Building the
New Economy of Movement

JUNE 2021

SUPPLY CHAINUSE CASES & BUSINESS REQUIREMENTS

Use Case
Parts Traceability

MOBI SC0002/UC/2021
Version 1.1

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INTRODUCTION
The Mobility Open Blockchain Initiative (MOBI) Supply Chain
Working Group is a global, multi-stakeholder projectworking to co-design blockchain and distributed ledger
technologies standards to improve efficiency in theautomotive supply chain. The project engages stakeholders
across the chain: OEMs, Tier-N suppliers, dealers,
consumers, and regulatory agencies. This report is based on
numerous discussions, workshops, and research efforts.
Opinions expressed herein do not necessarily reflect theviews of individual members.
Sincere thanks are extended to those who contributed theirunique insights to this report.

Rajat Rajbhandari, PhD, MOBI
Pramita Mitra, Ford
Daniel Miehle, BMW Group
Dominik Batz, BMW Group
Thad Dungan, AWS

Supply Chain Working Group Co-Chairs
Pramita Mitra, Ford
Daniel Miehle/Dominik Batz, BMW Group

Supply Chain Working Group Team Members
Loren Adams, Accenture
Roger Berg, DENSO
Sebastian Banescu, QuantstampJose Cantera, IOTA
Josh Cartellone, Accenture
Alisa DiCaprio, R3
Thad Dungan, AWS
Josh Fodale, Ford
Chris Floersch, Honda
Kamil Gaweda, Arxum
Chris Hwee, Honda
Carsten Hiemsch, IBM
Philip Harrison, Fifth-9

Marco Lang, Marelli
Jens Lund-Nielsen, IOTA
Daniel Miehle, BMW
Angie Ruthenberg, AutoData
Kristin Slanina, Thirdware
Shannon Hamilton, DLT Labs
Kellie Treppa, Thirdware,
Diwakar Muthu, Ford
Heiko Musa, BMW
Vinay Mynnjewar, SyncFab
Drew Paroz, Honda
Dean Philips, AWS

MOBI Team
Chris Ballinger, Founder + CEO
Tram Vo, Founder + COO
Rajat Rajbhandari, Working Groups Lead
Robin Pilling, Technical Lead

Matt Shi, Fellow
Kelly Clark, Communications Manager
Grace Pulliam, Communications Associate

01

TABLE OFCONTENTS

Executive Summary

03

List of Acronyms

05

Purpose of Supply Chain Standards

09

Leveraging DLT/Blockchain

13

31

Background
Objectives and Key Pain Points
Scope in this Version
Stakeholders' Current Workflow
Stakeholders' Future Workflow
High-Level Business Requirements

57

Parts Life Cycle Events Traceability

69
Use Cases ConsideredGroup 1: Business Process Management
Group 2: Manufacturing
Group 3: Parts Traceability and Recall
Management
Group 4: Ethical Sourcing and SustainabilityGroup 5: Transportation and Logistics
Group 6: Finance and Payments
Group 7: Consumption

Appendix A: List of Other Use Cases ConsideredBusiness Process Management
Manufacturing
Parts Traceability and Recall Management
Ethical Sourcing and Sustainability
Logistics
Finance and Payments
Consumption

Definition of Traceability
Key Stakeholders
Problems and Value Propositions
Traceability as a Multi-Layered Construct
Complex Identity Relationships
Need for Standards in Implementation

25

SC-UC1: Lighting Part Traceability

Bibliography

Executive
Summary
The automotive supply chain facilitates the manufacturing,
supply, and distribution of parts, vehicles, and services. Tiered
parts suppliers, dealers, repair shops, and logistics providers
play critical roles in the automotive supply chain. Needless tosay, the supply chain is complex with thousands of suppliers
located in several countries serving many vehicle
manufacturers. The automotive supply chain is highly
fragmented, which led to challenges in creating an efficient
digital twin for the stakeholders to trace parts while responding
to parts recalls, gather greenhouse emissions, reducecounterfeit parts, etc.

MOBI's Supply Chain
Standards, particularly thisdocument describe thecomplex workflow involving
automotive parts traceability
and methods to leverage
blockchain/DLT technology toincrease its efficacy.

The current version of the MOBI Supply Chain Standard focuseson two key foundational capabilities for the stakeholders to
become better partners in the ecosystem: 1) ability for the
stakeholders conducting business to securely authenticate eachother’s identity and securely exchange data by issuingcredential(s) (i.e., master data management), and (2) ability to
track and trace part’s lifecycle events including chain of custodyfrom birth to end of life (i.e., part traceability).
The Supply Chain Working Group believes that by enabling these
two foundational capabilities, the standard will provide a secure
and privacy-preserving framework for the automotive supply
chain stakeholders to implement a whole gamut of distributed
applications toward common corporate objectives such as
higher trust and transparency, faster settlement and conflict
resolution, part and material provenance, sustainability, and soon. The WG also believes that the participants of the wholemobility value chain could refer to the same underlying ledger
which would overcome the need for many bilateral agreements
between participants and proprietary implementations that areprone to break over time.
Both foundational capabilities require a root of trust, a protocolthat the stakeholders can adhere to, and standards to which thesystems can anchor.
This report describes 1) the parts traceability problem by breaking
down the current workflow into nuanced steps, 2) specific steps
in the workflow that can be enhanced/modified DLT/blockchain,and 3) high-level business requirements to build such anenhanced parts traceability solution.

© 2021 MOBI — SC Use Cases and Business Requirements

2

GHG — Greenhouse Gas

LIST OFACRONYMS

ID — Identification AG
IP — Intellectual Property
LSP — Logistics Service Provider
OEM — Original Equipment Manufacturer
OEM-SD — OEM Specific Dealer
SCAC — Standard Carrier Alpha Code

ASN — Advanced Shipment Notice
BMW — Bayerische Motoren Werke AG
BOM — Bill of Material
DLT — Distributed Ledger Technology
ECU — Electronic Control Unit
EDI — Electronic Data Interchange
EOL — End of Life
EV — Electric Vehicle3© 2021 MOBI — SC Use Cases and Business Requirements© 2021 MOBI — SC Use Cases and Business Requirements

4Current MOBI Supply Chain
Standards include a use casereview of parts traceability
and a reference architecture
to implement blockchain/DLT
for life cycle management ofparts from birth to end of life.

The objective of the Supply Chain Working Group (WG) is torelease data specification and reference architectures (broadly
termed as standards) that the stakeholders can use to
implement systems to augment procurement, logistics,
production, finance, and other use cases related to theautomotive supply chain by leveraging blockchain and otherdecentralized ledger technologies. The standards will prescribeinterfaces, data structures, on-chain and off-chain information
storage, security, permissions/roles, and governance.
The working group will also assess the value proposition of using
blockchain and decentralized ledger technologies for problems
in the following use cases: authenticity of components, N-tiercomponent traceability, mineral provenance/fair labor practice,automation of tier-x payments/smart contracts, organization
ID/master data management, 3D printing workflow traceability,
supplier site data collection, and trade agreement origin
certification.

As shown in Figure 1, the automotive value chain involves
Original Equipment Manufacturers (OEM), Tier-N suppliers,
logistics companies, dealers, and packaging companies. It also
involves third-party service providers such as financial
institutions, insurance, regulators, and more. These entities are
distributed across the globe. The management andorchestration of such a complex system is associated withvarious challenges. Such supply chains are spread acrosshundreds of stages over multiple locations and national borders.
Enterprise data is stored across multiple siloed systems. The
prevalence of partners and current practices of siloed data
management results in a lack of transparency andresponsiveness in acquiring cross-company information.

PURPOSE of SC
STANDARDS
5© 2021 MOBI — SC Use Cases and Business Requirements© 2021 MOBI — SC Use Cases and Business Requirements

6

The Supply Chain Working Group believes that by sharing aledger(s), the industry can solve many issues that have proven tobe either expensive to solve and/or run counter to theregulatory requirements, especially antitrust laws. The working
group also emphasized the industry’s need to perform proof ofconcepts, scale those concepts with participation from OEMs,
suppliers, and other stakeholders, and achieve horizontal as wellas vertical integrations surrounding one or more use cases.
With implementation in mind, the supply chain working grouphas released the following deliverables:
MOBI SC0001/UC/2021 Use Case Review and Business
Requirements - Describes use cases prioritized by theworking group members, maps stakeholder needs, andidentifies high-level requirements.
Figure 1. The automotive parts supply chain is complex, with several suppliers,
manufacturers, dealers, and logistics service providers using siloed enterprise systems.

A central tenet of MOBI
Supply Chain Standards isthat a shared ledger(s) withwhich the manufacturing
stakeholders can interact will
enable more efficient parts
traceability.

7

Although companies, especially manufacturing partners, haveintegrated their systems on a one-off basis, enabling all ofthese entities to interact with a shared ledger(s) requires
standardized methods for these entities to interface with theunderlying ledger(s). The purpose of the working group is not todefine how companies integrate with one another at anenterprise level, but rather to define how their enterprisesystems interface with the shared ledger(s).

© 2021 MOBI — SC Use Cases and Business Requirements

MOBI SC0002/RI/2021 Reference Implementation
Architecture - Describes reference implementation anddata specification to meet the business requirements.
MOBI and the working group intend to add more use cases in
the future.

© 2021 MOBI — SC Use Cases and Business Requirements

8

LEVERAGING
DLT/BLOCKCHAIN
Blockchain technology has ushered in the concept of“coopetition,” in which competing entities collaborate toalleviate common business problems by building a network
operated by a mutually agreeable common protocol, data
standards, and most importantly a shared ledger. Trust is
outsourced to the immutable and tamper-evident ledger that
operates within the boundaries defined by the network
participants. Transactions are pushed to the ledger using one
or more flavors of automated consensus mechanisms.
Augmented by off-chain and on-chain governance, competing
entities can be assured that the ledger is immutable as well
as tamper-evident. The ledger continuously records the stateof assets as a stream of incoming transactions. The network
autonomously agrees on the state of transactions added to
the ledger by the network’s participants.

9© 2021 MOBI — SC Use Cases and Business Requirements

The standards issued
henceforth do recognize thefact that companies will
share data on a ledger as per
their needs and requirements.
The standards do notmandate any particular data
to be shared between thestakeholders.

Due to antitrust laws, competing OEMs are not allowed todisclose certain details of transactions such as price andvolume. Hence, those details may be stored off-chain or someform of private storage for peer-to-peer access. On the other
hand, OEMs can share information of common concern such as
supplier’s reputation, threat intelligence, and parts recall, whenappropriate. With the appropriate privacy-preserving methods
and peer-to-peer private transactions implemented on theledger, OEMs can share with their suppliers the parts andcomponent demand, product capacity, inventory, recalls,
certifications, quality management data, etc. with the trust“out-sourced” to the shared ledger rather than an individually
owned centralized database.
Frequently during recalls of safety parts, the OEMs have to rely
on information provided by their Tier-1 supplier for which theinformation may have been provided to them by Tier-N suppliers
downstream. Hence, OEMs often have to rely on information
about second and third-tier suppliers that is provided by firsttier suppliers and it is difficult to verify the data. A shared andtamper-evident ledger with transactions from all levels of
suppliers will provide a possibility for OEMs to directly accessdata from second and third-tier suppliers ( e.g. about delivery,
validity, quality of documentation).
This issue of siloed data management systems in the
manufacturing supply chain forces the recall and inspection ofmuch larger numbers of vehicles than would be possible with
better tracing and tracking of components. The lack oftransparency also needlessly inflates the average cost ofcapital, shifts the burdens to those least able to financeefficiently, and imposes additional accounting andreconciliation steps.

© 2021 MOBI — SC Use Cases and Business Requirements

10This lack of “efficient” transparency snowballs to dealers andvehicle owners resulting in not being able to know theprovenance, ethical sourcing, and environmental impact of
products they are selling and buying. This level of transparency
will also allow the dealers and repair shops to verify if the parts
they are replacing on behalf of the customers are counterfeit byquerying the shared ledger for their provenance. Lifecycle
tracking of certified parts on the ledger can reveal additional
insights for verifiable part history, such as whether the part had aquality issue and was already scrapped by the OEM or the Tier-1
Supplier, or for an aftermarket part, whether it was previously ina vehicle involved in an accident, etc.

Furthermore, the working group believes that DLT/blockchain willallow new methods of incentivizing to manage the tier-supplier
relationships. There may be a potential for better market risk
management and the potential to enable more successfulplanning timelines.
Intended Audience of This Document
C-suite, strategists, solution architects, and product/project
managers.

A well-understood problem in the automotive value chain is theinjection of fraudulent automotive components by nonauthorized or non-licensed third parties. A verification is complex
to achieve considering that independent body shops that are notconnected to the OEM’s databases conduct repairs where
fraudulent components falsely branded with the OEM's
trademarks pose a liability risk for the OEMs. Looking at the
unlawful reproduction of electronic or semiconductor products,
the risk for function and life of the operator poses even a higher
liability exposure whereas authentication might be even harder.
The MOBI Standards also
assume that there are use
cases which necessitatesharing data both horizontallyand vertically.

11

The working group assumes that many suppliers will keep certain
information confidential to maintain competitiveness andnegotiation power. However, in high-risk situations like crisis
management (e.g. a tsunami, COVID-19, etc.), higher visibility
through the n-tiers of the supply chain will be highly desirable for
the OEMs. Real-time visibility of verifiable N-tier supply chain
data will enable higher trust and collaboration between the
OEM and the suppliers for identifying and tracking quality issues
in real-time at the supplier site, and thus save costs and increase
efficiency.

© 2021 MOBI — SC Use Cases and Business Requirements© 2021 MOBI — SC Use Cases and Business Requirements

12PARTS LIFE CYCLE EVENTSTRACEABILITY
Definition of Traceability
The working group defines “parts” as an independent component andsubcomponents of such a unit. We also assume that suppliers provide theserial numbers. Subcomponents like brackets etc. do not have serial
numbers; they are typically identified by batch numbers.
The working group defines “traceability” broadly; including the ability forthe stakeholders to trace the origin/provenance of parts, physicaltransport, change of custody during transport, addition to vehicles at
production floor, distribution to dealers, permission rights to data,
additional (of spare parts) to vehicles at a dealership during a recall,
repair/replacement or maintenance operation, and finally state of thepart (e.g., scrapped, installed, shelved). Parts traceability use case relies
on identification of13© 2021 MOBI — SC Use Cases and Business Requirements

parts passing through multiple enterprise systems of suppliers, OEM,packaging companies, dealers, logistics service providers (LSP), vehicle
owners, and repair shops.
The working group is of the opinion that parts traceability is thefoundation and an enabler use case to other high-value use cases
pertaining to the N-tier supply chain. It provides the basis for high-valueuse cases such as quality management including technical actions, recall
management as well as sustainability use cases including circular
economy/recycling, counterfeit claims, reduction of greenhouse gas
emissions, social standards. etc. All of these use cases require
stakeholders to collect data about the parts (and actions taken on them)as they physically travel between the stakeholders and parts
identification pass through their enterprise systems.

© 2021 MOBI — SC Use Cases and Business Requirements

14Parts Life Cycle Events Traceability
send them to recycling centers. Hence, they are involved in “endof life” activities of parts.

Key Stakeholders
Original Equipment Manufacturer (OEM) in the context of
this document refers to the vehicle manufacturers such as BMW,
Ford, GM, Honda, Paccar, and Daimler. The term does not referto parts manufacturers. This term is used to distinguishcompanies that actually manufacture vehicles in the production
facilities.
First Tier Suppliers (Tier-1) have a direct buyer-seller
relationship with one or more OEMs. They will supply OEMs withmajor parts such as powertrains, engines, lighting parts, airbags,
suspensions, and chassis. Examples of Tier-1 suppliers include
DENSO, Marelli, Magna, Borg-Warner, Bosch, Continental, KnorrBremse, and Hitachi Automotive Systems.
Tier-2, Tier-3 (Tier-N) suppliers manufacture smaller subcomponents of the parts the Tier-1 suppliers sell to the OEMs.
Examples of these sub-components may include door handle
mechanisms, motors, and heat exchangers. Tier-2 companies do
not deal directly with an OEM, but only with the Tier-1
companies. Tier-3 companies typically manufacture the mostbasic components in vehicles such as individual switches,
cables. Tier-3 companies supply subcomponents to Tier-1 andTier-2 companies.
Throughout the document, Tier-1 to Tier-N suppliers may becollectively referred to as “Suppliers.”
OEM Specific Dealers (OEM-SD) are companies that sell aparticular brand of vehicles to consumers. They have exclusive
contracts with the OEMs to sell and provide repair services tothe vehicles they sell to customers. Dealers also scrap parts and15© 2021 MOBI — SC Use Cases and Business Requirements

OEM Affiliated Repair Shops - Repair Shops affiliated with
OEMs to perform repairs on vehicles.
Logistics Service Providers (LSP) - For simplicity, LSPs include
companies that provide services to the OEMs and the suppliers
for physically transporting parts and vehicles. LSPs may include
third-party logistics or 3PLs, freight forwarders, customs brokers,
ground/air/sea carriers.

Problems and Value Propositions
Parts traceability is afoundational component
required to build other use
cases such as production
streamlining, greenhouse gas
emissions tracking, recall
management, etc.

This section describes various problems related to parts
traceability in general and value propositions for the
stakeholders for creating a more resilient and efficient
traceability system by leveraging tamper-evident andimmutable digital ledger(s). The section also describes how
parts traceability is a fundamental building block to achieve
strategic goals such as environmental sustainability andreducing losses due to parts counterfeiting.
Meeting Sustainability Goals
OEMs such as Ford and BMW have announced lofty
1, 2 neutrality. Government
sustainability goals of carbon
regulators, public groups, and investors are putting pressure on
1. “Sustainability Strategy”, Ford Motor Company,
https://corporate.ford.com/microsites/sustainability-report-2020/sustainabilitystrategy.html, Accessed February 09, 2021.
2. “Sustainability at the BMW Group, BMW Group,https://www.bmwgroup.com/en/responsibility/sustainability-at-the-bmw-group.html,
Accessed February 08, 2021.

© 2021 MOBI — SC Use Cases and Business Requirements

16Parts Life Cycle Events Traceability
OEMs to reduce the Greenhouse Gas (GHG) emissions in the
supply chain. Due to the globalized nature of vehicle
production, measuring and managing greenhouse gas emissions
along the entire supply chain is not trivial.
One of the key challenges in estimating emissions during the
production, physical transport, and end-of-life process of parts
stems from the fact that multiple entities are involved in those
processes encompassing hundreds of siloed systems.
Nonetheless, the fundamental process that enables proper
measurement of GHG emissions in the supply chain requires
traceability at parts level (in terms of granularity) anddetermines the entities gathering energy consumption
expended during production, logistics, storage, andscrapping/recycling of those parts.
Reducing Losses Due to Counterfeit Parts
In 2011, Frost and Sullivan estimated that the global loss toautomotive suppliers because of counterfeiting could be as highas USD 45 Billion (Euro = 34 Billion). The problem is alsosignificant in the US, where the industry loses around USD 8
Billion (Euro = 6 Billion) annually as a result of service parts
3
counterfeiters. The article also described that counterfeit parts
are mostly discovered during the logistics process, especiallyduring customs inspections.
Increasing counterfeit of parts means an increase in delays tothe movement of legal parts as well during customs clearancewith a snowball effect on the supply chain. This is because law
enforcement agencies would have limited ability to differentiate
between verified suppliers, importers, exporters, serial numbers
3.

17

Williams, M., “Counterfeit parts are costing the industry billions,” Automotive Logistics,
January 01, 2013.

© 2021 MOBI — SC Use Cases and Business Requirements

An efficient and transparent
parts traceability program will
reduce bottlenecks in flow oflegal movement of parts
across the global supply
chain.

of parts, and suppliers that are unknown to OEMs and Tier-1. In
the absence of an efficient parts traceability program, customs
agencies would have no way to scan serial numbers anddetermine if they are counterfeit or not. Hence, the parts
traceability requires that parts serial numbers andidentifications are not duplicated and such duplications areevident for dealers, suppliers, and OEMs.
Other sources of counterfeiting are scrap yards and recycling
plants. Counterfeiters steal parts and subcomponents of parts
from these locations. Occasionally, they also steal barcodes4
from damaged parts. Counterfeit parts create safety
5problems for consumers and liability issues for OEMs.
Reducing Recall Costs
There are typically two types of vehicle recalls - mandatory andvoluntary recalls. Mandatory recalls occur when a vehicle has asafety-related defect determined by the National Highway
Traffic Safety Administration (NHTSA). Legally, any repairs madeunder this safety recall must be paid for by the manufacturer ofthe vehicle. For instance, the Takata AirBag recall affected
6
millions of vehicles spanning several years, makes, and models.
Repairs on affected cars went on for years because accurately
4. Chen, N., “Two men indicted on charges of selling counterfeit airbags from China,”
KIRO7 News, May 22, 2014.
https://www.kiro7.com/news/two-men-indicted-selling-counterfeit-airbagschina/81960980/.
5. Peresson, S., “Counterfeit automotive parts increasingly putting consumer safety at risk,”
World Trademark Review, May 13, 2019,https://www.worldtrademarkreview.com/anti-counterfeiting/counterfeit-automotiveparts-increasingly-putting-consumer-safety-risk.
6. Krisher, T., “Takata recalls 10 million more airbags from 14 automakers including Subaru,
Ford, GM and Toyota,” USA Today, January 08 2020,
https://www.usatoday.com/story/money/cars/2020/01/08/takata-airbag-recall2020-more-airbags-recalled-explosion-risk/2848334001/.

© 2021 MOBI — SC Use Cases and Business Requirements

18Parts Life Cycle Events Traceability
finding affected vehicle owners is time-consuming andexpensive.

traceability programs by integrating their system directly to theprogram rather than doing several one-off integrations with
their customers.

Recalls are also a big portion of warranty claims. In a 2018
report released by the Warranty Management Professionals, itestimated that warranty expenses constituted 2.9% of revenue
or USD 577 (Euro 480) per vehicle sold by OEMs globallyreaching over USD 50 Billion (Euro = 42 Billion) in 2017. OEMs
reserved over USD 140 Billion (Euro = 117 Billion) in reserves to 7
pay for warranty claims.
A shared ledger can be an
excellent tool to automate
and reduce parts recalls by
providing the ability to track
and prove the part's heritage.

The current practice for OEMs is also to recall or call back more
vehicles to cover for any inaccuracies in finding the affectedvehicles. Due to the high variety of different connected parts inthe automotive industry, it is difficult to prove the origin of adefective part or module, which complicates recourse cases.
DLT/blockchain could be an excellent tool to automate
recourse cases by making it possible to track and prove theexact heritage of every single part.
The working group members are convinced more than ever thatan efficient parts traceability program is critical and OEMs must
collaborate with their suppliers to increase the efficiency ofsafety recalls.
Reducing Barriers of Entry for New Businesses
New entrants such as lower-tiered suppliers must integrate theirsystems to their customers i.e., Tier-1 and/or OEMs, to exchange
information during parts production and transportation. Such
one-offs and company to company integrations are timeconsuming and expensive for small firms, especially new
entrants. Instead, these new firms can participate in parts
7.

19“Worldwide Automobile Warranties,” Warranty Week, August 16 2018,https://www.warrantyweek.com/archive/ww20180816.html.

© 2021 MOBI — SC Use Cases and Business Requirements

Horizontal Collaboration with Other OEMs
The working group believes that parts traceability can be acatalyst in further horizontal collaboration between competing
OEMs and between competing suppliers. They believe
competing entities can band together, rally around a common
cause (e.g., carbon neutrality and sustainability in the supply
chain), and implement systems that benefit the industry on aneutral platform like MOBI. Parts traceability can be alighthouse use case for the industry to find other ways toremove barriers for future collaboration by opening up
information silos.

Traceability as a Multi-Layered Construct
Parts ID shared across thestakeholders is thefoundational layer upon which
other layers with chain ofcustody, emissions, transport
events can be added.

Visibility of Parts ID across multiple stakeholders is key to parts
traceability because parts are the smallest value unit in the
supply chain. Once Parts IDs are visible to the stakeholders,then additional attributes related to the parts can be layered tomake those attributes visible to the stakeholders. In principle,
Parts ID has to be referred to various other stakeholders. Hence,
depending on the use case, traceability can be designed andbuilt in multiple layers with Parts ID and Entity ID as foundations.
As illustrated in Figure 2, Parts and Entity IDs are foundationaland enable unlocking of other attributes related to the parts inomni directions of the supply chain including logistics service
providers (LSP), dealers, etc. Parts and Entity IDs are thenrelated to state of parts such as assigned to Vehicle ID,© 2021 MOBI — SC Use Cases and Business Requirements

20Parts Life Cycle Events Traceability
scrapped, shelved. Parts ID are attached to Shipment IDs
created by LSPs along the transport process, which in turn will
unlock types of mode used to transport the part.

Complex Identity Relationships
Ensuring Parts ID is related to identifications of value units
generated by individual entities in their workflow is perhaps thegreatest challenge to deploying a fully functioning parts
traceability program. For example, it is important to ensure Part
ID (packaged in a pallet) created by a Tier-1 is related to a
Shipment ID created by a freight forwarder.

The traceability can extend horizontally beyond dealers tovehicle owners as well as vertically such as packagers, recyclers
that service OEMs, and suppliers. For this version of the
document, the working group limited the scope to thestakeholders shown in Figure 2 in the interest of time and effort.
The most challenging task in
implementing parts
traceability is associating
Parts ID to other IDs, such as
shipment IDs and user IDs
residing in multiple systems.

Because those two IDs are created by two different enterprisesystems, both entities have to agree on how to relate them intheir respective systems. Even more challenging is for a Tier-1 toconvince all the logistics providers and Tier-Ns to use their
methods for integrating those identifications because Tier-1
may have several suppliers who also supply to competingcustomers.
As parts flow upstream from Tier-N to OEM and from it todealers, other identifications are created by stakeholders of the
supply chain including LSPs to trace the physical custody,
geographic locations, mode of transport utilized by the part.
Parts are then assigned to Vehicle IDs at the OEM’s
manufacturing facility. Parts that are not assigned to vehicles
due to defects are either sent back or shelved or scrapped.
Figure 3 shows relationships between identities created in thesaid process of sending parts to OEM where the part is either
assigned to a vehicle or sent back to Tier-1 or
shelved/scrapped.

Figure 2. Multi-layered construct of traceability with Parts ID and
Entity IDs as foundational elements.

21© 2021 MOBI — SC Use Cases and Business Requirements© 2021 MOBI — SC Use Cases and Business Requirements

22Parts Life Cycle Events Traceability
It also shows that the identities created by multiple
stakeholders and their relationships must be persistently stored
in legacy enterprise systems. LSP1...3 represent different LSPs
used by Tier-N and OEM. Hence, they will produce different
Shipment IDs. Because delivery notes serve different purposes
between different stakeholders, their IDs will be different.
For safety-critical service parts (i.e., the scope of thisdocument), they are sent to the OEM by Tier-1 before
distributing them to dealers. Tier-1 can also sell parts (typically
non-safety) directly to dealers or in the after market. Dealers
send the defective parts back to the OEM.

Need for Standards in Implementation
Common data attributes
ensure that interfaces
between enterprise systems
is seamlessly integrated. The
reference implementation
provides consensus withrespect to on-chain and offchain storage of attributes.

Figure 3. Relationship between various identities as parts flow from Tier-N to OEM where parts are
assigned to vehicles.
Note: * Shipment ID may be accompanied by purchase order ID, bill of lading ID, manifest ID etc. Each
LSP group may include several companies involved in moving the shipment, including freight
forwarders, brokers, and carriers of different modes.

23© 2021 MOBI — SC Use Cases and Business Requirements

The working group assumes that stakeholders will build system(s)with participation from both horizontal and vertical partners totrace parts in the supply chain. Such a system will utilize someflavor of DLT/blockchain as a shared ledger integrated withparticipant’s legacy enterprise systems.
In order for the systems to be interoperable, the interface
requirements must be standardized. Standards in this regard
relate to - 1) data attributes stored on-chain and off-chain, 2)
requirements with regards to accessibility and visibility of data
between direct partners and by outside networks. In addition tointerface requirements (e.g., API, data schemas), the industry
also needs reference implementations related to referencearchitecture for various use cases, common sets of logics stored
in the ledger to efficiently query information depending on theuse case, and minimum requirements and guidelines forgoverning networks.

© 2021 MOBI — SC Use Cases and Business Requirements

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USE CASESCONSIDERED
The working group considered various use
cases that would greatly benefit enhanced
supply chain traceability. Those use cases areaggregated into seven groups, which aresummarized below. Appendix A provides
detailed descriptions of the individual use
cases.

Group 1: Business
Process Management
Group 2:
Manufacturing
Group 3: Parts Traceability
and Recall Management
Group 4: EthicalSourcing andSustainabilityGroup 5: Transportationand Logistics
Group 6: Finance andPayments
Group 7: Consumption

25© 2021 MOBI — SC Use Cases and Business Requirements© 2021 MOBI — SC Use Cases and Business Requirements

26

Use Cases ConsideredBusiness Process Management
Harmonize relevant data between OEM - Tier-1 - Tier-N.
However, companies use multiple systems for procurement,planning, logistic, production, aftersales. The Top 100
automotive suppliers provide for the top 35 OEMs a majority ofthe parts which means there are 35 different systems andprocesses defined for these 100 suppliers. There are huge
improvement opportunities to use blockchain technology tointegrate data being shared between counterparties up anddown the supply chain.

Manufacturing

Parts recall management today is inefficient primarily because
the OEMs do not have sufficient data on ownership of vehicles
and parts assigned to the vehicles post-production. When thevehicles are out of the OEM warranty window or when thevehicle’s lease and financing term has expired, OEMs havedifficulty identifying the current owner and parts assigned in thevehicle. Lack of visibility to upstream supply chain/source of
subcomponents of a part or part assembly also introduces
challenges to the scope of recall, in that OEMs often recall
many more vehicles than they need to.

Ethical Sourcing and Sustainability
One of the challenges of the manufacturing process is to track
and protect the intellectual property for the parts designed by
the OEM and outsourced to Tier-1 suppliers. This has become aforefront issue due to the fact that more and more
OEMs/suppliers are using 3D printing, also called additive
manufacturing. Carmakers are starting to look into
fundamentally changing how they design, manufacture, anddistribute products. The digital workflow of distributed
manufacturing can involve many stakeholders along the value
chain and has a risk of introducing counterfeit parts into theecosystem. Tracking the digital files and data is required toensure the quality of our products and the safety of ourcustomers. Tracking needs to be done in a way so that we canprotect the security of the highly sensitive intellectual property
information shared across the value chain.

27

Parts Traceability and Recall Management© 2021 MOBI — SC Use Cases and Business Requirements

OEMs at each stage of the supply chain need to collect data
about the material content of the parts and subassemblies they
put into their products in order to meet regulations defined byvarious industry standards and regulators. Such data includes
origin of parts, ethical practices at production sites, sustainable
use of natural resources, and use of ethically sourced materials
from conflict zones. Due to the fragmented nature of material
sourcing, digital twins do not exist to reliably collect those data.

Transportation and Logistics
Physical transport of parts/vehicles and associated document
workflow, tracking, and payments are mostly outsourced by theOEMs and suppliers to third parties (third party logistics, freight
forwarders, asset-based carriers, etc.). These companies have a© 2021 MOBI — SC Use Cases and Business Requirements

28

Use Cases Considered
workflow (a digital twin) that is disconnected from theOEM/supplier’s workflow. This disconnection limits the OEM’s
ability to efficiently track chain of custody of shipments, track
emissions objectives, production planning, and many more.

Finance and Payments
Today several manual steps are required for approval of
financial terms, amount and delivery time of vehicles/parts, andpayment release to various third parties involved in the supply
chain. Often, these smaller entities resort to short-term
financing to meet their cash flow needs. There are opportunities
to accelerate the process of verifying and approving steps inthe supply chain process and issue payments and reduce risks in
issuing financing to the companies.

Consumption
Consumers and vehicle owners require correct information
about the state of their vehicles and high-value parts such asbatteries. Such information is key to determine the resale valueof vehicles and other innovative use cases such as swapping of
high-value parts.

29© 2021 MOBI — SC Use Cases and Business Requirements© 2021 MOBI — SC Use Cases and Business Requirements

30

PARTS TRACEABILITY
Background
The Supply Chain WG chose traceability of Lighting Components(headlights, rear lights, etc.) because they are safety components.
Traceability of safety components is associated with regulatorycompliance, parts counterfeits, high recall costs, and more. Lighting is
one of the critical parts of safe operations. Electronic defects
accounted for the highest percentage of recalls in 2018 (6.3 million =26%).
Modern Automotive Lighting Systems (as shown in Figure 4) are highly
complex and consist of many hundreds, safety-critical parts.
Subassemblies, plastic components, adjustment-, cooling- andventilation systems but also electronic components including lightemitting diodes (LEDs). The increasing complexity of Lighting Systems isleading to globally diversified value chains which are presenting theautomotive industry with ever greater challenges in ensuring efficientand reliable supply chains.

31© 2021 MOBI — SC Use Cases and Business Requirements

Figure 4. Headlight components in a BMW X5.

© 2021 MOBI — SC Use Cases and Business Requirements

32

Parts Traceability
Pain Point 2: Complexity of the supply chain consisting ofvarious sub-suppliers and manufacturing locations. One pain
point was counterfeit components (e.g. semiconductor) in thelower tiers.
Pain Point 3: "High recall costs" due to insufficient identificationof affected vehicles/parts and costly search processes.
Pain Point 4: Need for a standardized data specification tocreate a tamper-evident decentralized ledger equallyaccessible to the stakeholders.

Figure 5. Four levels of component suppliers for a headlight.

Objectives and Key Pain Points
The working group
identified 7 key pain points
to implementing parts
traceability.

The objective of this use case review and the subsequent
reference implementation architecture is to enhance andaugment the existing process by which the stakeholders
perform traceability of the vehicle's lighting component. The
traceability of parts comprises both production and logistics
processes and events. Use cases include anti-counterfeit,
document verification, traceability/provenance, quality
management, sustainability, and digital vehicle twin (including
spare parts).

Pain Point 5: Need for a standardized workflow of adding
information about the traceability to the “master” and tamperevident decentralized ledger equally accessible to thestakeholders.
Pain Point 6: Insufficient data exchange and mapping due tocompany-specific data models.
Pain Point 7: High effort due to manual operation in case ofquality traceability along the supply chain (e.g. checking excel
sheets, logistics documents (Delivery Notes, Purchase Orders,Advanced Shipment Notices, etc.)

Other key pain points of the traceability include the following:
Pain Point 1: Provenance and quality of production, chain ofcustody during transport, chain of ownership, and maintenancestatus.

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34

Parts Traceability
The use case assumes that the future deployment of the parts
traceability will include competing OEMs, competing Tier-Ns,
and logistics service providers. Such deployments must becompliant with the antitrust laws.

Scope in this Version
In this version of the document, traceability of safety
components (e.g., lighting) is limited from Tier-N to OEM to
OEM-specific dealers (OEM-SD). Note: OEM-SD means dealersthat have specific contracts with the OEMs. For example,
contract parameters include that the dealers must use theOEM-certified parts and equipment to service the vehicles.
The working group decided tolimit the scope of this use
case review in terms ofvertical integrations between
Tier N to OEM to specificdealers. However, there is nolimit to horizontal
integrations. The working
group decided not to include
vehicle owners, scrap yards,
and non authorized repair
shops.

In the future versions, the working group will include authorized
workshops, consumers, and non-OEM-SDs. The current scopeincludes inbound/outbound parts, and inbound/outboundfinished headlamps. The scope also does not include parts
recycling, scraps, and reverse logistics between the parties.
Hence, the use case does not include after-market parts.
The traceability information includes identification of parts,
location, owner/custodian, and reference to part’s quality. Thisuse case does not include tracking resource requirements,
greenhouse gas emissions, etc. It includes provenance or originof the part in the context of first manufactured by a supplier.
This use-case also includes the full lifecycle traceability of apart, from birth at Tier-1 supplier to end of life at a dealer(within the scope.)
The scope is limited to recording the necessary actions taken by
the stakeholders after receiving the traceability information. It
does not prescribe/justify actions to be taken by the
stakeholders when they receive the information about parts
traceability, but only records the attributes of the actions taken.

The scope of this project is not to rewrite the standards (e.g.,
X12, UN EDIFACT, VDA, GS1) that already exist in theautomotive supply chain. The reference architecture willleverage these standards while describing various electronic
information (e.g., bill of lading, advanced shipment notice,purchase orders) being shared between the stakeholders.

Stakeholders Current Workflow: Parts Assembly and
Forward Distribution
The working group analyzed
and documented thecurrent workflow of how
parts flow (physically anddigitally) between thestakeholders. This allowed
the working group to
identify bottlenecks where
DLT/blockchain can bemost effective.

Current Workflow Breakdown
The breakdown of current workflow related to parts movement(upstream from Tier-N to OEM and downstream from OEM todealers/repair shops) is described as follows:
Sending Components from Tier-N to Tier-1.
Receiving Components from Tier-N and Sending Parts toOEM.
Receiving, Testing, and Assigning Parts to Vehicles at
OEMs.
Receiving and Assigning Parts to Vehicles at OEM-SDs.
Reporting End of Life reporting of parts at different
stakeholders (Scrapping for current use-case or in future
refurbishing or recycling.)
Role of Logistics Service Providers35© 2021 MOBI — SC Use Cases and Business Requirements© 2021 MOBI — SC Use Cases and Business Requirements

36

Parts Traceability
One of the challenges
identified by the working
group was the fact that thesame part may be assigned
different IDs by stakeholders
in the supply chain. Hence, a
mapping and assignment of asingle ID in a shared ledger isimportant.

Assignment of the internal Reference ID to thesubcomponents’ Drawing ID specification, and Customer ID(i.e., Tier-1).

Sending Components from Tier-N to Tier-1
One tracking complexity of a part is the multiple identification
numbers assigned during its life cycle, depending on thestakeholder using it. The Tier-N supplier may have an internalpart number and it may go to multiple OEM customers who, inturn, assign it their own internal number. Similarly for aftermarket
service, there is yet another service part number assigned.
Ideally, a part has to have a maximum of two identification
numbers (Supplier_Part ID and OEM_Part ID), collectively PartID, and doesn't change it during its life cycle. If a part is aservice part, then it has a specific ID (OEM-provided ID) fromthe beginning. Hence, we need a mapping of the two IDs in thesystem to ensure the end-to-end traceability of the parts.
The more basic or consumable the product as raw material, themore difficult it is to assign a serial number and is moregenerally described using a lot or batch code. This introducestime and potential error into processes for checking for logistics,
payables, receivables, quality issues or recall. It is envisionedthat for crucial parts, Tier-Ns would follow a similar process as
Tier-1 to create unique identifications for the subcomponents
they produce.
At Tier-Ns, their legacy enterprise system such as Manufacturing
Execution System, Quality Tracking System, and other companyspecific systems capture the following:Bill of materials with Purchase Order ID (sent by Tier-1),
internal Reference ID, internal Customer ID, and IDs of thesubcomponents.
Part IDs in many instances
are not associated with
documents created by theOEMs to ship with theparts downstream. Also,
LSPs create their own
documents without part orbatch information that
OEMs and suppliers use.

Receiving Components from Tier-N and Sending Parts toOEMTier-1s assign unique Part ID (internal, not globally unique at thispoint). These are serial IDs created as a unique identifier (digitaltwin) and provided to the receiving OEM. Parts are then shippedout to the OEMs. Depending on domestic or internal shipping,various documents required as per international shipping rules
are prepared either by the Tier-1’s freight forwarding department
or the third-party logistics service providers.
Prior to sending parts to OEMs, Tier-1s prepare delivery notes.
Delivery Notes (DN) are electronic or printed documents that are
dispatched alongside the shipments in printed form or sent
separately via email. In some countries, delivery notes areimportant for Customs to collect export and import duties.
Hence, DN can be used to aggregate the shipment info. A
shipment can contain several delivery notes. DNs are typicallycreated by the LSPs.

Batch IDs and Subcomponent IDs of subcomponents
produced.
Final quality test results performed on the subcomponents.
Technical drawing and tool preparation of thesubcomponent.

37© 2021 MOBI — SC Use Cases and Business Requirements© 2021 MOBI — SC Use Cases and Business Requirements

38

Parts Traceability
On the other hand, suppliers provide Advanced Shipment
Notice (ASN) to their customers. Key data elements in ASN
include the following:
Ship-to location, Ship notice number, Ship and/or delivery
date, Ship from/supplier, Purchase order number, andProduct/service identifiers such as UPC/EAN/GTIN with
their respective quantities.
Additional data that may also be included in the ASN:
Freight terms, Supplier number, Item description, Carrierreference/tracking numbers and service levels, Additional
item identifiers such as buyer item number and vendor partnumberAt present, many Tier-1s do not include Part ID to the DNs. It
would be helpful to do so in the future to track which part is inwhich shipment. This requires that LSPs associate their internal
Shipment ID to the Delivery Note ID. Shipment IDs are usuallytied to conveyance IDs representing Truck ID, Container ID, etc.
in the LSPs system.
Figure 6 illustrates how Tier-Ns and Tier-1s use logistics service
providers (LSP) to physically move shipments to their upstream
customers. It is important to note that in most cases, LSPs
systems may not be well integrated with their customer’s
enterprise systems.

39© 2021 MOBI — SC Use Cases and Business Requirements

Figure 6. Example of a simplified workflow of ground delivery of parts from Tier-1 to OEM.
Note: Most OEMs do not store logistics process data. Their systems may be integrated withlogistics systems to receive specific updates.

© 2021 MOBI — SC Use Cases and Business Requirements

40

Parts Traceability
Parts are received, tested,
and assigned to vehicles
using internal production
identity and eventually VIN.
During the receiving process,the OEM has to perform
three-way checks to ensure it
received the correct parts.

The final assembly test creates the final serial number and isapplied to the parts. NOTE: Bill of Material along with technicaldrawings about the parts are included in OEM and Tier-1’ssystems for traceability.

Receiving, Testing, and Assigning Parts to Vehicles at OEMs
OEM receives parts from the suppliers at the dock. The LSP
collects proof of delivery information (e.g., electronic signature
on bills of lading). At the OEM’s receiving department, a threeway verification is performed as illustrated in Figure 7. The
verification compares information in the purchase order sent to
the Tier-1, ASN sent by the supplier, and the delivery note
received from the LSP. OEMs apply the same Parts ID provided
by the Tier-1s. Trailer ID, container ID, and carrier ID are used in
the three-way verification process. OEM’s receiving dock also
verifies the number of parts received with that in the
ASN/delivery note.

The provenance of a certain part at the production line can be
identified by scanning the Part ID or sending an ad hoc request
to the supplier network.
OEMs perform inbound quality tests of critical components
received. A system logs the test procedure and the results oftests. Final quality tests of parts are performed at the end of the
production line which verifies the parts meet the OEM’s
specifications. In case of faulty parts, root cause analysis isperformed, recorded and the information is shared with the Tier1 supplier.
OEM Specific Dealers andRepair Shops receive parts
from OEMs. However, they
do not record theassignment of parts to a
specific VIN or whether thepart wasscrapped/recycled. This
breaks the parts
traceability from OEM tovehicle owner.

Figure 7. Example of a simplified workflow of delivery,testing, and assignment of parts at OEM.

41

© 2021 MOBI — SC Use Cases and Business Requirements

Finally, OEMs perform parts assembly into vehicles. Part is
assigned to a vehicle and the Part ID is associated with a
Vehicle ID At this point, OEMs may have a different internal ID(e.g., BMW uses UUID mapped to a VIN) for the vehicle rather
than a VIN number. Parts may still fail at this stage when OEMs
perform the function test in the vehicles.
Receiving and Assigning Parts at OEM-SDs/Repair Shops
OEM Specific Dealers order parts from OEMs depending onwhether those parts are for special handling, off-road vehicles
that are inoperable, or a stock order. Figure 8 illustrates theworkflow with regards to receipt of parts at the OEM-SDs.
Special handling orders are dealer-generated orders requiringurgent special handling attention for emergency situations, toresolve customer concerns. If the customer’s vehicle isinoperable, then the part order would be expedited.

© 2021 MOBI — SC Use Cases and Business Requirements

42

Parts Traceability
It is important to note that there are multiple permutations of
who is involved in transporting the shipments. The scope in thisdocument assumes that the OEM has assigned an LSP and that
it is solely responsible to provide the OEM with full traceability ofparts as they are being transported. In reality, however, the LSP
will have to collect shipment status from several subcontractors,
third-party carriers, and warehouses. Also, the LSP is responsible
for preparing documentation (e.g., ASN, manifests, proof of pickand delivery). The LSP will provide its client status of current
custodian of the shipment.
Following is the list of learning from BMW’s PartsChain projectwith regards to the role of LSPs play in parts traceability:
Figure 8. Example of a simplified workflow of parts receipt at OEMSD/Repair Shops.
Note: At present assignment of Part ID to Vehicle ID is optional.

Dealers use Dealer Management System (DMS) to order parts
from the OEM. The OEM can send the parts to third-party
packagers before sending them to the dealer. The third-party
packagers may dispatch the parts to the dealer or to a stocking
point depending on the order type.
LSPs physically move theshipments. However, due tofact that parts ID is not
associated with IDs of ASN,
Delivery Note, Manifests, it isdifficult for OEMs to identify
the actual carriers delivering
the shipment posing a hugechallenge to estimate
delivery times, emissions
tracking, chain of custody
etc.

43

Role of Logistics Service Providers
OEMs and Tier-Ns contract with Logistics Service Providers (LSP)
to transport parts to their customers. In most cases, LSPs
subcontract specific parts of the task to other companies. Some
LSPs may have their own fleet of vehicles to transport shipments.
If not, they may subcontract to other asset-based carriers. LSPs
also take custody of the shipment. If the transport issubcontracted, then the custody is also transferred with orwithout the client (OEM, Tier-N) knowing about the change ofcustody.

© 2021 MOBI — SC Use Cases and Business Requirements

Tier-1 supplier was responsible for supplying the information
about parts to OEMs. Sometimes they may not be prepared
to provide such information.
At the moment, LPSs were not integrated with Tier-1/OEMs
systems. There are so many systems used by LSP, it’s hard to
integrate.
Information about shipments carrying parts is hopping
between stakeholders, sometimes faster than EDI data. The
parts traceability should be able to start tracking frombeginning to the end, identifying everyone involved intransport as well as major shipment events.
High-value parts would need point-by-point geographic
location, physical state, and custody.
Persistent chain of IDs have to be maintained = (Part ID <>Delivery Note ID <> Shipment ID <> ASN/Manifest ID <>Conveyance ID) of Leg 1...n of trip from origin to finaldestination.

© 2021 MOBI — SC Use Cases and Business Requirements

44

Parts Traceability
traceability, the stakeholders require the following components,
regardless of network architecture and usage scenarios.

Stakeholder’s Future Workflow for Traceability
In 2019, the BMW Group, together with Marelli, initiated the
PartChain project to ensure seamless traceability of parts – moreor less “at the push of a button” – and provide immediate datatransparency in complex supply chains for all partners involved
going forward. It successfully implemented the project for
tracking and tracing the purchase of headlamps. Due to thecomplexity of the supply chain, considerable effort is needed toclearly track the part’s origin or supply route, for instance. Up
until now, it has been customary for many partners to manage
their own data separately. The companies’ respective IT systems
have not always been able to communicate consistently with one
another.
The project’s aim is to create data transparency between allpartners within the n-tier automotive supply chain. It enables
verifiable, tamper-proof data collection and secure transactionsin operational supply chain processes. The pilot involved two of
the BMW Group’s 31 plants (Spartanburg, US and Dingolfing,
Germany), as well as three locations of the supplier Marelli
Automotive Lighting. In 2021, BMW plans to expand the platform
to include about ten n-tier suppliers and include multiple vehicle
models and components, such as electronic components.
The working group members, including BMW and other OEMs,
are interested in scaling their internal pilots to include
competing OEMs in order to increase efficiency in various joint
use cases such as recalls of parts supplied by the same supplier,vendor onboarding, provenance of common parts andcomponents, ethical sourcing, and reduction of carbon
emissions. In order to implement such a cross-platform andcross-company parts

45© 2021 MOBI — SC Use Cases and Business Requirements

A key requirement of parts
traceability is creating a
digital twin of parts ID
creation and assignment
and integrating with otherdigital twins oftransportation, production,and repairs.

Major Components for Multi-OEM Parts Traceability
1. Minimum set of attributes to be “shared” or “visible”
between 1) two direct parties, and optionally 2) third party
upstream or downstream during exceptional conditions (e.g.,safety recall, audits).
2. New set of practices in the workflow that did not exist
before (e.g., assigning delivery note to Shipment ID),
assigning Parts ID to a Vehicle ID (VID).
3. Definition of identifications aka digital twin of physicaland digital assets in the workflow.
a. Physical Vehicle ID (MOBI) takes the form of DID.
b. Part identification has to be globally unique andidentifiable. So, it can be a DID. Parts identifications
should be assigned by a supplier and OEM as
Supplier_Part ID and OEM_Part ID.
c. Various document IDs shared bi-laterally such as BOM
ID (specify types of BOMs), Purchase Order ID, Delivery
Note ID, Shipment ID, Business Location ID. These IDs do
not have to be a DID.
4. Framework to provide information to third-party entities
such as insurance, finance, regulators:a. Access rights
b. Data visibility
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Parts Traceability
5. Framework to exchange information between partner entities:
a. Confidentiality requirements, data visibility between thecompeting entities in the network (so as not to violate
antitrust laws).
b. OEM 1 should not be able to deduce the quality, price,and volume of parts of OEM 2’s. Quality may be shared
during the mandatory safety recalls. Other types of trade
data visibility between competitors must be prevented.
c. Similar to b), Tier-1 Supplier A should not be able todeduce the price and volume of parts manufactured by Tier1 Supplier B.
d. Vehicle ID cannot be public knowledge when the vehicle
is sold or registered with DMV, but okay during the
production phase. Vehicle ID is a privacy criterion in Europe.
But, Part ID is not.

The working group believes
there are two
implementation scenarios
for parts traceability basedon data sharing
requirements for specificuse cases: 1) a network ofOEMs, suppliers, andothers, and 2) multiple
networks compatible witheach other.

the network. The network may have one or more shared ledgers
depending on the use cases and as defined by the accesspolicies agreed upon by the stakeholders as shown in Figure 9
below. This scenario is more likely for aftermarket parts
traceability after vehicles are sold. For example, regulatory
agencies may create a single network for all the OEMs/Tier-1 tojoin to track safety recalls, carbon footprint. However, this
scenario is not feasible to capture the manufacturing andproduction processes due to privacy requirements between
competing entities. In order to make it feasible, information on
the chain will have to be encrypted, which adds significant
overhead to the transaction consensus process. It will depend on
the implementation, as encrypted transactions between two
known parties on the network could still be counted and thus
reveal "volume" information to competing companies.

e. Standards to publish info between the chains in the casetwo competing chains want to “collaborate.”
6. Recommended/minimum governance including access rights,
incentivization techniques for the stakeholders to sustain the
network, assuming multiple OEMs are part of it.
7. Reference implementation architecture to encapsulate all of
the above.
Usage Scenarios
There are two scenarios with regards to building the networkand the underlying shared ledger.
Scenario 1: OEMs and other stakeholders form a single networkwith governance principles applicable to all the participants of47© 2021 MOBI — SC Use Cases and Business Requirements

Figure 9. Scenario-1, OEMs and other stakeholders agree to implement asingle network on a single protocol agreed
upon by the participants.

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48

Parts Traceability
Scenario-2: In this scenario, the two networks shown in Figure 10
below are interoperable in the sense that participants in one
network can read and write into another network’s ledger. Bothnetworks recognize each other’s participants. Please note thatmutual accessibility is not a given. That said, the working groupbelieves it should be enabled by the standard, while real-life
access management should be implemented as a layer-2
service. However, this scenario is useful for trade finance inwhich interoperability could be forced.

vehicles. Hence, blockchain can help weed out those counterfeit
parts in the supply chain inbound/outbound finished headlamps– with a blockchain-based system, OEMs will be able to track
and trace every part from the source to the individual vehicle.
Events On-Chain and Off-Chain

On-chain: Bi-lateral information but visible to a third party,
information shared between more than two parties.
Registration of participant, vehicle, and part identification.

Approval of new suppliers and new sites of existing suppliers
by OEMs.
Status description of parts quality (OEM, Tier-1).
Proof of shipment received, picked up, delivered (Tier-1,
OEM, LSP.)
Current custody of the parts exchanged between Tier-1, LSP,
OEM.
State of part (e.g., defective) returned by OEM-SD to OEM
to Tier-1.

Figure 10. Scenario-2, OEMs create their own network however compatible and accessible toparticipants from other networks.

Inbound/outbound finished headlamps – by registering
components on the blockchain companies now have an
immutable digital ledger to trace provenance. So, if a shipmentof headlamps hasn’t been registered and proven authentic on
the blockchain, a manufacturer will know the parts are unusable
when receiving the inventory and they won’t be installed in49© 2021 MOBI — SC Use Cases and Business Requirements

Birth event of the vehicle, parts, and assignment of parts
identification to Vehicle ID (+VIN) visible to OEM and only
the Tier-1 who supplied the particular part.
Part ID assignment to Vehicle ID by the OEM-SD shall bevisible to OEM and Tier-1.
OEM should be able to query on-chain data at any point of thepart lifecycle and see the latest part status (i.e., active, invehicle, retired/scrapped), the assigned VID (if appropriate),and the owner and/or custodian (i.e., Tier-1, LSP, OEM, OEM-SD,
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50

Parts Traceability
Off-chain: Strictly bi-lateral information not visible to a third
party such as:
Invoice, payments, price of any component, and activities.
Bilateral agreement attributes.
Test actions performed on parts, quality and test results,
parts condition, maintenance history, performance of parts.

High Level Business Requirements
Future implementations
must meet a set of highlevel business
requirements to achieveparts traceability using
DLT/blockchain asenvisioned by the working
group. The accompanying
reference architecture isdesigned to meet therequirements.

List of high-level business requirements for a referencearchitecture leading up to future deployment to satisfy the
stakeholder’s needs to trace parts traceability.
General (System Accessibility)
1.The system shall be accessible to the registered participants
only (i.e., OEM, Tier-1, Tier-N, LSPs). OEMs could register
applications for OEM-SDs to interact with the parts traceability
systems.
2.The system shall have an accessibility policy in place andimplemented by the network in order to limit access to relations
and transactions between the businesses.
3. The system shall be accessible to registered third parties suchas regulators, insurance, auditors. The system shall adhere to thecountry/region/state’s regulatory requirements.
4. The system shall have clearly documented policies withregards to access and visibility of information by participants.
Basically, no exceptions and one-offs.

51© 2021 MOBI — SC Use Cases and Business Requirements

5. The system shall allow peer-to-peer data exchange between
the two parties. Both parties agree to allow a third party to view
such data exchange. Alternatively, a third party is alreadyallowed access to such data exchange as part of the agreement
to join the network.
Requirements for Tier-1… N Suppliers
6. Tier-1, Tier-N shall be able to register parts attributes (alongwith Part IDs) on-chain. Users shall be able to register parts ID
and receive a globally unique identifier (e.g., Parts DID) in orderto reduce duplicate parts ID.
7. Users shall be able to provide a chain of custody of shipped
parts to their receiving customers and third parties by querying
their internal system and the underlying ledger if necessary.
8. Users shall be able to assign shipment-related documents(e.g., delivery note, ASN, DELJIT) to parts IDs.
9. Users shall be able to request from the LSP Shipment ID
assigned to the delivery note ID.
10. Users shall be able to receive proof of pick up and proof ofdelivery from the LSPs and associate such receipts with the parts
purchase document number provided by the OEMs. Such proofof pick up and delivery shall be anchored to the underlying
ledger.
11. Users (only the concerned parties such as Tier-1, and LSPs)
shall be able to receive the result of the three-way match fromthe OEMs.

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52

Parts Traceability
12. Users shall be able to register a hash of drawing details and
BOM of parts ID. Leave as optional. Same as hash of quality
data.
Requirements for Logistics Service Providers
13. LSP users shall be able to assign responsibility for gathering
events (i.e., change of custody) related to the physical transportof parts to the first level LSP.
14. Users shall attach one or more shipping documents, which
may include delivery notes, ASN, DELJIT, purchase orders, bill ofmaterials, manifests, etc.
15. Users shall submit to its customer (Tier-1, OEM) proofs of pickup of parts and proof of delivery, which may include bill of
lading, electronic receipts from consignee locations, etc.
16. Users shall receive the documents about the contents of theshipment (e.g., delivery note, BOM) from Tier-1s/OEMs andassociate it with the internal Shipment ID. Each Shipment ID may
have more than one DNs.
17. For each Shipment ID, LSP shall be able to register a chain ofcustody during transport including details of current custodian,location, date/time of handoff between custodians. For
example, a trucking company to a bonded warehouse. The chainof custody shall be accessible to the corresponding OEM andTier (as a customer).
18. For each Shipment ID, users shall be able to register parties,
who are not custodians but are involved in the transport process,such as the assignment of brokers, insurance providers, etc.

53

© 2021 MOBI — SC Use Cases and Business Requirements

Requirements for OEMs to Receive, Test, and Assign Parts
from Tier-1
19. OEM users shall be able to receive shipping documents(electronically or otherwise) along with the physical goods anduse it to verify parts sent by the supplier against its orders. Users
shall be able to perform three-way matching or other types ofmatching corresponding to its internal policies. Examples ofthree-way matching include comparing ASN from Tier-1, physicalcount and identification of parts received at the dock, purchaseorder sent to Tier-1.
20. Users shall be able to register information about the parts it
received from Tier-1. Sign proof of receipt of part. Such proof
shall be viewable and be verified by the Tier-1 that shipped theparts has been received by the OEM.
21. Users shall be able to record the quality of received parts
and inform the Tier-1 of faulty parts. Tier-1 shall be able to viewthe results of the quality tests. Users shall perform root cause
analysis of defective parts. At the request of the supplier, it shallbe able to reveal the data for the analysis.
22. Users shall be able to assign parts to vehicles in production.
Users shall be able to register Part ID as failed/passed inboundquality test. Register events for every part received from Tier-1.
Users shall be able to “de-couple” part ID from vehicle ID after
trying several times. Failed parts can go to the scrap partner, go
to the service center for additional testing, then decide to send
to Tier-1 or shelf them. Users shall be able to maintaintraceability of failed as well as good parts. This is important sothat failed parts are not stolen and appear as counterfeit partsin the aftermarket.

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54

Parts Traceability
23. Users shall be able to scan a part in the production line,
send a request to a network to determine which entity createdthe part.
24. Users shall be able to assign, query, view on-chain ID ofparts to off-chain data IDs. Some high-level info about the parts
can be on-chain e.g., manufacturer, part status (in vehicle,
scrapped, shelved).
25. Users shall be able to verify and prove that quality results ofparts haven't been tampered with.
Requirements for OEMs to Send Parts to OEM-SD/Repair
Shops
26. OEM users shall be able to verify the consignee based on
proof of receipt provided by an LSP.
27. Users shall be able to receive proof of delivery of parts fromconsignee (OEM -SD/Repair Shops).
28. Users shall be able to view the parts replacement workflow.
29. Users shall be able to receive the decoupled old Part ID froma Vehicle ID and add a new Part ID to the Vehicle ID.
30. If the part was serviced at the OEM-SD/Repair Shop, theusers shall be able to add service location, service attributes,
date/time, etc.
Requirements for OEM - Specific Dealers/Repair Shops
31. OEM-SD/Repair Shop users shall be able to order parts from
OEMs. LSPs perform warehouse staging and picking, and deliverto the dealership/repair shops. They shall be able to sign thereceipt with the LSPs.

55© 2021 MOBI — SC Use Cases and Business Requirements

32. Delivery note shall be part of the OEM - Dealer/Repair Shop
workflow. Users shall be able to scan Parts ID at the point ofreceipt. Such receipts signed by the users shall be shared with
the OEM.
33. Users shall inform the OEM which service part was installed
into which Vehicle ID and VIN.
34. Users shall attach Parts ID to the consumer’s service invoiceand hence is tied to the VID.
35. Users shall be able to send defective parts back to the OEM,
along with root cause analysis results.
36. Users shall be able to verify the integrity of the new (spare)
part received from the OEM before it is used for replacement.
37. Before the users install parts into the vehicles, especiallyusing parts from their inventory, they shall be able to verify theprovenance of the spare part.
38. After successful installation of parts into the vehicles, theusers shall assign the new Part ID to Vehicle ID (or VIN) andreport it back to the OEM using a Part Replacement Report.
39. The Part Replacement Report shall trigger the End of Life
Documentation of the old part, where the OEM shall report the
EOL status for the old Part ID and old Part Serial Number(assuming safety-critical parts which are serialized). The reportshall capture how the old part was treated at its end of life, i.e.,
did it begin a second life as a refurbished aftermarket part, or
was it recycled for the purpose of remanufacturing, or sent tolandfill, etc. Enabling such complete, end-to-end lifecycle
tracking of parts allows OEMs to ensure that old parts cannot bestolen and used to make counterfeit parts look like genuine
parts.

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56

Appendix A: List of Other Use Cases Consideredcounterfeits are even more critical, so are tracking the license distribution,
quantity consumed, and part quality.
2. Definition of a standard (for IP tracking) is needed for digital parts (and IP)
moving through the supply chain. The current supply chain won't work, since it isdesign -> manufacture -> distribute, whereas in 3D printing the flow is design ->distribute -> manufacture. The risk modeling of this difference isn't sufficiently
done and understood in the automotive industry.
3. Efficiency in tracking chain of custody of digital part and license, as well asin process monitoring data and quality measurements data could be tracked onblockchain, creating a full part digital twin. This will help in improving issue
detection and resolution, warranty and recall management, etc. Dealers being
on the same network could function as just-in-time suppliers and print parts ondemand, reducing their inventory overhead. Particularly useful for independent
dealers who serve a multi-OEM business. From market data, the majority ofvehicle owners take their business to the independents than the single OEM
franchise dealers.

Business Process Management
Use Case

Description (1), Pain Points (2), Value of Using Blockchain (3)Organization
ID/
Master DataManagement

1. Self-Sovereign Identities (SSI) for supply chain organizations enableefficiencies for identity management and master data management.
2. Definition of an (international) standard needed. SSI solutions for simple use
cases may be overdone.
3. Efficiencies in master data management and certifications (creation,verification, updating, etc.)

Supplier KYC

1. Without question, supplier relationships and Qualification have a significant
impact on any corporate success. Many OEMs have difficulty ensuring supplier
identity and discovering quality suppliers. A single supplier works for multiple
OEMs and every OEM has to verify supplier identity by their process. Most of thetime supplier qualification is executed by 3rd party verifiers. There is definitely
an opportunity to manage supplier identity in a distributed database andAutomotive OEMs and related supply chains can accelerate supplieronboarding quickly and replace the risk of 3rd party processes.
2. The Procurement Department goes via a cumbersome process of supplierselection and has to rely on 3rd party verifiers. Processes include many manual
checks and limited transparency with supplier certifications and history. Eachbuyer independently manages data that is often stale and no real-time update.
Increasing need for regulatory requirements, compliance, and audits.
3. Blockchain-based platform for OEM and supplier of Consortium which will be asingle trusted source of digital identity for suppliers.

3D Printing
Workflow
Traceability

57

1. With advances in 3D printing, use-cases like printing low-volume parts, orservice parts, or even seasonal components are becoming priorities. 3D printing
supply chain for automotive is new, where digital parts (design files and print
instructions) are released by an OEM and sent to supplier or dealer for ondemand printing. IP protection of digital parts, and preventing© 2021 MOBI — SC Use Cases and Business Requirements

Quality in
Real-Time:
Supplier Site
Data
Collection

1. OEMs require suppliers to provide quality data on the parts they produce. In
many cases, these processes are fairly manual, i.e., data is captured in excel
files and sent via emails or uploaded to a shared network drive, etc. There isdefinitely an opportunity to increase the trust in the data if it is verified atsource, i.e., at the IoT gateways collecting data from sensors in the factory, andnot tampered with in the future.
2. Today there is no easy way to trust the supplier data in real-time, this usuallydepends on the long-term evaluation and relationship building between OEM
and supplier. Also, the manual sharing process is not proof to tampering, errors,
etc. While some of the quality data could be private, there would be enoughparts for which quality is fairly standard across the industry (e.g, safety-criticalparts). Additional data elements we might care about could be environmental
and ethical responsibilities, such as recycling, water and power usage, labor
condition, etc.
3. Blockchain would be an ideal to have a standardized platform where thequality data common across the industry could be collected and stored.

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58

Appendix: List of Other Use Cases Considered
Tool Usage
Tracking

3D PrinterAsset
Tracking

59

1. Design of tools are outsourced, or OEM designed, but then outsourced tosuppliers to actually use. OEMs lack visibility into the movement and usage oftools. Payment to suppliers was the focus of this use case.
2. OEM buys and pays for the tooling, if the supplier goes bankrupt, OEMs cantake the tools (it's theirs). However, tracking of these tools is problematic withpaper, purchasing department, etc. There is no good real-time monitoring oftool usage and unauthorized volume tracking. Tool usage audit is inefficientand manual.
3. Adding tool usage, purchase orders, and other process-related documents in
DLT/blockchain and IoT, greater flexibility and visibility of tool usage.

1. 3D printing has made significant technological advancements in the field ofadditive manufacturing 3D printing is used in operations that require quick-tomarket builds, unique design requirements, and even low-volume production
runs. 3D Printing technology works on basic principal Stock inventory Digitallyand Produce Physically when needed. Blockchain can make sure that the Data,
Process, and Performance integrity meets regulatory and compliancerequirements to produce parts.
2. Conflicting reports from different systems. Locating and tracking assets.
Getting timely updates on asset status. Verifying product provenance andintegrity. Managing a portfolio of unique assets.
3. Synchronized and connected systems. (Production forecasting andmanagement.) Precise location information of assets (like Uber Model to locate
Drivers). Real-time status updates from assets (Track Production Capacity).
End-to-end traceability of assets (Asset History of maintenance, documentation
for product quality). Robust asset data standards of asset (Asset Identification).
Protecting IP by using an encrypted, immutable file. Offering Transparency into
quality. (Manage raw material info and process parameters). Smart Contract
Executing Machine-Controlled. Maintenance and Payment. Building Production
forecast on a trusted network of assets and its capacity.

© 2021 MOBI — SC Use Cases and Business Requirements

SoftwareBOM

1. Just like the hardware, a software bill of material specifies the components ofthe software run on an Electronic Control Unit (ECU.)
2. Tracking 3rd party software components, their licensing, allowed use, also
shared components of software that might be in multiple ECU, e.g., driver code.
If software is the cause of a recall, the BOM would provide the supplier/OEM
and regulators with an accurate audit trail.
3. Immutable evidence of the makeup of the software component and all changes
are traceable.

LicenseAccounting
for E/E
Components

1. For several electronic components in the car, a license fee is applicable that either
the Tier-1 covers and accounts into the part price or the OEM covers and Tier-1
manufactures on behalf of the OEM under that license. Complications arise if alicense agreement has to be between OEM and Third Party whereas Tier-1 or evenadditional Tier-2 have to be manufactured. Problem 1: Contractual setup between
parties, Problem 2: accounting, verification of who has what right, Problem 3:
Tracking if all licenses are fully paid and valid is a manual process.
2. Different contractual parties and manufacturing parties; manual process to assure
license coverage and accounting; Over-The-Air updated features that may requirea license.
3. Necessary licenses can be tied to Vehicle ID and Part ID and can be tracked andverified over time automatically.

Parts Traceability and Recall Management
Use Case

Description (1), Pain Points (2), Value of Using Blockchain (3)Authenticity
ofcomponents

1. Identification and prohibition of fake parts introduced into the supply chain bysuppliers is important for many reasons. When Tier 1 doesn't have suppliers down
the chain to provide the parts, they have to go to marketplaces. This is where they
may inadvertently purchase fake parts. Sellers/manufacturers of such fake parts
use OEM-produced drawings, which are leaked by suppliers or stolen fromsuppliers. Another use case is when a former supplier does not stop producing
parts and unload them in marketplaces.
2. Negative business implication especially in case of warranty/product safety.

© 2021 MOBI — SC Use Cases and Business Requirements

60Appendix: List of Other Use Cases Considered
OEM’s lose ownership of intellectual property of technical designs.
3. Blockchain can be used as a decentralized ledger of authentic parts
manufactured and serviced by the stakeholders.

Part Life
Cycle
Management

Parts Trackand Trace(Multi-Tier)61

1. During its life cycle, part moves from many internal and external systems. In
today's collaborative ecosystem, stakeholders share data about parts withseveral other parties. There must be clear visibility about the access of sensitive
information related to special projects for which parts are being produced.
Once such information leaves OEM, it becomes very difficult to prevent datafrom getting into the hands of unauthorized individuals. This could result incounterfeit parts and leakage of IP to competitors.
2. After OEMs share sensitive information about a special project is shared with
their suppliers, suppliers use their own system to manage such sensitive
information. Many suppliers are not technically equipped to secure such dataand prevent unauthorized access.
3. Blockchain-powered security can provide transparency and visibility to sensitive
data being accessed by both authorized and unauthorized parties. Timely
intervention is possible during unauthorized access to OEM-provided sensitivedata.

1. Tracking of shipments and production of parts through blockchain/ capability
to track which components are assembled into larger components and vehicles
2. Transparency in multi-tier supply chain networks is limited. Once you have thecomponents you can go one lever down into the minerals. New laws are being
looked at to have product conformity but law is regionalized and the standards
are regionalized. Components made in Europe might be used for anothermarket end destination.
3. Improved product safety, conformity, and provenance resulting in a reduction of
fraud and reduction of costs for technical actions. Tracking parts throughout
the production process improves the accuracy of forecasting and collaborativeplanning within the supply chain. Easier proactive contact to the end consumer.

© 2021 MOBI — SC Use Cases and Business Requirements

End of life(EOL) andHigh ValueParts
Recycling

1. OEMs and major suppliers may need to recover certain high-value parts at theirend of life. These parts often have advanced high durability material which
could be recycled for a second life.
2. It is not easy for an EOL processor (e.g., scrapyard owner) to detect the highvalue parts at their end of life since there could be many changes to the vehicle
during its lifespan (parts might be replaced, or exceeded the predetermined
lifespan desired for recyclability).
3. Bringing part traceability data from multiple OEMs into a common and trusted
platform made available to the EOL processors (e.g., scrapyard owners) would
be beneficial. The platform could also incentivize the scrapyards for recycling
by enabling micro-transactions at the part's level. Government entities could
also be part of the network to observe environmental policy adherence.

RecallManagement

1. Recall handling is one of the major issues for OEMs and suppliers of all-tierbecause they are unable to trace all the parts/systems in their vehicles bythemselves. Once their products are claimed for recall, a lot of cost and humanresources are required to identify target vehicles with cooperation with several
companies, make contact with owners, and complete repair works.
2. Manufacturers need significant resources to handle recalls and avoid risks ofincidents/accidents by vehicles not repaired on time.
3. The records of parts/systems are stored securely and distributed among all the
stakeholders. Once a recall is claimed for a product, all the stakeholders areable to investigate which products of theirs have been affected by that recall.
The information related to recall is strictly confidential and blockchain protects
the data access by unrelated companies.

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62

Appendix: List of Other Use Cases Considered
Ethical Sourcing and Sustainability
Use Case

Description (1), Pain Points (2), Value of Using Blockchain (3)Parts
Sustainability

1. OEMs at each stage of the supply chain need to collect data about thematerial content of the parts and subassemblies they put into their products inorder to meet regulations defined by industry standards.
2. Material declaration records can be altered. Many times OEMs have to trust
compliance certification provided by the supplier. There are no secured
mechanisms to store regulatory reports, compliance certificates, and lab
reports provided by the suppliers. Lack of transparency in audit records resultsin heavy penalties.
3. Blockchain-based solution to manage all part material compliance andregulatory data. This will provide the level of security and transparency of
information between partners needed to make the process reliable andtrustworthy and also avoid heavy penalties from auditors.

Mineral
Provenanceand FairLabor
Practice

1. For OEMs and Tier-1s, ensuring the origin of minerals and materials produced
through fair labor practices is important. Cobalt is one such mineral that is
gaining industry attention due to conflicts at cobalt mines.
2. OEMs and Tier-Ns spend a significant amount of time to perform due diligence
to ensure sources of minerals and materials are acceptable i.e. follow
guidelines of organizations such as Public-Private Alliance for Responsible
Minerals Trade (“PPA”), a multi-sector initiative supporting the ethicalproduction, trade, and sourcing of minerals from the Great Lakes region ofCentral Africa.
3. Build a fairer, transparent, efficient, and reliable supply chain.

Certificationof the Origin
for RareMetal

1. Child laborers have been reported at mining sites of rare metals. Information
about such minerals is tampered with to make them appear compliant. In order
to eliminate illegal laborers, a system/process providing transparent
certificates of origin of rare metal origins is required. Companies have to spend
significant

63© 2021 MOBI — SC Use Cases and Business Requirements

resources to prepare appropriate documentation to demonstrate conflict-freematerials and minerals.
2. Manufacturing companies are facing reputation risks such as the materials
used in their products have been declared as the ones mined by child laborers
or conflict minerals even though they don't know such facts. A reliable recordkeeping system utilized among all the stakeholders will reduce illegal mining.
3. Blockchain provides high tolerance against data tampering especially insupply chains having dishonest dealers.

CarbonNeutrality

1. Carbon neutrality is one of the important global issues to be resolved and many
countries have been tackling it to reduce carbon emissions. In spite of theefforts by the governments setting regulations and/or systems for carbon
offset/neutrality, the reduction of greenhouse gas has not yet been achieved.
2. Considering the trends to achieve carbon neutrality, the governments will set
stricter regulations for companies and the concept of SDGs will accelerate thistrend. In that case, the companies will suffer from reputation risk andcompensation unless they prove their activities to achieve carbon neutrality.
3. The function "smart contract" by blockchain will be compatible with the "credit"
system to balance between emission and absorption of carbon dioxide. In orderto achieve a fair "credit system", accurate records of carbon dioxide
emission/absorption are essential and this will be supported by blockchain
technology.

© 2021 MOBI — SC Use Cases and Business Requirements

64Appendix: List of Other Use Cases Considered
integrating the multiple government and private systems. It will also provide acommon framework to verify identity, authenticate data exchange between thecompanies.

Logistics
Use Case

Description (1), Pain Points (2), Value of Using Blockchain (3)TariffCalculation
for Customs

1. Facilitate customs entry and duty payment process. In the US, this needs toalign with CBP's 21st Century Customs Framework initiative,
2. Entry processing and duty payment are tedious, incredibly arcane, fraught withintermediaries committed to the status quo. Align customs process to enterpriseaccounting model so as to maximize supply chain efficiency, product flow, andimprove regulatory compliance. Export control law - you cannot export someparts from certain regions to other regions.
3. Optimization of customs costs (e.g., inward/outward processing). Ease thetariff calculations based on the source of materials and location of productionof the vehicle.

Trade
Agreement
OriginCertification

1. Efficiently manage origin certifications, satisfying OEM's concerns suppliers will
efficiently and properly certify originating products.
2. OEMs do not have full visibility to assess supplier compliance and incur
increased liability.
3. Create a DLT network of multiple participating agencies (e.g., OEM, suppliers,
government) in the trade agreement origin certification and a create ledger
accessible to them.

International
Cargo
Carrier

1. Engage mainline air, ocean, and rail carriers to digitize processes by way ofenabling freight contracts, bills of lading, shipment status events, and freight
payment.
2. Tedious ”paper-based” processes remain despite electronic efforts. Carrier
contracts remain difficult to manage and audit the accuracy of freight
payments. Some governments are moving to digitization, but mostly have to beon paper.
3. The blockchain/DLT and standardized data schema may lower the cost of65© 2021 MOBI — SC Use Cases and Business Requirements

Shipping andPhysicalTransport

1. Transport and logistics workflow to physically move parts/vehicles is separated
from OEM/Tier-N’s procurement and production workflow.
2. This separation has resulted in inefficient tracking of parts/vehicles, resource
planning at the production floor, measuring end-to-end greenhouse gas
emissions.
3. The blockchain/DLT and standardized data schema may lower the cost of
integrating the two systems. It will also provide a common framework to verify
identity, authenticate data exchange between logistics companies andOEMs/Tier Ns.

Material
Shipments &Payments
Processing Inbound /Outbound

1. Enabling a blockchain-based supply chain network addressing current pain
points around visibility, traceability, auditability, and smarter business decision
making.
2. No real-time visibility of shipment status. Multiple physical documents used foreach shipping and traceability/tagging of these documents is a challenge in
specific markets. Currently, OEM's maintain buffer stock to address shipment
delays. Multiple systems and business rules leading to data discrepancy issues
including price variances etc. Missing approvals/documentation leads torepeat reconciliations. Missing receivers leading to multiple reconciliations.
Address payment delays
3. Today's information chain has info passed from one partner to another partner,
sometimes the shipment happens earlier than the information. Putting a routeplan/authority info on blockchain. If the route is in the plan or not, track
deviation of the route plan. All the participants in the transport chain can see
the route plan.

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66

Appendix: List of Other Use Cases Considered
3. Smart contracts can be used to automatically issue faster payment for lowrisk invoices. Invoices can be turned into non-fungible tokens and used ascollateral for companies to easily bundle and sell as securities.

Finance and Payments
Use Case

Description (1), Pain Points (2), Value of Using Blockchain (3)Supplier
Smart
Payments/
Rewards withMFG

1. Automation of supplier payments when the right quantity of authentic parts aredelivered at OEM (or even when the vehicle is sold) - building on top of
capability that automotive parts have a Blockchain identity
2. After goods get delivered and OEM factory quality control is done. OEM issues
the payment to the suppliers. Suppliers have to accept the payment terms of
the OEMs (30-90 days usually). Suppliers also borrow at times if they don't havethe liquidity to finance the production.
3. Blockchain and smart contracts enable secure easy quality data sharing andpayment to suppliers. A pre-coded smart contract also protects the supplierand improves suppliers liquid management.

Sureties

1. Insurance companies provide valuable support to cargo handling by way ofmarine insurance products through customs bonding.
2. Insurance claims payment and processing is ”paper-based,” reliant upontransactional details. Clear visibility into incidents can be difficult to attain, as
well as claim processing and payment.
3. Some aspects of the paper-based claims processing can be removed by using
smart contracts augmented by providing transparent information about theclaims to the affected parties.

Automationof Tier-N
Payments

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1. Automation of supplier payments when the right quantity of authentic parts aredelivered at OEM (or even when the vehicle is sold) - building on top of
capability that automotive parts have a Blockchain identity.
2. Goods get shipped, OEM factory quality control is done, then it is going tocontrol to ensure that funding is there and then authorize the payment
Suppliers to accept the payment terms of the OEMs (30-90 days usually).
Suppliers also borrow at times if they don't have liquidity to finance theproduction. Crisis liquidity management. Parts with high raw material
components have indexes that can be linked to the payment.

© 2021 MOBI — SC Use Cases and Business Requirements

Consumption
Use Case

Description (1), Pain Points (2), Value of Using Blockchain (3)Parts Health
Monitoring

1. High-value parts such as Electric Vehicle (EV) innovative business models are
emerging that require the industry to treat batteries as a separate asset for use
cases such as battery swapping, battery rental, etc.
2. There is no industry-wide battery identity framework that allows us to create a
global unique battery ID for OEMs, consumers, dealers to verify battery
provenance, state of health, etc.
3. A global battery identity framework on blockchain/DLT will allow companies toefficiently identify batteries used in battery swapping and rental businesses.

Battery
Consumption

1. When the electric vehicle (EV) becomes more common, reuse of its battery
becomes more important. The accurate record keeping of the battery usage isa good approach to estimate its condition. In order to create a fair market
globally for reused batteries, a standard of record-keeping and verification of
the accuracy of the record is required.
2. The battery conditions have been evaluated with different methods and there is
no reliable way that such results are correct or not. Accordingly, the quality of
the reused batteries in the current markets varies and there is risk of incidents
by batteries of poor quality.
3. Data provenance and sharing among several stakeholders globally.

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Bibliography“Sustainability Strategy,” Ford Motor Company,
https://corporate.ford.com/microsites/sustainability-report-2020/sustainabilitystrategy.html, Accessed February 09, 2021.
“Sustainability at the BMW Group," BMW Group,https://www.bmwgroup.com/en/responsibility/sustainability-at-the-bmw-group.html,
Accessed February 08, 2021.
Williams, M., “Counterfeit parts are costing the industry billions,” Automotive Logistics,
January 01, 2013.
Chen, N., “Two men indicted on charges of selling counterfeit airbags from China,” KIRO7
News, May 22, 2014.
Peresson, S., “Counterfeit automotive parts increasingly putting consumer safety at risk,”`World Trademark Review, May 13, 2019.
Krisher, T., “Takata recalls 10 million more airbags from 14 automakers including Subaru, Ford,
GM and Toyota,” USA Today, January 08, 2020.
https://www.usatoday.com/story/money/cars/2020/01/08/takata-airbag-recall2020-more-airbags-recalled-explosion-risk/2848334001/“Worldwide Automobile Warranties,” Warranty Week, August 16, 2018.
https://www.warrantyweek.com/archive/ww20180816.html

69© 2021 MOBI — SC Use Cases and Business Requirements© 2021 MOBI — SC Use Cases and Business Requirements

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MOBI is a nonprofit industry consortium of many of the world’s largest vehicle
manufacturers, along with many startups, NGOs, transit agencies, insurers, toll roadproviders, smart city leaders, and technology companies working to accelerate
adoption and promote standards in blockchain, distributed ledgers, and related
technologies.
MOBI is creating simple blockchain-based standards to identify vehicles, people, andbusinesses in order to securely exchange and monetize data, and pay for mobility
services, with the goal of making transportation more efficient, affordable, greener,
safer, and less congested. MOBI itself is technology and ledger agnostic. For additional
information about or joining MOBI, please visit our website.

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