Supply chain transparency is key to ensuring sustainable transformation. Learn how Circularise worked with the Porsche supply chain to achieve visibility into this complex system while protecting all parties' proprietary information.
The lack of transparency across automotive supply chains
Ever more stringent environmental requirements, the growth of the circular economy, increasing consumer expectations, and regulatory demands for material traceability and transparency - these are just a few of the major trends the automotive industry is facing today.
Many of these changes have led to positive results, such as the greater willingness of OEMs to collaborate with automotive partners and other parties. However, these challenges have also highlighted the lack of transparency across supply chains needed to assess the environmental footprint of automobile manufacturing.
The lack of transparency of automotive supply chains is understandable when we look at a regular car that has ~30,000 different parts, made from a range of raw materials, including aluminium, iron, steel, rubber, plastics, special fibres, and glass. Combined with a supply chain that can be over 20 tiers long due to the various processing and manufacturing steps. This means getting detailed information about the materials used for automobile manufacturing is extremely difficult.
Enable Porsche to gather more information directly from the suppliers about the parts and materials they use in cars.
Porsche has a large number of suppliers providing parts and components to its cars but it doesn’t stop the company from looking into their supply chains for more information about the materials.
In order to tackle this challenge, Porsche partnered with Circularise as well as the pioneering material suppliers Borealis, Covestro, Domo Chemicals, Sika, Asahi Kasei, PPG, Mitsubishi Chemicals, two aluminium providers, the certification body UL, and others to work on a blockchain traceability project. The key question we addressed was “How can Circularise’s blockchain technology help increase transparency across Porsche's value chain?”
“We need to know more details on the parts and materials being used in our products, that means information on production processes deep down the supply chain, statements of recycled content and more.”
Antoon Versteeg - Project Lead Innovation Research, Porsche
Despite supply chain complexity, automotive manufacturers need to and want to understand where materials come from, what they are made of, where their products end up, and how they might impact the environment throughout their production, use, and end-of-life. However obtaining this full picture of the supply chain immediately raises concerns around trust, privacy, and confidentiality. This is because the available data on the materials is often proprietary, not accessible or incomplete.
In an ideal world, all members of the supply chain would provide proof that all the criteria required to ensure a sustainable system have been met (LCA, chain of custody, certifications, social and corporate governance), without having to forfeit their proprietary information. This way all companies could showcase their sustainability and maintain their competitive advantages.
To achieve this, Porsche and its suppliers partnered with Circularise to use blockchain and a patent-pending Smart Questioning technology to set up secure, end-to-end traceability for specific material streams.
Using a decentralised blockchain ensures that each party maintains ownership of their data and prevents the information from being tampered with. This technology allows a digital record to be created for the material flowing through the supply chain. The digital product passport is updated by each company as the material moves through the supply chain, creating a record with the total history and impact of that material.
Combining this approach with Smart Questioning ensures that the information being shared is reliable and also prevents proprietary data from being shared publicly. Smart Questioning allows key information to be selectively shared with members of the value chain, where the owner of the original data is always in control of who can access the insights into this data.
By digitising materials on blockchain car manufacturers can make better decisions for the next generations of vehicles and support end-of-life recycling approaches, as well as help final consumers to learn more about their vehicle and its origins, enabling them to make more sustainable choices. Ultimately reducing the environmental impact across the whole value chain.
To launch the project we started with one use case - the digital traceability of plastics - and over time more materials and companies were added to cover aluminium, fabric, coatings, adhesives, and a certification body. Using Circularise’s API and a Porsche demo app, we wanted to give consumers better insights into the impact of their vehicles. By digitising each batch of material on the blockchain we created a digital copy, called a digital twin/ passport.
An audit of all the available product information was conducted, including LCA data, chain of custody, certifications, and social governance information. The various categories of information were then prioritised to decide what data should be included in the digital twin/ passport, such as its environmental footprint and origin. This digital thread (how the digital twin transfers through the supply chain) improved transparency between supply chain actors. This also offered great advantages to the material suppliers to differentiate their materials or products within the market.
By creating a new digital thread in the automotive value chain in cooperation with Porsche and selected Tier 1-2 suppliers, we have proved that supply chain transparency and sustainable material traceability can be achieved even within complex production. This is a big step forward in supporting industries like the automotive sector, in achieving their sustainability goals and complying with upcoming regulations.
Digitising materials on blockchain helps car manufacturers to make better decisions for the next generations of vehicles and support end-of-life recycling approaches. This information is made available to consumers by connecting the data insight outputs to the Porsche app. Supply chain information helps final consumers to learn more about their vehicle and its origins, enabling them to make more sustainable choices. All of this combined helps to reduce the environmental impact across the whole value chain.
Circularise is in continuous dialogue with automotive value chains to introduce supply chain transparency into the automotive industry. We are also forging a range of partnerships across the value chain with groups such as Catena X and RAI Automotive, to jointly create new solutions on processes for increased digital supply chain transparency and the circular economy.
"For us, it is really important to share information and be more transparent while maintaining confidentiality. For instance, the material composition is of competitive advantage so we would never share that openly. Here, Circularise helps us to maintain this confidentiality and only disclose the information needed from raw material producer to recycler. And with that, we can close the loop."
Uwe Peuker - Vice President Regional Product Management Polycarbonates, Covestro
We love to tell you all about it