PartChain: A Decentralized Traceability Application for Multi-Tier Supply Chain Networks in the Automotive Industry

Supply chain networks in the automotive industry deal with numerous participants and parts on multiple tiers that are spread across several geographical locations. Due to their inherent complexity and high focus on data protection in a competitive original equipment manufacturer market, supply chains often lack transparency and responsiveness. However, legal authorities such as the Federal Motor Transport Authority of Germany or the National Highway Traffic Safety Administration of USA require end-to-end traceability of parts. This is particularly important for the identification of defective parts in recalls when multiple suppliers are involved. Affected parts must be promptly identified among several million vehicles. Manual investigation of the same results in high costs and risks. Another challenge is the detection of counterfeit parts, especially in after-sales markets. In this paper, we propose PartChain - a decentralized supply chain traceability application - that enables the creation, monitoring, and sharing of a unique digital representation of a physical part across a supply chain network using Blockchain technology. We conducted a case study with our industry partner to demonstrate the feasibility and potential of our concept. Here, physical parts were tokenized on a permissioned Blockchain using our PartChain mobile app, enabling the storage of process data and the ownership transfer of parts in a reliable and immutable manner.

I. Introduction

Car manufacturers, commonly referred to as original equipment manufacturers (OEMs) act as integrators because they do not manufacture a majority of the parts they use in-house. They depend on numerous suppliers providing parts, which are delivered in supply chain networks. Supply chain networks are complex ecosystems consisting of multiple participants such as OEMs, suppliers, and logistics service providers (LSPs) exchanging material, information, and money. According to their rank in the supply chain networks, suppliers are called “tier-n” suppliers. A tier-1 supplier is a first rank supplier, who incorporates parts from a tier-2 supplier and so on. Each supply chain participant uses a local database representation and a company-specific data model leading to unavailable and potentially inconsistent information on the event history of a part. Therefore, in recalls, OEMs can identify which cars are affected. However, the process is cumbersome and often requires significant human intervention due to no common master data, compatibility issues, and missing standards. Thus, detection of defective and counterfeit parts is inefficient, expensive, and error-prone.