Sustainability: Only those who are transparent will be resilient

Long-term resilience and sustainability are the most important goals in the automotive industry today. However, according to a recent survey by Capgemini, there is often a lack of transparency through data-driven decision-making and monitoring along the supply chain. The Catena-X data ecosystem, in which the first solutions have already been developed, aims to change this.

When global supply chains are disrupted, the automotive industry has to react: moving from offshore concepts to nearshore collaboration, producing semiconductors in-house or creating greater independence from critical suppliers. According to a Capgemini survey of more than 1,000 executives from global automotive companies, monitoring solutions are particularly important in crisis management, especially for suppliers. While Tier 1 suppliers, such as ZF, Bosch or Continental, typically have a risk monitoring system in place, the situation is different for Tier 2 or Tier 3 suppliers. According to the study, only 13 percent of Tier 3 and 57 percent of Tier 2 suppliers surveyed have implemented risk monitoring for their supply chain. Overall, automotive companies are still in the process of creating an intelligent, data-driven supply chain enabling near real-time decisions. The survey found that only one in two companies (57%), including automakers and Tier 1 suppliers, are well positioned.

The dual nature of corporate strategy: Sustainability and Resilience

The goal of being able to withstand disruptive influences (resilience) goes hand in hand with a company’s sustainability goals. As the Capgemini survey shows, the vast majority of respondents (75 percent) feel committed to the CO2 targets of the Paris Agreement. Transparency is also a key factor: a data-driven solution to evaluate and monitor suppliers (60%) is the top sustainability initiative in 2023, followed by mapping a product’s environmental footprint (59%) and detailed information on the origin and composition of products (59%). Manufacturers need to connect with their suppliers (regardless of rank) to obtain the necessary data. To facilitate these transactions, the Catena-X data ecosystem was launched two years ago. Its goal is “standardized, open and trusted data exchange in the automotive industry ecosystem” – including a digital twin of a product and product traceability. Precondition: manufacturers and suppliers use the Catena-X data ecosystem.

Catena-X: Apps and dashboards visualize sustainability impact

An ongoing challenge for the automotive industry today is to accurately represent and calculate the Product Carbon Footprint (PCF) of a product.

• For example, OEMs request data from Tier 1 suppliers, who in turn request and collect the relevant data from their suppliers. Siemens has digitally mapped the process in its SiGREEN app using the example of emissions along the supply chain for the “cradle to gate” process: The journey from raw material through processing to delivery to the OEM. Following a PCF request from the OEM, the supplier is asked to calculate the corresponding CO2 equivalent and send it online to the OEM via the Catena-X network.
• With “Greentoken“, network partner SAP has a corresponding solution for determining the carbon footprint (“Sustainable Footprint Management“). An important basis and prerequisite for secure cross-company data exchange is the Eclipse Dataspace Connector (EDC), which, as described by Catena-X on its website, “bundles the capabilities required to participate in a data space and enables peer-to-peer connections between participants”.

CO2 footprint: The Catena-X rulebook as the heart of sustainability

An important challenge for these Catena-X-based solutions is to obtain the necessary data from OEMs, suppliers, and sub-suppliers in digital form and in suitable quality. The necessary calculation and quality requirements (also for the apps mentioned) are documented in a “rulebook“, that is updated by Catena-X regularly. Version 2 has just been released. It provides clarity on which values can be used, how credible they are, and how the Footprint is finally calculated. It shows, for example, which methods and standards are used as a basis, how the values for the manufacture of the product and its transport can be determined, and how the quality of the data submitted can be assessed. For example, self-collected data (primary data) is better than data from knowledge databases or studies (secondary data). Ultimately, the result is a carbon footprint with a quality assessment. “The goal will be not only to receive self-disclosures, but to work with certified values in the future,” says Sven Dahlmeier, Senior Director and Head of Catena-X at Capgemini. For example, if steel is used in production, a key question is whether fossil or green energy was used for production and how this should be assessed.

End-to-end perspective: A holistic view is critical

A company’s supply chain should ultimately be resilient, connected, intelligent and sustainable. In this case, apps for determining the carbon footprint are just one component in a bundle of measures that are not “only” technological based. A holistic approach to this strategic issue is needed to collect and process data in an efficient way, and educate employees on sustainability issues. Sven Dahlmeier refers to an end-to-end understanding of the supply chain, which also includes reporting obligations (currently, for example, through the Supply Chain Sustainability Act). It is also clear that automotive companies have to take sustainability seriously in order to avoid sanctions. After all, decision-makers in the industry are not just strong supporters of the Paris Agreement, but the majority of them (73%) are also aware that a commitment to the circular economy is crucial for long-term success and to be one of the “more resilient” leaders among the competition.

Further information:

Capgemini study “Automotive Supply Chain: Long-term resilience”, 2023

Information Catena-X

28 consortium partners and more than 160 association members are currently organized in Catena-X. The list ranges from Volkswagen, Mercedes Benz, Stellantis, Schaeffler, Bosch, Conti and Dräxlmaier to SAP, Siemens and Capgemini: Many important multipliers in the automotive industry and service providers are involved as consortium partners or association members. In total, an estimated 275,000 companies involved in vehicle manufacturing worldwide will benefit from new solutions.

https://catena-x.net/de/