Taking advantage of the business values of sustainability with PTC technology

Looking beyond regulations to the business advantages of industrial supply-chain traceability

As regulations tighten across all industrial sectors, supply chain traceability is growing in important for most organizations. Supply chain management in all its guises really comes down to the ability to operate your business based on data. In the latest PTC Talks Kim Albertsen, Traceability Lead Nordics at Accenture, explained how industrial supply-chain traceability impacts organizations in the digital age.

The intensified focus on regulatory compliance has a direct correlation to traceability. This is not a new trend, but new sectors are defined and targeted by the European Union where traceability will play a significant role. To comply with these regulations requires presenting and delivering auditable data to the authorities to document and verify carbon footprint, levels of recycling, and the root level of upcycling. But companies should not simply view this as an onerous regulatory burden because there are numerous operational benefits related to compliance. Have a clear traceability strategy will help break down the data silos that inconvenience many companies today and allow them to use the data to establish a data-driven operation.

How is regulation driving traceability requirements?

Much of the European sustainability initiatives are driven by a significant overarching regulation, in The Green Deal, but alongside this there are numerous associated regulations and laws. The EU is committed to a net-zero future and their regulatory roadmap clearly states that they want industry and society to transition into a circular economy. They have acknowledged to everyone that this will not be easy: they know it will be tough. They say it will be systemic, profound, transformative, and disruptive.

Behind this sustainable and carbon-related ambitions, there are also some aspects of establishing trade barriers. It is hoped that European industries enjoy better conditions for competition by ensuring that low-cost providers will have to comply with the same strict regulation that the European industry works under. A further goal is to make the EU more resilient and self-reliant on critical products and raw materials because the ability to reuse and recycle the different materials will push us in that direction.

What is the digital product passport (DPP)?

One of the principal regulations that the EU is focusing on is the digital product passport (DPP). The first sector targeted is industrial batteries, also including vehicle batteries. By January 1st, 2026, they will have to produce a battery DPP with auditable documentable data that can verify some critical elements related to the sustainability of each battery. That sector is not alone as textiles, consumer electronics, and construction materials have been identified as the next wave of industries impacted by the DPP regulation. There are various other sectors that will be included over coming years.

It will become increasingly difficult to imagine companies that will not be impacted because this will have a trickle-down effect in the supply chain. Not only the companies themselves but they will require information from sub-suppliers, business, and logistic partners as well.

Beyond regulatory compliance, there are also opportunities to build exciting and profitable business cases on the back of a traceability strategy. Each industry will have different challenges and opportunities that are common across all sectors. They are establishing supply chain transparency: getting a more robust agile supply chain, achieving quicker response times, visibility, and predictability of what is moving where and when. Then there is digitization, which is about compiling data across all the silos.

There is not a single architecture solution to deliver the required level of traceability but it will require a corporate data repository to collect data right along the supply chain from the raw materials through to end of life of the product. Each company along the supply chain will have its corporate data repository, not one extensive, industry-wide, companywide, or European-wide repository. That is an important thing to keep in mind.

In production, of course, there is complete control; we can collect all the data points that are desired and possible from the MES, PLM, CRM and ERP systems and add them to the data repository. That is not the most challenging part. The hardest part is getting the data from upstream. On top of this, there are multiple possibilities to set up alarms, control towers, and standard reports, inked to traditional data reporting tools.

How to select the right traceability solution?

There are many things to look out for when looking for vendors that can implement and deliver technology for traceability.

Centralized repository: the right solution will make it possible to capture and correlate events across the supply chain and into one central repository.

Interoperability: links to external systems through a global industry standard and open APIs is vital. For this purpose, utilization of the EPCIS format is suggested.

Dashboard: only well-organized data and data that are standardized and harmonized will be able to support and deliver real time dashboards and reporting.

Scalability: a solution able to scale - both in terms of volume, but furthermore to handle complexity and high speed is in many cases critical to ensure a durable. long term solution

Non-intrusive: The ability to provide interfaces and APIs that are non-intrusive for other data providers is important to facilitate collaboration, adoption states, and project velocity.

Flexible: the solution chosen must be capable of evolving with future demands and changes in the regulatory requirements and new business demands.

I have seen examples of huge companies building standalone solutions. Then, suddenly, the regulatory requirements changed, and they had to build everything again, which is not a desirable solution.