VW adding transparency link with blockchain

A new collaboration between Volkswagen Group and tech company Minespider will soon begin working on a pilot to track the auto manufacturer’s lead supply using blockchain technology
VW adding transparency link with blockchain VW adding transparency link with blockchain VW adding transparency link with blockchain VW adding transparency link with blockchain VW adding transparency link with blockchain

The two said they will work with suppliers and third-party subs to meet their three-pronged goal: optimising supply chains, eliminating sources of error, and guaranteeing social and ecological standards.

The pilot project will be developed to permit transparency in the global supply chain for its lead and ensure its raw materials are sourced in a socially and environmentally sound way, as the blockchain will make it possible to trace the material back to its point of origin with digital certificates.

"Supply-chain transparency is a major issue in many industries, including the automotive sector, [and] responsible raw material procurement is fundamental for sustainable mobility," VW officials noted.

The companies will begin the supply-chain tracing this month. Whether the source is a mine or a recycling source, more than two-thirds of VW's total lead starter battery requirements will be traceable.

Minespider's solution, built on a public blockchain, will use a multi-layer architecture to guarantee supply-chain data security. As the partner explained, one protocol layer contains generally accessible information, while the second layer contains private data blocks that are unchangeable. Its third layer is the encryption layer.

"The advantage versus a private blockchain is that everyone - from suppliers and sub-suppliers through to those directly responsible for mining or recycling the raw material - works with one system, even if several supply chains are involved," strategy group procurement head Marco Philippi said.

"This creates a common digital infrastructure that allows the transparent exchange of information. Digitalisation provides important technological instruments that enable us to track the path of minerals and raw materials in cross-border supply chains in ever greater detail. Once the test work wraps, it is hoping to use its tech findings to further raw materials and their supply chains.

"We are witnessing a transformation of global supply chains. Companies have the right to know that their suppliers are operating responsibly and with blockchain we finally have the tools to prove it," he said.

The collaboration is the culmination of outcomes from the Hackathon for Supply Chain Transparency held in 2018. The hackathon series continues in 2019.