Digital Product Passports
Introduction
Upcoming EU legislation will require organisations to adopt Digital Product Passports (DPPs) for goods made, transferred, or sold in Europe. The measures aim to bring greater transparency to products and Value Chains with a focus on easy product identification and traceability. These measures are part of the Circular Economy Action Plan (CEAP) under the Ecodesign for Sustainable Products Regulation (ESPR) which aims to provide clear and reliable to information to users throughout its lifecycle from informing purchase decisions using the details about the origin of the materials through to information to help an item be repaired such as the supplier’s name. This article therefore seeks to explore how DPPs will be used, what can be expected, and practical steps to prepare for the upcoming requirements.
What to expect
The Digital Product Passport (DPP) will be a QR code (or RFID/NFC chip) linked to the product which can be scanned to show information such as the product code, description, attributes, country of origin, material, carbon footprint, water usage, degree of recyclability and ownership information. On certain products, it may also include reparability or the availability of spare parts of a product. This may be used by production teams, customs officials, sales channel partners, service teams, and end customers. It should help consumers and businesses make informed choices when purchasing products, facilitate repairs and recycling, and improve transparency about products’ life cycle impacts on the environment.
Getting started
Readiness for the upcoming change is likely to vary between industry, operation scale, and by an individual organisation. This section outlines steps that can be taken by the seller or manufacturer to ensure that their organisations are well-prepared for the approaching changes.
In this phase, an organisation seeks to understand the extent to which product data is complete, robust, de-duplicated, and surrounded by strong governance practices. Leading organisations tend to manage product data in a central repository (or hub) which disseminates information to downstream systems such as manufacturing, procurement, marketing, sales channels, and CRM systems. By performing an assessment of current maturity, organisations can develop a road map to effectively navigate potential challenges.
Products and components should be traceable to the original country of origin and supplier (where applicable) and such data can be complex where there are extensive Bills of Materials (BoMs) and/or significant variability at the serial number level. This information can vary for every batch of the production as the raw material, or components used for a batch can come from different suppliers or different countries of origin.
Taking the example of a manufacturer of diamond-tipped drills, the diamonds may be mined in Namibia, polished in the Netherlands, and cut in France resulting in a complex value chain; in such cases and particularly with high-value products and components, firms are using Blockchain-based technologies to ensure reliable information is managed effectively.
The Traceability Gap Analysis helps organisations to understand their maturity of their product traceability management.
The details in the DPP, will not be ‘one-size fits all’ and this will likely depend on the product type. In this step, organisations seek to understand the data to be displayed based on the intended users and identify any pain points linked to the assessment performed in Steps 1 and 2.
Conclusion
Digital Product Passports will become a requirement in the near future and organisations can gain an advantage by taking proactive steps to be ready ahead of time. The size of the challenge will likely depend upon the scale, depth, and complexity of the product data and a plan should be developed to ensure this can be met. Embracing DPPs at an early stage goes beyond mere legislative compliance and aims to enhance customer journeys and facilitate product-related processes. In deciding when to start a readiness assessment, the usual truism applies that if the best time to start is yesterday, the second-best time is today.
InspireXT holds extensive knowledge and experience in providing advisory services and implementing solutions in Master Data Management and Supply Chain Management.
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