Business Use Case
Supply Chain – Digital Product Pass
- Innovative solution for managing complex and global supply chains
- Provide comprehensive information about a product’s entire lifecycle, offering benefits such as supply chain efficiency, waste reduction, and sustainability performance
- Technical implementation requires decentralized storage and data encryption to ensure data security and immutability
- Transportation is a key part in supply chain implementing information about goods such as origin, destination etc.
- Companies: Can validate green claims and demonstrate commitment to sustainability.
- Policymakers: Can verify compliance with regulations and drive sustainability initiatives.
- Consumers: Can make more informed purchase choices and identify greenwashing claims.
Introduction
Supply chain management is a complex and critical process that involves multiple stakeholders, from sourcing raw materials to delivering end-products to customers. As supply chains have become increasingly global and complex, the need for greater transparency, traceability, and efficiency has become more important than ever. To address these challenges, the use of digital product passports has emerged as an innovative solution for managing supply chains more effectively. A digital product passport is a tool that provides comprehensive information about a product’s entire lifecycle as well as a range of data that helps to identify and track the product. Different to an identity of a person, a product doesn’t own a smartphone to store the digital product pass which is why the principles of SSI doesn’t apply to the following use cases in the area of supply chain.
Technical infrastructure
The infrastructure for digital product passports can be based on various technical solutions, mainly to distinguish between centralised and decentralised solutions. Using a centralized system where data is stored at one place and controlled by a single entity might not be the best option considering the importance of the data.
Decentralized storage, on the other hand eliminates single points of failure and makes data tampering and fraud virtually impossible. It also ensure the security and immutability of the data based on a consensus-based data validation mechanism.
However, if a company does not want to share certain data due to proprietary concerns, using encryption methods may not be a viable option. In such cases, zero-knowledge proofs can provide a more flexible means of achieving compliance with product passport standards without revealing sensitive product data.
Automation: Smart contracts can be used to verify the origin and authenticity of goods. For instance, a smart contract can be set up to automatically trigger a payment once the authenticity of a product is confirmed
Applications
①
Textiles
②
Batteries
③
Products
1. Textiles
The textile industry is facing significant challenges with the upcoming EU strategy for sustainable and circular textiles. One of the key requirements of this framework is to establish a traceability system for textile products to ensure that they are produced sustainably and in compliance with environmental and social standards. Currently, there is no uniform standard for traceability, and the existing systems are often fragmented and complex. This makes it difficult for manufacturers to track the environmental impact of their products and ensure compliance with regulations.
Digital product passports can help textile manufacturers and retailers provide consumers with information on the origin, composition, and environmental impact of their products. This pass can be shared across the supply chain, enabling manufacturers, retailers, and consumers to access key information about the product.
2. Batteries
EU Battery Regulation requires manufacturers to provide a battery passport for all batteries with a capacity greater than 2 KWh. One of the key challenges is the lack of a standardized system for tracking the environmental impact of batteries throughout their lifecycle.
A decentralized infrastructure can help to address these challenges by enabling the creation of a battery passport that contains detailed information about the battery’s origin, carbon footprint, durability etc. as well as the sharing of key information across the supply chain, promoting greater transparency and accountability.
3. Products
The Ecodesign for Sustainable Products Regulation will introduce new requirements for manufacturers to provide information about their products, and to make this information available to consumers and businesses. This proposal gives a hint for upcoming use cases of the digital product pass in various product sectors.
Tracking the lifecycle of products can help to ensure that products are maintained and repaired as necessary, thus reducing waste and extending the useful life of products as well as implementing circular business models that prioritize product reuse and recycling.
Conclusion
In conclusion, digital product passports have emerged as an innovative solution to address the challenges of managing complex and global supply chains as well as meeting regulations. The three use cases discussed in this blog post – textiles, batteries, and products – demonstrate the wide-ranging applications of digital product passports now as well as in the near future.