5 reasons Digital Product Passports demand more than an ERP 

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by Simen Kjellberg

The temptation to use expensive tools you’ve already integrated into your system for new use cases is undeniable. As the mandate to introduce digital product passports (DPPs) draws nearer, global companies understandably want to make the most of the tools they already have. Having put resources into enterprise resource planning (ERP) systems, it’s easy to task these ERPs with requirements for which they were not designed. 

As we welcome the era of the digital product passport, in which systems need to collect billions of pieces of data, traditional ERPs don’t scale. They are not flexible enough for the coming demands. And ERPs are very likely to slow down an organization’s digital transformation initiatives. 

Five reasons to think beyond ERPs for DPPs

Here are five reasons to think beyond the ERP to source a secure, scalable item-level traceability platform: 

  1. Start fresh and offload the ERP system

One thing we hear from clients is that they do not want to continue “clogging up” their ERP system. External consultants already customize them, sometimes over decades. Meanwhile, while the world keeps changing around such systems, rendering them unsuitable. 

That’s why we repeatedly hear that they’d prefer to “start fresh”. They want to build up their modern item-level traceability in parallel and make the necessary integrations with their existing ERP system as they go. The last thing they want is to further slow down their ERP. It makes more sense to invest in a system that can offload it.

  1. Maintain flexibility

Another common concern for companies across industries is configurability. With a traceability solution that is too rigid, there’s lock-in. If the solution is too underdeveloped, there is a risk of having to build a system mostly from scratch. 

At the same time, the requirements for the DPP are not fully mapped out, meaning that getting locked into something (which is almost inevitable with an existing ERP system) limits you. What we do know is that interoperability and the adoption of standards around traceability will be important alongside the need for technologies that are adaptable and configurable accordingly.  

The best of both worlds exists in a Connected Products Platform like Kezzler’s. Kezzler delivers some of the most vital components, delivered as an off-the-shelf, managed software as a service that enables enterprises to build their own item-level traceability solutions from a solid foundation. The building blocks are there, and enterprises can build on them to implement more granular traceability over time, across global organizations, across various  IT systems, product ranges and distribution – now also catering to the sustainable life cycle of the product. Clearly, building this kind of system demands a high degree of configurability to accommodate requirements and changes in the enterprise itself as well as with integrations for the legacy IT architecture. The aim is to avoid sunk cost on existing systems, while improving the ROI on IT investments already made.

An item-level traceability and Connected Products Platform must offer this flexibility and the inherent ability to evolve over time – keeping performance in mind. That is why manufacturers of branded goods do not just select a system – they are also choosing their traceability partner or partners. It’s also why we work with various partners in the ecosystem to support DPP traceability. 

  1. Get the scale and performance the DPP experience demands 

Previous experience can be helpful but does not always guide the way. Tobacco and pharmaceutical industry traceability projects, with which many enterprises are familiar, are a different animal altogether.

Reasons 1 and 2 described above are not arguments as to why ERP cannot solve requirements. Expensive consultants would be able to configure the system to support meta-data and traceability events at item-level. Some ERP vendors even claim to have ready-made modules. 

But the problem is scalability and performance. What worked for item-level traceability in the past in the pharma space is not adequate now. Prescription drugs have quite standardized manufacturing, relatively low volumes, easy-to-achieve performance requirements when integrating to other systems, such as government reporting, as well as no consumer interaction based on the unique ID of the product. 

There isn’t a standard for the DPP experience yet. And this will differ from industry to industry. The volumes we are talking about are vast and rapidly changing. And this is just the beginning. Even if an ERP could be adapted to suit today’s requirements, today’s requirements are quickly obsolete – and a platform that scales – and continues to perform at scale – beyond the limitations of ERP systems will carry you into and cover you in an uncertain, but certainly more demanding, future.

  1. Avoid the misleadingly simple “product cloud”

A Digital Product Passport solution is not just a “product cloud” or “digital ID platform”. We are talking about a traceability and connected products system that prepares the enterprise for the upcoming EU requirements, but most of all – providing real business value well beyond compliance. 

It is the enterprise’s own traceability system, it’s their own data, integrated with their legacy IT architecture, but managed by a third party that makes sure that the system can evolve over time and stay up to date. 

  1. Maintain control  

Branded goods companies have long been happy when using their ERP systems to control products at SKU level – sometimes also drilling down to manufacturing batches. This is all about to change. 

Some industries, like apparel, and its retail partners have controlled products at item-level through use of other systems, mainly RFID inventory management systems. However, once the product leaves the store, purchasers remove the RFID and its unique ID.

The European Union is near “considering a product being waste from the moment it is placed on the market”. The unique ID for a product should now follow the item throughout its life cycle to account for unsold goods, facilitate consumer services like repair, resale/reuse, incentivize returns, sort for resale/reuse as well as recycling. We centralize unique ID management at a global level for these reasons. Simply having disparate systems to avoid collision in counting and ease point-of-sale check-out simply will not do.

Other industries, like consumer electronics, already use serial numbers supported by the ERP system throughout the item’s life. However, it is only used for manual lookups. This is not used for user-friendly consumer interaction, through a Digital Product Passport or other means. It is not used to support the modern consumer journey, nor for automation of business processes and services. And it does not aggregate data in preparation for stricter requirements in the upcoming revision of the current EU Electronics Directive.

For batteries, the EU has already decided to control products at item level. For apparel, there is intrinsic value to do so regardless – even if the EU may only require it indirectly. How else would you be able to account for all your unsold goods across omnichannel distribution, especially considering ecommerce returns?

If not ERP: What solution does a Digital Product Passport need?

If the ERP is not sufficient for managing the future of traceability and Digital Product Passports, what should a solution look like? The fuller story continues to unfold. It is clear that the future of DPP implementation requires a platform for managing digital product identities, lifecycle events and dynamic interactions

Connected Products Platform

The last core element of a Digital Product Passport solution is the Connected Products Platform. Basically, a systematic way to orchestrate the experience when people and other systems interact with the product. This is where things become complex behind the scenes but simple for the end user – whomever that is. Based on contextual parameters, users and systems get the right experience or data for them specifically.

The Kezzler Connected Products Platform makes these interactions possible. It captures every event in a product’s lifetime journey, connecting them with secure digital IDs. Different users and systems interact with the connected product at any point in the journey through the Connected Products Platform. The collected data leads to valuable insights, breaking down silos between systems and connecting previously unlinked data.

A fuller digital product understanding 

Make no mistake. The venerable ERP is one of the most vital IT systems in running a consumer goods company. But it’s not the ideal solution for implementing Digital Product Passports. DPPs require a level of scalability, flexibility, and performance that an ERP simply cannot match. We’d love to discuss in more detail what this means for your brand. 

Adopt a robust, future-proof solution designed for scale: Contact us to learn more about the Connected Products Platform.