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Are You Prepared For The Digital Product Passport?

READ TIME: 6 MINUTES
February 28, 2024
Digital Product Passport

The Digital Product Passport (DPP) is coming to the European Union (EU) and will significantly impact the global data management processes and business operations of manufacturers and retailers. But what is it? Here’s what you need to know so you can start getting ready successfully.

Digital Product Passport

Consumers want more sustainable products and transparency

As a shopper, how important is product content transparency when you buy something? If you said “very” you’re not alone. There’s a growing global shift in consumer expectations about knowing the content and origins of what’s in the products they use. Many may switch to “greener” brands if they aren’t satisfied with the level of product content transparency. From foodservice and CPG to manufacturing, every sector is under greater scrutiny by buyers.

According to a joint study by McKinsey & Company and NielsenIQ, “products making ESG-related claims averaged 28 percent cumulative growth over the past five-year period, versus 20 percent for products that made no such claims.” Just think of the long-term growth potential that more transparency can yield!

What is the Digital Product Passport?

Here’s some background: The DPP was created to help achieve the mission of The European Green Deal, which strives for the European Union to become the first climate-neutral continent with net-zero greenhouse gas emissions by 2050. There are several initiatives to meet this ambitious goal. One of these includes updating the Ecodesign for Sustainable Products Regulation (ESPR), the European Commission’s cornerstone policy to achieve more environmentally sustainable and circular products. During this update, the DPP will be introduced to help fulfill this directive.

What type of data will the DPP require?

The DPP will require key information about products throughout their lifecycle. This means data on where and how the product was produced, what material was used, what does the material contain, and how components should be repaired or recycled at the product’s end of life.

The aim is to achieve full transparency and traceability on things like a products’ origin, ingredients, and carbon footprint. This way, the passport gives a complete picture of the product’s history. But it should also include plans for the future, such as instructions for recycling or enabling circular products and business models.

Some advantages of the DPP

  • Creates a cost-effective process, making it easier to share data and information.
  • Establishes a high-quality minimum level of content and information.
  • Ensures compatibility for data exchange.
  • Facilitates procurement.
  • Promotes trade and exports.

To start getting ready, you should look at your situation, your company, what sector you’re in, and what kind of industry. Are you global? Are you not? Where are you located? Get involved and start looking into this in your company now. You should see this as a business value opportunity, not just another IT project.

Ulrik Lilius
Senior Business Advisor at Avensia

What is the current status of the DPP?

Right now, the DPP is under development, but there are some frameworks and directives that have been addressed so far. These include the following.

  • The three key information points required include details about the product itself, the financial operator (who puts it on the European market and is responsible for the DPP), and the facility (where it’s produced).
  • There will be decentralized data storage.
  • Data information for products/components will be machine-readable (e.g., open APIs) and not in documents or on web pages.
  • It will be based on open standards that may include existing ISO (International Organization for Standardization) or IEC (International Electronics Commission) standards.
  • Though this information is open, there will be some degree of limited access so competitors and other parties to protect sensitive information.
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Data management approaches for DPP

Many brands and retailers have PIM, MDM, syndication, and other contributing technology platforms in place, but identifying how to leverage these is important. It’s not about one single solution or platform. It’s about a solution that can be molded into the very fabric of your IT landscape by selecting the right technology and architectural approaches to do that.

Effectively managing the data DPP requires means being able to identify the connections between the different types of data to provide more insights and visibility into their interactions so you can understand your products coming from different suppliers, from different manufacturing facilities, using different production equipment with different labor rules in different countries, and more.

This is very much about a multi-domain journey. In particular, the ability to support data that touches products, suppliers, locations, assets, employees, facilities, transportation, and much, much more.

Ian Rendall
Global SVP, Solution Engineering at Syndigo

This knowledge is fundamental to DPP and ESG initiatives, but it’s about more than being compliant. If all you do is focus on compliance, you may miss a huge opportunity to go beyond to deliver exceptional experiences to customers who aren’t asking you to do that. But you’ve got an opportunity to get ahead of their ask.

Watch Are You Ready For The Digital Product Passport?

 

A strategic advantage: partner collaboration

Working closely with your information supply chain outside of your organization is essential for any kind of ESG initiative that you undertake. This is where PIM, MDM, and syndication tools play a key role because they support and facilitate the collaboration frameworks that allow you to exchange not only the data itself, but also all of the complexities that sit around brands, retailers, suppliers, and manufacturers that can be very, very significant.

Don’t sit in a silo doing your own work. If you work with solution partners, it is beneficial to leverage the work that others may already be doing, to help your preparedness…and you may be able to help them too! This collaboration can be very beneficial in bringing down some of the barriers to implementation, while also removing some of the complexities and duplication of effort that will go into these activities.

The path to success

A successful digital product passport initiative requires careful consideration around preparation, understanding the data footprint, looking at the technology capabilities that you have, and making sure you’ve got effective collaboration tools.

PIM, MDM, and syndication capabilities play a pivotal role in letting you acquire, govern, and distribute that data. They provide a strong foundation for a comprehensive, sustainable DPP initiative.

The challenge of the DPP is its dynamic component, which will keep us very busy over the next few years. The topic has two dimensions: firstly, the horizontal breadth along the value chain with its intermediate steps, and secondly, the verticality in the higher demands on the data itself. Both lead to an enormous increase in complexity and the need to orchestrate much more data in new domains and structures. The answer to this can only be greater automation in order to meet the visibility and transparency requirements of the new regulations. However, many of today’s product master data systems are far too rigid and inflexible.

Garvin Prenzing
Managing Director, Germany, Advellence

Stay up to date on DPP developments

Keeping track of the evolving DPP requirements is vital. It’s important to stay engaged to keep your DPP initiative current. Once you understand the outcomes you’re trying to achieve and what it means to you as a business, you will be in a better position to assess your data platform options and augment their capabilities to meet DPP guidelines.

For example, Syndigo, with partners like Avensia and Advellence, has been helping global brands, retailers, and manufacturers across industries with ESG for many years. Leveraging a knowledgeable partner can help you get started now by building a DPP plan to navigate these new layers of data complexity.

Watch Are You Ready For The Digital Product Passport?

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