How Boeing, Toyota, Caterpillar, and other OEMs can double their current net profit by using smart contracts to become unmanned “virtual companies”, with or without cryptocurrency: Part 12

Simultaneously Coordinating Through Multiple Supplier Tiers, the Crown Jewel of Life at the Speed of Business

Recall the scathing Capgemini quote:

“[Most] existing commercial contracts unfit for the world of real-time commerce”

We’ve already described a world where the OEM’s smart contract will automatically order parts from tier 1 suppliers in accordance with the sales forecast it got from Clari and/or actual dealer/customer orders (depending on the situation).

Now imagine that the tier 1 suppliers are also using smart contracts to buy parts from their tier 2s. In turn, the tier 2s are using smart contracts to buy parts from their tier 3s. So on and forth. Like cascading dominos.

When it comes to life at the speed of business, this truly is the crown jewel.

Imagine the following (fictitious but plausible) scene:

A big ASAP order from a VIP customer comes in with late-notice (that the AI somehow didn’t predict). From the moment that order comes in, all the smart contracts have automatically talked to each other within a matter of 20 seconds (the upper end of Ethereum’s “typical” block time).

In the old system, humans would have had to manually call, email, and invoice each other with a hodge-podge of disjointed internal software systems to make sure everything gets coordinated properly. Entire materials & procurement departments would have had to get involved. Lots of information that needs to be communicated quickly and accurately. It’s a complex vehicle and it had better be built right for this VIP customer.

In the new system, the tier-5 supplier in Shenzhen, China has already been paid before the best human materials procurement manager at the OEM can even send out a single email or pick up their phone.

All downstream consequences are automatically communicated to lower tiers with 100% accuracy within 20 seconds. Allowing all the muscles to flex as one unit. This is a huge, impactful innovation.

Continue to part 13….