Delays and disruptions of recent years have raised significant questions about the resilience of global supply chains. 

Achieving transparency of product movements, from acquisition of raw materials through manufacturing, distribution and delivery to the end customer, is more important than ever before. Yet companies at the top of the chain often struggle to acquire that level of visibility. Without it, they can’t detect exploitative labor practices, ecosystem degradation or environmental malpractice.

The key to ensuring supply chain transparency is having access to product data that is consistent and of the highest quality. It’s also crucial to keeping pace with ever-changing regulations. In Europe, for example, a digital product passport (DPP) will be deployed for collecting and sharing data throughout a product’s lifecycle, with information about sustainability, environmental impact and recyclability opportunities. This will enable businesses to make better sourcing decisions, launch initiatives to encourage creation of a circular economy, and comply with regulations on product safety, environmental protection and social responsibility. Consumers, meanwhile, will be able to make more informed purchasing decisions.

Approval of this initiative by the European Union, expected in 2024, will also signal a broader move toward circularity and supply chain transparency. Any brand or manufacturer doing business within the region will need to adhere to the regulations. And that will require manufacturers to recalibrate their entire supply chains.

Every piece of textile sold in the EU will have a DPP, containing a set of predefined attributes such as CO₂ emissions and overall carbon footprint of the materials used to make or treat the item. For example, if you’re buying a white T-shirt, you’ll need to specify the source of the raw materials used to make the fabric, the amount of water for treating and washing it, and the chemicals used to bleach it.  

Brands and manufacturers across Europe and the world are beginning the process of reassessing their tech stacks in preparation for the new regulations. They’re working to get their data out of various siloes and systems, and create a system of record for managing product data, with the help of a product information management application. Adherence to the DPP requirement will be next to impossible without a PIM. 

The first step in preparing for upcoming regulations is to ensure that you have a clear and thorough view of your supply chain data. All companies must embrace total transparency as the foundation for regulatory compliance, environmental responsibility and supply chain efficiency. 

Niels Stenfeldt is chief executive officer of inriver.