The Supply Chain — Reimagined

When shortages arise in the supply chain, a domino chain of delays is triggered that can bring the entire industry to a halt. The automotive industry has therefore been developing the Catena-X data ecosystem to better prepare itself for crises of this type. Catena-X is also expected to lower costs, improve quality, ensure greater sustainability, and lead to new business models. Here, in Porsche Consulting Magazine, three experts explain what Catena-X does and how the ecosystem will soon also be benefiting many smaller companies and other sectors.


Collaboration as a source of added value: with Catena-X the automotive industry is building a shared data ecosystem and industry network whose interoperability and transparency bring benefits to all involved.Porsche Consulting/Clara Nabi

At a dig­i­tal­iza­tion sum­mit in Decem­ber 2022, Dr. Robert Habeck, the Ger­man Fed­er­al Min­is­ter for Eco­nom­ic Affairs and Cli­mate Action, described Catena‑X as a “light­house project in indus­tri­al pol­i­cy for dig­i­tal­iz­ing sup­ply chains.” That was prob­a­bly not an under­state­ment. The auto­mo­tive indus­try is hop­ing the new and expand­able data ecosys­tem will lead not only to more resilient, sus­tain­able, and eco­nom­i­cal sup­ply-chain struc­tures but also to new busi­ness mod­els. As ever more com­pa­nies in the auto­mo­tive indus­try col­lab­o­rate in Catena‑X along with their deal­ers and out­fit­ters, the shared data space will also be serv­ing as a blue­print for anal­o­gous plat­forms in other sec­tors. This is because the prin­ci­ples, appli­ca­tions, and stan­dards devel­oped by Catena‑X are essen­tial­ly uni­ver­sal and can there­fore be eas­i­ly mod­i­fied to fit the value-adding process­es of other industries.

Risks are involved when com­po­nents are sourced from around the globe, espe­cial­ly when it comes to raw mate­ri­als and pre­lim­i­nary prod­ucts. One strik­ing exam­ple was when the Ever Given freighter ran aground in the Suez Canal in March of 2021 and ended up block­ing the cru­cial artery of mar­itime trade. Frank Göller, Head of Dig­i­tal Pro­duc­tion & Process­es at Volk­swa­gen AG, is well aware of the con­se­quences. “If I’m forced to deter­mine that 20,000 elec­tron­ic com­po­nents won’t be deliv­ered on time, in a worst-case sce­nario I could end up sell­ing 20,000 fewer cars.”

Transparency from raw materials to recycling

The unin­tend­ed block­age of the Suez Canal, the COVID pan­dem­ic, the reper­cus­sions of the Russ­ian war on Ukraine — these unan­tic­i­pat­ed devel­op­ments have shown that it is almost impos­si­ble to rapid­ly read­just capac­i­ties beyond those already estab­lished with­in sup­ply struc­tures. In many cases this is due to exten­sive gaps in acces­si­ble data. Most com­pa­nies have tra­di­tion­al­ly only pro­vid­ed their infor­ma­tion to imme­di­ate cus­tomers or direct sup­pli­ers. How­ev­er, com­plex com­po­nents often con­tain prod­ucts from numer­ous sub-sup­pli­ers. The tra­di­tion­al data streams, in other words, are hard­ly capa­ble of allow­ing com­po­nents and capac­i­ties to be rapid­ly and direct­ly tracked.

More­over, com­pa­nies use a wide range of dif­fer­ent soft­ware solu­tions, and each indi­vid­ual com­pa­ny defines its own data stan­dards. As a result, dif­fer­ent sources of infor­ma­tion are often incom­pat­i­ble with each other. Fur­ther­more, some com­pa­nies still oper­ate the req­ui­site inter­faces on a man­u­al basis. That makes it vir­tu­al­ly impos­si­ble to syn­chro­nize data for pre­lim­i­nary prod­ucts in the value chain. The trans­paren­cy need­ed to respond quick­ly to crises sim­ply does not exist.

The auto­mo­tive indus­try wants to change this. Catena‑X is designed to illu­mi­nate the entire value chain — from raw mate­r­i­al mines and com­po­nent sup­pli­ers to the car­mak­ers them­selves. And then on to recy­cling com­pa­nies in order to doc­u­ment com­plete mate­r­i­al cycles. This in turn opens the door to new solu­tions for man­ag­ing demand and capac­i­ties in the sup­ply chain. For exam­ple, Catena‑X’s devel­op­ment teams are work­ing on user-friend­ly apps that can iden­ti­fy capac­i­ty prob­lems in real time. “When Catena‑X makes the entire sup­ply chain com­plete­ly trans­par­ent, then I can see which capac­i­ties are avail­able and which urgent­ly need­ed com­po­nents I can reroute to han­dle my spe­cif­ic sit­u­a­tion,” explains Göller.

But Catena‑X is about more than increas­ing resilience. It is also about real cost sav­ings, new busi­ness mod­els, more sus­tain­able oper­a­tions, more effi­cient process­es, and opti­mized qual­i­ty man­age­ment. How­ev­er, achiev­ing the ambi­tious aims in these areas requires no less than a con­cert­ed joint effort on the part of the entire sec­tor — among com­peti­tors as well. This is no easy task, espe­cial­ly regard­ing the cru­cial issues of data trans­fer and sovereignty.

SustainabilityBattery Passport shows all environmental data at a glance

The Catena-X ecosystem gathers all the important sustainability information about a product: the materials used, its CO2 values, hazardous substances, certifications, percentages of recycled or recyclable substances, and much more. One app already using these data is the Battery Passport. It compiles battery data for all stages of the value chain. The material producers, mines, and refiners (node 1) provide information about the amounts of cobalt, lead, lithium, and similar substances.

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The makers of preliminary products (node 2) contribute data about battery type, composition, and other matters like the share of recyclables. The battery manufacturers (node 3) provide behavioral parameters for the end product after installation. And aftersales and recycling enterprises (node 4) supply information about potential reuse or recycling. Consumers can therefore see at a glance the type of battery in their vehicle, how it was made, and how sustainable it is. The Battery Passport also enables companies to comply with the requirements of the EU’s new battery directive.

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ResilienceTransparent supply chains enable better management of future chip crises

Transparent supply chains enable considerably better management of supply shortages for crucial industry components such as microchips. When master data from business partners as well as capacity and demand data from individual partners throughout the value chain are available, bottlenecks can be detected at earlier points in time. The industry can then introduce fallback options early on. By analyzing data from the value chain, material suppliers and refiners (node 1) can develop alternative procurement strategies to minimize the effects of new chip crises.

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They can use data on raw material availability, battery production times, or inventory levels at downstream value-chain partners (nodes 2/3) to optimize delivery times. Suppliers (node 2) also play an important role: access to manufacturer data (node 3) allows them to better predict microchip demand levels and prioritize distribution of resources. Manufacturers themselves (node 3) can also respond better with Catena-X. Warned early on about shortages thanks to capacity data from their module suppliers, they can make strategic (fallback) decisions sooner. A view of customer data can be helpful here as well. Appropriate analyses of, e.g., order histories, use patterns, or sales forecasts can enable more accurate predictions for demand.

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Cost reduction Optimized quality management minimizes cost

Unforeseen costs often arise in production or from quality issues in products already on the market. In both cases it is important to gain a rapid and complete overview of suppliers, components, and production process steps in a given value chain. Manufacturers can then introduce measures to eliminate errors. An early warning system throughout the supply chain allows prompt modification of production to minimize downtimes. An exchange of quality information along all nodes of the supply chain also allows long-term enhancement of preliminary product quality.

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Cost reduction

Catena-X will inform manufacturers (node 3) early on if raw materials are causing problems in preliminary products (nodes 1/2). Over the long term, exchanging information with material producers (node 1) can facilitate continuous improvement in raw material quality and refinement processes. If carmakers (node 3) also exchange information with their suppliers (node 2) about the number and type of errors, the underlying causes and patterns of quality problems can be identified sooner. Suppliers can then take targeted steps to reduce malfunction and failure rates and improve product quality. Transfer of information between original manufacturers (node 3) and recycling companies (node 4) is just as important. Access to field data enables recyclers to make earlier and more accurate assessments of battery reuse.

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New business modelsSupply chain data yield new business ideas

Catena-X experts agree that data from value chains will lead to new business models as yet unimagined today. The models do not necessarily have to be initiated by established companies in the automotive industry, start-ups can also establish and profit from ideas for new apps. In the initial stage, however, monetarization is more likely of data with direct additional benefit to network partners.

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New business models

Raw material producers (node 1), for example, could make their processes more demand-oriented and better assess their material quality if they can access the field and workshop data from original and preliminary product manufacturers (nodes 2/3). If they can thereby save costs and increase customer loyalty, they should also be willing to purchase the relevant data. The same logic would apply to suppliers (node 2), who should be interested in data gathered by vehicles in the field and from workshop repairs. For their part, the manufacturers (node 3) could be interested in which components can be used successfully by recycling companies (node 4). This would help them orient their product engineering and production processes more strongly toward sustainability.

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European values generate trust

The first rea­son for con­fi­dence in Catena‑X is the fact that many of its prin­ci­ples are not near­ly as new as they might appear. They have already proved them­selves in other con­texts. Gaia‑X, a non-prof­it orga­ni­za­tion based in Brus­sels, for­mu­lat­ed the pio­neer­ing data-trans­fer prin­ci­ples back in 2020. Three hun­dred and fifty com­pa­nies agreed on the prin­ci­ples of equi­table col­lab­o­ra­tion, inter­op­er­abil­i­ty, open-source soft­ware, and above all on data sovereignty.

Catena‑X makes use of these wide­ly rec­og­nized stan­dards. In order to fully embrace the prin­ci­ple of data sov­er­eign­ty, Catena‑X dis­pens­es with a cen­tral cloud sys­tem. “The data remain with the respec­tive com­pa­nies, with­out excep­tion,” says Dr. Jür­gen Sturm, CIO of the ZF Ger­man auto­mo­tive sup­ply group and one of the Catena‑X pio­neers. “Access rights are only grant­ed for spe­cif­ic appli­ca­tions and con­texts. Instead of con­sol­i­dat­ing all the data flows with a sin­gle inter­me­di­ary, we’ve opted for a decen­tral­ized solu­tion — which sub­stan­tial­ly low­ers the poten­tial for misuse.”

These guide­lines are attract­ing ever more com­pa­nies to the idea of exchang­ing data. In the spring of 2021, some 28 of them found­ed the Catena‑X con­sor­tium on the basis of these “Euro­pean val­ues.” With around 110 mil­lion euros from the Ger­man Min­istry of Eco­nom­ic Affairs, they devel­oped the first open-source soft­ware for a shared data space. Two fur­ther enti­ties were added to form the struc­ture that exists today. One is the Catena‑X Auto­mo­tive Net­work asso­ci­a­tion, which pro­vides a com­mon umbrel­la, so to speak, for its 170 mem­bers. It defines gov­er­nance, spec­i­fies data stan­dards, and cer­ti­fies the appli­ca­tions that mem­bers can use to process data. The sec­ond is the Cofinity‑X oper­at­ing com­pa­ny, which gives inter­est­ed par­ties access to the net­work. Its mar­ket­place app lets com­pa­nies use the net­work and also make their own apps available.

Since the project was found­ed, devel­op­ment has pro­ceed­ed rapid­ly — not least thanks to the more than 100 pro­gram­mers who have joint­ly devel­oped both the open-source code and the shared data stan­dards. The con­sor­tium was there­fore already able to present a pilot ver­sion of its plat­form in April 2023 at the Han­nover Messe, a lead­ing indus­try trade fair in north­ern Ger­many. The next mile­stone — the go-live of Catena‑X ser­vices and KITs, the stan­dards defined for tasks such as devel­op­ing and using data – was reached by Cofinity‑X in Octo­ber 2023. With tools from Cofinity‑X’s mar­ket­place app, part­ner com­pa­nies should be able to ana­lyze sup­ply-chain data in numer­ous dif­fer­ent areas.

Advancing sustainability

Not every field is of equal impor­tance to the play­ers in the auto­mo­tive indus­try. “Sus­tain­abil­i­ty issues are fig­ur­ing promi­nent­ly in dis­cus­sions about sup­ply chains right now,” says Dr. Andreas Woll­ny, Senior Man­ag­er Dig­i­tal­iza­tion for the giant BASF chem­i­cal cor­po­ra­tion. One rea­son why com­pa­nies are focus­ing on the envi­ron­ment and social respon­si­bil­i­ty has to do with new report­ing reg­u­la­tions. In Ger­many, the Liefer­ket­ten­sorgfalt­spflicht­enge­setz (Sup­ply Chain Due Dili­gence Act, or LkSG), which came into effect in 2022, requires larg­er com­pa­nies to ensure and doc­u­ment com­pli­ance with sus­tain­abil­i­ty stan­dards through­out their value chains. Report­ing can of course be done with­out the ben­e­fit of dig­i­tal data spaces, says Göller. “But if you have to com­pile your reports man­u­al­ly with Excel, that takes a huge amount of time and will def­i­nite­ly not be very exact.”

The “sus­tain­abil­i­ty report­ing” topic could well become increas­ing­ly rel­e­vant in the next few years. As of 2024, all com­pa­nies in Ger­many with more than 1,000 employ­ees will have to demon­strate how they are meet­ing envi­ron­men­tal and social stan­dards — from raw mate­r­i­al sources to the end prod­ucts in car deal­er­ships. That same year, a sim­i­lar reg­u­la­tion will go into effect in the Euro­pean Union. Report­ing require­ments apply not only to the auto­mo­tive sec­tor but also to every branch of indus­try. “Our solu­tions are there­fore of inter­est for all com­pa­nies that gath­er sus­tain­abil­i­ty-relat­ed data and want to share them with their cus­tomers and part­ners,” empha­sizes Wollny.

Catena-X — A successful model for other sectors?

And in fact, the first indus­try asso­ci­a­tions from other sec­tors have already approached the Catena‑X Auto­mo­tive Net­work for tips on how to set up sys­tems of their own. The lead­ers of the Manufacturing‑X ini­tia­tive could well be the far­thest along toward the goal of map­ping their indus­try. It’s clear to experts that other sec­tors, too, will ben­e­fit from the expe­ri­ence gained with Catena‑X. After all, Catena‑X’s prin­ci­ples, appli­ca­tions, and stan­dards are con­sid­ered essen­tial­ly uni­ver­sal. Adapt­ed to value chains of other indus­tries, the sys­tem could quick­ly and depend­ably bring advan­tages there too.

Attracting smaller companies worldwide

“For Catena‑X to suc­ceed, it’s impor­tant to encour­age even more enthu­si­asm for the project in our own indus­try,” says Sturm. “That also means tak­ing an inter­na­tion­al approach. The Ger­man auto­mo­tive indus­try can only be suc­cess­ful on a glob­al basis, which means we want our stan­dards to be applied world­wide.” Göller, as Catena‑X’s vice pres­i­dent in charge of inter­na­tion­al­iza­tion, is lead­ing the charge here on the world’s major car mar­kets. Suc­cess­ful­ly so, with one Catena‑X hub already estab­lished in France and promis­ing talks under­way in the USA, Japan, and China. Although he often faces skep­ti­cism at first, Göller’s win­ning nature — and above all his argu­ments — are chang­ing the minds of poten­tial crit­ics. “At some point, every­one will real­ize the ben­e­fits that come from being part of this func­tion­ing ecosys­tem,” he predicts.

The big play­ers are fre­quent­ly the first to rec­og­nize the added value from Catena‑X. “The accep­tance level among medi­um-sized enter­pris­es remains a chal­lenge,” grants Woll­ny. Because high­ly spe­cial­ized small and medi­um-sized enter­pris­es (SMEs) are key play­ers in car pro­duc­tion, the sys­tem can­not work over the long term with­out them. Woll­ny and his col­leagues are there­fore devel­op­ing tools tai­lored to their needs. These include offers with even lower thresh­olds and solu­tions of even greater sim­plic­i­ty that can also be used by com­pa­nies that don’t have their own sys­tem admin­is­tra­tors. Sturm is even talk­ing about “appli­ca­tions on a plug-and-play principle.”

New business ideas — Investments in the future

Although easy-to-use tools are a nec­es­sary con­di­tion for expand­ing Catena‑X to broad­er tar­get groups, what will ulti­mate­ly con­vince deci­sion-mak­ers is the value the sys­tem offers to their com­pa­nies. High­er qual­i­ty, lower costs, greater resilience, faster and more effi­cient data man­age­ment, and bet­ter coor­di­na­tion with cus­tomer needs — there are many rea­sons to become part of a larg­er whole. Poten­tial Catena‑X users should also take strate­gic con­sid­er­a­tions into account. Experts agree that the net­work­ing approach will soon give rise to pre­vi­ous­ly unimag­ined busi­ness con­cepts. As such, Catena‑X is also an enor­mous source of future poten­tial. Woll­ny is there­fore con­vinced that despite all its suc­cess­es to date, Catena‑X is only get­ting start­ed. “Catena‑X gives the indus­tri­al world a new, scal­able, future-ori­ent­ed tech­nol­o­gy that will become ever more rel­e­vant in ever more sec­tors around the globe.”

Dr. Jürgen Sturm: “From 'Ego Systems' to an Ecosystem”

ZF Friedrichshafen

Dr. Jür­gen Sturm, CIO and Senior Vice Pres­i­dent, is in charge of Cor­po­rate IT for the inter­na­tion­al ZF Group. He also chairs the Catena‑X auto­mo­tive net­work and is one of the very first Catena‑X pio­neers. Before join­ing ZF in 2015, Sturm spent 16 years as a CIO in the con­sumer indus­try, guid­ing dig­i­tal trans­for­ma­tions at BSH Haus­geräte GmbH and at Grundig. After earn­ing a doc­tor­ate in mechan­i­cal engi­neer­ing, he began his career in 1995 with the Ger­man car­mak­er Daim­ler, first as the head of Busi­ness Process Reengi­neer­ing and later in charge of Glob­al Sup­ply Chain Man­age­ment for the Daim­ler sub­sidiary TEMIC Semiconductors.

Dr. Sturm has very clear memories of the visions people cherished four or five years ago. “Back then, every big company wanted to build its own cloud and make it available to other companies,” is how he describes the period. The thought model of a company-owned cloud, however, did not go far enough — at least insofar as it consisted of a centralized platform or cloud infrastructure assuming the role of a central intermediary or key node to which all information would flow and which would then process these data on a universal basis and provide them to all users. Most of the visionaries, of course, imagined their own companies in the role of this key intermediary. Dr. Sturm, however, quickly realized that “none of these approaches would work, and instead were doomed to failure.”
For Jürgen Sturm, CIO and Senior Vice President Corporate Information Technology at the ZF Group and member of the Catena-X Automotive Network management board, Catena-X represents a real paradigm shift.Porsche Consulting/Jörg Eberl

What the early vision­ar­ies failed to see was that the sup­ply chains are too com­plex for a sin­gle com­pa­ny to be able to inte­grate them all into a sin­gle cen­tral cloud enti­ty. No com­pa­ny can for­mu­late the stan­dards for all the oth­ers — and cer­tain­ly not in a sec­tor as inter­na­tion­al as the auto­mo­tive indus­try. More­over, there are good rea­sons for com­pa­nies not to entrust their most impor­tant asset, name­ly their data, to a sin­gle actor. It makes far more sense for each indi­vid­ual owner to retain con­trol of its data and to exchange only the spe­cif­ic infor­ma­tion need­ed for a given appli­ca­tion. “Every­one involved first had to grasp the con­cept,” says Sturm. “We all had to real­ize that coop­er­a­tion is the bet­ter way for­ward. Togeth­er, we have to move beyond the notion of indi­vid­ual ‘ego sys­tems’ and devel­op an over­ar­ch­ing ecosystem.”

Col­lab­o­ra­tion was what was need­ed, as well as tech­ni­cal solu­tions that could allay the fears of the part­ners. For exam­ple, the fear of expo­sure, also and espe­cial­ly to one’s com­peti­tors. The prin­ci­ples of Gaia‑X formed mile­stones along the road to the auto­mo­tive industry’s shared ecosys­tem. These laid the ground­work for the launch of Catena‑X by a hand­ful of com­pa­nies in 2021. “It was noth­ing less than a par­a­digm shift,” observes Sturm. The part­ners joined forces to devel­op every­thing right from the start, from for­mu­lat­ing the task — what do we want to achieve togeth­er? — to design­ing the solu­tions. “This shared pre­c­om­pet­i­tive basis laid a solid foun­da­tion of trust.”

No risks in sharing data?

Because the data from each com­pa­ny have to remain under that company’s con­trol, they are only “mutu­al­ly acces­si­ble in con­text-sen­si­tive ways,” as Sturm explains. The key com­po­nent of the new data space is a tech­nol­o­gy known as eclipse data­space con­nec­tor (EDC), which has both a con­trol plane and a data plane. On the con­trol plane, par­tic­i­pat­ing com­pa­nies nego­ti­ate which sup­ply chain data are need­ed for a spe­cif­ic use case. On the data plane, the sys­tem then dis­plays the spec­i­fied data — and only those data. The cru­cial fea­ture of the sys­tem is that the sup­ply chain mem­bers enter into con­trac­tu­al rela­tions with other mem­bers regard­ing that spe­cif­ic data set, which elim­i­nates poten­tial ‘ mis­use of infor­ma­tion right from the start. Catena‑X uses a “one up and one down” prin­ci­ple in its data chain. That means each par­tic­i­pant sees only its imme­di­ate sup­pli­ers and cus­tomers, but no fur­ther com­pa­nies either upstream or down­stream. Data are only exchanged direct­ly between com­pa­nies, with­out a cen­tral intermediary.

Catena‑X’s approach is designed to inte­grate a large num­ber of com­pa­nies of dif­fer­ent sizes. “As such, it’s not a Ger­man or even a Euro­pean net­work,” says Sturm. “The Euro­pean auto­mo­tive indus­try can only be suc­cess­ful on a glob­al basis — and that means the over­all stan­dards have to be applic­a­ble every­where in the world.” But the ini­tia­tors were not just think­ing about the big fish. Right from the start, they want­ed to include small and medi­um-sized enter­pris­es (SMEs) as well. “That’s essen­tial, because SMEs make up a major­i­ty of the sup­ply chain — you can’t do with­out them if you want Catena‑X to be successful.”

What, then, is the best way to encour­age SMEs to join in? Pres­sure is not the way to go, accord­ing to Sturm. Instead, he says, these com­pa­nies need to rec­og­nize the added value Catena‑X has to offer. At the same time, the network’s appli­ca­tions should work on a “plug-and-play” prin­ci­ple to the extent pos­si­ble. In con­trast to the big play­ers, after all, small­er com­pa­nies often do not have their own IT experts who can carry out com­plex sys­tem inte­gra­tion projects. “That means we need low-thresh­old offers with the fewest pos­si­ble acces­si­bil­i­ty hur­dles, because oth­er­wise we won’t man­age to get these com­pa­nies on board.”

Part of the ben­e­fit for SMEs lies in the appli­ca­tions Catena‑X makes avail­able. For instance, it can opti­mize and stream­line data man­age­ment sys­tems for busi­ness part­ners. Small enter­pris­es, too, are inter­est­ed in sup­pli­er queries. If Catena‑X suc­ceeds in becom­ing a uni­ver­sal instru­ment that bal­ances capac­i­ties in sup­ply chains and lets man­u­fac­tur­ers coor­di­nate their needs with sup­pli­ers, this will rep­re­sent an addi­tion­al major incen­tive for all par­ties to work togeth­er. Yet anoth­er ben­e­fit is the inter­op­er­abil­i­ty of the appli­ca­tions. Regard­less of which sup­pli­er or which open-source appli­ca­tion is used, the appli­ca­tions them­selves are com­pat­i­ble because of the uni­form seman­tics and cal­cu­la­tion meth­ods defined by the Catena‑X standards.

Big players need their smaller counterparts

For its part, ZF nei­ther can nor wants to do with­out the small sup­pli­ers in Catena‑X. “We want to achieve cli­mate neu­tral­i­ty by 2040 at the lat­est,“ says Sturm. “The speed at which we can com­mit to this tar­get, and also demon­strate and doc­u­ment it, will depend in part on our data chains.” And SMEs are inte­gral parts of these data chains. As Sturm explains, too many com­pa­nies are already los­ing too much time pre­cise­ly when it comes to aggre­gat­ing their data. How­ev­er, “If com­pa­nies suc­ceed in gath­er­ing the req­ui­site data faster, they’ll have more time to ana­lyze these data and ulti­mate­ly also take steps to elim­i­nate prob­lems or to enhance process­es and make them more economical.”

Catena‑X would exceed all other sys­tems in its abil­i­ty to accel­er­ate the exchange of data mul­ti­ple times over. But ZF expects far more than that from Catena‑X. This can be seen in the extent to which it is already using the consortium’s apps — name­ly in seven of the ten use cases: for sus­tain­abil­i­ty, sup­ply chain mat­ters, data com­pi­la­tion for cir­cu­lar economies, demand and capac­i­ty man­age­ment, busi­ness part­ner data man­age­ment, and the exchange of qual­i­ty data. And final­ly, Sturm and his col­leagues are using Catena‑X data to gen­er­ate dig­i­tal twins. The idea here is that vehi­cle use pat­terns are expect­ed to enable pre­ven­tive main­te­nance and repair.

Undreamt-of possibilities

Despite the wide range of appli­ca­tions already avail­able, the part­ners are work­ing tire­less­ly to expand the areas of appli­ca­tion, and to extend them to other indus­tries with sim­i­lar approach­es, for exam­ple in the form of Manufacturing‑X in the pro­duc­tion indus­try. Sturm expects that con­nect­ing Catena‑X with other indus­tries will open up “undreamt-of busi­ness pos­si­bil­i­ties” in the future. He sees an espe­cial­ly high level of poten­tial in inte­grat­ing infra­struc­ture, mobil­i­ty, ener­gy, and safe­ty with­in the con­text of smart-city con­cepts, for exam­ple. “Many areas of life are merg­ing ever more with each other,” he notes. “If we can use data-space tech­nol­o­gy to inter­con­nect the under­ly­ing data in con­text-sen­si­tive ways, we’ll be able to devel­op entire­ly new busi­ness models.“

Frank Göller: ”We’re Building the Network of Networks”

Porsche Consulting/Andreas Laible

Frank Göller became Head of Dig­i­tal Pro­duc­tion & Process­es at Volk­swa­gen in the north­ern Ger­man city of Wolfs­burg in 2019. He guides Group-wide dig­i­tal­iza­tion activ­i­ties in pro­duc­tion and logis­tics with the aim of estab­lish­ing an autonomous and com­plete­ly net­worked pro­duc­tion process. As chair­man of the Catena‑X Auto­mo­tive Net­work asso­ci­a­tion, he was in charge of inter­na­tion­al scal­ing for the data ecosys­tem until May of 2023, when he took on the role of Vice Pres­i­dent Inter­na­tion­al­iza­tion in order to focus even more on accel­er­at­ing the roll­out. Before join­ing Volk­swa­gen, Göller held var­i­ous indus­try man­age­ment posi­tions and launched his own start-up in the green ener­gy sector.

Frank Göller has traveled extensively over the past two years, with destinations including Tokyo, Shanghai, Beijing, and Seattle, not to mention three visits to Paris. His mission is to raise the profile of the Catena-X vision, bring out the network’s benefits, and gain new members. As Vice President Internationalization for the Catena-X Automotive Network, he wants to Europeanize what began as a system primarily for the German automotive and supplier context, and internationalize it further. The problem, he says, is that “many automotive decision-makers have yet to grasp the full potential of Catena-X.” These benefits need to be highlighted more strongly in Germany and beyond. “We still have a huge job to do,” he notes.
Frank Göller, Head of Digital Production & Processes at Volkswagen, relies on cooperation and wants to internationalize Catena-X even further.Porsche Consulting/Andreas Laible

That being said, Göller and his team have accom­plished a lot in a short peri­od of time. Under his direc­tion, the first Euro­pean Catena‑X hub out­side Ger­many was found­ed in France. It wasn’t easy to win over the French, says Göller. Their ini­tial skep­ti­cism revolved around two points: first, how will com­pa­nies retain com­plete con­trol over their data at all times; and sec­ond, how will exist­ing French struc­tures com­bine with those of Catena‑X.

Regard­ing data con­trol, Göller first held many dis­cus­sions in Paris on stan­dard def­i­n­i­tions. His French col­leagues were also inter­est­ed in the use of blockchain tech­nol­o­gy and how to inte­grate exist­ing mate­r­i­al track­ing appli­ca­tions. Göller and his team repeat­ed­ly empha­sized the advan­tages of a decen­tral­ized data space and the prin­ci­ple of con­text-based access rights. “Those were the fac­tors that ulti­mate­ly con­vinced our col­leagues to join the shared project,” he says. Göller also sat­is­fied his French coun­ter­parts on the topic of con­nec­tions with exist­ing struc­tures. “Our idea is pre­cise­ly to cre­ate com­pat­i­ble inter­faces for exist­ing net­works, and to build our net­work on this basis,” he explains. “Catena‑X is the net­work of networks.”

Welcome to the club of the willing

“We start by talk­ing with the club of the will­ing”: this is Göller’s method and his term for those who are already open to the idea. In France, the first large part­ner to join the “club” was Stel­lan­tis with brands such as Peu­geot and Cit­roën, but also Opel, Fiat, and Chrysler. Valeo, an impor­tant sup­pli­er that is also active inter­na­tion­al­ly, joined short­ly there­after. The two com­pa­nies are mem­bers of Galia, a major French auto­mo­tive asso­ci­a­tion head­quar­tered in Boulogne-Bil­lan­court. With Stel­lan­tis and Valeo as inter­me­di­aries, Göller had mul­ti­ple meet­ings with Galia rep­re­sen­ta­tives in Paris. “The result we came up with sat­is­fied every­one and gen­er­at­ed vis­i­ble syn­er­gies,” reports Göller. It also brought a new Catena‑X mem­ber, name­ly Renault. Today a Renault rep­re­sen­ta­tive is active in Catena‑X as an elect­ed mem­ber of the board.

The inter­na­tion­al­iza­tion team is pur­su­ing a sim­i­lar, albeit not iden­ti­cal, course for impor­tant auto­mo­tive mar­kets in Asia. The focus is on Japan and China. Göller and a num­ber of Catena‑X expert mem­bers vis­it­ed Shang­hai and Bei­jing in mid-2023, where they spoke with rep­re­sen­ta­tives from eight auto­mo­tive asso­ci­a­tions and orga­ni­za­tions with­in just four days. Most of their con­tacts came from superbly net­worked col­leagues at Volk­swa­gen China, but the strong pres­ence of the Ger­man Cham­ber of Com­merce and Indus­try (IHK) and the Ger­man Cham­ber of Indus­try Abroad (AHK) also opened doors in the Mid­dle King­dom. Nev­er­the­less, Göller’s “Ger­man ideas” are also met with skep­ti­cism here too. “We keep hav­ing to explain that Catena‑X can only be suc­cess­ful on a glob­al scale, and that all Ger­many did was get it started.”

European values carry weight in Asia as well

At the same time, those Euro­pean val­ues under­ly­ing Catena‑X are often a strong point in the network’s favor. “The data-sov­er­eign­ty prin­ci­ple is a strong argu­ment for non-Euro­peans as well,” Göller observes. It shouldn’t come as a sur­prise that the export-ori­ent­ed Chi­nese com­pa­nies are espe­cial­ly open to Catena‑X. After all, they too have to meet the legal require­ments that already apply in Ger­many and will be Europe-wide as of 2024. “Many of our con­tacts quick­ly real­ized that Catena‑X can help them here.” These con­tacts are the ones cur­rent­ly engaged in the most active talks with the inter­na­tion­al­iza­tion team. An alliance of the will­ing is expect­ed to form in China soon too, with mem­ber com­pa­nies such as Siemens, BMW, SAP, Huawei, and T‑Systems.

In Japan the team is a step fur­ther along. Inter­me­di­aries here includ­ed col­leagues from the Ger­man soft­ware com­pa­ny SAP, which itself was one of the orig­i­nal Catena‑X mem­bers. Inspired by Catena‑X, the Japan­ese have been work­ing on their own sup­ply chain net­work known as Oura­nos — and con­se­quent­ly already think­ing of future col­lab­o­ra­tion with the Euro­peans. Here, too, the guid­ing prin­ci­ple is that of a “net­work of net­works.” The only thing that counts is enabling data to flow smooth­ly from sup­pli­ers in Ger­many to OEMs in Japan, and the other way around. “Whether the net­work is later called ‘Catena‑X,’ ‘Oura­nos,’ or ‘Let’s Share Data, Inc.’ doesn’t mat­ter to us.”

Volkswagen’s expertise valued at Catena-X

Expe­ri­ence gained by Volk­swa­gen is help­ing put Catena‑X into prac­tice. The world’s largest car­mak­er began build­ing its own suc­cess­ful inter­nal dig­i­tal pro­duc­tion plat­form back in 2019. Its first step was to con­nect more than 100 sites with each other on a dig­i­tal pro­duc­tion plat­form (DPP). But deter­min­ing end-to-end PCFs, or prod­uct car­bon foot­prints, for its vehi­cles using a sin­gle indus­try-wide stan­dard would have required the Group to con­nect with addi­tion­al part­ners well beyond its own sup­pli­er net­work. “We were forced to real­ize the project was a lit­tle too big even for Volk­swa­gen,” admits Göller.

Volkswagen’s experts con­tributed their knowl­edge as one of the first mem­bers of the asso­ci­a­tion and also of the con­sor­tium. Togeth­er, with­in the cir­cle of 28 part­ners, they devel­oped the project’s ini­tial soft­ware on an open-source basis. “That was when we real­ly got excit­ed about the big pic­ture of Catena‑X,” recalls Göller.

Feeding the app

No one in the Group has regret­ted tak­ing that step. The progress made in just two years by the Catena‑X part­ners has taken the wind from the sails of ini­tial skep­tics. Numer­ous apps are already avail­able that can con­sid­er­ably enhance sup­ply chain man­age­ment, meet report­ing require­ments, and mit­i­gate dam­age in future crises. With ever more users pro­vid­ing the data need­ed by the apps, Catena‑X is becom­ing ever more valu­able to its com­mu­ni­ty. In light of these rapid devel­op­ments, Göller is cer­tain that “Catena‑X will soon be able to iden­ti­fy facts and con­texts that we even can’t even imag­ine today.”

Dr. Andreas Wollny: ”The shared ecosystem fascinated us right from the start”

Porsche Consulting/Jörg Eberl

Dr. Andreas Woll­ny is Senior Man­ag­er Dig­i­tal­iza­tion and the Catena‑X project leader at BASF. Head­quar­tered in Lud­wigshafen am Rhein, in south­west­ern Ger­many, BASF is the world’s high­est-gross­ing chem­i­cal com­pa­ny. Dr. Woll­ny sup­ports the imple­men­ta­tion of dig­i­tal solu­tions for Catena‑X and ensures the req­ui­site data exchange. Before join­ing BASF, Woll­ny spent five years as a prod­uct devel­op­ment man­ag­er for the French chem­i­cal com­pa­ny Arke­ma. He stud­ied chem­istry in Stuttgart in south­ern Ger­many and Lyon in France. He received a doc­tor­ate with a spe­cial­ty in poly­mer chem­istry from the Uni­ver­si­ty of Freiburg in the far south­west of Germany.

If every company wants its own platform, there’ll ultimately be no platform at all. Like many of his colleagues, Dr. Andreas Wollny, Senior Manager Digitalization at BASF, is familiar with this problem. He was all the more thrilled, therefore, when the incipient Catena-X consortium invited him in 2021 to work with the automotive industry in setting up a decentralized data system. “We had already thought about how we could gather cross-company data on matters like circular economies, sustainability, and product carbon footprints and share it with our customers — so we were extremely excited about the idea of a joint ecosystem.”
Andreas Wollny, Senior Manager Digitalization and Catena-X Project Leader at BASF since 2021. In his view, Catena-X will open the door to new future technologies.Porsche Consulting/Jörg Eberl

The dig­i­tal­iza­tion expert was espe­cial­ly inter­est­ed in two top­ics right from the start: the new plat­form should cover the entire auto­mo­tive value chain, and it should be based on the key cri­te­ri­on of inter­op­er­abil­i­ty. The cen­tral­i­ty of these two points reflects the spe­cial sig­nif­i­cance BASF has for the auto­mo­tive indus­try and beyond. The glob­al­ly active chem­i­cal com­pa­ny occu­pies var­i­ous posi­tions in the auto­mo­tive sup­ply chain. It is a tier 1 sup­pli­er, name­ly of top-level mod­ules and sys­tems, for prod­ucts such as coat­ings. For bat­tery chem­i­cals and syn­thet­ic mate­ri­als, it is posi­tioned fur­ther down the value chain in the auto­mo­tive sup­ply sec­tor, at tiers 2 to 5. The goal, of course, is to incor­po­rate all of these points along the chain into the new data space.

Sim­i­lar con­sid­er­a­tions are lead­ing Woll­ny to place a greater empha­sis on inter­op­er­abil­i­ty. “Because we’re active in many dif­fer­ent indus­tries, we want to be able to move data back and forth between dif­fer­ent plat­forms,” he explains. The data there­fore have to be com­pat­i­ble with other sys­tems’ stan­dards. That is pre­cise­ly the point of interoperability.

The automotive industry as a blueprint for other sectors

One fac­tor that fos­ters inter­op­er­abil­i­ty is the exam­ple Catena‑X is set­ting to an increas­ing degree for coun­ter­parts in relat­ed branch­es of indus­try. As Woll­ny observes in describ­ing the devel­op­ment, “Catena‑X is already serv­ing as a type of blue­print for other decen­tral­ized data ecosys­tems.” Its lead­ing role is based in part on the shared approach taken early on by a num­ber of auto­mo­tive com­pa­nies — and sure­ly also on finan­cial back­ing from the Ger­man Min­istry for Eco­nom­ic Affairs and Cli­mate Action. As Woll­ny explains, “Catena‑X gives Ger­many a new, scal­able, future-ori­ent­ed tech­nol­o­gy that will become ever more rel­e­vant both nation­al­ly and inter­na­tion­al­ly in an increas­ing num­ber of sec­tors.” The Manufacturing‑X and Health‑X data spaces, which have also been devel­oped in Ger­many, are already uti­liz­ing prin­ci­ples devel­oped by Woll­ny and his col­leagues from the consortium.

Anoth­er ben­e­fit of Catena‑X is the enor­mous speed at which its oper­a­tors are achiev­ing their goals and inter­im tar­gets. “More than 1,000 employ­ees at 28 com­pa­nies are work­ing on it togeth­er in agile ways,” says Woll­ny. That admit­ted­ly requires an enor­mous amount of coor­di­na­tion. Yet the mutu­al trust aris­ing from joint efforts by what are actu­al­ly com­peti­tors has helped mas­ter many a chal­lenge. The first pro­to­type was ready soon­er than antic­i­pat­ed. Assum­ing the upcom­ing “go live” is suc­cess­ful, signs will then point to expan­sion — “inter­na­tion­al­ly as well as nation­al­ly with greater recruit­ment of small­er and medi­um-sized companies.”

Although Catena‑X has already made aston­ish­ing progress on Euro­pean and other inter­na­tion­al lev­els, Woll­ny expects the chal­lenge of increas­ing accep­tance among small­er and medi­um-sized enter­pris­es (SMEs) to con­tin­ue. “We’re attend­ing many events and trade fairs and hold­ing a lot of indi­vid­ual talks these days, but the value chain still has gaps that we want to close,” he says. How­ev­er, ever more deci­sion-mak­ers are real­iz­ing the advan­tages of no longer need­ing to draw their data from dif­fer­ent plat­forms with dif­fer­ent stan­dards but instead being able to access it from a sin­gle space with a uni­form standard.

BASF’s high aims for a circular economy

Woll­ny him­self has high­er aims for Catena‑X. BASF is espe­cial­ly inter­est­ed in sus­tain­abil­i­ty and prod­uct car­bon foot­prints (PCFs). “We’re look­ing at the entire cir­cu­lar econ­o­my here,” he says, “start­ing with the raw mate­r­i­al pro­duc­ers on one end of the chain and going all the way to recy­cling com­pa­nies at the other.” When the data are gath­ered and ana­lyzed, the idea is to share them with the mar­ket and cus­tomers. BASF is already work­ing on a good solu­tion here.

Woll­ny is espe­cial­ly proud of the Bat­tery Pass­port, an app whose devel­op­ment BASF has guid­ed with part­ners from Catena‑X. Once users down­load and inte­grate it into their sys­tems, they can see the chem­i­cal com­po­si­tion of bat­ter­ies at a glance. The app can also show bat­tery sta­tus. As Woll­ny notes, “The data are all the more impor­tant toward the end of bat­tery life cycles when recy­clers have to deter­mine whether they can be reused or reprocessed.” Thanks to Woll­ny and his con­sor­tium, a check of the Bat­tery Pass­port will soon be all that is needed.

Commentary by Ole Sassenroth

Generating transparency — Not only during crises

Ole Sassenroth, Associate Partner at Porsche Consulting, expert for digital industrial ecosystems.Porsche Consulting
Shortages and crises are showing European industry how vulnerable companies are if their suppliers suddenly fail or transport issues interrupt the flow of goods. For example, if semiconductors or cable harnesses cannot be delivered, entire production halls have to shut down. Calmer times are probably not on the horizon for Europe and its economies. Resilience is therefore the order of the day — and to increase resilience, supply chains need to be transparent. With Catena-X, the German automotive industry has developed a suitable model that runs on principles all companies can agree upon. The ecosystem’s appeal is also clear from the great interest arising in other sectors — even before the actual market launch of Catena-X at the end of 2023. The high level of interest is only to be expected because with Catena-X, the supply chain will no longer be an Achilles heel. Tools from the marketplace app will show in real time at the press of a button which suppliers have the capacities to fill gaps that arise in logistics chains. This in turn can reduce or even prevent losses in production. Major market players who have found out the hard way about the costs that accrue when production lines stop for even a single day are already playing an active role in Catena-X. Regardless of any crises to master, they also benefit in their everyday operations. By using this shared data ecosystem, they can lower costs, accelerate processes, raise product quality, and obtain the data that help them meet sustainability legal requirements as well as their own internal aims. In short, a trans-sector industrial network generates value for its users at all times. Collaboration-based models benefit international corporations, medium-sized enterprises, and small-scale specialists alike. The solid groundwork laid by the Catena-X consortium can significantly reduce the technical and administrative effort needed to build similar networks in other manufacturing sectors.
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