OEMs look to blockchain solutions for compliance and parts performance | Automotive Industry Analysis

Working in a consortium Renault says it has developed a new blockchain solution for the European automotive industry to certify the compliance of vehicle’s components from design to production. Supply chain visibility is an increasing issue for companies looking to mitigate risk and ensure regulatory compliance.

Developed by Groupe Renault, Faurecia, Knauf Industries, Simoldes, and Coskunöz, in association with IBM, the solution – called ‘XCEED’ – is now available to OEMs and automotive suppliers worldwide following a successful test at Renault’s Douai facility.

It will be first implemented at partner plants around Bursa in Turkey, Douai in France and Palencia in Spain.

Groupe Renault, Faurecia, Knauf Industries, Simoldes, and Coskunöz, in association with IBM, have signed a partnership contract for the deployment of XCEED (eXtended Compliance End-to-End Distributed), a blockchain based shared solution to trace the compliance of thousands of parts assembled in a vehicle in almost real time. XCEED is now open to global OEMs and suppliers, regardless of size, throughout the supply chain.

Renault says XCEED improves responsiveness and efficiency during a time when regulations are becoming increasingly stringent. New market surveillance regulations came into force in September 2020, introducing enhanced regulatory controls for vehicles already on the market. Therefore, the entire production chain must adjust its structure to respond to the regulatory authorities within shorter timeframes, the company notes.

The ambition with XCEED is to provide a compliance and conformity traceability platform for the entire ecosystem of the European automotive industry. The platform is able to answer regulation and customer demand whilst bolstering European industrial competitivity and technological sovereignty. XCEED is designed to be inclusive for all the automotive industry players worldwide, from multinational companies to SMEs, offering access to a powerful, shared digital tool.

XCEED uses the blockchain to create a trusted network for sharing compliance information between parts/systems manufacturers, throughout the supply chain to end vehicle manufacturers.

Besides Renault, other OEMs, including Mercedes-Benz, Volvo Cars and BMW, are also developing blockchain solutions for specific regulatory needs that involve their suppliers.

Mercedes-Benz, working with a blockchain specialist called Circulor, tracks the emissions of climate-relevant gases as well as the amount of secondary material along the complex supply chains of battery cell manufacturers.

A blockchain-based system maps the production flow of the materials as well as the associated CO2 emissions. In the long-term, Mercedes-Benz is pursuing the goal of a circular economy and is working to close material cycles. For this purpose, the mapping of the material flow also records the amount of recycled material in the supply chain. Furthermore, the network also displays whether Mercedes’ sustainability requirements in terms of working conditions, human rights, environmental protection, safety, business ethics and compliance are passed on to all companies involved. Mercedes says such a system can drive transparency in the supply chain beyond its direct contractual partners.

Mercedes says blockchain technology offers numerous advantages for the documentation of product and contract data. It links digital data records through encodings (“cryptography”) and cannot be altered unnoticed.

Mercedes says blockchain technology offers numerous advantages for the documentation of product and contract data. It links digital data records through encodings (“cryptography”) and cannot be altered unnoticed. All participants in the supply chain are able to trace the integration, transmission and confirmation of information at any time. At the same time, confidential information remains protected. This is of particular relevance for complex and highly dynamic global supply chains, such as in battery cell production.

Geely-owned Volvo Cars is also working with Circulor. Circulor’s blockchain technology is used throughout Volvo Cars’ battery supply chain, which it says will achieve 100 per cent traceability of cobalt used in the XC40 Recharge P8, its first fully electric car. Volvo Cars has reached an agreement with its two global battery suppliers, CATL of China and LG Chem of South Korea, and leading global blockchain technology firms to implement traceability of cobalt. The agreements between Volvo Cars, CATL and LG Chem cover the supply of batteries over the coming decade for next generation Volvo and Polestar models, including the XC40 Recharge. In this particular case, data in the blockchain include the cobalt’s origin, attributes such as weight and size, the chain of custody and information establishing that participants’ behaviour is consistent with supply chain guidelines.

Volvo says it wants both companies to expand their focus beyond cobalt, for example by looking at increasing traceability of mica, a mineral used as isolation material in the battery pack of electric Volvos.

Volvo Cars and Circulor are also investigating the possibility to expand their blockchain technology cooperation to other areas, for example tracking and reducing CO2 footprints, helping Circulor to potentially set standards for ethical sourcing in automotive and other industries.

Amazon (AWS) and BMW will also collaborate on products and solutions to improve operational performance and increase transparency in the supply chain, with particular reference to parts defects and installing failure preventative systems.

The BMW Group’s PartChain Platform uses AWS services such as Amazon Elastic Kubernetes Service (Amazon EKS) in conjunction with open-source blockchain management tools to enhance the traceability of automotive parts and critical raw materials throughout the supply chain.

BMW’s platform can link specific parts and vehicles to assist in defect investigations, as well as validate that materials are coming from socially responsible sources.

This allows the BMW Group to link specific parts and vehicles to assist in defect investigations, as well as validate that materials are coming from socially responsible sources. The BMW Group is also using Amazon SageMaker to examine data from vehicle subsystems, leveraging machine learning to predict the performance of parts, proactively recommend maintenance, and inform parts suppliers of potential issues with their manufacturing processes to improve quality.

We can expect to see more automotive companies adopting blockchain processes – especially of the distributed ledger (ie private network) type – as a means to mitigating the risk of supply chain ‘breaks’ and understanding strengths and weaknesses along the chain, assist in analysis of parts failures and reliability, but also as a way to meet increasing demands for compliance in regulatory areas such as sustainability.