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- Digital Product Passports (DPPs) are a digital record of a product, containing key information about its composition and lifecycle, essentially providing the “story” of a product
- While the EU does have specific regulations that mandate DPPs, the US currently has no such requirements. However, this could change as the market continues to grow
- DPPs can greatly improve logistics operations by improving the traceability of a product, informing decision making, and even improving operational costs
- They can also standardize data processes, improve customer transparency, and encourage more sustainable practices within businesses
- Businesses wanting to get started with DPPs should start small, as well as engage with internal and external teams, audit existing supply chain data, and integrate DPP-suitable technology
Digital Product Passports (DPPs) are already taking off in several industries. They provide a quick, easy method to discern the characteristics of a product, from its material composition to its environmental impact.
While they are primarily in use in Europe, experts predict that the technology could help revolutionize logistics and supply chain on a global scale.
They can provide increased traceability and visibility for a product, allowing it to progress more efficiently through the supply chain. Likewise, they can promote a more sustainable and circular economy by providing key end-of-life information.
In this article, we dive into the potential benefits of DPPs for logistics professionals. We’ll also provide a quick checklist for logistics companies looking to get started with DPPs, to ensure the transition is smooth and effective.
What Are Digital Product Passports and How Do They Work?
Digital Product Passports (DPPs) are a digital record that holds key information about a product and its lifecycle. This includes the materials it’s made of, its energy efficiency, durability, environmental impact, and end-of-life options. In short, they aim to tell consumers the “story” of a product, and provide the product with a unique identity that can be easily tracked and traced.
They are typically accessed via a near field communication (NFC) chip or a quick-response (QR) code, which is embedded into the product for an individual to scan using a device such as a smartphone, where the passport can then be accessed.
What Are The US Regulations Around Digital Product Passports?
There are currently no regulations in the US that mandate DPPs.
The rise of DPPs has mostly happened in Europe. In June 2024, the EU’s Ecodesign for Sustainable Production Regulation (ESPR) came into effect, which mandates DPPs for several product groups, including textiles, batteries, and consumer electronics. Further measures and regulations are expected to come for priority sectors in 2027 or 2028.
However, while the US is yet to make DPPs mandatory, Grand View Research predict that the US DPP market will reach $9.6bn by 2030, suggesting that the innovation may catch on soon enough.
Some US businesses have already started to adopt them. It also may be useful for US businesses that trade within Europe to adopt the strategy, to stay up-to-date with competing companies.
How Digital Product Passports Can Help With Logistics Operations
Sarah Barnes-Humphrey, Founder of Let’s Talk Supply Chain and well-known logistics influencer, said in a recent LinkedIn video that logistics businesses embracing DPPs can expect “better data,” “fewer disputes,” and a “tighter chain of custody,” highlighting the potential for logistics businesses. The benefits go beyond singular businesses, however, and will affect the whole supply chain.
Improves traceability
DPPs provide information on a product at all levels, which means businesses will easily be able to locate and track items throughout their journey to the consumer. Professionals can therefore keep their own internal teams informed, improving efficiency, as well as any third parties or consumers, fostering solid communication and demonstrating trust.
Informs decision making
Businesses, through using DPPs, will have access to all the data they need on a specific product, and will therefore be able to make decisions that are accurate and relevant as the product makes its way through the supply chain.
Lowers operational costs
Logistics operations are no doubt struggling amidst rising costs. According to August Tech.co data, rising diesel prices are a significant pain point for 16% of businesses, leading to professionals looking to decrease other costs where possible.
Due to increased traceability, bottlenecks along the supply chain can be easily identified and resolved in real time. Ensuring the product journey is as smooth as possible will lead to fewer costs related to delays and recalls.
Likewise, with better product information readily available, inventory management will improve, minimizing overproduction and stockouts.
Improves customer transparency
DPPs give companies the opportunity to foster transparency and communication between themselves and their customers by being truthful about where their products have come from, what they are made of, and the journey they’ve taken. Customers who are aware of what exactly they are getting are more likely to trust the company in the long run and repeat business.
Standardizes data practices
Standardizing data can improve overall accuracy and consistency across businesses. Sarah Barnes-Humphrey, on LinkedIn, suggested that, while everyone is more focused on implementing AI, the standardized data and transparency “enables AI to actually do its job”. And indeed, AI thrives on solid and accurate data, which DPPs can provide.
Prioritizes sustainable practices
DPPs give information about a product relating to how it can be reused and recycled, as well as the ways it should be properly disposed of when it reaches its end of life. This will help facilitate a circular economy, which prioritizes the extension of product lifecycles.
Furthermore, with DPPs, companies implementing unsustainable practices will have nowhere to hide, and those prioritizing sustainability can prove it with the data. This also enables greenwashing to be easily identified, which is the practice of deceiving customers by suggesting a product is more environmentally friendly than it really is, in order to generate appeal.
As all the details behind a product are outlined in its DPP, customers will be able to see for themselves if a product is environmentally friendly or not.
Getting Started: What Logistics Managers Can Expect From Digital Product Passports
Here are some things logistics professionals should consider when getting started with DPPs:
- Audit existing product and supply chain data, and identify where you would find all of the necessary product data to have in the passports
- Engage with your suppliers to make sure everyone is on the same page, setting up processes and workflows so all parties can receive regular updates and operations can align with compliance checks
- Build internal teams dedicated to DPPs, with employees in different fields, in order to ensure no element of the process is missed out
- Adopt or integrate DPP-compatible technology, such as product information management (PIM) systems, which are used to collect, manage, and distribute product data. This will also help make sure you have a centralized data system
- Start small, maybe with one product, and begin to map out its materials and suppliers. Focus on the core data and slowly expand to other products as you become more comfortable
DPPs can change the way that products move through the supply chain, providing increased traceability and visibility to products. They can help bridge the gap between consumers and businesses, improve efficiency and decrease costs, and ensure businesses are following sustainable practices.
However, they still remain in the early stages and are yet to be properly regulated in the US. Similarly, while Europe is making digital product information mandatory, it may be that not all consumers and businesses will be completely on board. The process of gathering a high level of data and investing in new logistics technology can be a long and arduous process.
Despite this, the potential benefits are huge, so they are definitely something to look out for as a logistics professional.
