If you think having a digital product passport to promote supply chain transparency sounds like a good idea, you’d be in good company. The EU published its proposal for the Ecodesign for Sustainable Products Regulation (ESPR) in March 2022. And a key pillar of the proposal is the creation of a digital product passport, which can be used to promote sustainable equipment and materials across value chains such as electronics, batteries and textiles.
Improvements in product labeling driven by advances in technology are putting valuable information in the hands of consumers. Details such as product durability and reliability, reusability, upgradeability and repairability will enable stakeholders across supply chains to make much more informed purchasing decisions. And highlighting the prospects for maintenance and refurbishment, the presence of substances of concern, details on energy and resource efficiency, as well as the amount of recycled content, can save resources and reduce landfill.
ESPR focuses on a wide range of goods. However, there are a few exceptions in the EU proposal, including food. But the good news for consumers is that solutions such as UNISOT’s digital passport module have already filled these gaps, helping suppliers and distributors demonstrate the origin of food and protect buyers from food fraud.
Timestamped product information
Using a blockchain-powered digital product passport, the UNISOT platform can record data that stakeholders choose to share across entire product journeys. And consumers can then check these details to track and trace the production of items available in the market.
In the past, supply chains have relied on point-to-point systems. But with companies changing suppliers much more frequently than in the past and serving new customers all the time, this approach can’t keep up. “Point-to-point software cannot be built fast enough,” said Stephan Nilsson – Founder and CEO of UNISOT TechHQ.
Nilsson first thought about using a central database, but corporate data is too valuable for companies, and organizations are understandably wary of sharing sensitive business information. Blockchain had been tried by others in the past, but used private implementations of decentralized databases, which had problems. His breakthrough was to demonstrate that a public blockchain could be used in conjunction with common enterprise software – for example, to generate a SAP sales order and work with different types of information.
Being able to timestamp business operations and store those events on a tamper-proof digital ledger opens the door to recording every step of a product’s journey. IoT devices can be included to record processing and transport data. In fact, Nilsson explains that it is possible to monetize these product details using blockchain, putting a price on a temperature or a weight, to create an incentive for nodes to exchange information with each other. “It gives manufacturers a new tool to prove the quality of their products to consumers,” he explains. “We sell a sustainability and traceability solution as a service.”
The more stakeholders that participate, the better. But the system can also use machine learning tools to fill in some of the gaps and to detect anomalies. For example, to find out how values compare to historical data. Suppliers and manufacturers decide how much information they want to share, sign those details with a private key, and then the data becomes part of the digital product passport.
ERP plugin
Available as an ERP plugin, customers do not need to change their own backend systems to take advantage. And furthermore, the benefits of contributing to a digital product passport extend beyond the EU proposal. Customers can, for example, use the system to give feedback to suppliers.
UNISOT started in the food and beverage sector. And today, the digital product passport provider has customers in construction, agriculture and even the art world, where the technology is used to verify paintings and sculptures. The fine-grained detail that can be logged helps speed up audits and means that companies don’t necessarily need to recall all products – for example, if a quality problem occurs – only those traced to a particular batch of materials or processing window.
Digital product passports powered by blockchain technology can help supply chains in a number of ways. For example, they can encourage the circular economy by enabling consumers to get a refund when returning materials to a recycling point. They can also make it easy for users to reorder products online. And companies can share much richer maker stories with their customers to develop their brands and engage more deeply with users.
Provenance and federated learning
Today, consumers want to know more about where the goods come from. And digital product passport solutions link material supply and production history to goods in ways that were not possible before. Consumers have the potential to check the authenticity of individual items – for example, to verify whether foods are organic or non-gmo based on time-stamped, digital product histories.
Systems also have the potential to enable federated learning by validating machine learning at the edge. It’s an exciting area, and companies like UNISOT are finding digital product pass solutions that will only become more common as regulatory wheels turn.
