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Sustainability is no longer a “nice to have” and has quickly become a key strategic priority for organizations in the chemical industry. Since chemicals shape our everyday world, it is imperative that manufacturers strive to minimize their impact on the environment when producing and distributing products. Consumers are also increasingly demanding more transparency in the supply chain of chemical manufacturing and have moved towards greener purchasing decisions.
In harmony with sustainability is the industry’s movement towards building a circular economy. The circular economy initiative aims to cut waste and extend resource longevity when we produce, consume, and utilize products. For chemical manufacturers, this means:
- Improving the durability, reusability, and upgradability of products;
- Increasing recycled content to reduce the use of net-new materials; and
- Reducing their carbon and environmental footprint.
With growing legislation around data transparency that fosters sustainability and circularity, the Digital Product Passport (DPP) is a tool created to collect and share product data so that there’s a full audit trail of events for a product’s lifecycle. A product’s sustainability, environmental, and recyclability attributes will be easily trackable with a DPP. Given the increasing developments of EU legislation that will make DPPs mandatory for manufacturers within the textiles, electronics, battery and construction industries, among others, it is critical that stakeholders understand what is involved and how to start preparing now for the digital path ahead.
Assessing your product data availability and gaps
For most companies in the chemical industry, product data is disorganized and spread across the organization. Data is siloed by region, market, and business system; it’s trapped in PDFs, spreadsheets and SharePoint drives. There’s no central source of truth for product data. Since the basis of DPP lies in enabling data transparency, assessing and organizing product data is the first vital step that your organization must take. Do you know where all of your materials are sourced? How about the carbon footprint of your manufacturing process? Understanding what data already exists at your company as well as what is missing is imperative to knowing whether or not you will comply with upcoming regulations.
Organizing your data and using a PIM to start your process
Once you’ve collected and organized your product content, documentation, and collateral, you need to be able to extract data out of that content. Getting data out of your documents and then cleaning and normalizing that data is the most challenging aspect of the process.
Your product data also needs a place to live — a central source of truth. This is what a Product Information Management (PIM) system is for — it’s the single system of record for your product data. Having a PIM is essential for your company to feed consistent product information across all your systems, channels and touchpoints – including a Digital Product Passport.
Knowde’s PIM solution is the only PIM software built explicitly for the chemical industry. We’ve spent years solving the problem of disorganized product data. Knowde not only builds your PIM system for you, but first helps to establish your product master data – the hardest but most critical piece of the puzzle. Knowde’s technology can then seamlessly integrate with your existing business software and enable your internal teams to unlock the benefits of DPP. As your organization begins to prepare for DPP and hone your sustainability and circularity strategies, book a demo with a PIM expert at Knowde to start getting your product data in order.
Informing and engaging your internal teams
Involving all of the relevant internal teams in your DPP planning and implementation process early will help various stakeholders understand the impact that new regulations will have and align your organization on what priority actions to take. By distributing information about DPP with your organization now (see the Resources that we’ve linked at the bottom of this article), different functions can start determining what internal and external data they need to uncover, what investments to make, and how to most effectively cross-collaborate with one another.
Below are some areas that your different teams can start thinking about:
Leadership: What is your company’s vision for DPP and how will you articulate that to the rest of the organization?
Public Affairs and Sustainability Teams: How will DPP implementation align with your company’s existing sustainability and/or circularity goals?
Finance: What investments will your company make that DPP implementation will require?
Procurement: How will you align your current sourcing processes with DPP requirements?
Production: What data points do you need to enable future production improvements?
Sales & Marketing: How can you use DPP as a way to speak with customers about product sustainability?
R&D: What data points do you need to improve your eco-design and circularity?
IT: What digital and tech investments will your company need for DPP implementation?
EHSQ (Environment, Health, Safety & Quality): How can you anticipate, monitor and understand the pending DDP regulations and begin modifying your processes accordingly?
Supplier Management (for Distributors): Start having conversations with your supplier partners about what product data needs to be gathered.
Business growth opportunities that DPP enables
Since the Digital Product Passport is a key enabler for sustainability and circularity, its adoption will become mandatory for companies in our industry faster than we think. Preparing early by organizing your product data and aligning internal stakeholders will grant you a first-mover advantage and ensure that your teams have enough time to bring your manufacturing processes in line with DPP requirements.
There are several growth opportunities that DPP will enable for chemical companies, including:
Unlocking a better sustainability strategy
- Showcase to your customers the sustainability features of your products
- Increase your customer loyalty by communicating more transparent information about your products
- Use a price premium and better position your products
Getting more out of your existing resources
- Recycled materials can come at a lower price and still maintain their quality
- Track products through their entire lifecycle so that you can select more sustainable, cost-effective materials
- Higher quality control management of your products will improve product quality and safety, meaning less product returns for your company
- Improve your resource forecasting
Enabling more data-driven decisions
- Make more informed product improvement decisions based on new, and cleaner, product data
- Create faster product innovations based on new data and better data mapping across your value chain
Many industries are already staying ahead of the game and leveraging DPP technology to unlock additional benefits related to transparency, traceability and tradability. As the DPP and legislation develops further, our industry will uncover even more business opportunities that reap the benefits of this move towards a more sustainable world. To ensure that your company is prepared for the DPP journey, assess and organize your product data with a PIM, engage with your internal stakeholders early, and devise a strategy that synergizes sustainability and business growth.