How traceability can save billions of euros on recalls

Imagine you have a critical airbag sensor. Do you want to recall 20,000 or 100,000 cars? Or just the few that contain the traceable critical part? The answer is easy. For automakers and suppliers alike, recalls are costly and stressful. A smarter traceability approach can help reduce the impact and cost.

The recall nightmare

With some of the biggest automotive recalls affecting millions – even tens of millions – of drivers, a solution that limits the scope of recalls can save automotive brands and suppliers millions or even billions of euros on a single recall.

The biggest recall of all time was the Takata airbag recall starting in 2013. It affected over 67 million vehicles from 20 automakers and drove Takata into bankruptcy. In fact, that recall is still ongoing – because no one knows exactly where the faulty parts are.

Traceability drives smarter QM and process optimization

Traceability in Catena-X builds on digital twins – giving each part, component or batch a unique digital identity that links real-world production events to the virtual supply chain. This enables full lifecycle tracking, from raw material to finished vehicle. If a critical part is detected later, manufacturers no longer have to cast a wide net. Instead, they can pinpoint the exact vehicles that contain the specific part in question.

For instance, imagine a defective brake system sensor installed in certain vehicles. With traceability, it’s possible to trace the faulty sensor back to a specific production batch, determine which brake assemblies it was used in and identify exactly which vehicles received those assemblies. In fact, even the location in each vehicle can be specified (e.g. left-front brake only). The result? Only the affected vehicles need to be recalled – not an entire model year.

Traceability also creates value well before any recall happens. It provides manufacturers and suppliers with a clearer view of their value chains and helps them comply with increasing regulatory demands within a secure dataspace. When OEMs like BMW, Mercedes or Volkswagen require full traceability from their suppliers, being able to deliver that data quickly and reliably becomes essential for maintaining business relationships.

Data security

Some manufacturers and suppliers might hesitate to adopt traceability due to concerns about exposing sensitive supply chain data or revealing business relationships.

Central here is the “one-up, one-down approach.” In short, “one-up" means each participant in the supply chain knows who they sold to (their immediate customer), and "one-down" means each participant knows who they bought from (their immediate supplier). This is key for enabling data sovereignty and targeted traceability without requiring every company to know the full end-to-end value chain.

Traceability solutions based on the Catena-X framework are designed with data sovereignty in mind. So every company remains in control of its own data – deciding what to share, with whom and under what terms. Traceability does not mean giving away trade secrets. Instead, it enables controlled, secure data exchange based on clear contractual agreements.

Traceability: the foundation for Quality Management

Traceability and quality management are closely related but serve different purposes. Traceability provides end-to-end visibility into the lifecycle of parts and components, documenting their origin, processing and movement through the value chain, is critical when dealing with issues such as recalls, as it rapidly identifies and isolates the affected items. Quality Management focuses on maintaining and improving product and process standards.

Quality Management uses traceability data to detect quality deviations, generate quality notifications and perform root cause analysis, ultimately facilitating corrective action and long-term process optimization. Traceability therefore underpins many aspects of Quality Management.

Trace-X for traceability in Catena-X

To make this process easier, Cofinity-X offers Trace-X, which was built based on user feedback and with expertise from an OEM in Germany. This practical, ready-to-use application makes traceability feasible for automotive players of all sizes. It’s designed to be fast to implement into existing IT tools, easy to use and compatible with the broader Catena-X ecosystem. For manufacturers and suppliers, the direct benefits are fast and standardized communication and an application that can be individually tailored to their needs.

Once a fault is detected, Trace-X takes over the entire communication process, automatically informing all relevant parties in the value chain, but without exposing their data. This reduces delays, avoids miscommunication and ensures that the right information reaches the right stakeholders at the right time. Instead of relying on manual phone calls, e-mails or scattered spreadsheets, companies can respond quickly, with a consistent and verifiable flow of data. This helps contain the issue faster, limit the scope of damage and reduce legal or reputational risk.

Trace-X from Cofinity-X is your entry point for traceability in Catena-X.

Don’t just react to recalls, prevent them.

Want to trace smarter? With Trace-X, you’re ready. Get in touch here to get started.

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Related links

Watch a deep dive on traceability by Catena-X.

Learn about a traceability use case with Dräxlmaier.

Learn about a traceability use case with Koller Kunststofftechnik.

Request a demo to see for yourself how traceability can work for you.

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