Leveraging blockchain technology to streamline coordination and procurement in the aviation industry in order to effectively manage supply chain networks and facilitate aftermarket exchanges.
How it works
The story of Aerotrax started when one of our co-founders, Phong Nguyen Dang, worked at one of the world’s largest independent Maintenance, Repair, Overhaul (MRO) service provider. During his time at the firm, Phong came upon some critical inefficiencies within the MRO service provider, which applies to the entire aviation industry aftermarket.
Despite an industry that is projected to break $100bn+ the operating system in place is heavily paper-based.
Complicated regulatory auditing procedures for a MRO service provider to become an approved vendor can take upwards of eight years.
In fact, only 2.5% of aftermarket transactions occur online.
End-clients, being airline operators, must undergo an arduous process of communicating with several firms prior to the purchase of parts due to the difficulty in finding specific items and the difference in pricing from varied service providers.
The procurement teams typically control 70-90% of total spending at leading airlines.
The arduous procurement process requires weeks of phone calls, faxes, and email exchanges before the appraisal process even begins.
An airplane engine can cost upwards of $80mn yet the end-clients can only rely on relational trust.
The buyers of parts must solely rely on the reputation of these MRO service providers and their relationship with these firms, trusting that these companies are in perfect compliance with the Federal Aviation Administration (FAA) regulations and that there are no errors within the evaluation process.
Although parties within the industry have been attempting to enhance internal operations, there is a massive opportunity to optimize procedures at the market level through decentralization.
Implementing blockchain technology can drastically enhance the industry’s evolving digital infrastructure. In the Aerotrax application, each physical plane part is represented by a digital asset token on R3’s Corda platform. This token is connected to the specific part through its Unique Aerotrax Identifier.
By adopting the barcoded Supply Chain Management process, data associated with each part is updated and displayed onto dashboards in real-time. Every service performed on a part under assessment is recorded in the corresponding block on the digital ledger. Only certified personnel have the ability to perform tasks and update information in the block. This process enables data, such as job cards, workshop summaries, and airworthiness release forms, to be preserved throughout the entire life cycle of the part.
The data collected from the Supply Chain Management process feeds into the Predictive Analytics Suite, which applies artificial intelligence (AI) to forecast demand and optimize maintenance. Aerotrax is partnering with R4 Artificial Intelligence to design these algorithms and to further explore other relevant AI applications that will reduce costs for our customers. The information generated in the Predictive Analytics Suite is private to the individual organization, while relevant data captured through the Supply Chain Management Solution is visible to authorized parties on the Marketplace.
The Marketplace provides a secure and integrated platform for the exchange of new and used airplanes and parts. By having the entire historical life cycle of airplanes and parts recorded onto digital asset tokens, potential buyers benefit from data transparency. The purpose of this environment is to facilitate frictionless aftermarket exchanges, so vendors may balance inventory holdings efficiently and buyers can find and purchase necessary parts with ease. Corda’s private-permissioned protocol enables sellers to list items for approved buyers, while the transactions are only visible to those whom are involved.
Why It Matters.
Aerotrax emphasizes safety as the primary priority for the industry by ensuring the authenticity, provenance, and functionality of parts. Aerotrax provides value through a dramatic decrease in effort and expenses normally associated with coordination and procurement. This leads to increased transparency while significantly improving profitability for our customers.
the people who make it possible
President & CEO
Senior Managing Director
Certares Management LLC
U Systems Consulting LLC
Head of Trade & Supply Chain
Chairman & CEO
Internet Think Tank
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