How Blockchain Technology Is Transforming Aircraft Parts Traceability
Author: GA Telesis
Blockchain technology is increasingly accepted as a transformative force across industries, including the aviation sector. Within aviation specifically, records and historical traces of aircraft parts have become an exceedingly critical area for the blockchain to begin enhancing efficiency, transparency, and security. The complexities of aviation supply chain provenance, coupled with rising concerns about counterfeit records and parts, drive a growing need for urgent innovative solutions. But first, let us talk about how the blockchain works to better understand how it will transform our industry.
1. What is Blockchain? How Does it Work?
Blockchain is a groundbreaking technology that serves as a decentralized digital ledger, enabling secure and transparent record-keeping across multiple locations. At its core, a blockchain consists of a chain of digital blocks, each containing a list of transactions.
These blocks are linked together using cryptographic hashes. They create a secure, immutable record of all transactions that occur within a secure network. Once data is recorded in a block and added to the chain, it cannot be altered without changing all subsequent blocks, which is practically impossible without detection.
1.1 Key Components of Blockchain
There are various key aspects of the blockchain that are critical to supporting security within its data:
-
- Decentralization: Unlike traditional databases that are controlled by a central authority, blockchain operates on a network of decentralized computers called nodes. Depending on the blockchain architecture, nodes maintain synchronized copies of the ledger data relevant to their permissions. Enterprise blockchains can restrict visibility through channels or private data collections while still preserving decentralization and data integrity.
- Blocks: Each block in the blockchain contains a set of transactions, a timestamp, and a reference to the previous block, also known as the parent block. This creates a chronological chain of blocks. This type of structure makes it easy to trace histories.
- Cryptographic Hashing: Cryptographic hashing is a mathematical algorithm that transforms an input into a fixed-size string of characters, known as the hash value. In its essence, any digital information can be hashed; in aviation, it makes sense to hash component paperwork, including airworthiness certifications and photos.
- Hashing is used to create an alias for data and produce a unique, fixed-length string for any given piece of data or “message.” Each block is secured using a cryptographic hash function, which generates a unique hash value from its contents. Any changes to the block’s data will result in a different hash, thereby altering the network’s potential for tampering. This feature helps ensure the integrity of data stored on the blockchain.
- Consensus Mechanisms: To validate transactions and/or add new blocks to the blockchain, a consensus mechanism is employed. Commonly used mechanisms include Proof of Work (PoW) and Proof of Stake (PoS). They require participants (miners or validators) to agree on the validity of a transaction before it is recorded. This makes sure that only legitimate transactions are added to the blockchain.
How Blockchain Works
| 1 | Transaction Initiation | A user initiates a pre-identified transaction with defined rules in the governing structure of the blockchain, which is submitted to the blockchain netw ork according to predefined governance and access rules. This transaction could involve the transfer of assets, data, or any other form of value. |
| 2 | Transaction Validation | Network nodes receive the transaction and evaluate it against authorization rules, business logic, and the applicable consensus process to determine whether it is valid and permitted to be recorded on the ledger. |
| 3 | Block Creation | Once approved, transactions are ordered and committed to the ledger, often in blocks, according to the network’s governance and ordering rules, creating an append only record of the transaction. |
| 4 | Distribution | The updated ledger state is replicated with network nodes according to the platform’s synchronization model and access controls. Authorized participants can verify the current state and history of the records they are permitted to see, which supports trust and auditability across stakeholders. |
| 5 | Immutability | Once committed, records are designed to be tamper resistant and append only, preserving a verifiable audit trail over time. Corrections are typically handled through additional transactions that maintain the history rather than overwriting prior entries. |
1.2 Blockchain Smart Contracts – Efficiency and Accuracy Improvements
Blockchain technology introduces smart contracts, a concept that can automate numerous processes within the supply chain. Smart contracts are self-executing agreements with the terms of the contract directly written into the code and deployed on the blockchain and triggered by transactions.
This automation allows for automatic execution of approvals, payments, and logistics events based on predefined conditions. Throughput depends on the chosen platform and configuration. Permissioned enterprise blockchains such as Hyperledger Fabric can reach thousands of transactions per second in certain benchmark configurations, but results vary based on network size, hardware, endorsement policies, and workload.
The deployment of smart contracts within the aviation supply chain can lead to significant improvements in efficiency. For instance, a study conducted by PwC estimates that implementing blockchain solutions in aviation could reduce operational costs by approximately 5-10% annually, which translates to about $3.5 billion globally in MRO alone.
1.3 Applications for Blockchain
In the aviation sector, companies can begin envisioning how to use blockchain across various areas to shore up security in vendor management, records, and traceability. They are:
- Supply Chain Management: This technology enhances traceability and transparency by providing a secure record of each component’s journey from manufacturing to the end user, through to scrap.
- Vendor Accreditation: Streamlining the vendor credentials, certification, and verification reduces the risk of counterfeit parts entering the supply chain.
- Maintenance Records: Creating immutable records of aircraft parts production and maintenance history, ensuring their compliance with regulations and safety protocols.
Blockchain technology represents a grand advancement in recording, sharing, and securing data. Its decentralized nature, along with the cryptographic security and consensus mechanisms, makes it an ideal solution for industries such as aviation that necessitate transparency, trust, and efficiency. As the aviation world continues to evolve, adopting blockchain technology will play a key role in addressing challenges in traceability, parts tracking, and vendor accreditation.
2 Streamlined Vendor Accreditation and Certification
Within the aviation community, the airline and lessor networks rely on an approved vendor list for its quality systems to regulate approved suppliers. The importance around managing those vendors is incredibly important, with blockchain about to play a role in that overall quality system management.
2.1 Importance of Vendor Accreditation
In today’s aviation community, the integrity of components and their records is paramount. The vendor accreditation process ensures that suppliers are audited and meet the standards or qualifications necessary to provide aircraft parts and maintain traceability. However, traditional vendor accreditation methods rely on manual processes that are time-consuming and prone to documentation errors and human errors. Blockchain technology addresses a dire need for a permanent, verifiable record of vendor qualifications, certifications, and performance history.
2.2 How Blockchain Facilitates Vendor Accreditation
Blockchain facilitates the creation of a decentralized ledger that records all relevant information regarding vendors. Each vendor’s blockchain audit qualifications are stored in a tamper-proof manner, enabling automated verification of aviation part suppliers. This system reduces the time and effort required to validate credentials, as stakeholders can access data in real time without intermediaries. Audited and validated vendors can also be known as a clearing house, similar to what we see in the banking industry.
3 Enhanced Data Management and Interoperability
One of the key aspects of future aviation blockchain technology is having interoperability between not only multiple companies, but multiple blockchain types. Below are a few areas to note when considering the need for the right blockchain technology.
3.1 Need for Interoperable Systems
Data management is a vital aspect of the aviation industry; it oversees the traceability and sharing of information related to aircraft parts. However, many organizations operate in silos, which leads to fragmented data that hampers collaboration, safety, and decision-making. Blockchain technology enables a shared but permissioned digital infrastructure, where authorized stakeholders can access and verify relevant data in real time while sensitive information remains restricted according to role and regulatory requirements.
3.2 Breaking Down Data Silos
Data silos refer to isolated collections of data that are not easily accessible or shared across different departments, systems, or organizations. These silos often arise when teams or departments use their own systems to manage data, which lacks integration into a central repository. This lack of integration can cause fragmentation, inefficiencies, safety issues, and challenges in decision-making.
When data is siloed, it becomes hard for employees to access the information they need to. This results in delays in processes and therefore increased operational costs. Moreover, poor decision-making can occur because stakeholders may not have access to all relevant information, leading to decisions based on incomplete or outdated data.
Additionally, data silos can complicate reporting and compliance processes. With aviation being such a regulated industry where accurate and comprehensive data is crucial, data silos are not welcome.
Blockchain technology addresses these challenges by enabling seamless data exchange among aviation industry players through a decentralized platform where all relevant information can be stored and accessed. By breaking down these data silos, organizations can foster collaboration among departments and stakeholders, leading to operational safety and efficiency with better and more informed decision-making. For example, when a part is scrapped in aviation today, only the company scrapping the parts knows about it and records it. This is a silo.
In a blockchain enabled aviation ecosystem, authorized stakeholders would be able to verify scrap events in real time, ensuring that retired parts cannot re-enter the supply chain, while access remains governed by permissions and regulatory requirements. This centralized information sharing enhances safety dramatically, reducing the amount of potential counterfeit parts or records.
Leveraging blockchain technology allows organizations to access a single source of truth regarding parts and components, enhancing inventory management, maintenance planning, and compliance tracing. This enhanced interoperability provided by blockchain can reduce administrative costs, and its interconnectedness also reduces the risk of errors associated with manual data handling or coordination across multiple systems.
4 Immutable, Live Transparent Recordkeeping and Provenance
Records management is one of the most time-consuming and tedious aspects of aviation. It is also the industry’s largest safety gray area. Blockchain will begin to have an immediate impact across various areas, enhancing provenance as a whole.
4.1 Need for Transparency in Aviation
Transparency is crucial in aviation, especially regarding traceability and the management of aircraft parts. We have seen examples where some companies, unfortunately, hide or omit certain information about a component to help their sales. Not only is it ethically wrong, but it also opens the door to safety gaps.
In aviation, safety is the absolute highest priority in all of our daily roles. Safety is an area we focus on as part of continuous aviation improvement; it drives us to do better in all aspects of our business, day in and day out.
Blockchain technology addresses these issues by ensuring that each transaction or update on a component is permanently recorded in a tamper-resistant distributed ledger. This helps avoid potential fraud and errors in recordkeeping, preventing dire consequences around safety risks and regulatory violations, and enabling safer air travel worldwide.
4.2 Benefits of Immutable Recordkeeping
Immutable means to be unchanging over time or unable to change forever. The immutability of blockchain means that once data is recorded, it cannot be altered or deleted.
This is an important feature for aircraft parts tracing, where maintaining accurate records of maintenance history, ownership, and compliance is essential. The transparent nature of blockchain allows authorized stakeholders or clearing houses to access this information, creating trust and harmonization amongst industry players.
4.2.1 Case Study
The urgency for this innovative solution is exemplified through multiple aviation aftermarket scandals. In a widely reported case involving UK-based supplier AOG Technics, aviation authorities, including the UK CAA, FAA, and EASA, issued safety alerts in 2023 after discovering unapproved CFM56 engine components accompanied by forged documentation. As a result, airlines were required to remove affected parts from service, grounding nearly 100 aircraft at the time of reporting and exposing systemic weaknesses in traditional parts traceability and records management.
It underscored vulnerabilities in the aviation supply chain and highlighted the direct consequences of using unverified component records, all of which could be avoided by implementing blockchain technology. The scandal served as a wake-up call for the industry, prompting stakeholders to reconsider the implementation of blockchain technology for enhanced traceability, immutable record keeping, passenger safety, and financial opportunity costs for airlines and others. By adopting such innovative solutions, the aviation industry aims to prevent future occurrences of counterfeit parts and restore trust among manufacturers, suppliers, and airlines.
By providing a clear, verifiable history of each part, along with accredited vendors or clearinghouses, stakeholders can confidently verify the authenticity of components, thereby enhancing overall safety and compliance within the aviation sector.
4.3 The Challenge of Counterfeit Parts
Counterfeit parts also pose a significant threat to aviation as they can compromise safety and operational integrity. The challenge lies in accurately tracing the origin of components and the maintenance history of parts as they change hands throughout the supply chain. Blockchain technology offers a comprehensive solution to this problem by enabling real-time traceability, improved provenance, and computer vision capture technology.
4.4 Real-Time Tracking and Computer Vision Capture with Blockchain Technology
In a blockchain-enabled system, the origin, maintenance history, and computer vision capture (CVC) of every aircraft part can be traced in real time. Computer vision capture ensures real-time computer photos of the part are captured using software that accounts for the part’s actual dimensions. In manufacturing, all parts have tolerances, and computer vision can capture them, even when two identical parts are next to one another.
Computer vision can support part verification by capturing dimensional characteristics and visual features that help detect anomalies or inconsistencies. When combined with serialized identifiers, cryptographic hashes, and controlled data capture processes, it can strengthen verification workflows. With that added level of security, each transaction related to a part is securely recorded, creating a comprehensive digital diary that includes essential details such as manufacturing ring dates, maintenance logs, ownership transfers, actual manufacturing photos, maintenance photos, and more. This level of traceability is vital in marginally reducing the risk of counterfeit parts and fraudulent activities.
The ability to track parts in real-time empowers aviation companies to respond quickly to any discrepancies or issues that may arise. For example, if a part is flagged as potentially counterfeit, the stakeholders can swiftly access its complete history and original computer vision capture to verify legitimacy and appropriately take further steps. This proactive approach to tracing parts not only enhances safety but also improves operational efficiency, making sure that the aviation industry can seamlessly maintain high standards of reliability.
5 Streamlined Regulatory Compliance
Airworthiness authorities play a defining role across all areas of manufacturing, maintenance, and overall aviation safety. Blockchain technology will now enable quicker, real-time oversight in areas once deemed time-consuming and costly.
5.1 The Regulatory Landscape in Aviation
Aviation is subject to stringent regulatory frameworks designed to ensure safety and compliance. It is worth noting that most of these current practices rely on paperwork, the key driver behind the inability to have a digital source of truth.
Navigating the regulations can be complex, especially for maintaining accurate records and documentation. The FAA, EASA, CAAC and other regulatory bodies require detailed records of component history, which are cumbersome to manage.
Furthermore, the fragmentation of aviation bodies and the difficulty of compliance for all aviation players, such as the airline, lessor, MRO, etc. can all be helped, as blockchain would provide a one-stop shop to manage all the compliance requirements digitally. Imagine transferring an entire asset from one company to the next in minutes rather than months.
Paperwork records are painstaking to maintain and even more time-consuming to review when compliance with lease return conditions is called upon, for example. Simply selling an engine from one company to the next can take months, mainly because it requires human resources to review the paperwork. Blockchain technology simplifies this process by automating compliance and providing verifiable, real-time audit trails.
5.2 How Blockchain Could Enhance Compliance in the Aviation Industry
Blockchain’s ability to create immutable records of transactions is what makes it the ideal solution for regulatory compliance. Each transaction related to aircraft parts is securely recorded, allowing for easy access and verification by regulatory authorities. This transparency not only streamlines the compliance process but also reduces the risk of penalties associated with non-compliance.
The automation of these compliance processes can lead to significant time and cost savings. By providing real-time access to accurate records, organizations can be sure to meet regulatory requirements without the burden of manual documents and audits.
6 Conclusion
The aviation industry supply chain is highly complex, spanning manufacturers, lessors, suppliers, airlines, and maintenance organizations, and GA Telesis coordinates across these stakeholders to help ensure timely parts delivery. At the same time, paper heavy processes still create friction: IATA estimates that automating and standardizing air cargo documentation through e-freight standards can deliver up to $4.9 billion in annual cost savings across the international supply chain and eliminate about 64 percent of the paper used in global air freight, where a single shipment can generate up to 30 different paper documents. McKinsey similarly quantifies the documentation burden and the payoff from digitization, estimating that adopting an electronic bill of lading could save $6.5 billion in direct costs and enable about $40 billion in global trade, with documentation for one shipment requiring up to 50 sheets of paper exchanged among up to 30 stakeholders.
Blockchain technology is poised to be the next groundbreaking innovation in aviation, transforming aircraft parts traceability by leaps and bounds. GA Telesis is exploring and developing blockchain based capabilities to streamline vendor accreditation, strengthen record integrity, enhance traceability, improve supply chain transparency, and support more efficient regulatory compliance.
Blockchain addresses some of the most pressing challenges in the industry. The adoption of blockchain solutions by GA Telesis not only enhances safety and operational efficiency but also fosters trust among stakeholders, paving the way for a more transparent and accountable ecosystem in aviation.
Despite the promising benefits of blockchain technology in enhancing parts tracing, the industry has encountered significant adoption difficulties. Despite past challenges that stalled previous adoption, this new blockchain solution breaks down the complexities of integration by blending its technology into existing ERP systems and processes.
Aviation continues to recognize the immediate and immense benefits of blockchain. There is optimism that these adoption hurdles will finally be overcome, paving the way for broader implementation and a more secure aviation and safer overall ecosystem.
By embracing this innovative solution, organizations can position themselves at the forefront of industry advancements, thus ensuring they meet the demands of an increasingly complex and competitive landscape. The potential benefits of blockchain are immense, and GA Telesis is at the forefront of its implementation, leading to a safer, more efficient, and more resilient aviation landscape.