The German Federal Ministry of Economics and Energy and the German Association of the Automotive Industry has initiated an alliance to secure data exchange between automotive companies.

The partnership association includes industry leaders such as BMW, Mercedes-Benz, BASF, Deutsche Telekom, Henkel, Schaeffler, Robert Bosch, SAP, Siemens and ZF, the German Aerospace Center, and other companies.

The preliminary name of the new alliance is Catena-X Automotive Network. It was conceived as an expanding ecosystem in which car manufacturers and suppliers, dealer associations, and equipment providers, including applications, platforms, and infrastructure developers, can participate on an equal footing.

In the first phase, Catena-X pilot projects focus on five application areas: quality management, logistics, maintenance, supply chain management, and supply chain sustainability.

The initiative aims to:

  • Increase the competitiveness of the automotive industry
  • Drive efficiencies through data and processes standardizations
  • Promote industry cooperation, enabling data access to all, especially SMEs who lack resources for the same

The benefits of the network come from its ability to ‘track things’ moving across the distributed supply chain, such as:

  • Enhanced traceability and transparency
  • Increased operational efficiency
  • Simplified data management
  • Faster response times to disruptions
  • Better forecasting and planning
  • Optimized asset utilization

The data chain network members have identified five focus areas:

1. Quality management
2. Logistics
3. Maintenance
4. Supply chain
5. Sustainability

Implementation planning of the selected top priority use cases (in these areas) has already begun. Traceability of hardware and software components, which will help comply with Germany’s new Supply Chain Act is one such use case, and compliance with standards requiring ascertaining the CO2 footprint across the supply chain is another.

The automotive industry needs collaborative efforts to compete with the non-traditional players entering the market. Open data exchange will generate efficiencies and innovations to overcome the disruptions of ACES (autonomous, connected, electrified, and shared) trends. It will require a massive structural shift in the industry, which is traditional, rigid, and riddled with legacy.

Traditional OEMs and other players have now started their journey. According to a recent Capgemini survey, at least 60% of the surveyed organizations plan to increase data sharing within their ecosystem. Data sharing in a member network can have significant benefits in:

  • efficient production planning
  • inventory control
  • transportation
  • quality

Cross-industry data networks are now creating intelligent supply chains. One can even imagine that in the future, data will always become available to network members. For example, data around capacity constraints, stock levels, and quality performance will become available to relevant members upon placing an order. Everything will be tracked in real-time. This will allow members to manage their capacity efficiently. They will need to handle only the exceptions to standard processes, realizing extreme improvements in asset utilization, performance, and service levels. One can almost feel the true implementation of Industry 4.0 and integrated supply chains becoming a reality sooner than later.

Nagarro is a trusted digital engineering partner to several global automotive OEMs, mobility service providers, and global automotive suppliers. We help them move forward on their digital transformation journeys by conceptualizing and implementing their data strategy. Our data-driven approach leverages AI to enable effective decision-making and reduce uncertainties in multiple areas such as inventory optimization, demand forecasting, and reverse logistics. With our cloud technology-based IoT solutions, we help in asset tracking and tracing, leading to better utilization of resources.

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