The Shift Toward Supply Chain Transparency
In March 2024, the European Union introduced digital product passports (DPPs) for most goods sold within its borders, marking a milestone in global supply chain transparency. By 2026, these digital records—detailing a product’s origins, materials, environmental impact, and disposal instructions—will be legally enforced, fundamentally transforming how industries track and share product information.
European industries, particularly in batteries and automotive manufacturing, are already preparing to integrate DPPs into production processes. Despite their potential to revolutionize traceability, build customer trust, and drive manufacturing efficiency, the U.S. has yet to take meaningful steps toward this groundbreaking approach.
While American manufacturers have made strides in supply chain optimization and data analytics, efforts remain fragmented. Many businesses focus on short-term pilots rather than long-term systemic change, leading to benefits that are often short-lived. DPPs present an opportunity to establish a new standard for supply chain visibility, aligning with the industry’s push toward digital transformation and operational resilience.
Staying Competitive in a Global Market
To remain competitive and strengthen domestic manufacturing, U.S. manufacturers must prioritize transparency and data-driven quality control. European manufacturers are already benefiting from integrating digital product records, gaining operational efficiency and enhanced customer trust. For U.S. businesses, the question is not whether to embrace DPPs, but when.
Companies that proactively adopt digital tools will gain an edge over competitors still reliant on outdated manual processes. Those who embrace DPPs ahead of regulatory mandates will future-proof their operations and position themselves as leaders in a transparency-driven economy where trust and traceability define market success.
The rapid adoption of holistic digital tools across American supply chains offers multiple advantages. As the EU moves ahead with DPPs, manufacturers that integrate digital traceability are not merely complying with new regulations—they are reshaping their industries with unprecedented operational insight. At Ingersoll Rand, we see customers in highly regulated industries, such as industrial switchgear, leveraging DPP principles to achieve full product traceability.
Enhancing Product Quality Through Digitization
Quality concerns have long challenged U.S. manufacturing. In a modern, connected supply chain, these issues must be addressed proactively rather than reactively.
Digital traceability tools, similar to DPPs, enable manufacturers to adopt “right first time” and “no faults forward” practices. By embedding quality control into the production process, manufacturers can track each component, identify potential defects at the source, and address issues before they escalate. This results in fewer disruptions, lower rework costs, and greater customer satisfaction.
Early adopters of digital traceability shift their focus from cost-cutting to value creation. By providing verifiable product data, they can secure premium partnerships with OEMs and establish themselves as preferred suppliers in highly regulated industries.
Overcoming Barriers to Digital Modernization
While the benefits of digitization are clear, many manufacturers face challenges in transitioning from paper-based processes to integrated digital systems. The shift requires an assessment of existing data infrastructure, alignment of IT systems, and investment in interoperable software platforms.
For manufacturers operating with legacy systems, the first step is evaluating current data accessibility. Factories must determine which product records are retrievable from existing reports and what additional data needs to be collected. Ensuring technology readiness for digitization will involve centralizing data storage, integrating platforms across supply chains, and enabling real-time information sharing.
Despite the complexities of implementation, the long-term benefits outweigh the initial hurdles. Digital factories can significantly reduce operational inefficiencies, improve accuracy, and eliminate redundant manual tasks. Tools such as smart IoT devices, automated data collection, and visual worker guidance can streamline production and enhance workforce productivity.
Real-World Benefits of Early Digitization
Several U.S. manufacturers have already reaped the rewards of early digital adoption. Louisville-based Winston Industries, developer of KFC’s original pressure fryer, is using digital worker guidance to enhance productivity, employee training, and retention. Michigan-based Pollington Machine & Tool, a Tier 1 automotive supplier, has digitized over 100 processes and integrated 56 tools, enabling its operators to meet safety requirements in just two weeks. Indiana-based RV manufacturer MORryde has increased production output by 50% through digital assembly lines.
These examples underscore a crucial lesson—waiting for government mandates is not a viable strategy. Manufacturers that embrace digital transformation now will be well-positioned to thrive in an increasingly data-driven supply chain landscape.
A Call to Action for U.S. Manufacturing
DPPs represent a fundamental shift toward greater efficiency, sustainability, and competitiveness. By enhancing product traceability, reducing waste, and fostering stronger partnerships, digital factory technologies drive both economic and environmental benefits.
U.S. manufacturers cannot afford to wait for regulatory enforcement. To stay competitive, they must embrace digitization as a core strategy for sustainable growth, leveraging digital product records to unlock efficiency gains, improve supply chain resilience, and lead in the global marketplace.
