' SAIC-GM-Wuling,' the Liuzhou-based automaker, announced that it is testing blockchain ledger technology in order to reduce operation costs. The company was selected for the pilot test by China's central government, which chose the automaker based on its top-selling 'HongGuang Mini EV.'
One of the largest changes that SAIC-GM-Wuling will make by leveraging the blockchain is the removal of paper documents, and subsequently, a large portion of human errors. The company will transfer its supply chain information, and other important document information, to a digital format to be stored on the blockchain. According to early estimates, this will reduce SAIC-GM-Wuling's paper usage by over 10 million sheets of paper per year, resulting in an approximate $2.5 million USD reduction in operation costs.
In addition to reducing paper, though, the company believes a large amount of money will be saved by removing physical human error. The blockchain ledger is reliable and traceable, subverting issues such as illegible text on a paper, indistinguishable signatures, miscommunications in parts supply, and more. Following the SAIC-GM-Wuling pilot test, it is expected that more automakers in China will adopt blockchain ledger technology.
Image Credit: Qilai Shen, Bloomberg
SAIC-GM-Wuling is Testing Blockchain Technology to Reduce Costs
1. Blockchain Adoption in Supply Chains - SAIC-GM-Wuling's adoption of blockchain to revolutionize their supply chain management sets a precedent and presents innovative opportunities for other automakers to improve efficiency and reduce operation costs.
2. Digitization of Paper-based Processes - SAIC-GM-Wuling's move to transfer supply chain information and other important document information to digital format to eliminate paper-based processes offers opportunities for financial, legal, and government industries to streamline their record-keeping.
3. Reliable and Traceable Supply Chain Management - SAIC-GM-Wuling's implementation of a traceable and reliable supply chain management system using blockchain technology presents possible innovation opportunities for logistics and transportation industries to increase transparency and accountability.
1. Automotive - SAIC-GM-Wuling's use of blockchain in supply chain management could be adopted by other automakers to improve productivity and reduce costs.
2. Financial Services - SAIC-GM-Wuling's digitization of important document information through blockchain technology can provide a secure and cost-effective record-keeping solution for financial services firms.
3. Logistics and Transportation - SAIC-GM-Wuling's use of blockchain technology for supply chain management creates opportunities for logistics and transportation companies to implement a reliable and traceable system to improve efficiency and mitigate risks.