Digital product passport readiness: 5 questions for your supply chain
blogSeptember 13, 2023
New sustainability regulations are fast approaching. Is your supply chain ready for what's coming?
1. How are your raw materials extracted?
The first step to complete supply chain transparency is understanding exactly what raw materials go into your products, and how. The digital product passport legislation is prioritizing specific industries based in part on how resource-intensive the materials extraction processes are. For example, the EC has identified the electronics sector as an early priority for digital product passports. This makes sense as not only do electronic devices often have large waste footprints, but they are resource-intensive to produce with many raw materials extracted in the process.
To meet DPP regulations, electronics brands will need complete transparency about the materials they source. This is both to reduce the environmental impact of resource extraction and to protect vulnerable local communities.
Getting better visibility over this part of your supply chain can be challenging. However, there are a range of actions you can start taking now:
- Conduct audits and site visits at your suppliers’ mines or extraction sites
- Explore traceability technologies such as blockchain to track the origin and journey of the raw materials
- Engage with third-party auditors or certification bodies that can also provide assurance of responsible sourcing practices
2. What is the environmental impact of your manufacturing process?
DPPs will likely require brands and manufacturers to accurately report on environmental inputs and outputs of their production processes. Depending on the product in question, these processes can be significantly impactful. However, for many companies, the hardest challenge will be the size of their production processes. With manufacturing and assembly across many locations, countries, and regions, getting all that data into one place is no simple exercise.
One way to prepare now is by performing a life cycle assessment (LCA) of your product. This will help you quantify the environmental impacts associated with all the stages of a product’s life and should be a strategic priority for all companies likely to be impacted by DPPs. An LCA assesses various aspects, including material processing and manufacturing, and will give you an important base on which to build. Another option is regular environmental audits of your production processes and locations. Environmental management systems (EMS) can help you monitor these audits and minimize any environmental impact.
3. What is the carbon footprint of your supply chain logistics?
Once your product is made, tested, and packaged – what happens next? How is that product transported to your warehouses? How does it then make it to every retail location you sell through? What is the distribution method when ordered online? Whether you manage your own logistics operations or rely on a third party, you will need to know the details.
Carbon accounting systems have emerged as a way for brands to reduce the carbon footprint of their supply chain logistics. Companies can also collaborate with their logistics providers to find ways to reduce emissions, such as optimizing routes for efficiency, using lower-emission vehicles, or offsetting emissions through verified projects.
4. How are your supply chain partners reacting to the digital product passport?
This is an important one. The influence of your supply chain partners is already huge in terms of your go-to-market strategy. However, when it comes to preparing for a future with digital product passports, these supply chain actors soon become the difference between compliance and failing to meet regulations.
In order to tackle the demands of DPP, you will need each and every supply chain partner by your side. Every supplier will need to have all their parts and processes documented, traceable, and compliant for your products to comply with new regulations. To ensure operations are as straightforward as possible, start conversations with suppliers early. The sooner you can get your systems and software aligned, the more time you will save down the road.
5. Are you confident you have the right technology stack to be DPP compliant?
Two things are certain about DPPs. First, they’ll be here soon and companies in industries like electronics, apparel, and manufacturing need to respond sooner rather than later. Second, failure to do so will have big consequences that could render your products unsellable in your target markets. Even companies not based in Europe will still need to comply if they wish to sell into the European market.
While the exact details are still being decided, DPPs will likely come with more obligations around data storage, access, security, quality, and integration. And there will likely be fines for those who are unable to comply. That’s why so many brands and manufacturers are reassessing their data management capabilities and finding new software solutions for the upcoming impact of DPPs. One such software solution is PIM, also known as product information management.
Answer these supply chain questions… only with inriver
With the inriver PIM as the centerpiece solution for your product-related data across your supply chain, you can be sure you have the best possible start for your digital product passport journey. DPPs will revolutionize data transparency around each and every product. The inriver PIM, with a fully extensible data model, offers the ongoing data complexity management you need to fulfill the evolving demands of the DPP. This is just one of many benefits of PIM.
In addition to revolutionizing your product data governance and supporting DPP compliance, the inriver PIM offers the complete solution for your entire product journey. With API-based product content syndication and digital shelf analytics both built into our PIM solution, you have all the tools you need for even the most complex omnichannel strategy and better customer experiences at every touchpoint. Want to see how the inriver PIM could transform your marketing and sales strategy while also preparing you for the demands of DPP? Book a personalized, guided demo with one of our PIM experts today to find out.