27 Nov 2019 Overview: Blockchain in the Aviation Supply Chain Management Industry
Few technologies can claim to have such a tremendous impact as the blockchain. In more areas than one, the distributed ledger has led to a paradigm shift and the aviation industry is no different. When it comes to the use of blockchain in aviation, there are far-reaching consequences in supply chain management as we shall see in this article.
A brief introduction to this revolutionary technology is in order. Simply put, the blockchain is a shared ledger that is completely decentralized in that there is no central entity that can manage data that is immutably recorded in a transparent manner. We will closely examine some of the most exciting use cases and announcements pertaining to blockchain technology in aviation in 2019.
Aviation Supply Chain and Blockchain Growth Projections
Supply chain and logistics companies such accounted for a major share of over 900 companies announced plans to use blockchain in the first quarter of 2019. In fact, blockchain in aviation, aerospace, and defense markets is likely to reach a CAGR of 35% by 2026.
Accenture believes blockchain adoption in aviation space is increasing and that the technology will be used by about 86% of all defense and aviation enterprises by 2021. The logistics industry makes extensive use of the blockchain, with the air, land, and sea transport sectors closely working in tandem to secure 31.5% of the technological use cases.
Blockchain in Aviation: The Year So Far
Honeywell announced its new e-commerce venture offering aircraft parts for sale and purchase secured with the blockchain this year. The company is expected to have a first-mover advantage in that fewer than 2.5% of the aircraft parts transactions occur online. The use of the blockchain will help inspire greater trust between the buyers and sellers. The technology helps buyers ascertain the quality and authenticity of the parts in a space that largely relies on manual logs and the resulting inefficiencies. Honeywell aims to protect both parties through their blockchain-powered GoDirect Trade marketplace for the aviation industry.
The blockchain can greatly increase transparency in aerospace supply chain management, making aircraft parts trackable and traceable. Moreover, it can also promote aviation security by utilising the loyalty points program. It could benefit professionals, pilots, passengers, as well as the general public. Blockchain can be utilised to monitor pilot logs and aircraft maintenance to ensure aviation safety.
There are several use cases for the blockchain in aviation, particularly supply chain optimization, and as the technology matures, we might see greater decentralization in this space.
The aircraft parts industry has long struggled with the paperwork and manual labor-associated inefficiencies. An industry ripe for disruption, the aviation supply chain and logistics space is likely to see more and more players adopt the trustless ledger.
There are challenges to be overcome in the road ahead, but the promise of viewing the maintenance status of the aircraft you’ll be taking your next flight in is far more profound and indicative of the future of the industry.