Volkswagen: “We want clean raw materials!”

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Volkswagen:

The great challenges of electromobility include the sustainable recovery of the raw materials. In a series of Hackathons * the car manufacturer Volkswagen is looking for solutions together with start-ups and other partners. In a VW self-published interview, Marco Philippi, Head of Procurement Strategy, talks about the problems of cobalt graduation, supplier ratings and similarities with the fashion industry.

Mr. Philippi, for the second time, Volkswagen is involved in a series of Hackathons. What are you promising?

Marco Philippi: The hackathons are about two things. For the first time we work on concepts to bring the best possible transparency into our supply chains. The reason: We only want to use raw materials that were degraded under decent, sustainable conditions. Second, we want to support the use of our employees for social interests – this is part of good corporate citizenship. Under both aspects, Hackathons 2018 were a success. That’s why we participate in the new edition.

Which results are there before?

More than 100 employees from the Volkswagen Group involved themselves in the past year from their own motivation to the Hackathon: For one day each day they were available as a sparring partner available to help innovate and business models. This has revealed many good concepts to increase the transparency of supply chains. An example is the blockchain solution of Minespider. Together with the start-up, we started a project after the Hackathons to better understand the path of raw materials from the mine to the car. At the end of 2019, the results will be available.

What are the biggest difficulties in purchasing clean raw materials?

Many supply chains are long and branched. Some raw materials go through nine steps before they come to us. However, we usually only have a contractual relationship with the direct supplier. This makes it extremely difficult to guarantee compliance with all environmental and social standards for each stage. In addition, supply chains often change: companies divorce, other providers take their place. This makes it extremely difficult to have a current image of the complete supply chain at any time.

How do you deal with that?

On the one hand, we undertake our suppliers to ensure compliance with all sustainability standards. You do not just have to comply with this commitment, but also pass on to your sub-suppliers. Who does not hold on it, loses the order. On the other hand, we work on technical solutions to be informed at any time about changes in the supply chain – among other things by blockchain approaches as of Minespider. Our goal: We want the best possible transparency – and best at the push of a button.

Volkswagen: Marco Philippi: “We want the best possible transparency – and most of the heart at the touch of a button.”(Picture: Volkswagen)

How do you make sure that suppliers are holding their obligations?

We have introduced a compulsory sustainability rating to identify and exclude risks in human rights, environmental protection and corruption at an early stage. The basis for this are documents that each supplier must deliver with us. Volkswagen commissions independent professionals, which check all information – in doubt also with local controls. If the experts determine errors, we exclude the supplier of the contract award. Our attitude is clear: We only want clean raw materials for our electric cars.

Especially with cobalt replacement, there is always criticism of human rights violations to child labor. Where do you get the cobalt for your electric cars?

One must distinguish two types of cobalt deduction: small mining, in which child labor is actually a common problem, and industrial mining. We buy our cobalt exclusively from industrial suppliers, because of child labor, we do not want to benefit in any way. In the long term, we work to significantly reduce the cobalt content in our batteries. However, the problem is not solved, because the need for children and their families remain. That’s why we use ourselves for solutions that enable sustainable miniature.

There are many activities to find viable sustainability solutions. Which contribute the hackathons?

Common teams from start-ups and corporations complement themselves excellent. Simplified: The one has the unconventional ideas, the others know what works in practice. The cooperation of different industries is fruitful. As a rule, there are a few points of contact between automobile manufacturers and fashion companies. In your supply chains, however, you are looking for similar challenges.

What topics are particularly promising for the participants of this year’s Hackathons?

Sustainable, transparent supply chains are already the focus. Who offering practical solutions or develop together, this is a large business area open.

* What is a “hackathon”?

A hackathon (word creation from “hack” and “marathon”) is an event for simultaneous development of software and hardware. The aim of a hackathon is to create useful, creative or entertaining software products or, more generally, to find solutions for given problems. The participants usually come from various areas of the software or hardware industry in software hackets and often process their projects in cross-functional teams. Hackathons always have a specific topic or are technology-related.

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