CHRIS JONES | OCTOBER 15, 2024 | 5 MINUTE READ
As sustainability takes centre stage in global fashion, Digital Product Passports (DPPs) are no longer a distant requirement—they are an immediate priority. Brands that act now will be poised to lead in compliance, transparency, and operational efficiency. For small and medium enterprises (SMEs), navigating the complexities of DPP implementation will be critical to remaining competitive in an increasingly eco-conscious marketplace.
Enforced in EU markets under the Ecodesign for Sustainable Products Regulation (ESPR), DPPs are designed to track more than 100 data points across a product's lifecycle, including raw material sourcing, manufacturing details, and recycling options. Implementing DPPs can present several challenges for fashion brands, especially SMEs. However, overcoming these challenges offers significant opportunities for growth, operational efficiency, and compliance in the evolving global market.
This article is part of an ongoing series addressing the challenges and opportunities of implementing DPPs to help brands define a clear strategy for this transformation. Stay tuned as we explore various facets of DPP adoption, including data management, supplier collaboration, and technology integration, to provide a comprehensive guide for fashion companies.
More than compliance, DPP can generate new opportunities.
Understanding Digital Product Passports (DPPs)
Digital Product Passports provide essential information on a product's lifecycle, promoting sustainability and ensuring compliance with growing global environmental standards. By 2027, DPPs will be mandatory for fashion products sold in the European Union. Each DPP will track details about the product's journey, from raw material acquisition to eventual recycling or reuse.
The technology needed to collect, manage, and store this data already exists. However, a core challenge for fashion brands lies in capturing accurate data, integrating new systems into existing IT infrastructures, and ensuring data consistency across the supply chain.
Build Strong Supplier Partnerships for Data Centralisation
The first and perhaps most significant challenge for fashion brands is centralising primary data across the global supply chain. Strong supplier relationships are vital to ensuring compliance. Brands must embed sustainability metrics in contracts to build trust and create accountability. Those who foster transparent partnerships will find DPP compliance more seamless.
Key Steps to Centralise Data Collection:
1. Collaborating with Suppliers
Fashion brands need to develop solid and transparent partnerships with their suppliers. This includes ensuring suppliers provide detailed data on raw materials, production processes, and transportation. To incentivise suppliers, brands can include sustainability and data accuracy metrics in their contracts, offer benefits, or include penalties to encourage adherence to DPP requirements.
The EU DPP requirements define the Responsible Economic Operator (brand or retailer) as solely responsible for the data accuracy of the mandatory data. Therefore, purchasing contracts are likely to include terms that spread the risk and potential penalty across the supply chain in the case of inaccurate data.
Insight: Manufacturers and suppliers that guarantee the accuracy of their mandatory data for DPP will develop a competitive advantage.
2. Utilising DPP-as-a-Service Providers
For smaller companies or those lacking technical expertise, third-party solutions from DPP-as-a-Service (DPPaaS) providers can simplify data collection and management. These cloud-based platforms streamline the centralisation of lifecycle data, offering tools that capture, validate, and store the necessary information across the supply chain.
Caution: Although DPPaaS solutions will develop rich functionality over time, these should initially be considered ‘dumb terminals.’ Ask key questions:
How do we acquire and verify the accuracy of mandatory data from the supply chain that must be uploaded to the DPPaaS?
Who owns the data once uploaded, and what about data generated throughout the extended lifecycle of the product across the circular economy?
Can we view insights from all products or only each unique DPP?
3. Leveraging Blockchain Technology
Blockchain is increasingly used in traceability and supply chain transparency. Blockchain's immutable, decentralized nature ensures data accuracy and security, building confidence in a product's sustainability claims.
Caution: Is Blockchain Right for Your DPP Strategy?
Focus on Data Accuracy First: Blockchain secures data but doesn’t validate its accuracy. Ensure data accuracy before storing it on a blockchain.
Energy Costs: Blockchain is resource-intensive. Consider its environmental impact, especially for smaller brands.
Counterfeit Risks: Secure physical data carriers (QR codes, NFC tags) to prevent counterfeits from using blockchain data.
Use for Critical Cases: Reserve blockchain for high-security needs like luxury goods, where traceability is paramount.
Strong, transparent partnerships are essential to consistent and accurate data collection.
Create a Unified Approach by Integrating Systems
For many fashion brands, integrating DPPs into existing IT infrastructure is the second major challenge. For DPPs to work effectively, they must link to critical data systems such as Enterprise Resource Planning (ERP), Product Lifecycle Management (PLM), and Traceability platforms. Overhauling these systems can seem daunting, but doing so ensures long-term compliance and scalability.
Key Steps to Integration:
1. Assess Existing Infrastructure
Begin by auditing current IT systems to identify potential gaps. Map out existing ERP, PLM, and traceability systems to understand data origin, ownership, and consistency of data flow, identifying where upgrades or new integrations are needed.
2. Adopt Modular, Scalable Technology
Modular, scalable systems allow brands to start small and expand their tech capabilities as regulations evolve. Cloud-based ERP and PLM systems provide flexibility. Ensure system vendors offer a managed data model that includes DPP data and the capability to populate from external sources.
3. Invest in Automation and Data Management
Reduce the complexity of data integration by investing in automation technologies that handle data entry, validation, and reporting. This minimises human error and ensures that lifecycle data remains up-to-date across systems.
Integration is essential for consistent and accurate data.
Ensuring Data Accuracy: Reducing Risk and Strengthening Trust
One of the most significant risks when implementing DPPs is data inaccuracy. Without reliable data, brands selling in the EU risk non-compliance, which could lead to fines, restricted market access, and reputational damage. Moreover, inaccurate data may lead to consumer mistrust, particularly among eco-conscious buyers.
Key Steps to Ensure Data Accuracy:
1. Establish Robust Verification Processes
Implement supplier audits to ensure data meets quality standards. These audits can be automated but must also involve manual checks for new products, processes, and suppliers.
2. Invest in Data Validation Technology
Brands should invest in data validation technology to automate accuracy checks. Systems can flag discrepancies and recommend data verification based on historical results. Automated validation helps maintain real-time lifecycle updates.
3. Staff and Partner Development
Train staff and suppliers on the importance of data accuracy. Building a culture of sustainability awareness ensures data integrity at every operational level.
Data verification processes are essential to populate unified systems with accurate data.
Challenges Specific to SMEs
While larger companies have the resources to build internal teams and invest in custom software, SMEs often face tighter budgets and limited access to technology. However, cloud-based and DPP-as-a-Service solutions provide SMEs with accessible, scalable ways to meet DPP requirements without excessive upfront investment.
Key Solutions for SMEs:
1. Utilise Third-Party Providers
SMEs should leverage third-party DPP providers offering tailored solutions for smaller companies. These providers can handle data management, allowing SMEs to focus on core business activities.
2. Collaborate on Data-Sharing Platforms
Join industry-wide data-sharing platforms to pool resources with peers, access supplier data, track lifecycles, and share compliance costs. Collaboration helps SMEs remain competitive in a market dominated by sustainability demands.
Example: Burton Snowboards, an SME, partnered with Avery Dennison to implement a DPP-as-a-Service platform. This allowed Burton to centralise its supply chain data, eliminate waste, and promote circularity. This cloud-based technology enabled compliance while improving customer engagement by showcasing sustainability initiatives.
Lean on the modular systems of 3rd party providers and external networks to drive your business.
Conclusion: Leading Through Strategic DPP Implementation
Digital Product Passports are more than just a regulatory requirement—they are the roadmap to a sustainable future. By embracing data centralisation, modular technology, and data accuracy, fashion brands can unlock new business opportunities, build stronger consumer trust, and ensure compliance with ESPR and future regulations.
This article is part of an ongoing series that addresses the challenges and opportunities of DPP implementation. Future articles will explore data management practices, supplier collaboration, and leveraging new business models. Stay tuned for more insights, and contact JBSO Group for expert assistance in overcoming DPP challenges and capitalising on its transformative potential.
JBSO Group can help
For brands looking to leverage the strategic potential of DPPs, reach out to JBSO Group for expert insights and guidance on integrating this transformative technology into your business model.
➡️ LinkedIn
Author Chris Jones
For over three decades, Chris has helped global brands, retailers, and manufacturers align people, processes, and technology, driving transformation projects to maximise business impact.
This article is also published in the JBSO Group LinkedIn newsletter: