table 1: Air Traffic Growth Results source from (IATA - Industry Statistics, 2019) .............11
Table 2: Sample of categorized comments ...............................................................................25
Table 3: Blockchain Respondents - Categorization ..................................................................26
Table 4: Blockchain related respondent's comments ................................................................33

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 1. Introduction

This chapter introduces the use of Blockchain in the aviation Maintenance Repair and Overhaul
(MRO) industry, which lacks uniform platforms for the exchange of information, which in turn
leads to information asymmetries in aircraft spare parts. Our research objective is to examine
Blockchain technology and its benefits, and develop a framework to evaluate the conceivable
application of the Blockchain technology. This chapter provides an overview of Blockchain
technology in the track and trace capability of aircraft spare parts on the Maintenance, Repair,
and Overhaul (MRO) Supply Chain.

1.1 Application of Blockchain Technology in the Aviation Engine MRO

Supply Chain

Our objective is to study how Blockchain technology works, and its application in the aviation
industry. The study background mainly relates to the aviation engine Maintenance, Repair and
Overhaul (MRO) supply chain, aircraft engine parts and component manufacturing
environment.

Our aim is to develop a better understanding of the aviation engine MRO supply chain, and
capture the current operational challenges faced by the industry. With that, we evaluate how
Blockchain works and if it has a positive impact on the supply chain, in the areas of parts
demand and supply management, process flows, parts traceability and tracking of raw materials
until the end product; in the aviation engine MRO supply chain ecosystem.

Blockchain technology has been developed in a few industries, however successful cases are
still very limited. The company considered in this study has developed a Blockchain which is
in its testing phase, and in the process of implementation. This therefore provides us an
appropriate platform to check the effectiveness and the possible application of Blockchain
technology in the aviation supply chain.

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1.2 Aviation Industry and Its Growth

On the 1st of January 1914, the world’s first commercial flight service took off between St.
Petersburg and Tampa (Sharp, 2018). Since then, commercial air travel has grown
exponentially year on year. After over a century (105 years) of commercial aviation history, the
International Air Transport Association (IATA) reported that there are 290 airlines in 120
countries worldwide in the year 2019.

The advancement in technology for the aviation industry has contributed to the latest Jet
Engines, Gas Turbines, Avionics and other improved aircraft systems and components.
Commercial aircrafts are getting bigger and much more advanced compared to older aircraft
models, and now has the ability to transport more passengers over longer distances. One such
example is the Airbus A380 model, which can carry up to 853 passengers and has a flight range
up to 15,000km (Airbus A380, 2005, p. 22).

Over time, as air travel has become safer due to safer aircrafts and stricter safety regulations,
the use of aircrafts and air travel has also increased. This has helped to improve supply chains
across industries, facilitate global trade (flow of goods, people, capital, technology and ideas)
and increase Gross Domestic Product (GDP) for countries who rely on transporting
manufactured goods in and out of countries. Furthermore, according to IATA’s recent economic
performance report on the airline industry, the number of new destinations is forecasted to rise
further, with frequencies up to 6% on average (IATA - Economic Performance of the Airline
Industry, 2019).

Table 1: Air Traffic Growth Results source from (IATA - Industry Statistics, 2019)

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The IATA study (IATA - Industry Statistics, 2019), indicates that between 2013 to 2018 there
was a year-on-year increase in global air passenger traffic between 5.8% to 8%, an average
6.83% yearly increase of air passenger traffic (see Table 1).

Figure 1: Cost of Air Transport vs. Unique city pairs source from (Pearce, 2019)

Figure 1 demonstrates that as the cost of air transport has reduced, the connectivity between
cities has increased, therefore giving more access for people to travel. Thus, as air travel
becomes cheaper and more accessible to the mass population, it is highly likely to continue to
grow.

1.3 The Rise of Blockchain Technology

Blockchain technology has been utlilised in industry for more than a decade (from 2008), but
it is only in recent years that more research and development has been undertaken on how it
can be applied in business operations, and to help facilitate the fourth industrial revolution
(Industry 4.0).

The concept of Blockchain was first discussed as early as 1991; however, it first came into
operation in 2008 as the underpinning technology that runs Bitcoin (Horsley, 2017).

Bitcoin is essentially a peer-to-peer electronic cash system that allows online payments to be
transacted between two parties, without going through a financial institution. Since Bitcoin,

12
more and more digital currencies have emerged e.g. Etherium, Litecoin etc., and these digital
currencies are now known as “crypto-currencies” and “digital assets” (Crosby, et al 2016). This
has caused significant disruptions to the financial institutions, and has led to more people
wanting to understand how Blockchain technology works, as well as increased research and
development from industries.

Figure 2: Blockchain Technology Market Size source from (Grand View Research,
2019)

According to Grand View Research, the global Blockchain technology market size was valued
at USD 1,590.9 million in 2018 and is expected to grow at a Compound Annual Growth Rate
(CAGR) of 69.4% from 2019 to 2025, (Refer Figure 2). Furthermore, the report suggests that
Blockchain technology is attracting attention and investments from the financial sector as well
as many other technology firms. Over time, it is expected that several other industries will
follow suit in using the Blockchain technology. (Grand View Research, 2019).

1.4 Research Process Overview

To understand the Blockchain technology and evaluate its application in the aviation MRO
supply chain, we divided our study into three phases. In phase one, we reviewed the relevant
literature and conducted interviews to collect data. In phase two, we identified the common
issues in the aviation MRO function, then mapped them and developed an understanding of the
current processes. In addition, we gained a better understanding of how Blockchain works in
practice after analyzing the interview data. In phase three, we explored how Blockchain could

13
potentially solve the problems faced in the MRO processes, and analyzed the outcomes as the
implementation of the technology progresses in the company considered in our study. (see
Figure 3).

Figure 3: Research process overview

Phase 1
Literature review
Phase 2
Mapping out current process
Phase 3
Data collection via semi-
structured interviews Assess & evaluate current
Identify issues in processes processes using Blockchain

Identify uses of Blockchain Analyse results & discussion

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 2. Literature Review

In this chapter we review relevant literature pertaining to our research.

Supply chain management (SCM) is defined as the integration of materials flow, services,
information, and financial capital flow in an effective and efficient way to achieve high
performance and mitigate risk (Li, 2005).

The globalization of industries rose dramatically in the 20 th and 21st centuries, mainly due to
the advancements of technology that helped facilitate movements of goods. Many industries
make use of modern technology to increase their reach into markets all over the world. Not only
that, many of these industries also continuously seek and use new technologies to help increase
a high service level to customers within their supply chain.

With the recent rise of Blockchain Technology (Davidson, 2016) in digital currencies
(cryptocurrencies), such as Bitcoin (Nakamoto, 2008) and Ethereum, many technology
companies found that the concept of shared ledgers, decentralized information transfer,
traceability and security in these digital currencies could be applied to other business functions.
The idea is that with this digital technology and information transformation and sharing, supply
chains in any industries can be improved.

Some applications of Blockchain have rapidly changed the landscape of information sharing,
transparency, trustworthiness, increasing the speed of transaction, and the accuracy of data,
which has reduced the cost of operations in various industries and governments (Iansiti, 2017).
However, there are still gaps in the understanding and acceptance of the technology, mainly
because the accuracy of data flowing through the Blockchain is not fully trusted. In other words,
several companies still think it lacks traceability and trustworthiness (Robert Garrard, 2020).

Another major pushback against Blockchain is about the implications of decentralization for
economic, social, and political control. During the US Senate hearing in October 2018, the

15
economist Professor Nouriel Roubini called Blockchain “the most over-hyped technology ever,
no better than a spreadsheet/database” (Roubini, 2018), and thus almost no reason for its
widespread adoption. In contrast, according to Abeyratne and Monfared (2016), Blockchain
technology is fundamentally a distributed ledger which provides an innovative platform for
decentralized and transparent deals in global trade. The new technology enables supply chain
professionals to develop and provide complex services by using a data-driven approach.

From the perspective of our study, with the tremendous growth of passengers’ traffic and the
consistent increase in aircraft demand and production, the growth of aviation MRO should be
in tandem, and meet the needs for components and inventories within the MRO. The critical
information for these components is the shelf-life information, as well as details on which
components have multiple usages. Such information requirements necessitate a transparent
supply chain network; however, currently there are no real-time inventory or transaction details,
and no visibility of the parts supply from upstream to downstream.

In view of this, Blockchain Technology can be considered to be in the introductory phase in the
aviation sector. This study therefore focuses on how this technology contributes to the
development of a secure, safe and trusted platform for information to be shared among the MRO
stakeholders. This is to achieve higher transparency, trustworthiness and efficient information
sharing within the aviation industry. Furthermore, through the analysis of Blockchain
technology and its application, we can understand how information is shared in the aviation
MRO parts supply chain, enabling us to better assess the opportunities and regulatory
challenges for future improvements.

2.1 Aviation Maintenance, Repair, and Overhaul (MRO)

Aviation MRO is used to describe aircraft maintenance activity which includes the combination
of all actions corresponding to technical, managerial, supervision, and administrative processes.
The objective of MRO is to ensure that any task undertaken on the aircraft is to return to its
original level of functionality, safety and reliability (Kinnison & Siddiqui, 2013). Most of the
MRO organizations have numerous repair stations set up. Furthermore, all these stations are
authorized from different aviation authorities around the world so that they are able to

16
accomplish major maintenance on aircrafts that primarily belong to airlines and leasing
companies. The ultimate goals of aviation MRO are (Shafiee & Chukova, 2013):
 To guarantee the safety and reliability of the fleet in commercial airlines
 Keeping product availability, reliability, and quality at an appropriate level
 To address the product safety requirements
 To reduce repair time by capturing relevant information for analysis

In the past 100 years of the aviation industry, there has been a considerable amount of
improvement in the quality and reliability of components and systems, as well as in materials
and procedures. However, despite this, the industry has still not reached a 100% safety record.
There are still increasing levels of investigation surrounding aviation incidents, and with each
incident detailed, investigations reveal that the root causes are often component failures and
inadequate maintenance, which is an important factor for improving aviation safety standards.
(Marais & Robichaud, 2012)

In the operation of aviation MRO, Kinnisson (2012) explains the difference between scheduled
and unscheduled maintenance. Scheduled maintenance is a preventive action to ensure that
aircraft components function properly at pre-set intervals. The main objective of scheduled
maintenance is to anticipate and prevent failures. Unscheduled maintenance is not planned or
programmed, but it is required when a component has failed or broken down. Scheduled
maintenance includes routine and detailed inspections called “A”, “B”, “C” and “D” checks. A
and B checks are lighter checks, while C and D are considered heavier checks. Aircraft
operators may perform checks at their own facilities, but often the heavier checks usually take
place at MRO company sites.

2.2 Linking MRO Supply Chain and Blockchain Technology

Aviation MRO is a complex process that has strict and precise requirements to guarantee the
safety of passengers and aircrews. Phillips et al (2011) concluded that maintenance forms and
documentation are an essential part of meeting aircraft airworthiness criteria; their main
objective is to ensure a fully serviced, operational and safe aircraft. For aircraft parts to be
serviced, they may have to move from one place to another, as in most cases, specific services

17
are only available in different parts of the world. Having proper documentation and records are
one of the main ways of ensuring the quality of the repairs and the performance marking for the
part. If there are any errors or faults, this can be traced for improvement, repair or replacement.

Aircraft fleet is the most important asset for an airline, while punctuality of flights is of the
highest importance for customers. As a result, the top priority in the aviation MRO is to fulfill
the airlines’ preconditions, which is to provide both safe and reliable aircraft. Therefore, it is
preferred that all spare parts are available on hand whenever and wherever they are needed, to
ensure aircraft airworthiness. A component is identified by part number, part description, part
serial number, and life-limited scheduled intervals, in particular Hours Since New (HSN) and
Cycles Since New (CSN) (IATA, 2015). In order to maximize efficiency, the airline operator
tends to maximize the utilization between these intervals. In addition, for aircraft safety reasons,
each of these aircraft-related parts needs to be certified by the aviation authorities and requires
full traceability back to their origin. These high standards for production and approval of parts,
as well as other quality regulations for suppliers, in combination with high investment costs,
generate an overall highly oligopolistic and even monopolistic market structure for the supply
of aircraft parts and services.

Blockchain is inherently capable of providing significant advantages of timely, efficient and

transparent transactions to the supply chain systems (Crosby et al., 2016). This is because it can
decentralize the common database used to record transactions between different users by
enabling individual ledgers that will update all the transactions anonymously and
simultaneously. Thus, it would be difficult for a single party to manipulate or interfere with
database. The traceability of open ledgers allows one to track where the component is transacted
to which member of the chain, although the two parties stand anonymous. If there is any error
or fault in the final component, this can be easily traced back to the path of supply (Wickboldt,
2019), and thus solves the trust issues that appear in the current centralized database. As a result,
users in the aviation ecosystem can trust the Blockchain system of the public ledger, as opposed
to having to trust the transaction counterparty or third party intermediary recording. In addition,
the internal security problems in distributed systems can be resolved by the multiple node
validations of the Blockchain technology. If a malicious node enters the system, this change in

18
the ledger will require validation by the rest of nodes according to Blockchain rules and
restrictions. The modification can only be replicated if it gets validated by the clear majority of
nodes. Every non-valid change is discarded, to deny and reject malicious intents.

The Blockchain therefore, not only allows the disintermediation and decentralization of all
transactions of any type between all parties on a global basis by providing a robust platform. In
addition, Blockchain applications can also be used in economic transactions, in the form of
asset registry, inventory, and exchange. These assets can be hard assets, which include physical
spare parts, and intangible assets that comprise of service records, spare part life span, condition
data, etc. Therefore, it is likely that Blockchain implementation can facilitate much of the
capabilities that aviation MRO required. We explore this in our study.

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 3. Research Method

This study has two primary objectives – firstly to understand how aviation engine MRO supply
chain operates; and secondly, how Blockchain can be applied within the said supply chain. In
order to do this, we collected two sets of data, one for the aviation engine MRO and the second,
for the application of Blockchain. For the purpose of this study, we undertook an exploratory
sequential mixed-methods design, where data was collected via a qualitative strand, followed
by a quantitative strand. (Creswell et al., 2003)

To ensure that data was consistently collected, a structured interview process was developed.
The study began with qualitative data collection, and was done by developing two standard lists
of questions followed by an interview protocol. The interview data was subsequently analyzed
using content analysis to interpret the results. The research steps are shown in Figure 4 below.

Figure 4 - Data Framing, Collection, Categorization and Analysis Process

Step 1 Step 2 Step 3 Step 4

•Design •Identify key •Identify and •Perform

questions for respondents classify any subsequent
semi- for the common analysis on
structured interview. issues faced by data collected
interviews for the from
aviation •Conduct stakeholders stakeholders.
engine MRO interviews in the aviation
supply chain with engine MRO •Test basic
and stakeholders supply chain. concept
Blockchain from both the application of
application. aviation •Identify the Blockchain for
engine MRO capabilites the said supply
supply chain, and chain
and the Blockchain
Blockchain application •Analyze
industry. cases. outcome.

3.1 Research Setting

This study’s qualitative strand was conducted with a group of operations executives at an
aviation engine MRO facility in Malaysia, with a pseudonym company name referred to as G

20
Company, with its headquarters based in the United States. A facility like G Company employs
300 highly skilled employees, which services popular civil aircraft engines for more than 40
global carriers, and is one of the flagship facilities in the region. When the study was conducted
in 2018, there were millions of dollars of orphaned inventory sitting at G Company’s warehouse
facility in Texas. Because of a lack of proper paperwork, G Company was unable to sell those
used parts into the open market. The company and the aviation industry in general still does not
have a digital solution to obtain the necessary paperwork to sell those parts back into the market.

Aircraft engines represent substantial investments and operational costs for the owner, and any
quality defect in the aircraft engine industry can be catastrophic. Part of the process includes
maintaining flight history records of how many cycles each part has flown, with the data then
returned to aviation MRO so that the appropriate parts are replaced. This makes documentation
and certifications important. However, existing paper-based documentation processes have led
to several inefficiencies.

At the time of this study, G Company revealed their first Aircraft Parts Blockchain, a permission
fork of Ethereum. This was after more than two years of development with Microsoft Azure.
The aim was to share the Blockchain across an industry-wide consortium of partners which
monitors and collates data tied to the manufacture and life cycle of critical aircraft engine parts.

Our engagement with G Company’s Blockchain began with the CTO and supply chain teams
interviews. Through the introduction of Aircraft Parts Blockchain, the respondents provided us
with access to information on Blockchain development in the aviation industry. Furthermore,
they discussed key drivers to improve aviation efficiencies, accountability, and visibility into
the process of making an aviation engine which makes safer and reliable aircraft.

Apart from the interviews with personnel from G Company, we also interviewed other experts
from within the aviation MRO and Blockchain industry, in order to capture a wider perspective
in our study.

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3.2 Data Collection Process

3.2.1 Framing the questionnaire

Two different sets of interview questions were designed, firstly for the aviation engine MRO
supply chain industry and the secondly for the Blockchain Industry.

Both sets of interview questions were designed in two parts. The first part was framed in a way
to capture the respondent’s company’s core operational services, position, years of experience,
information about the industry, and their daily operations. The full question format is provided
in Appendix A & B. The second part of the questions were industry specific, and were set out to
capture responses in the following industries respectively:

Aviation engine MRO supply chain industry:

- Respondent’s function in the company within the MRO supply chain
- Identifying underlining issues faced in the company in terms of material, information
or cash flow
- Understand the future of the aviation industry
- Awareness of Blockchain technology

Blockchain application:
- Respondent’s function in the company within the Blockchain application
- How Blockchain works
- To understand the different types of Blockchain
- Problems in using Blockchain
- The future of Blockchain

3.2.2 Data collection sources

All the data sources and details of respondents are located in Appendix B. There were a total of
17 executives interviewed who belong to a wide spectrum of supply chain functions, such as
production (2), quality (2), engineering (1), material (5), logistics (2), customer service (3) and
IT Blockchain (2).

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The first set of data was based around part and information movements within the aircraft
engine MRO supply chain network. Therefore, the data collected ranges from component or
part OEM, to the MRO companies. The majority had some contact with any given part in terms
of physical flow or information transfer. The second set of data is about Blockchain and its
application.

3.2.3 Qualitative interview

As mentioned above, we used the mixed-method design, where we started with the collection
of qualitative data through interviews. The interviews were mainly face-to-face and involved
asking the participants the preset questionnaires. However, some interviews were conducted
through video conferences by the authors and were recorded with each respondent’s consent.
Some voice data could not be transferred to any third party due to data security and privacy
policy.

At the start of each interview session, the respondents were encouraged to be open, and further
elaborate on points that were relevant to the study. We, as the interviewers, did not presume to
impose prior constructs or theories on the respondent as we were interested in hearing the
respondent’s perspectives. As the questions were designed to be open-ended, it encouraged the
respondents to freely express and emphasize what they felt was important, and to bring up any
information that they deemed relevant.

As respondents provided their responses, we noted down points of interest that we thought were
relevant to the study, and proceeded to question further where possible. The answers that were
not related to the framed questions but were relevant to the study were noted as points to further
investigate and to explore via different avenues, especially if the respondents were unable to
elaborate further during the interview due to time constraints.

We carefully noted all key points mentioned. At this point, several markers describing the
environment or strategy had been gathered, covering the breadth of the respondent's attention.

23
The interview concluded after we gathered most of the key points described in the semi-
structured questions. The average interview time was between 45 minutes to an hour.

3.3 Data Transformation

3.3.1 Qualitative data collected

After the conclusion of each interview, we proceeded to transcribe the voice data into an Excel
spreadsheet. The respondents’ answers were recorded under the designed questions.

While undergoing this exercise, we were able to have an overview of the operations of the
aviation engine MRO supply chain and how Blockchain works. For example, an insight we
derived from the data collected was that “we were able to identify if the problem is seen
throughout the said supply chain and not just specific to one segment of the said supply chain”.
The respondent’s job position was also an indication who would most likely face challenges;
and from their years of job experience, a rough indication of how long any problems might have
existed could also be inferred.

From the data collected from the respondents who are in the Blockchain industry, we were able
to further our understanding of Blockchain and its application. Examples were provided to us
on current designs and actual live use cases and prototypes that were being developed.

We also found through each respondent’s answers that there were some recurring narratives
which we grouped together.

3.3.2 Data Categorization

With the initial grouping of answers to the designed questions in the first set of data, we found
that we could further categorize the issues faced by the respondents into three: “Material flow”,
“Information flow” or “Combination of both Material and Information flow”. This linked to the
areas identified by (Robertson, 2002): the oversight of material; information; and financial
issues, which are common problems faced in any supply chain. As the data collected did not
consist of any financial issues, we adjusted the categories as above.

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We then contacted the relevant respondents with our data and had them allocate their said issues
into any of the 3 categories.

Table 2 provides some examples of respondents’ comments and the classification of the
respective issues they faced (The full set of data can be found in Appendix C).

Table 2: Sample of categorized comments

Information flow
•(Receiving inspector) Regulation FAA & EASA & CAA multiple regulators authorities duplicate information on different
certifications.
•(Material Manager) Parts in the market have incomplete paperwork/documentation which prevents us from purchasing
and using it.
•(Material Manager) Record keeping for some companies are not as reliable.
•(Engineering) TSN CSN is needed to have a better understanding of the engine condition and how much work is needed to
be done.
•(Procurement) Finding good tracebility parts (need ATA130, NIS, Goods of Sales, Back to birth documents)
•(Quality Engineer) Information discrepancies on documentations.
•(Technical Records) If engines go to another MRO shop, information may or may not be the same the next time round if the
engine returns to the shop again.
•(Vendor) There is always some missing information during incoming (mostly due to human error), where documents are
attached to the wrong part or if certain repairs are not done accordingly.
Material flow
•(Receiving inspector) Bogus parts identified based on past experience.
•(Material Manager) Manufacture LLP (Limited Life Parts) from scratch take at least 3 to 4 months lead time. But with
correct forecast it would not be an issue, but that is not the case in the market.
•(Procurement) World wide part shortages
•(Quality Engineer) Quality of parts in terms of part arriving damaged or not repaired as per request.
•(Vendor) Unable to accurately track parts within the shop, and may need to physically locate where the part is in the repair
process.
Combination of both Information and Material flow
•(Engineering) Engine owners tend to swap components (LRU) on multiple engines in order to keep the aircraft operating,
and do not maintain records properly. 50% to 60% of the time part information is different to the EDS (Engine Data
Submitle)
•(Engineering) Components swapping may affect the performance of the engine, but it is hard to confirm without proper
testing or data records… Data could be there but needs time to sieve through papwerwork and it is not digital
•(Procurement) 3rd party part sellers make up the main USM (used serviceable material). If they are unable to repair the old
parts and recertify, and there are no second hand parts available, there is no other choice but to order new at a higher cost
and longer lead time.

The second set of data (refer Table 3) was obtained from the Blockchain industry, where we
were able to categorize some common themes around the responses. They are “Characteristics
of Blockchain”, “Benefits of Blockchain”, and “Challenges of using Blockchain” (A full data
sample can be found in Appendix D)

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Table 3: Blockchain Respondents - Categorization

Characteristics of Blockchain
•It is designed to add new information rather than change it.
•Data is designed to be decentralized and uses consensus to validate the data.
•Information data is encrypted and harder to hack, therefore giving better data security.
•History of data is transparent to those who are given access.
•Data is not centralized, and is hence immutable unless the entire network collapes or people stop using
them entirely. This is different with the current cloud based system where data storage is based on
subscription, and if payment is stopped, data will be wiped off. But in Blockchain, it will remain
permanent.
•Automated execution with smart contracts, where as long as coded criterias are met, the required
actions will take place.

Benefits of using Blockchain

•Aviation is considered a very regulated industry, and considered a relatively small industry in terms of
the numbers of manufacturers of aircraft & engines.
•FAA is interested in using Blockchain to drive Transparency, Auditability, Visibility, which is currently
lacking in standardization, as they are receiving different data packaging (the data format could be in
paper or digital)
•Blockchain is able to provide that standardization with the assumption that the industry has agreed to
the format and what should be the standard
•Blockchain is good at sharing information securely, therefore the more you share, the more you can
collaborate.
•Traceability of any part across the entire supply chain from manufacture, to on wing, repairs/MRO, until
end of life. (multiple data points to be collected and stored)
•Traceability is easier, currently it is a very manual base action to traceback if something were to happen.
Blockchain is able to build the "story" in realtime.

Challenges of using Blockchain

•Design and creation of Blockchain due to hype to gain credibility as a Blockchain company, undermines
the true benefits of using Blockchian.
•For Blockchain to be sustainable and succefully implemented, it needs to be at the industry level.
•In house developed Blockchain may not be able to get buy in from external parties if the blockchain only
benefits the company that has developed it.
•Public perception of Blockchain is limted and linked to Bitcoin and is therefore unwilling to
invest/explore in experimental blokcchian ideas and solution.
•Implementing the use of Blockchain to the existing work process may encoutner initial resistance.

In one of the interviews, through a respondent’s explanation, we were able to understand that
one of the core benefits of Blockchain technology was as follows; “The main thing to
understand about the Blockchain is that, it is a form of information/data recording. The data
recorded is encrypted and distributed (decentralized) throughout the Blockchain network,
where it will be verified and stored. To access and amend these data is not as easy compared to
the traditional (centralized) data. Changes to that data requires a huge amount of processing
power, so it is easier to just update (append) the data. This way anything that was written or

26
stored before would still be there as part of the history of the data, which is hard to erase. All
in all, the technology is basically just that (in sic)...”

3.4 Data Analysis

3.4.1 Qualitative data analysis

Based on the first set of data collected, we reviewed and extracted key relevant information
required for our analysis. With the information, we were able to expand and link each piece of
information according to what was described through the interviews, thus giving us a clear
understanding of the data collected. Through this exercise, we were able to map out how the
information and material flow is organized in the aviation engine MRO supply chain and G
Company’s internal supply chain. This is further explained in Chapter 4.

We did a similar exercise on the second set of data, and this provided a deeper understanding
of the application of Blockchain. With that knowledge, we proceeded to research further into
the functionality of Blockchain and carried out a basic test simulation on how it performs in
reality.

3.4.2 Quantitative data analysis

After categorizing the first set of data, we were able to quantify the number of occurrences
based on what each respondent perceived the issues as. With that data, we proceeded to compare
it to the Blockchain benefits described in the second data, and matched those issues to the
Blockchain’s capability of reducing or mitigating the issues from the first set of data. We
present our findings below.

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 4. Results / Findings

This chapter presents our findings from the qualitative interviews. These findings were broken
down into two main sections: firstly, the current state of G Company’s view on the supply chain,
focusing on the aircraft parts track and trace capability challenges faced within the aviation
MRO industry; and secondly, the future state whereby we analyzed G Company’s
implementation of their Blockchain as part of their future products.

We delved further into the basic workings of the Blockchain, and performed a basic function
test, to test the feasibility of the aviation Blockchain consortium since this was considered
important by interviewees.

4.1 Current State - Understanding the Information and Material Flow

(Paper Flow)

Through the interviews, we managed to get a better understanding of the company’s internal
information and material flow (paper flow). We were informed that at the current stage, the
industry does not have any advanced digital capabilities to capture material flow and
information flow simultaneously, hence there is a heavy reliance on the paperwork attached
with the physical part. Figure 5 maps out information flow.
Figure 5: System Information Flow

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Based on this, multiple departments are needed in the information flow; indeed, each
department has some reliance on the previous department to ensure flows accordingly. Through
the interviews, many of the respondents complained about not knowing certain information
which hinders their work process. Figure 6 shows the outcomes of physical part flow.

Figure 6: Physical Part Flow (Paper Flow)

4.2 Current State - Respondent’s Interview Findings

Data collected in Appendix B, as well as the full set of data collected through interviews and
the categories selected by the respondents in Appendix C was compiled to show how many
issues are informational issues and how many are material issues. For those that covered both,
we included them in both categories.

Figure 7: Number of issues under each category

#Material (28) #Information

Issues (50) Issues (92)

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Through this exercise, we came to the conclusion that information flow issues were above 60%
of all issues faced by the respondents.

4.3 Current state - Understanding and Analysis of the Data

With the categorized data, a further deep dive into the information issues was conducted, in
order to have a better understanding of what issues are faced by the respondents, and whether
they can be further categorized. By doing so, we managed to see some issues that are commonly
shared across the different departments.

We then further classified these into 4 different categories.

i) Lack of information on part history (traceability): we came to this conclusion as the
respondents indicated that there is a lack of proper tools for data visibility on the part
history, especially if they have gone through multiple tiers. This prevents them from
performing any actions on the part. For example, the Engineering department needs
more part history for analysis to recommend different types of repairs. Furthermore, the
Purchasing team relies on part history documentation to decide on an appropriate
purchase price. Engineers and Technicians are trained so that if they do not know the
history of the part, they cannot use the part even though the part seems usable.

RESPONDENT 05. Used part suppliers were unable to find justification to repair
certain parts that are needed by customers, hence parts are just left as scrap.
RESPONDENT 07. Finding good traceability parts (need ATA130, NIS, Goods of
Sales, Back to birth documents).
RESPONDENT 03. Engine owners tend to swap components (LRU) on multiple
engines to keep on flying, and sometimes are not recorded properly, 50% to 60% of the
time it is different to the EDS (Engine Data Submitle).
RESPONDENT 03. Components swapping may affect the performance of the engine,
but are hard to judge without proper testing or data record… Data could be there but
needs time to dig out and it is not digital.

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ii) Information Discrepancy (immutability): respondents from engineering, tech records,
and engine induction departments all indicated that they found themselves having to
check back with different departments and even customers on the part information they
receive. On occasions, the information on documentation does not tally with the part,
therefore causing disruption in their work process.

RESPONDENT 03. Engine owners tend to swap components (LRU) on multiple

engines to keep on flying, and sometimes are not recorded properly, 50% to 60% of the
time it is different to the EDS (Engine Data Submitle).
RESPONDENT 03. Components swapping may affect the performance of the engine,
but this is hard to judge without proper testing or data records… Data could be there
but needs time to dig out and it is not digital.

iii) Lack of information for tracking (transparency): it seems that almost all departments
that assist in the material flow will require information of the part to be followed
through, as well before performing tasks on the part. This includes the logistics
department, warehouse department, material planning department, and production.
Information of the whereabouts of the part is crucial, but the system may not tally and
can cause problems in many engine buildup processes, and lead to quality failure.

RESPONDENT 06. System errors - input work scope into the system, but not appearing
on the physical PO or not as complete in the system.
RESPONDENT 02. Engine documentation given by customers is not complete.
Generally, about 10% of information is incomplete, the majority of types of part is the
LRU parts.
RESPONDENT 05. Manufacture LLP (limited Life Parts) from scratch takes at least 3
to 4 months lead time. But with the correct forecast, it would not be an issue, but that is
not the case in the market.
RESPONDENT 11. (Vendor) with a clear history of the part, engineers and then submit
DR (deviation repairs) if they know what to expect, at the moment they rely fully on the
visual inspection of the part which is limited.

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 iv) Others: We classify this as information that is non-part related, for example repair
procedure changes, repair manual upgrades, changes in production schedules etc.

RESPONDENT 03. Maintenance/troubleshooting instructions may differ with

Components Maintenance Manual (CMM-OEM) vs Engine Serviceable/Shop Manual
(ESM).
RESPONDENT 03. (Engineering) Not the latest update (information) from OEM,
updates happened 2 times a year periodically and comes in a CD format.

With the breakdown, we were able to categorize them, and the count of each category is shown
in Figure 8.

Figure 8: Types of issues & counts

4.4 Blockchain Interview Outcome

As mentioned in Chapter 3, 2 respondents were interviewed with background of the uses of

Blockchain.

Here we will have analyze and classify 2 separate findings:

i) What are the issues of the supply chain that Blockchain is trying to solve;
ii) What are the Blockchain capabilities and types

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4.4.1 What are the issues of Supply Chain that Blockchain is trying to solve

The first respondent is from G Company, and at the time of writing, they were already in the
development stage of setting up the Blockchain prototype system, with the intention of
implementing this in the near future. The respondent also indicated that the company was taking
the first step to developing the Blockchain as an industry use. Furthermore, because of the
nature of the company’s business and its market reach of nearly 60% of the industry, they
believe they will need to take the lead so that the rest would follow suit.

The second respondent from WQ Company is in the Blockchain development industry, where
they have helped companies design a Blockchain system to support businesses operations and
processes.

These 2 different companies both have different goals; G Company is hoping to be established
as an industry standard, whereas WQ Company is in the business of designing and customizing
Blockchain’s platforms to suit customer’s need. However, from our analysis, both are using the
capabilities of Blockchain to solve common issues in the supply chain – Information / data flow.
These can be seen from the comments by the respondents below (Table 4).

Table 4: Blockchain related respondent's comments

Respondent 1 : G Company
•FAA is interested in the uses of blockchain is to drive Transparency, Auditability, Visibility,
which is currently lacking in standardization, as everyone is giving different data packaging
(These data format could be in paper or digital)
•Blockchain is able to provide that standardization with the assumption that the industry
has agreed to the format and what should be the standard.
•Tracebility of the part across the entire supply chain from manufacture, to on wing,
repairs/MRO, until end of life. (multiple data points to be collected and stored)
•Traceability is easier, currently it is a very manual base action to traceback if something
were to happen. Blockchain is able to build the "story" in realtime.

Respondent 2 : WQ Company
•As long as the dataset is on the blockchain, the platform developed would be able to query
the information of that part.
•Depending on how much data you want to track…. As long as there is a way to trace that
part even if there is a SN# on the 1 rice, we can still trace it to that level if that is what you
want…

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Based on the comments, it is relatively clear that both companies are using Blockchain to try
and solve their information / data flow issues. They believe that Blockchain is a relatively good
solution as of now, and our analysis seems to support that.

4.4.2 What are the Blockchain capabilities and types

The second part of this analysis is on a technical level. To achieve this analysis, we had to
further learn and understand the technical side of the Blockchain technology.

From the interviews, the respondents all agreed that the Blockchain technology itself is still at
an early stage, and there are still many who are analyzing how to use it, and improve their
current systems. At the moment, the very basic understanding is that, the way how the data is
stored and transferred via the Blockchain is different compared to the current traditional way,
where data centers are set up to operate and support a particular business function. In this way,
the data storage is very centralized, compared to the Blockchain where it is decentralized –
there is no one central computer that holds all the data like a server. In terms of data source via
the current data storage method, although the data accuracy can be high, it can still be easily
amended, deleted, and data sources could be manipulated. Whereas in the Blockchain, it is
programmed in a way that data can only be added to. Furthermore, because it is encrypted, a
consensus needs to be met or the user needs to have permission to append the data in order to
make changes.

Blockchain technology has been in use since 2008; and since then, the technology itself has
gone through many changes as well. However, the “core” of how the data is time-stamped,
stored, encrypted and distributed is still maintained. The improvements are the encryption /
access method, distribution method, and varied immutability through consensus methods. This
variation would depend on how is the company going to use Blockchain and what is its core
contribution to the company. Through the interviews, we were able to see the divergence, where
each company has chosen to use the Blockchain in a different manner to achieve their goals
(refer Figure 9).

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Figure 9: The Divergence of Blockchain Type &Characteristics

G WQ
Comapany Company

Using Using Ethereum

Hyperledger Token

Chaincode Solidity

Permissioned
Public Blockchain
Blockchain

Practical
Byzantine Fault Proof of Stake
Tolerance

As we can see, the application of the types of Blockchain differed. The key reason of why the
companies have both chosen different types of Blockchain is mainly because the application
goals are different.

As previously mentioned, G Company is a market leader in the engine MRO industry. In the
interview, the respondent informed us that they were taking a different approach where they
want to push the application of Blockchain into the industry itself, making it an industry
standard; therefore, they require a Blockchain that is capable of achieving that goal. On top of
that, because of the nature of the industry, the users of the Blockchain will need to be taken into
consideration as to how are they going to contribute to the Blockchain. In terms of industry,
generally this applied to B2B scenarios, which is why G Company opted to use Hyperledger.

Another key reason why G Company chose to use Hyperledger is because of its status as a
permissioned Ethereum Blockchain; it therefore has the capability to support multiple
consortiums - B2B. Because of the nature of the industry, anyone outside of the industry
(consortium) should not have access to these data, this again is due to sensitive requirements of
the aviation industry itself. However, by having a permissioned Blockchain, the person who
owns the data will have the authority to give permission to relevant parties to have access. The
main data will be the true data, and all future data added to the original data would just need to
be verified via the consensus model of the Blockchain.

35
WQ Company however has chosen to use the Ethereum public Blockchain instead. As the
company is in the business of designing a Blockchain system for their customers, the needs for
the individual company differs from G Company. According to WQ Company, the companies
that they serve, mainly use transactions and tracking. Therefore, the data recorded on the
Blockchain need to be transparent and traceable for all users. These are usually only for one
company; therefore Ethereum seems to be able to support the needs of the customer.

There are two other reasons that WQ Company prefers Ethereum. Firstly, the respondent
mentioned that the programming / coding community for Ethereum is one of the largest; and
because the technology is still relatively new, support on knowhow is one of the key decisions
in using Ethereum. Secondly, Ethereum has a Smart Contract function, where it can enhance
the uses of the Blockchain. This means that while programming the system, one can also include
execution protocols upon completing a transaction or task along the Blockchain, therefore
giving it additional functions when doing programing; in other words, creating additional value
to paying customers.

4.5 Future State – Applying Blockchain in the aviation MRO

Through the outcomes of our interviews in Chapter 4.3 and the Chapter 4.4, we have
categorized the challenges faced within the industry, which can be represented in the current
Blockchain framework on immutability, traceability, and transparency.

Figure 10: Blockchain Framework

Immutability Traceability Transparency

•Reduced the need •Ability to identify •Ability to share

to verify and and trace parts data and
confirm with from multiple information from
different tiers. upstream to
departments and •Ability to identify downstream
customers on part common parts within the whole
information. with different part MRO supply chain
•Ensure part versus numbers from ecosystem.
information on smart contract,
document tally. public cloud or
private database.

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This gave us a clearer picture of where the application of Blockchain is possible and if
implemented on a scale will be able to solve the challenges posed. Figure 10 shows some
examples of this categorization.

4.6 Future State - Blockchain decentralized supply chain and regulatory

compliance

Chapter 4.1 Figure 5 & Figure 6 were based on the initial insights on the actual information
flow in G Company. These were expanded into a comprehensible artifact that can be evaluated
in practice in the aviation MRO supply chain. Any entity operating with aircraft spare parts is
always required to have a full history and lineage of that part; i.e. where it has been around the
world, and how many miles or cycles it has flown. Furthermore, a non-incident statement is
required to prove that it had not been involved in any accidents, as well as physical paperwork
which is saying that is airworthy. A digital copy is also required by the regulatory body. If any
of these documents are missing, then that part will become un-airworthy. If there are
breakdowns in this process, orphaned parts may sit in warehouses waiting for paperwork; and
naturally, this can be inefficient and time-consuming.

If MROs store data on the Blockchain, they should be able to print out the relevant paperwork
and present it to the authority. In this scenario, the authorities are not interested in how the data
is stored, as long as they believe that the MRO has rigorous spare part tracking mechanisms.
However, even though it is difficult to tamper with Blockchain data, it is possible for other
failures to occur, which the regulators will care about. Even though these regulatory
considerations complicate the industry and supply chain dynamics, it does not necessarily mean
that Blockchain could not be successful. However, once there is regulatory support, components
might no longer be certified with stamps on paper documents, but with the immutable
Blockchain data. In the end, a transition might happen from components with paper logbooks
that can lose easily to components with digital information that provides full maintenance and
fault history.

37
4.7 Additional Blockchain Information Supporting Research Sample

Since Blockchain is relatively nascent, we needed to gather more information on further

developments in the industry. As the immediate sample size for the Blockchain uses is small,
we collected additional data on current written articles on the concept and use cases specific to
the aviation industry, which is relevant to our research.

Data was further collected through the references of three main sources below:
1) Blockchain in Aviation – IATA White Paper (Goudarzi & Martin, 2018)
2) Spec 2500 & Blockchain ( (Henderson, 2019)
3) Secure Aircraft Maintenance Records Using Blockchain (SAMR) (Aleshi, 2018)

Based on the information gathered from the three sources, the directions both G Company and
WQ Company are working towards with Blockchain were matched. Below is the information
extracted from each source.

4.7.1 Blockchain in Aviation (Goudarzi & Martin, 2018)

From the article, it is mentioned that there are different types of Blockchain (refer Figure 11),
Public - Permissionless, Public - Permissioned, Private – Permissionless & Private -
Permissioned. However, depending on what goal is to be achieved, each of those different
Blockchains will have their advantages and disadvantages.

Figure 11: Types of Blockchain

The article also explains that with the Blockchain, there would be a consensus mechanism
where it could verify the data, although it may not be as important in a private Blockchain if
there is already a “single truth” embedded in the Blockchain. (Goudarzi & Martin, 2018).

38
In terms of application, the authors also foresee that the aviation industry would be using
Blockchain Smart Contracts for automated execution based on agreed conditions. Tokenization
to prevent overspend on assets: for example, flight tickets/coupons, part provenance – location
and tracking of parts, certification – traceability of parts or individual records and also
immutability of data when it comes to part ownership.

Base on the above information, we can see that G Company is using the technology of
Blockchain in solving the problems faced in the industry as a whole. The type of Blockchain
chosen (private permissioned) to solve the issues faced seems to coincide with comments stated
in this article.

4.7.2 Spec 2500 & Blockchain (Henderson, 2019)

This is mainly a system that was created by J Company, which is in the business of
documentation and aircraft data recording. Based on their industry experiences in data
recording, they have outlined 3 main issues faced by them:
- Critical Aircraft Information Records are not passed properly between owners
- Various Information Tracking formats cause flow of misinformation (e.g. paper, PDF,
Excel or tracking software)
- No historical “industry” agreement on what information (content and format) is needed
and how it is to be transmitted.

Figure 12: Information Format & Transmission methods

J Company provided history on the formats and the way data was transmitted (refer Figure 12).
J Company also identified the types of data that are important to be put on the Blockchain:
1) Operators with operational data

39
 2) Operators with maintenance data
3) MRO facilities with maintenance data

In addition, J Company identified those who can contribute to make the Blockchain “catch on”
and to ensure data is collected at each “owner”; and that the data will be distributed among all
the “owners” (see Figure 13).

Figure 13: "Owners" in the Blockchain and the types of data contributed.

Source:
https://www.nortonrosefulbright.com/en/knowledge/publications/53482ee6/blockchains-and-
distributed-ledger-for-aviation

Based on the information above, and comparing it with data collected through the interview
with the respondent from G Company, it seems that G Company faces the problems stated by J
Company. Being the leader in engine manufacturer in the industry, they have taken the initiative
to start developing and pushing the use of Blockchain through their products, thus taking an
industry approach when developing the use of the Blockchain.

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4.7.3 Secure Aircraft Maintenance Records Using Blockchain (SAMR) (Aleshi, 2018)

Information extracted from this thesis report is mainly on the function and back-end proof of
operational programming using the Blockchain, and mainly focuses on data integrity and
security. In Aleshi’s thesis (Aleshi, 2018), the Hyperledger Sawtooth was used, which is
different from the one being developed used by G Company (Hyperledger Fabric).

The differences are explained by Linux below.

“Hyperledger Fabric is intended as a foundation for developing applications or solutions with

a modular architecture. Hyperledger Fabric allows components, such as consensus and
membership services, to be plug-and-play. Its modular and versatile design satisfies a broad
range of industry use cases. It offers a unique approach to consensus that enables performance
at scale while preserving privacy.” (Hyperledger Fabric, 2020)

“Hyperledger Sawtooth offers a flexible and modular architecture that separates the core
system from the application domain, so smart contracts can specify the business rules for
applications without needing to know the underlying design of the core system. Hyperledger
Sawtooth supports a variety of consensus algorithms, including Practical Byzantine Fault
Tolerance (PBFT) and Proof of Elapsed Time (PoET).” (Hyperledger Sawtooth, 2020)

However, the key take away from Aleshi’s thesis (Aleshi, 2018) is the Blockchain use
simulation – Chapter 4.8. With the assumption that all industry players contribute to the use of
Blockchain for recording data, data integrity and “true” information flow will be seamless as
the records can be seen by the aviation authorities as well. Any changes or new information or
records updated onto the Blockchain will be distributed and verified by parties in the network,
thus, supporting G Company’s initiative to develop the Blockchain.

4.8 Simulation of Information Flow Concept Using Basic Blockchain

For this study, in order to ascertain if Blockchain has the capability to bridge the gap of
inefficiencies, we performed simple simulations based on the current processes and issues in
the industry, and included the use of the Blockchain where it runs parallel with processes.

41
Here we focus mainly on the information flow, and we assume that all parties have their own
system, and have access to the Permissioned Blockchain; therefore, they are able to update any
information related to the aircraft components to the Blockchain.

We used three problems faced by respondents from our sample (Figure 8), and applied it to our
Blockchain as a simulation. This was done in order to examine whether using the Blockchain
as a store of data would capture or solve the mentioned issues, and close the gap of
inefficiencies. To achieve this, we used the Basic Blockchain Web-based Simulation tool:
https://andersbrownworth.com/blockchain/

4.8.1 Scenario 1: Procurement Standpoint - Lack of information on part history

(Traceability)

One of the respondents who works in the materials’ department as a procurement specialist
informed us that they would not purchase any used component if there is incomplete paperwork.
As a result of the component history being unavailable, the owners of the component would
have the option to send it for repair and recertified before reselling.

For this scenario, we assume that Company AA wants to sell an extra component that they have
kept in the warehouse for a number of years, to Company BB. Unfortunately, Company AA
has lost all physical certificates for this component. Under the current circumstances, Company
BB would reject purchasing the part as there is no concrete confirmation of the information for
the component, even though Company AA has recorded it in their system. As a result, Company
BB has no way of verifying if the information is accurate and reliable.

The hash capability function is being used in the simulation and it requires five Blocks of
information (Figure 14). For each block we explained what is being updated. The simulation
results below show how the information is shared on the Blockchain. As a result, Company BB
will be able to trace and trust the history of the part on the Blockchain. For a clearer view of the
individual blocks and its information, please refer to Appendix E.

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Figure 14: Information flow based on each block

Block 1 – This Block is created by the manufacturer as a digital birth certificate, and information
is stored on the Blockchain. The hash number created on this block will be the first imprint for
the next block, ensuring the details on the first block will be part of the second block.

Block 2 – This Block is where the owner of the component updates the information and logs
on to the Blockchain. The hash from the previous block is included in the creation for this new
hash. (Updated Block)

Block 3 – This Block is updated by the MRO Company, therefore certifying, and confirming
that the part has been repaired. Under normal circumstances, the MRO Company will provide
physical certification as a confirmation. However, if these details were updated on the
Blockchain, the information from the previous hash would also be included to create a new
hash, linking all the information together.

Block 4 – This Block is updated by the owner company AA. As mentioned in the scenario,
Company AA has kept the part/component in storage and the physical certification is missing
or no longer in existence, therefore, the procurement team would not have purchased this. But
in this case, the information would still be present in the Blockchain through the previous hash
data. From this block, all Company AA has to do is to update in their system and the Blockchain
will confirm the transfer of ownership even if there is missing information. All information on
the component is still intact through the hash number from the previous block, therefore
Company BB should be confident enough to proceed with the purchase of the component after
physical verification of the Serial Number on the Blockchain.

43
Block 5 – This Block is updated by the new owner Company BB, whereby they are able to
update new information including their own new part numbers and confirming receipt of the
component on the Blockchain without having the physical certificate. This would automatically
create a new hash which includes all information from the previous hash, thus ensuring that the
information of the component is intact and is confirmed by everyone upstream of the supply
chain. If Company BB is given access to the information on the Blockchain, they will be able
to track down and update the part number in the system accordingly. In the future, any purchaser
will be confident with the information on the Blockchain despite different part numbers,
because they can rely on the history of this part being intact and accurate.

Figure 15: Information on the Blockchain is shared amongst the network

Block 1 : Details Block 3 : Repaired

Block 5 : Company
Created by the Block 2 : Company Part retured to Block 4 : Part sold to
BB updates block
Manufacturer OEM AA part sent for Company AA and Company BB
based on company
and sold to repair. stored in the (without certificate)
details.
Company AA warehouse

Blockchain: Information Flow

The outcome of this simulation (Figure 15) shows that using the hash capability of the
Blockchain as a store or confirmation of information would give confidence to ensure
component history and its integrity is maintained, despite part number changes by different
companies.

4.8.2 Scenario 2: Engineering Standpoint - Information Discrepancy (Immutability)

One of the respondents who works in the engineering department shared that there are occasions
when they are unable to rely and trust the recorded repair history/information performed on the
part/component. Repairs, overhaul & modification information are usually recorded on the
physical part certificate (ARC - Airworthiness Review Certificate). Discrepancies are detected

44
during physical part inspection where repair information or modifications were performed but
not recorded or incorrectly recorded on the ARC.

As there are a few parties that update the information on the part/component, it is sometimes
hard to locate at which point in the supply chain information flow this has been incorrectly
updated, or if it was changed. Any mismatch of information needs to be corrected before
proceeding with any installation of a part to the engine. In a worst-case scenario, the part may
need to be fully overhauled again to ensure serviceability, and with all the information up to
date; this will result in higher unexpected costs.

Figure 16: Information in current flows is heavily reliant on the ARC

OEM MRO Company 1 MRO Company 1 MRO Company 2 MRO Company 2

• Manufacturer • ARC (0) No repair • ARC (1) Standard • ARC (2) Standard • ARC(3) Standard
Issue Cert (ARC 0) history repair history. repair history repair history
• 1st Repair • 2nd standard repair • 3rd standard repair • Full overhaul
standard and modification performed performed,due to
performed performed. • ARC (3) - Standard rare failure
• ARC (1) - • ARC (2) - Only repair recorded discovered.
Standard Repair stanrdard repair • Investigation
recorded recorded • Note* showed incorrect
Modification in repair was
2nd repair not performed in the
detected because 3rd standard repair
not recorded in • Resulting in higher
ARC (2). unexpected cost of
full overhaul

Based on the flow in Figure 16 above, a Blockchain map was created. In this simulation, we
used both the hash and immutability function of the Blockchain capability. We used five Blocks
where relevant information was recorded to the Blockchain according to the parties in
possession of the part/component at the time (OEM, MRO Company 1, MRO Company 2).
After each MRO company performed repairs on the part, information and part flowed through
the supply chain.

Figure 17 below shows the information flow which was verified and agreed by everyone in the
Blockchain, following the incorrect ARC. Each Block details are recorded and can be viewed
in Appendix F.

45
Figure 17: ARC records in Blockchain

Based on this scenario, as it is very rare to perform an overhaul on this part, an investigation
was underway, where the outcome of the investigation showed that modification was performed
during the second repair. The person who was responsible for the repair and modification was
identified. This person informed that they had changed the record in their system to reflect the
modification of the part after it had left the premise of MRO Company 1. Unfortunately, due to
breakdown in communication or processes, the updated ARC was not provided to the owner of
the part.

Thus, according to the investigation outcome above, we performed a simulation whereby the
person who corrected and updated the information in their system, is linked up to the
Blockchain. By doing so, the Blockchain was able to detect this simulated error based on the
differences in Hash number between Block 3 and 4. This should trigger and alert to MRO
Company 2 to set the part aside for further investigation. This part will remain in limbo until
the updated information has been verified by relevant parties and updated in the Blockchain
accordingly. Information updated in Block 3 can be viewed in Appendix F.

Figure 18 shows the results of information changed by MRO Company 1 in Block 3, triggering
an error of information downstream.

Outcome: From this simulation, a full overhaul was avoided in Block 5. Using the Blockchain’s
Hash capability for information immutability, any changes in the information without the
reliance of the physical certificate could be a trigger, even before the part arrives at MRO

46
Company 2. This could mean that MRO Company 2 would have performed the correct repairs,
thus avoiding any unexpected overhaul cost of the component.

Figure 18: Information error in Blockchain

4.8.3 Scenario 3: G Company part manufacturer – Live data tracking (transparency)

One of the main reasons G Company wants to incorporate Blockchain into their products is to
ensure that parts are properly tracked and any information about the part is live and transparent,
which would avoid bogus parts or unauthorized parts moving into the supply chain. This can
be overcome by the distributed ledger capability of the Blockchain. Currently, there are 3rd
parties MRO companies that try to salvage scrap parts without the knowledge of the OEM, and
some of the repairs could bypass regulators and make their way into the supply chain. This is a
“grey area” where regulated approved repairs are performed to make it functional. However, it
may not adhere to the strict specifications of the OEM, and therefore puts the integrity of the
part at risk and questionable.

Blockchains’ distribution ledger capability combined with the previous mentioned capabilities
are used in this simulation, where there are three parties involved on the permissioned
Blockchain. We labelled them as Peer A – OEM, Peer B – Permissioned MRO Company, Peer
C – Permissioned 3rd Party MRO Company.

There are three transaction boxes in focus where information is updated, shared and verified on
the Blockchain. The exact information of each Block can be viewed in Appendix G. Figure 20

47
shows how information is replicated and distributed within the Blockchain network where
information is shared and verified by all, here Block 3 is first updated as scrapped.

Figure 19: Blockchain replicated and distributed information

Figure 19 shows a typical Blockchain network where information is replicated and distributed.

In this situation, this scrap part was meant to be returned back to OEM or to a scrap metal
specialist. For this simulation we introduced the scenario as below.

The 3rd party MRO Company (Peer C, Block 3) managed to salvage the part, and therefore
needed to update it on the Blockchain. However, by doing so, it is expected that this Block will
be rejected, even though it is on the Blockchain due to the difference in Hash number. To view
details on this block, please refer to Appendix G 7.7.4.

48
Figure 20: Information in Blockchain

Figure 21 below shows the Blockchain network where there is an error triggered when the 3rd
Party MRO Company tried to update different information after repairing a scrap
component/part. The Hash key is no longer in sync with the previous or other blocks; therefore
the person who has access to the Blockchain will be able to pinpoint or clarify with the relevant
party in regards to the component in question.

Outcome: Without Blockchain, the process to salvage a part is a long process which involves
notifying numerous parties. This would potentially result in companies salvaging and re-
entering these unauthorized parts to the supply chain without notifying the key stakeholders.
Therefore, if all parts are recorded on the Blockchain, it will be difficult for non-approved parts
to re-enter the supply chain undetected by all parties.

49
Figure 21: How error is triggered in Blockchain

50
 5. Discussions

5.1 Is the Blockchain a Solution to the Supply Chain Problems Faced by

the Aviation MRO Industry?

Most of the supply chain system is a linear economy model whose goal is to fulfill supply and
demand needs. This means the manufacturer produces a product to meet the customer’s needs,
and that the product needs to be delivered on time. Therefore, the efficiency of the supply chain
is critical in this model. However, in aviation MRO, supply chain information transparency and
traceability are of the utmost priority. While the availability of information may lead to an
increase in traceability, traceability may not increase the transparency if there are only a few
participants in the supply chain that are contributing to information. Furthermore, the benefit
of traceability is limited by the complexity of the aviation MRO supply chain. A lot of decision-
making has to be based on key relevant information presented at any given point in time, e.g.
Production schedules can be affected and rearranged according to the lack of part visibility, or
not knowing if there are sufficient parts, or the location of the part, for the necessary engine
repairs. It also affects inventory management when it comes to parts distributed globally, where
knowing who the owners are and the location of any serialized parts is important. Information
for the procurement team to purchase parts that are “true”, i.e. with their part history confirming
their origins and repairs, is highly sought after.

Therefore, the question for most companies is, “Is Blockchain a good ‘fit’ for us?” We refer to
the below. Based on the decision tree (Figure 22), companies will still need to make the decision
if Blockchain can be applied as a solution to their problem. However, based on our simulation
using the Blockchain, it seems very possible for Blockchain to help in maintaining part history,
and facilitating information flow, hence meeting the objective of solving some issues faced in
the industry.

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Figure 22: Is Blockchain the "Fit"

Source: “BLOCKCHAIN IN AVIATION” IATA Whitepaper, Oct 2018 (Goudarzi & Martin,
2018)

5.2 Challenges of Implementing Blockchain

Based on the interviews conducted for our research thesis with G Company and WQ Company,
we uncovered multiple challenges for different issues. We found three challenges (discussed
below) which are important when it comes to the implementation of Blockchain:

5.2.1 Blockchain as an Aircraft Parts Database

This section examines how G Company’s Blockchain can potentially solve the problem of the
lack of centralized authority by providing a trusted and secure digital platform. One of the key
aspects that differentiates aircraft parts databases from common spreadsheets is that they
contain rules that help ensure the reliability of information. Each time a modification is
performed in the database, the software ensures that the database rules are adhered to, because
when any modification violates any set of rules, it will be rejected.

When an aircraft parts database belongs to a single organization, it is relatively simple to

manage the transactions. However, things will get more difficult when a single database is
shared between two or more organizations (Figure 23). A central entity is needed to control the
information integrity, manage simultaneous transactions that may include changes in the

52
information, and grant permissions to limited-access-only information. There are comments
from people within the industry which suggest that there are up to 21,000 independent data
points across the aviation supply chain and this does not include the individuals in the
companies that are all plugged into the same ecosystem.

Figure 23: Existing IT landscape

Source: Modified from https://blog.ifs.com/2017/06/disrupting-aviation-blockchain/

Blockchain’s unique capabilities of providing a ‘back-to-birth’ dataset is believed to be able to

drive cooperation and trust between organizations in the ecosystem. An extremely important
aspect of this is data sovereignty, i.e. where any data changes or transfers to or from any
platform will not affect the original imputation of that data. For example, countries in Europe
have data privacy laws whereby data cannot leave a particular geographic region for a specific
competitive advantage, or for risk management purposes.

In G Company’s Blockchain situation, they removed the intermediaries between data and
organizations, creating a database with a robust peer-to-peer network that allows a quick
propagation of the database transactions to all peers that are connected. Blockchain can enable
the automatic identification and resolve conflicts between transactions.

53
Figure 24: Blockchain Framework

Source: https://docs.microsoft.com/en-us/azure/blockchain/service/data-manager

G Company’s Blockchain ecosystem is built on top of a platform such as Microsoft Azure

(Figure 24). Microsoft Azure provided the foundation with great capabilities which allows
users to access data securely via the Cloud, apply machine learning, and bolt on IoT to it. While
Microsoft Azure focuses on the scaffolding, G Company is working on solving customer
problems versus focusing on customizing part traceability, settling cash, and governance. This
therefore gives G Company’s workers the ability to digitally record their tasks in a digital
document-certified manner, thereby doing away with high amounts of paper work, saving time
and money.

To ensure this solution is able to stand the test of time, G Company created data standards that
can actively be shared, meaning that the Blockchain technology can achieve economies of scale.
To achieve this, there needs to be an ecosystem where Blockchain is the foundation that drives
unlimited use cases with part traceability, digital document certification and real-time
information. In the Aviation MRO, Blockchain is extremely effective and efficient because the
data is immutable, event-driven, and is in real-time.

5.2.2 Buy in from Regulatory Authorities

According to both G Company and WQ Company, there are not many regulations on the use
of Blockchain currently, but they do believe that the underlining Blockchain technology can be
self-regulating using the consensus model.

54
At the present time, the aviation regulatory authorities have not put any restrictions on
Blockchain, mainly because the technology itself has not been widely adopted or used yet.
However, according to G Company, they have been involved with the FAA (Federation
Aviation Authority) and EASA (European Aviation Safety Authority) in their Blockchain
development process, therefore getting their input and contribution on what information should
be on the Blockchain; this was mainly in the hope that the regulators would make it official that
all the required information will be on the Blockchain. This would then push the industry as a
whole to adopt the Blockchain technology and make it a norm.

5.2.3 Effects on Operations

We gathered from our readings that the Blockchain will be running in tandem with any
company’s current operating systems and interlinks with its platform, therefore it should not
really affect normal operations. However, we are of the opinion that there would still be an
impact from an operational standpoint, although we cannot quantify or qualify this until the
Blockchain technology has been fully implemented in an aviation MRO company. The rationale
behind our opinion is that many of these Blockchains require the use of a separate application
or system that may or may not fully link to the Blockchain, thus the person managing the data
will need to manage two systems concurrently in order to maintain the information flow. This
would then result in duplication of data and doubling of workload in order to maintain accuracy
of data on both the company’s and the Blockchain system. In order to resolve this, IT
development will need to revamp the current operating systems, which would take time and
may be a costly process.

5.3 Future Research Possibilities

A Blockchain is essentially having a distributed true dataset on a database that is shared and
verified throughout the entire internet and Blockchain network. In this current age of Industrial
4.0, where the use of big data, internet of things and automated computers act based on data
input, linking algorithms with actual data would revolutionize the way we do things. There are
still functions in the Blockchain that could still be further developed and improved, such as the
following:

55
5.3.1 Smart contracts

Many Blockchain companies are gearing towards smart contracts, as this could be a way for
Trustless Transactions (Kasireddy, 2018), where algorithms of conditions are embedded into
setting up a contract on the Blockchain. When all the actions embedded in the smart contract
conditions are met, the smart contract would be triggered and actioned upon automatically.
Current use cases can be found in trade finances, where intermediaries such as the banks are
required, and transaction/process time is long. By using a Blockchain smart contract instead, as
long as both parties meet the conditions set in the Blockchain smart contract, transactions would
be automated, therefore reducing the intermediary’s oversight which quickens the process. In
terms of the aviation MRO industry, it is possible that repair contracts could be set up between
customers and the repair vendors. When repairs are completed, payment could be automated.
This function of the Blockchain would most likely be the next big application that users would
gravitate to.

5.3.2 Improved forecast accuracy

Any forecasting models that require data input and accuracy highly depend on the data sources;
therefore, if Blockchain becomes a norm for companies to use, it could become the data source
for all forecast models, simply because the data on the Blockchain would be considered “live
(real time) and accurate” based on data inputs by parties in the network. This should
theoretically mean forecast accuracies would be much better, which means suppliers would be
able to make the best decision on how resources would be applied in order to meet customer’s
demands efficiently.

5.3.3 Automation of machines with smart contracts

We briefly mentioned automation in the smart contract where automated transactions are
facilitated based on certain criteria or conditions met. If Blockchain does become the norm, it
could be the underlining data source for all automated machines that rely on data input, meaning
we may see further changes in the automation of machines. For example, in an automated
manufacturing plant, where Blockchain records live data, the plant would begin the
manufacturing of an engine part as soon as the part is recorded as scrapped by any particular
party in the Blockchain network.

56
There could be multiple areas of improvements in many industries apart from the Aviation
MRO industry; therefore, if Blockchain technology becomes the underlining source of data, the
opportunity of advancements would be endless. However, at this time, challenges for
implementing the use of this technology would still be a hurdle.

5.4 Conclusion

Since Blockchain is currently in the very early stages of adoption within the aviation MRO, it
is difficult to fully understand how well Blockchain could impact the industry. Currently, there
is no global authority that could enforce a central digital platform for documenting workshop
events and parts histories. To close these gaps, a database which is able to transform tangible
(spare part) and intangible (ownership, record) assets into digital information that can be
registered, tracked and traded with permitted operations is very much needed. Our Blockchain
research displayed a quick propagation of the database transactions and ensures that all peers
have an identical copy of the database. These include, but are not limited to, Blockchain’s
capability to tag different pieces of information belonging to different participants through the
use of tracking technologies such as RFID and QR code. More importantly, Blockchain can
enforce data ownership without a central authority, and automatically identify and resolve
conflicts between transactions.

Unfortunately, the Blockchain technology does come with challenges in terms of scalability.
Purely decentralized Blockchains often have a structure that hinders them from achieving high
transaction speed levels, as this is mostly due to the size of the data and number of confirmations
required; for example, ETH (Ethereum) vs ETC (Ethereum Classic) has a transaction time of 5
minutes vs 2 weeks (Kraken's confirmations requirements, 2021). Scalability is therefore a
major challenge and this has not been resolved by the leading decentralized platforms.
Therefore, it is necessary to reflect upon the findings of this research when parties adopt the
Blockchain for aircraft parts in the aviation MRO supply chain.

Throughout our research, we managed to have a better understanding of the issues faced in the
aviation MRO industry, and have a sample data to support it. With regards to the uses of

57
Blockchain, based on our research and sample size, it seems most cases are either in the concept
design, testing phases, or merely using the Blockchain to facilitate payment transfers and
tracking and tracing of products. Therefore, we believe that we have yet to see the full
advantages of using the Blockchain as there is insufficient full case application data that we can
refer to - at least for the aviation MRO industry.

58
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 7. Appendix

7.1 Appendix A - Data Collection Questions during the Interviews

- Understanding the respondent’s function in the company within the MRO supply chain.
i) Explain what your company’s core business is.
ii) Explain your roles and responsibilities at the company.

- Identifying underlining issues faced in the company in terms of

material/information/cash flow.
i) What are the challenges / problems you face while performing your daily tasks and
routines? Perhaps in terms of information / material flow / cash flow. How would
you categorize them? (e.g. materials defect quality/shortages, communication of
information, cash flow issues, tracking of scraps, defect report.)
ii) Being in the industry, what do you think are of the major issues faced in the Aviation
MRO as a whole? (Efficiency, Traceability, Transparency, Scalability)
iii) Do you think by improving the above, you will be able to better perform your daily
task? Elaborate, how would the improvement affect you?

- Future of the aviation industry as it grows

i) What type of technologies have you heard that you think would help in your daily
tasks?
ii) Which part of the aviation maintenance industry would you suggest need
improvements on?

- Awareness of Blockchain Technology

i) Have you heard of or have any knowledge about Blockchain?

- Understanding the respondent’s function in the company within the Blockchain

industry.
i) Explain what your company’s core business is.

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 ii) Explain your roles and responsibilities at the company
iii) What are the current Blockchain products developed or used by your company?

- Understanding how Blockchain work?

i) Briefly explain how Blockchain works?
ii) What are the key characteristics that are being pushed, that make people want to use
it?

- Understanding different types of Blockchain?

i) What type of Blockchain is being used?
ii) Why choose Etherium and not other types Blockchain?
iii) What is Hyperledger? And how does it work?

- Problems in using Blockchain

i) What are the current challenges you face in the Blockchain industry?
ii) Potential problems of the Blockchain? Implementation and work around?

- The future of Blockchain

i) The future of Blockchain and if there is a trend?
ii) What is the Blockchain's future, do you think it will overtake ERP systems or is
there a big process change in how we do things now?

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7.2 Appendix B – Table of Respondents

Company / Category Industry Position Department Years of Exp

Engine MRO
G Company Aircraft Engine MRO Production Scheduler Production 7
G Company Aircraft Engine MRO Tech Record Leader Quality 17
G Company Aircraft Engine MRO Process Engineer Engineering 5.5
G Company Aircraft Engine MRO Lead Material for LEAP parts Production 6
G Company Aircraft Engine MRO Material Manager Material 26
G Company Aircraft Engine MRO Quality Engineer Assistant Quality 1.5
G Company Aircraft Engine MRO Procurement Specialist Material 22
G Company Aircraft Engine MRO Receiving inspector Logistics 1.5
G Company Aircraft Engine MRO Receiving / Logistics Assistant Logistics 3.5
G Company Aircraft Engine MRO Material leader and production planner Material 6
G Company Aircraft Engine MRO Vendor Performance Leader Material 7

Outside vendors
A Company Aircraft Engine MRO/ OEM(new make) Service Co-ordinator Material 2.5
E Company Aircraft Engine Component / OEM / MRO Customer Account Manager Customer service 19
B Company Engine parts 3rd party repairer Customer Account Manager Customer service 19
AI Company Aircraft Engine Component / MRO Customer Support Manager Customer service 6

Blockchain
WQ company Blockchain Startup Head of Engineering (2 years in blockchain) IT / Digital 4
GD Company G Aviation Blockchain Engineer (2 years in blockchain) IT / Digital 15

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7.3 Appendix C – Aviation Engine MRO Supply Chain Respondents

Information flow issues

•(Receving inspector) Different technical understanding the information provided by vendor/supplier, leading to duplicate data entry.
• (Receving inspector) Regulation FAA & EASA & CAA multiple regulators authorities duplicate information on different certs.
•(Material Manager) Parts in the market have incomplete paperwork/documentation which prevents us from purchasing and use it.
•(Material Manager) Tracking of ppwk trails (incomplete ppwk / informations) causing delay in productions.
•(Material Manager) Used part suppliers unable to find justification to repair certain parts that are needed by customers, hence parts
are just left as scrap.
•(Material Manager) Record keeping for some companies are not as good.
•(Engineering) Maintenance/troubleshooting instructions may differ with Components Maintenance Manual (CMM-OEM) vs Engine
Serviceable/Shop Manual (ESM)
•(Engineering) Not the latest update (information) from OEM, updates happened 2 times a year periodically, and comes in a CD format.
•(Engineering) TSN CSN is needed to have been better understanding of the engine condition and how much work is needed to be
done.
•(Procurement) Finding good tracebility parts (need ATA130, NIS, Goods of Sales, Back to birth documents)
•(Procurement) Serial number error on paperwork/documents even from manufacturer
•(Procurement) Customer can be particular on history of the parts which would be rejected.
•(Quality Engineer) Information discrepancies on documentations.
•(Quality Engineer) System errors - input workscope into system, but not appearing on the physical PO or not as complete in the
system.
•(Quality Engieer) Firefighting issues in anything quality related more on information recording and internal flow.
•(Technical Records) Discrepancy of customer documentation vs physical information does not match, where we will need to recheck
with the physical and amend the record accordingly.
•(Technical Records) Engine documentation given by customers is not complete,generally about 10% of information is incomplete,
majority types of part is the LRU parts.
•(Technical Records) A lot of back and forth to customers to get confirmation and information on the part.
•(Technical Records) If engines goes to another MRO shop, information may or may not be the same the next time around if the engine
comes back to the shop again.
•(Vendor) There always is some missing information during incoming (generally I feel is human error) where documents are attend to
the wrong part or if certain repairs are not done accordingly.
•(Vendor) with clear history of the part, engineers and then submit DR (deviation repairs) if they know what to expect, at the moment
they rely fully on the visual inspection of the part which is limited.

Material flow issues

•(Receving inspector) Bogus parts base on experience.
•(Receving inspector) Locating urgent parts in the warehouse, lack of manpower to look for the physical parts.
•(Material Manager) Availability of part in the market, where shortages occur and is needed for engine build up.
•(Material Manager) Manufacture LLP (limited Life Parts) from scratch take at least 3 to 4 months lead time. But with correct forecast it
would not be an issue, but that is not the case in the market.
•(Procurement) World wide part shortages
•(Quality Engineer) Quality of parts in terms of part arrive damaged or not repaired as per request.
•(Vendor) Tracking of parts within the shop and what process it is up to is limited and I need to physically go down to the shop to check
on the part.
Combination of both Information and Material flow issues
•(Engineering) Engine owners tend to swap components (LRU) on multiple engines in order to keep on flying, and sometimes are not
recorded properly, 50% to 60% of the time it is different to the EDS (Engine Data Submitle)
•(Engineering) Components swapping may affect the performance of the engine, but hard to judge without proper testing or data
record… Data could be there but need time to dig out and it is not digital
•(Procurement) CFMM is the main USM (used serviceable material) if they don’t repair the old parts and recert then there is no parts
and forced to use new at a higher cost and longer lead time.

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7.4 Appendix D - Blockchain Respondents Responses

Characteristics of Blockchain
•it is designed in a way of only adding new information rather can changing it.
•Rather than centralizing the data, it is desgined to be decentralize and using the consensus in validation of data.
•it works via encryption therefore harder to hack, better data security.
•Transparency of history of data to those who are given access to.
•Data is not centralized, hence immutable unless the entire network collapes or people stop using them entirely.
Which is different with current cloud based system where data storage is based on subscrption, and if payment is
stopped data will be wipped off, but in Blockchain it will remain there forever until no one uses it.
•Data capacity storage is much higher has it leverages computer of individuals supporting the network.
•Automated execution with smart contracts, where as long as coded criterias are met, the required actions can take
place.

Benefits of using Blockchain

•Aviation is considered a very regulated industry, and considered a relatively small industry in terms of the numbers
of manufacturers of aircraft & engines.
•FAA is interested in the uses of blockchain is to drive Transparency, Auditability, Visibility, which is currently lacking
in standardization, as everyone is giving different data packaging (These data format could be in paper or digital)
•Blockchain is able to provide that standardization with the assumption that the industry has agreed to the format
and what should be the standard
•Blackchain is good at sharing information securely, therefore the more you share the more your can collaborate.
•Tracebility of the part across the entire supply chain from manufacture, to on wing, repairs/MRO, until end of life.
(multiple data points to be collected and stored)
•Share information securely will unlock collaboration to make everyone better
•Traceability is easier, currently it is a very manual base action to traceback if something were to happen. Blockchain
is able to build the "story" in realtime.
•basically our products are to facilitate those payment transfer regardless what the currency is, payment gateway.
•as long as the dataset is on the blockchain, the platform developed would be able to query the information of that
part.

Challenges of Blockchain
•The technology is over shawdowed by the cryptocurrency, where majority think it is only related to the digital
currency.
•Misconception, everyone is trying to design their own blockchain & tool kit in order to gain credibility.
•However to make it sustainable and for the blockchain to succeed, it needs to be on the industry level.
•They developed in house and forced others to use it, where it is beneficial of them, but not for all the other
competitors.
•Talent accuisition : always looking for people with computer science /data science background
•Public Perception and buy in experimental products.
•Developing the blockchain is quite complicated as there are a lot of background work… Generally customers just
wants the final product to be as user friendly as possible
•Enforcibility to use the blockchain could be a problem since it is still humans that use it

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7.5 Appendix E – Individual Block Details for Simulation Scenario 1

7.5.1 Block 1: Digital birth certificate created

7.5.2 Block 2: New transaction records

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7.5.3 Block 3: Service records updated

7.5.4 Block 4: All records are well maintained in Blockchain

7.5.5 Block 5: New owner able to validate the spare part immediately

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7.6 Appendix F

7.6.1 Block 1: New spare part registered in Blockchain

7.6.2 Block 2: MRO company updated the routine maintenance records

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7.6.3 Block 3: Next service records

7.6.4 Block 4: Identified previous records and repair required

7.6.5 Block 5: Physical condition mis-match with records

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7.6.6 Block 3: Introduced error block

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7.7 Appendix G

7.7.1 Block 1: OEM register new spare part

7.7.2 Block 2: MRO company updated information after conducted repair

7.7.3 Block 3: Spare part unable to repair

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7.7.4 Block 4: Change of repair information

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