Exchanging healthy and trusted data in the supply chain

Catena-X, a European-wide initiative to create an open data-sharing platform, was formed in 2021 to increase visibility in the automotive supply chain and improve the flow of parts and materials. The platform helps users exchange data and information such as digital twins through uniform standards, managed on a peer-to-peer system to ensure security.

As the initiative has grown and expanded in the last two years, it’s now setting its sights on expanding to China and Asia. But there is an obstacle to the platform’s ability to scale up globally, as many are still hesitant to supply their data, for fear of competitors using it to their advantage.

“People think, ‘I put my data in a dark room and I don’t know what is happening’, but this dark data information room is not something that will happen,” explained Frank Göller, head of digital production and processes at Volkswagen, and vice president of internationalization at Catena-X. “We have structures and defined technology that gives you control of your data. You need communication overall, and there are contracts in place within Catena, for example between Bosch and VW, or ZF and Siemens, and those contracts give security to your data.”

Similarly, Lars Bäumann, ambassador for China at the International Data Spaces Association (IDSA), said that you need to have the ability and mechanics to share data with boundaries. He said that this can be difficult to achieve if you are part of a small company with limited resources, but this is where being part of a group like Catena-X comes into play, as it has a data space where you can share data while keeping ultimate control of it. “It’s all about trust, and you have to be the sovereign of your own data,” he said. “You define what others can and cannot do with it.” 

Creating a globally trusted system

To encourage partners to join Catena-X and exchange data, trust needs to be the foundation of all communication. Göller said that this is why Catena-X was formed as a federated system – a group of entities and companies that are independent, but united under a central organisation.

“This could not be driven by one central organisation, as firstly it’s too big for one group, and secondly it would not be accepted,” he said. “If we go with a German idea to Japan or China, they will say, ‘no way, we’re not using that as it’s not a common or global thing’. That’s why we needed this to be a federated system.”

He said that VW started its own digital production platform around five years ago, and thought about inviting its supply chain and partners, but that the carmaker was too small to operate such a large programme, despite being such a prominent carmaker. “We cannot handle that on our own,” Göller said. “This thing is so big that there is no way that one company alone can finance the innovation behind that, therefore the idea was born two and a half years ago to share the cost of innovation, make a first investment together with some subsidies from the German government, and use it and invite other companies to continue building on these solutions.”

Instead of being threatened by VW’s competitors, Göller said it was reassuring to hear they would be partners in Catena-X. “It was brilliant to hear that BMW, ZF, Bosch, Siemens and all the other players in Catena-X wanted to create this system,” he said. “We said yes very quickly to being part of Catena-X as it’s not only for OEMs or tier one businesses, it’s for the full end-to-end supply chain from the raw material right up to the recycling process.”

He added: “The supply chain is global, so there must be a systematic approach to reach partners all around the world, all the community members, so that we have a really powerful supply chain in place.”

Removing fear by improving communication

As part of the management board and advisory council at Catena-X, Dr Birgit Boss, senior expert on digital twins at Bosch, believes that connectivity through data alone is not sufficient. She told delegates at the Digital Strategies conference that exchanging data you don’t understand helps no one, which is why definitions and semantic intent need to be agreed upon first.

“We need to agree on the data we want to exchange and what it means, and that’s what we did at Catena-X,” she said. “We’ve written semantic models, or sub model templates, and these templates define what data is in a semantic way, so everyone knows what is expected.”

Catena-X helps define these semantic models for different use cases of digital twins, for example use cases such as reducing carbon emissions in the supply chain, improving quality, or increasing efficiency. She explained: “If you’re exchanging data to reduce carbon footprints, there is a semantic model within Catena-X that makes it machine readable while making it clear to everybody in the supply chain what is expected to be delivered and when. We are not only exchanging data, we are exchanging information.”

Read more: Birgit Boss, Bosch explains why having clear use cases is necessary to reap the benefits of digital twins

By using experts who know how to use the software involved in digital twin modelling, as well as experts who can define what good semantic models look like, Catena-X has managed to agree definitions and boundaries around data very early on. “It’s working quite well in such associations like Catena-X because everyone wants to agree and have a consensus in the end,” she said. “It’s only been two years, and we already have a lot of standardised semantic models for the different use cases of Catena-X.”

Expanding beyond Europe

Having been founded in Berlin and partially funded by the German Federal Ministry of Economic Affairs and Energy, and the German Association of the Automotive Industry, Catena-X has been mostly focused in Europe. But the organisation is looking further afield to expand, and has China set in its sights.

To do this successfully, Bäumann said that there needs to be a middle ground between how data is treated and regulated in Europe and in China. He said it’s important to distinguish how much data can be shared to who and for how long, and define any possible implications that could come from that.

“The approach to digitalisation in China is very pragmatic,” he said. “In China I order three coffees with a barcode, and then big brother knows I order three coffees. I have to ask myself, ‘what problem do I have with that?’ If it’s data about my health, maybe I would see it differently, but if it’s coffee data it’s not a problem to me.”

He added: “We tend to have this one size fits all approach, that all the rules are applicable to all the data, but we need something in between that’s more pragmatic.”

As Catena-X ramps up, Göller said it’s important to remember the benefits that can come from exchanging data across the supply chain. “It’s about supply chain resiliency,” he said. “Catena-X will help to improve transparency and to understand hiccups in the supply chain even better, and how we can use and leverage our resources in a better and more sustainable way.”