Catena-X: Innovation through cooperation.

Together towards a successful future. Catena-X data ecosystem was created with other companies and networks the entire automotive value chain – achieving even more sustainability.

When the “Ever Given” container ship got stuck in the Suez Canal in spring 2021, it was at first nothing more than a meme. People on social media were making fun of a tiny excavator trying to dig the huge 400-metre barge out. But it was a very serious situation. And that quickly became clear. Because hundreds of ships with tens of thousands of containers and goods worth several billion US dollars were stuck in a traffic jam behind the “Ever Given”. This meant goods became scarce in Europe faster than some would have guessed.

Although the canal was only blocked for six days, it brought the entire world trade system grinding to a halt. A single ship showed the world how fragile supply chains are today. Since then, the pandemic and the war in Ukraine have made shortages the norm – including for the BMW Group and its roughly 12,000 suppliers.

The company’s answer to the global shortage of materials is: more together, less in opposition. This answer has a name too: Catena-X, an extensive data ecosystem that is now going online. The BMW Group wants to join forces as one of the main drivers with other companies such as Mercedes Benz AG, Deutsche Telekom AG, SAP SE, Siemens AG and ZF Friedrichshafen AG to form a uniform and integrated network that brings together all manufacturers and suppliers.

Faster, stronger, more sustainable: Catena-X will form the digital foundation.

From large corporations to small and medium-sized enterprises, this data ecosystem is open to all players in the automotive industry. The platform aims to leverage its transparent and cooperative thinking as a basis to address future challenges such as CO₂ reduction, supply chain security and the circular economy. Above all, however, Catena-X is intended to improve the quality of the vehicles. Because fewer recalls also mean fewer resources and lower costs.

We are stronger together – Catena-X lives by this philosophy. Catena is Latin for chain, the individual links of which must interlock and hold firmly together. And X represents the participating stakeholders: the more, the better.

The German automotive industry’s success is based on an extensive network of suppliers. Up to now, data has usually only been exchanged bilaterally between individual partners. Everyone uses their own formats and systems that are not compatible with each other. Catena-X is intended to standardise the data flow and make information accessible to all. Individual data pools are linked and standardised on this impartial, open and secure platform. The idea is that this should accelerate processes for all participants, secure competitiveness and promote sustainability.

Catena-X is based on three pillars: the Catena-X Automotive Network association is the central institution. The association is the guardian of the vision. The development consortium worked for one and a half years on the specific project implementation, funded by the German Federal Ministry for Economic Affairs and Climate Action and based on the Gaia-X European cloud. This has achieved important milestones such as technical requirements, standardisation and certification. It launched a proof-of-concept of Catena-X in mid-2022 with ten specific use cases.

The platform’s operations are handled by the operating company, Cofinity-X, which includes the BMW Group and nine other partners from the automotive value chain. With the help of Cofinity-X manufacturers and suppliers have been able to come on board as users and take the initial steps, such as logging their carbon footprint and using the business partner database. Every company involved in the value chain can and should become part of this network – from technology developers and raw material suppliers to software providers. That is why the development focuses on easily and cost-effectively connecting every company, irrespective of its size and state of digitalisation.

The automotive industry is going through profound change. Collaboration and digitalisation are essential to remain competitive. Catena-X provides the foundations for all parties and aims to pave the way for the future.

Catena-X will reveal more realistic CO₂ values and improve vehicle quality.

Data is a raw material that does not lack quantity – but it does lack structure. At the same time, there are always supply problems with semiconductor technology; cable harnesses have become scarce since the war in Ukraine. These are just two examples of how the BMW Group is producing vehicles under difficult conditions. A continuous data chain from raw material extraction to the manufacturer will result in a large marketplace emerging. For one thing, supply bottlenecks can be identified at an early stage by making it easier for cooperation partners to query availability and supply chains. Catena-X will also provide better purchasing power in material procurement. If all manufacturers work together, they are in a better position to compete with other industrial sectors in procuring scarce chips, for example.

This sustainable change in the industry produces logistics challenges and also calls for more teamwork – as well as organisations not being afraid to share knowledge. For example, a common network can make the circular economy less complex: what components contain which raw materials and how much of them? The exchange of data via Catena-X breaks this down and helps determine whether a part should be recycled or reprocessed.

Data infrastructure can also pave the way in CO₂ emissions: Catena-X helps carbon footprints become more readily measurable. Up to now, average values have been used for this purpose. In future, actual values will become transparent across the entire value chain. Components should also become better traceable in future – especially if they are safety-relevant in the vehicle. Compliance with environmental and human rights standards can also be checked.

A Boston Consulting Group survey shows that 70 per cent of all projects fail either from human unwillingness to digitise or a legislation. But at least legislation is not a problem with Catena-X: politicians have recognised its importance and funded the project with around 100 million euros from the Federal Ministry for Economic Affairs and Climate Action as part of the “Future Investments in the Vehicle Industry” funding programme. Department Head Robert Habeck described Catena-X as an “industrial policy beacon project for the digitalisation of supply chains” at the Digital Summit in December 2022.

The European Union has laid the foundation for a smooth cloud and data infrastructure and associated value propositions with its Gaia-X project. This is a specific and practical example of the initiative that has been running since 2019 and shows how data sovereignty can be lived. After all, data security and GDPR compliance are key topics that the consortium has to deal with.

Willingness to cooperate and trust form the most important prerequisites for success.

The BMW Group has therefore already achieved important milestones that it has set itself together with the other pioneering companies: the data ecosystem and technical prerequisites have been created, as have important milestones in standardisation and certification. A proof-of-concept of Catena-X with ten specific use cases was launched in mid-2022. In 2023 the next milestone was achieved and an operating company was founded. As soon as it goes live manufacturers and suppliers can then come on board and take the initial steps, for example, logging their carbon footprint or using the business partner database. Anyone can become a member of the association and thus participate in the standardisation process. However, Catena-X is also accessible to those who are not part of the association.

The goal is to grow Catena-X and establish it internationally. Because the network will only develop its full potential if as many companies as possible take part, and every supplier, no matter how small, can be inspired to do so as well and share their data. The data ecosystem’s success stands or falls with its acceptance and participation. The basis for a gigantic project has been created and will continue to develop steadily. Each individual must bring certain qualities to the table: willpower, trust and openness to cooperate.