Part 2: DPP, Compliance, and the Digital Thread
This blog is Part 2 of a two-part series on the Digital Product Passport (DPP). Part 1 defined the DPP as a key initiative proposed by the European Union (EU) as part of its strategy for a sustainable and circular economy. The DPP is a digital record that contains information about a product’s materials, components, carbon footprint, supply chain, durability, and repairability.
Implementing the DPP
DPP implementation requires all parties along the supply chain to be significantly more diligent in collecting and maintaining information on their products. Manufacturers that participate in a given supply chain will need to possess a more complete understanding of design, components, repairable parts, recyclable parts, and circularity, among other features. Manufacturers and retailers will have a new layer of detail to consider when deciding what products to buy and how to fill their inventories. Customers will immediately access a product’s origin, raw materials, energy usage, carbon footprint, and other sustainability data. The initial transition into this level of detail and transparency will almost certainly be costly, time-intensive, and prone to error:
- Data management: Collecting and managing the vast amounts of data required for DPPs can be challenging.
- Standardization: Developing standardized formats and protocols for DPPs across different industries.
- Costs: Initial implementation costs for developing the infrastructure needed for DPPs.
- Interoperability: Ensuring that DPP systems can work seamlessly across different regions and sectors.
Complying means embracing circularity
Complying with the new regulations will catalyze change, perhaps reaching the transformative level.
The first step toward a solution is transitioning from a linear supply chain model to one that embraces circularity. Circularity—a concept that’s gained much traction in recent years—refers to a product or resource’s ability to be reused, recycled, or regenerated in some way.
The electronics industry, for example, has seen significant growth over the past decades and an accompanying rise in electronic waste. In fact, at 62 million tons, it has the fastest-growing waste stream in the world. It has long adhered to a linear supply chain, resulting in ever-increasing waste. With so little being recycled, this trash continually poses logistical challenges and environmental threats to individuals and their governments.
Now they must start finding ways to incorporate more recycled materials into their products and have methods for recycling those products when they reach end-of-life. They will need to ramp up their data-gathering infrastructure significantly. Supply chain visibility and supply chain management will become even more critical to businesses that want to comply with the new regulations, adapt to the evolving expectations of governments and consumers, and thrive in an era in which sustainability metrics can be accessed and evaluated by virtually all key stakeholders.
There are interesting user stories shared by CIRPASS that look at the benefits of the DPP from various constituencies. The scenarios below reflect some of the benefits to individual users:
- As a responsible economic operator, I want to market my product and issue the DPP to comply with relevant regulatory requirements.
- As an online buyer, I want to retrieve the model-level data from a list of model-level product identifiers to compare sustainability markers.
- As an economic operator, I want to update the item-level DPP data to document a product’s repair.
- As a Recycler, I want to retrieve the DPP data from the product’s data carrier so I can optimize my operation and deactivate the DPP of recycled products.
- And more!
The role of the digital thread in the Digital Product Passport
The digital thread is a foundational element for the effective implementation of Digital Product Passports (DPPs), providing seamless data integration across the entire product lifecycle. By linking data from the material sources, initial design phase, manufacturing, use, and eventual disposal, the digital thread ensures continuity, traceability, and accuracy of information. This framework not only supports comprehensive lifecycle management but also facilitates compliance with regulatory standards, enhances customer transparency, and promotes sustainable practices such as recycling and reuse. It strengthens data interoperability, allowing different systems and stakeholders to access and utilize the data efficiently, thereby supporting complex supply chains and multi-faceted business operations. Organizations need to take a strategic, step-by-step approach that involves understanding regulatory requirements, assessing current data and processes, engaging stakeholders, developing a robust data collection strategy, and establishing a digital thread. This approach ensures compliance and adds significant value through enhanced transparency, operational efficiency, and sustainability.
1. Data integration and continuity
- Definition: A digital thread establishes traceability of product information across multiple domains in the product lifecycle to provide in-context relationship connections between a product’s digital assets. The digital thread maintains meaningful relationships among all of a product’s digital assets—and their revisions over the lifecycle—across multiple domains throughout an enterprise and the supply chain.
- Benefit: It ensures that all relevant data about a product is captured, stored, linked, and accessible at every stage, from requirement definitions to design and manufacturing to use and disposal. This continuous data flow is essential for creating a comprehensive DPP.
2. Enhanced traceability
- Definition: Traceability refers to tracking an item’s history, application, or location.
- Benefit: The digital thread provides end-to-end traceability, which is crucial for DPPs. It allows stakeholders to trace the origins of materials and substances, understand the impact of manufacturing processes, and monitor the product’s lifecycle, ensuring authenticity and compliance with regulations.
3. Improved data accuracy
- Definition: Data accuracy refers to the correctness and precision of the information collected.
- Benefit: The digital thread minimizes errors and inconsistencies by linking data with known maturity from various sources and stages of the product lifecycle. This accuracy is vital for the reliability and credibility of DPPs.
4. Lifecycle management
- Definition: Lifecycle management involves overseeing the entire lifecycle of a product from inception to disposal.
- Benefit: The digital thread supports comprehensive lifecycle management by providing detailed information at each stage. This facilitates better decision-making regarding design improvements, change impact, maintenance, and end-of-life recycling or disposal.
5. Regulatory compliance
- Definition: Regulatory compliance means adhering to laws, regulations, guidelines, and specifications relevant to the business.
- Benefit: The digital thread helps companies comply with regulatory requirements by ensuring all necessary data is available, accurate, and easily accessible. This is particularly important for DPPs.
6. Customer transparency and trust
- Definition: Transparency in this context means providing customers with clear and accessible information about the product.
- Benefit: The digital thread enables the creation of DPPs that provide customers with detailed information about the product’s materials, origin, and lifecycle. This transparency builds trust and helps consumers make informed decisions.
7. Support for circular economy
- Definition: A circular economy aims to eliminate waste and support the continual use of resources.
- Benefit: The digital thread aids in promoting a circular economy by providing detailed information that supports design for sustainability, recycling, refurbishment, and reuse. DPPs, enabled by the digital thread, ensure that products can be efficiently tracked and managed through their entire lifecycle, facilitating more sustainable practices.
8. Data interoperability
- Definition: Interoperability is the ability of different systems, devices, or applications to work together within and across organizational boundaries.
- Benefit: The digital thread ensures that data can be shared and used seamlessly across various systems and platforms. This interoperability is essential for creating and maintaining DPPs that involve multiple stakeholders and complex supply chains.
To get started, take a step-by-step approach
Getting started with DPPs requires a strategic approach that involves understanding regulations, assessing current capabilities, engaging stakeholders, and implementing the right technology. By following these steps, companies can effectively create and manage DPPs, ensuring compliance and adding value through transparency and sustainability.
Understand regulatory requirements
Action: Research and understand the specific regulatory requirements and standards for DPPs in your product group and region.
Benefit: Ensures compliance and helps you identify the necessary data and processes that need to be documented.
Assess current data and processes
Action: Evaluate your current data management systems and processes. Identify what data is already being collected, in what system and what additional information will be needed for DPPs.
Benefit: Provides a clear picture of your starting point and highlights gaps that need to be addressed.
Engage stakeholders
Action: Involve key stakeholders from various departments such as product development, supply chain, IT, compliance, and marketing. Also, consider engaging external partners, suppliers, and customers.
Benefit: Ensures that all relevant perspectives and requirements are considered, fostering collaboration and buy-in across the organization.
Develop a data collection strategy
Action: Define what data needs to be collected, how it will be collected, and from whom, including inside and outside (Data-as-a-Service or DaaS) an organization. This includes material composition, manufacturing processes, lifecycle information, and sustainability metrics.
Benefit: Establishes a structured approach to gathering all necessary information for the DPP.
Implement a digital thread
Action: Set up a digital thread to integrate data across the product lifecycle. This may involve investing in or upgrading digital platforms supporting data continuity and interoperability.
Benefit: Ensures seamless data flow and traceability from product inception to disposal.
Why Aras?
At Aras, we help users manage and model their digital threads and consider the digital thread the backbone of an enterprise ecosystem that supports Digital Product Passports and all product-related compliance requirements.
For large enterprise companies that design, build, and operate complex products and want to solve unique, complex business challenges to support the DPP, Aras Innovator® acts as the digital thread platform that enables organizations to be more diligent and meticulous in their efforts to collect and maintain product information transparency. It does so by modeling a traceable and complete understanding of design, components, recyclable parts, and circularity, among other features, and by connecting to all related product data throughout your industry ecosystem to support current and future reporting requirements.
Want to learn more?
We support our customers, partners, and others in implementing European Union regulations to secure a sustainable and “greener” future for all. If you want to hear from industry experts, check out the on-demand recording of Pulling the Digital Thread: Bring the Power of Data and AI to Managing Compliance. You won’t want to miss this panel discussion moderated by Aras’ Pawel Chądzyński and featuring David Segal, Tata Consulting Group, Marcellus Menges, SICK, and Louis Hendricks, Global Value Web.