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Ep.105 – GoDirect Trade, Honeywell’s blockchain airplane parts
Lisa Butters, is the General Manager at GoDirect Trade, a marketplace for used aerospace parts, part of Honeywell . Used aerospace parts is a $5 billion a year industry of which almost none of it is done online. Numerous emails and phone calls along with paper work is used to close a transaction. Blockchain was felt to be an applicable technology to manufacture digital trust between buyers and sellers in the used aerospace parts industry.
What is blockchain?
Honeywell uses blockchain technology in an enterprise manner. Lisa defines blockchain as a highly secure way to crowdsource a decentralised database. Traditional enterprises will have a centralised databased with a walled garden approach to data collection. With blockchain technology you’re using the technology so that you can get the data from various enterprises and parties in a secure manner.
Who is Honeywell?
Honeywell is a $40 billion company that operates in numerous industries. Lisa’s particular area is focused within aerospace. Within the aerospace industry Honeywell is an OEM, original equipment manufacturer, of components and piece parts all the way up to engines. Honeywell is the largest repair facility for aerospace parts across the world. Honeywell are also traders who trade used aerospace parts in the market.
Challenges of the used aerospace parts industry
According to Global Market Insights the global aerospace parts market will be worth $14 billion by 2025.
Lisa notes that there are some interesting parallels with the used aerospace parts industry to the used car industry. When buying a used car, buyers are compelled to negotiate on price, or else they don’t feel they’re getting the best price. In the used aerospace parts industry people don’t feel responsible if they’re not negotiating the best price on the parts.
There are fundamentally two reasons why that industry is so manual with emails and phone call:
* High dollar transactions - On GoDirect Trade transactions can go anywhere from nuts and bolts all the way to multimillion dollar engine, with the average transaction at around $10,000
* Safety - The parts being sold on GoDirect Trade have to be safe enough to reinstall back into an aircraft. This requires a very high bar of safety within the aircraft aerospace industry.
The combination of high dollar transaction and safety of parts to be reinstalled back into an aircraft are the two reasons why it has been difficult for buyers and sellers to move their transactions online. That are the reasons why Honeywell found blockchain technology so interesting for this space because it helps to manufacture that trust for people to start checking out online.
Guaranteeing the quality of use aerospace parts
According to NTSB data compiled and analysed by the NVC Bar Area Investigative Unit, unapproved aviation parts played a role in nearly two dozen crashes that killed seven and injured 18 others since 2010.
Lisa states that she has around 20 competitors in her space that list products for sale and facilitate some kind of online transaction. GoDirect Trade though is the only platform that requires price, product images, and quality documents for a product to be listed for sale.
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By Walid Al Saqqaf - Blockchain insuranceLisa Butters, is the General Manager at GoDirect Trade, a marketplace for used aerospace parts, part of Honeywell . Used aerospace parts is a $5 billion a year industry of which almost none of it is done online. Numerous emails and phone calls along with paper work is used to close a transaction. Blockchain was felt to be an applicable technology to manufacture digital trust between buyers and sellers in the used aerospace parts industry.
What is blockchain?
Honeywell uses blockchain technology in an enterprise manner. Lisa defines blockchain as a highly secure way to crowdsource a decentralised database. Traditional enterprises will have a centralised databased with a walled garden approach to data collection. With blockchain technology you’re using the technology so that you can get the data from various enterprises and parties in a secure manner.
Who is Honeywell?
Honeywell is a $40 billion company that operates in numerous industries. Lisa’s particular area is focused within aerospace. Within the aerospace industry Honeywell is an OEM, original equipment manufacturer, of components and piece parts all the way up to engines. Honeywell is the largest repair facility for aerospace parts across the world. Honeywell are also traders who trade used aerospace parts in the market.
Challenges of the used aerospace parts industry
According to Global Market Insights the global aerospace parts market will be worth $14 billion by 2025.
Lisa notes that there are some interesting parallels with the used aerospace parts industry to the used car industry. When buying a used car, buyers are compelled to negotiate on price, or else they don’t feel they’re getting the best price. In the used aerospace parts industry people don’t feel responsible if they’re not negotiating the best price on the parts.
There are fundamentally two reasons why that industry is so manual with emails and phone call:
* High dollar transactions - On GoDirect Trade transactions can go anywhere from nuts and bolts all the way to multimillion dollar engine, with the average transaction at around $10,000
* Safety - The parts being sold on GoDirect Trade have to be safe enough to reinstall back into an aircraft. This requires a very high bar of safety within the aircraft aerospace industry.
The combination of high dollar transaction and safety of parts to be reinstalled back into an aircraft are the two reasons why it has been difficult for buyers and sellers to move their transactions online. That are the reasons why Honeywell found blockchain technology so interesting for this space because it helps to manufacture that trust for people to start checking out online.
Guaranteeing the quality of use aerospace parts
According to NTSB data compiled and analysed by the NVC Bar Area Investigative Unit, unapproved aviation parts played a role in nearly two dozen crashes that killed seven and injured 18 others since 2010.
Lisa states that she has around 20 competitors in her space that list products for sale and facilitate some kind of online transaction. GoDirect Trade though is the only platform that requires price, product images, and quality documents for a product to be listed for sale.