Volkswagen Case Study

Minespisder analyzed Volkswagen’s lead supply chain with over 1,000 suppliers
Volkswagen AG
Project:
Supply chain mapping for lead
Industry:
Automotive OEMs
Geography:
Europe
Product:
Digital Product Passports
Share this article
Volkswagen AG
Project:
Supply chain mapping for lead
Industry:
Automotive OEMs
Geography:
Europe
Product:
Digital Product Passports
Summary
In 2019, Minespider conducted a lead traceability pilot project for Volkswagen, mapping around 1,000 suppliers in the company's upstream and downstream supply chain, with a deeper analysis of about 100 lead suppliers, including data availability and transparency and the willingness to use traceability software.
Results:
  • Minespider successfully mapped over 1,000 suppliers in Volkswagen's lead supply chain, analyzing data transparency and supply chain practices.
  • The project provided valuable insights into the current state of transparency, with over 100 suppliers undergoing a detailed assessment and feedback on using traceability software.

Why is it important to map mineral supply chains?

The level of complexity of supply chains in the EV and automotive sector is incredibly high in general. Manufacturers are facing increased scrutiny regarding the origins and the journey of raw materials from mine to automobile. The scrutiny is not without merit; raw materials sourced from developing countries are recognized as a leading cause of a wide range of human rights violations and environmental degradation.

As such, authorities around the world, including governments, NGOs, and industry players, are setting guidelines or mandates for the creation of responsible supply chains. Governments implement legislation, such as the EU regulation 2017/821, the US Dodd-Frank act or the EU Battery Regulation, which force organizations to adhere to stricter due diligence guidelines. Beyond that, automotive manufacturers strive to implement their own instruments to increase transparency across mineral supply chains. One of such initiatives is the Drive Sustainability Questionnaire. The Drive Sustainability Self-Assessment Questionnaire assesses the sustainability performance of automotive suppliers. The questionnaire is run by Drive Sustainable - a consortium of the world’s leading automotive companies, which includes VW.

In March of 2019, Minespider launched a project to apply blockchain traceability technology to Volkwagen’s lead supply chains. Lead is one of the most important minerals in Volkswagen’s supply chain; hundreds of thousands of tonnes of lead is used in starter-batteries on a yearly basis for more than 10 million vehicles. With the rise of electric vehicles in the future, it is expected that the prominence of lead will increase. Lead was chosen because its supply chain lifecycle is relatively well-known, holds a relatively small number of participants, and has attracted negative attention in the media.

The Scope of Lead Traceability Project and Key Achievements 

The Minespider’s lead traceability project for Volkwagen had three overarching goals:

  1. To trace the lead supply chain as far as possible

During the project, Minespider identified over 1,000 companies in VW’s upstream and downstream supply chain, with a wide and representative variety of sizes, industries, and roles in the supply chain. The identified companies were categorized in groups representing typical activities and types of suppliers. This includes, but is not limited to: mines, traders, smelters, manufacturers, car manufacturers, spare part logistic companies, spare part retailers, car repair stations, scrap car collectors, industrial recyclers, and breakers.

As a next step, the Minespider team analyzed and spoke with organizations to understand representative participants from every category along the supply chain, ranging in size from 2 to 10,000+ employees.

  1. To assess the current state of the supply chains’ transparency and sustainability

The analysis included research on the degree of transparency of suppliers. Minespider looked into which social and environmental sustainability information the companies made transparent on their website and analyzed more than 100 companies in more detail, with a particular focus on the Drive Sustainability Self-Assessment Questionnaire. 

Thirteen supply chains, including ten upstream and three downstream supply chains, were mapped from a lead mine or a recycling plant to the Volkswagen plant.

  1. To demonstrate Minespider’s technology and receive feedback

Another task within the project was to test Minespider’s traceability software in order to track lead within VW’s supply chain, get feedback and analyze the feasibility of using the software by lead supply chain participants. Within this task, Minespider created the templates and asked suppliers for what type of information they would like to use traceability software and what kind of supply chain data to store and communicate. Relevant information included basic information, such as location and human rights records, as well as more complex information, such as GHG emissions. As a result, Minespider created a model that shows how VW could incentivize supply chain participants to become more responsible and uphold mandatory and non-mandatory standards. The model was presented to VW, along with feedback from suppliers regarding their responsibility measures, user needs, the potential to use traceability software and track supply chain data.

Key project learnings

The diversity across the supply chain is very high. One supplier might have advanced practices in places while another one lacks transparency. A supplier with low levels of transparency will require traceability software and Digital Product Passports for effective due diligence, while those with higher level of supply chain data transparency can use Minespider to level up in their sustainability, for example, by customizing data templates to complement the working process.

Companies need education and guidance to better understand the advantages of Digital Product Passports, supply chain data transparency and traceability, as well as the technology behind the software. This includes comprehensive onboarding processes that embrace the needs of representative types of suppliers and user scenarios.

Minespider’s technology can provide an alternative to laborious reporting requirements.
Many participants communicated their frustration with the work involved to comply with existing sustainability reporting requirements. They understood that traceability and DPPs have the potential to simplify and reduce the workload, especially for those responsible for sales, procurement, compliance or sustainability.

Learn more about how Digital Product Passports can help you to comply with international guidelines and regulations or get expert advice from our team.

Find out more about the Battery Passports