Digital Product Passport (DPP)
Product Information MANAGEMENT
Today, sustainability has become a matter of course. According to the Global Sustainability Study 2021 by Simon-Kucher & Partners, it is even an important purchasing criterion for around 60% of customers. With the adoption of the digital product passport, or DPP for short, sustainability efforts by companies are becoming mandatory. We explain what this is all about below.
Introduced as a concept in 2019, the digital product passport is now getting closer and closer. Ultimately, the aim is to find a holistic solution for a sustainable and resource-efficient economy and implement it by 2030 at the latest. Unfortunately, the efforts and measures of individual players are not enough. Everyone has to pull together. The digital product passport should make this possible in future. Even if, from a business perspective, it initially looks like there are more challenges to come, the digital product passport also opens up new opportunities for companies.
Digital product passport
Whether batteries, notebooks or winter jackets. Many products in the EU are to receive a digital product passport as part of the European Green Deal (EGD). In addition to relevant product information along the respective supply chain, the digital product passport should also provide information on the reusability, repair and maintenance of a product. This means that, in future, all components of a product as well as its composition and origin will be documented, starting with the extraction of raw materials through production and use to disposal or reuse. Only a few sectors such as food, animal feed and pharmaceuticals are excluded.
New opportunities for companies
With the digital product passport, product information is to be stored digitally throughout the entire product life cycle. Put simply, it is like a CV for products. However, compiling all the relevant information can be difficult if companies have their products manufactured everywhere, because globalization does not only have advantages. They have created complex value chains that should not be underestimated and make it difficult to access previous information. At the same time, customers are increasingly demanding ecological and social responsibility from companies and want proof of this. Both are to be harmonized with the digital product passport. The goals of the EU Ecodesign Regulation are not in competition with the goals that companies set themselves. On the contrary. The objectives result in opportunities for companies.
- Sustainability: While the regulation is for sustainable business practices, companies can use the digital product passport to make data-based decisions in order to produce in an even more resource- and cost-optimized way in the future.
- Consumer decisions: With the digital product passport, consumers receive well-founded information and can make more conscious purchasing decisions. Companies that disclose their sustainability processes can thus crystallize unique selling points and build greater consumer confidence. Companies can also use the digital product passport to create targeted offers tailored to customer needs.
- Recycling and disposal: By providing information on recycling and correct disposal, less waste ends up in landfill sites. In addition, the reuse of products and materials and the data availability this creates makes it easier for companies to gain better access to critical raw materials.
- Living the circular economy: The digital product passport conserves resources by extending the life cycle of products and raw materials. From a business perspective, this pays off in terms of competitiveness, as insight into the components of products can reduce resource costs.
Which products need a digital product passport?
1. All products manufactured and sold in Europe
Anyone who believes that only European products are affected by the digital product passport is mistaken, as the impact extends beyond Europe. The reason lies in sales. In future, products that do not have a digital product passport will no longer be sold in EU countries. Therefore, it does not matter where the manufacturing company is based or where it produces. Its product must be subject to the DPP regulations, otherwise the goods cannot be placed on the market in the EU.
2. Not only products, but also services
The digital product passport is not only intended for physical products, but also for services, although the initial focus will be on particularly resource- and energy-intensive goods. The DPP is therefore initially tested in the “batteries” category (the first specific use case for the DPP). This is followed by textiles. The DPP will then gradually be rolled out in more than 30 product categories. For consumer goods, an obligation is expected from 2024, while the electrical industry will have to follow suit by 2027 at the latest. From 2030, regulations are to be introduced for many other product categories.
3. DPP depending on production type
Whether each individual product needs its own DPP depends on the type of production. If one and the same product follows an identical supply chain, one product passport is sufficient for all individual items. If a company manufactures its products on an individual order basis with individual component supply chains, then each product manufactured needs its own DPP.
What information is included in the digital product passport?
There is currently no concrete statement on this. The Cirpass consortium initiated by the EU Commission is currently developing prototypes for product passports for batteries, textiles and electrical appliances. Nevertheless, it can be assumed that the following information will be relevant for the DPP:
- Basic product information: Product name, make, model, production number, place and date of manufacture, warranty details
- Material information: Origin of raw materials and components, information on suppliers, chemical composition, recyclability of materials used
- Ownership information: Details of past sales and current owners (particularly relevant for durable products that are often resold)
- Repair information: Information on reparability, details of past repair work including the reasons for this (causes, replaced parts, material composition of replaced parts)
- Sustainability information: CO2 footprint in the manufacturing and distribution processes and during the use phase
In addition to the typical product information, certificates and operating instructions, the focus is now on information on repairability, refurbishment and recycling. Although much of this information is already publicly available today, the problem is that each of the players involved has different exchange formats. After all, the data comes from various sources, virtually everywhere:
Internal sources
- Production data
- Quality control data
- Service data
External sources
- Supplier data
- Partner data
It is not only the legally required information of a DPP that is currently unknown. The format for the digital product passport has also not yet been determined. The decisive factor is that clean and structured processes must be available for the DPP, which is ultimately a data set – both for recording and managing the required data, but also to enable standardized data communication. A PIM system is the only right tool for this. We will show you below how you can create a DPP using a PIM system.
Create a digital product passport using a PIM system
1. We create a digital product passport
No sale in the EU without a digital product passport. But without data, there is no digital product passport. Therefore, you must first have all the necessary data. We do not currently know which data is required by law, but the better you have prepared your product data, the better you will be able to adapt and comply with the requirements. But you don’t just need your data, you need all of it, i.e. all data along the entire value chain (partners and suppliers). Done? The data must then be brought together at a central location. Ideally in a PIM system such as OMN PIM. Side note: You can transfer your supplier data directly into OMN PIM via interfaces, you don’t have to import anything extra and you can even make sure that you get all the data you need by setting specifications. As soon as your data is available in a PIM system, you can manage it as you wish. As if by magic, the data is linked to the right products and is then available as information in your DPP.
2. As soon as our digital product pass is ready, we will publish it
Every digital product passport must be registered with the EU Commission. The information is to be entered via a special input page. The reason: The EU Commission is planning a reliable, central register for product passports. This should consist of both a public and a non-public part. The public part is intended for end users, among others, while the non-public part is only for the EU Commission and market surveillance authorities. The standards according to which the DPP and its versions and updates are to be stored digitally are currently being developed. However, you can integrate various interfaces into OMN PIM to report your data to the EU Commission in this case.
3. Now the digital product pass just needs to be attached to the product.
The digital product passport is not just about being approved on the EU market. This should give all stakeholders access to product information from anywhere and at any time. This is why the DPP is not a paper document. Instead, each product has an area for scanning. This can be an NFC chip, QR code or RFID tag. The data for the product passport is attached during production: either in the form of tiny NFC chips invisibly integrated into the product or its packaging, or as QR or bar codes. Either way, the DPP must be machine-readable. It is likely that both technologies will be used: a QR code on the packaging and a tamper-proof chip in the product. If the product has a DPP, every stakeholder with a smartphone can access all relevant product details directly. Registration, logging into an app or special hardware is not required.
4. We never stand still and always keep our digital product passport up to date
Anyone who manages product information knows very well that the data is not static. They are constantly updated and adapted to the prevailing market conditions. Therefore, the DPP will not be spared this effort. If you have a PIM system such as OMN PIM, for example, the product data can be easily updated and adapted. And you can do this at any time and from anywhere, because OMN PIM is web-based and only requires the Internet and a browser to be used. You can also use OMN PIM to add discounts and special promotions to the DPP and change the design of the digital product pass.
5. We make full use of the product experience with the digital product passport
Congratulations, your digital product pass is ready. Now your potential customers can communicate with it. You are free to offer your customers only “classic” information or also individually tailored content such as additional offers, moving images or up- and cross-selling. With the latter, you strengthen your market position and can gain the trust of your customers, as you not only demonstrate the sustainability of your products, but also provide personal added value.
Outlook on the digital product passport
Even if the respective dates have not yet been set, one thing is certain: the digital product pass is coming. By 2030 at the latest, a digital product passport will be required by law for all product groups. It’s better to leave it to your competitors to sit back and wait. Start making all the preparations for this important development now, otherwise everything will be too late when the time comes. In addition, by introducing DPP at an early stage, you stand out from the crowd, because you have not only understood the importance of environmental protection, but also of digitalization. The digital product passport is the ideal way for you to position yourself on the market as an environmentally conscious and modern supplier. So face up to the challenges and tackle the following points early on:
- Prepare your data collection for the upcoming launch by identifying data gaps and incorrect product information so you don’t fall through at the start of the DPP and miss out on sales.
- Identify your data sources and inform your suppliers and partners about future transparency requirements so as not to delay compliance unnecessarily at the start.
- Take advantage of the possibilities of digitization and get away from Excel by introducing a PIM system for your product data today, because with the DPP at the latest, you will definitely need a PIM system to be able to create a digital product passport from a central source.
- Put your existing PIM system through its paces, especially with regard to the latest possibilities in the field of AI, and don’t be afraid to compare other PIM systems and think about switching. The sooner you evaluate and modernize your IT landscape, the more time you gain for the DPP.
- Think about who should be on your DPP team so that you can call up this team when the time comes and don’t have to think about who and what first. This will help you to avoid personnel bottlenecks and raise awareness of this issue and its future importance for your company in good time.
About OMN PIM
With OMN PIM you can collect, structure and process product data from various sources. Regardless of whether the data comes from external or internal sources. Created specifically for product information, OMN PIM is therefore the ideal place for all your product data along the entire supply chain. Whether master data, specifications, materials, manufacturing processes or product compliance details, OMN PIM bundles and links them all in a central location. Structured digital processes and functions for data governance and version control ensure transparency, sustainability and compliance in your DPP development. See the power of OMN PIM for yourself and be well prepared when the digital product passport arrives.
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