A new age in product information management is upon us. And whether you are a manufacturer, supplier, retailer or consumer, the way in which you will be able to engage with a product’s journey through the supply chain is transforming. Niels Stenfeldt, CEO of inriver, joins us in this Executive Perspectives episode to discuss what stakeholders can expect when it comes to accountability and transparency in product information management.
This interview was edited and formatted for clarity.
Tyler Fussner, Managing Editor, Supply Chain Connect
Niels, thank you for joining us today.
Niels Stenfeldt, CEO, inriver
Thank you very much for inviting me.
Fussner
If you could please introduce yourself to our audience.
Stenfeldt 0:29
My name is Niels Steinfeld. I’m the CEO of inriver, a Swedish company that is focusing on Product Information Management, and we refer to it as the new breed of PIM, but I’m sure we’ll cover that during the course of today.
Fussner 0:45
That is something I definitely want to dive into. Can you tell us a little bit about PIM? What is Product Information Management?
Stenfeldt 0:54
Product Information Management (PIM) is basically keeping a digital twin of the physical product that every one of us knows, whether that is a manufactured machine, it’s a car or a product that we are about to pick up in a retail store. That product itself holds a number of valid information that needs to have one record that is following the product, whether you are in the early stages of the production, whether throughout the production; it might be measures, it might be recipe information, it might be information about packaging, sizing and other specific items, and you want to make sure that that is accurate across the entire supply chain. That is what Product Information Management, in short, is all about.
Fussner 1:42
Something you just touched on: We want to be able to document it and have access to that information across the product’s entire journey through the supply chain. But what does that mean for stakeholders throughout that supply chain? Why should they pay attention to PIM and how does it impact them?
Stenfeldt 2:01
PIM, historically, many thought was something you used for your ecommerce experience. Why? Because you needed to handle a number of additional items. Perhaps it was specific for your commerce solution. You needed to be able to orchestrate your overall assortment; you may have had to do some other few tweaks. And so, in the early days of PIM, that was where it sat.
However, with all the requirements there are around supply chain transparency, being accurately able now to not just promote the standard features of a product, but even to the point where some of it is about traceability and sustainability information, that information needs to now be carried throughout the supply chain, providing not just a level of transparency but also making sure that at the end, the consumer can take the right informed decision based on the attributes—which are those specific data points that describes this product. It could be the CO2 footprint; it could be allergies; it can be anything. But to make sure that that is accurate, you need to be able to track it across the supply chain. And then suddenly, being able to not just receive the data, but also document that you haven’t changed or altered them, and they are accurate and factual is something that becomes more and more important. Also, legislators are dramatically coming closer to Product Information Management much more than they were in the past.
Fussner 3:45
That gets to the heart of what I was hoping to dive into today with our discussion. There is such a big focus on ESG scores, sustainability, providing that transparency throughout the supply chain and products’ entire journey… Consumers really want to better understand the environmental or social impacts of the products that they’re consuming. Legislators and stakeholders are also helping to drive the forces towards sustainability. With that in mind, how do you see the current state of supply chain transparency within the manufacturing sector? And looking ahead, what do you think that is going to look like in the future?
Stenfeldt 4:28
I think, with the risk of sounding like, “The wolf is coming,” because others have said in the past, now is the time. I do think that, overall, when you look at transparency across particular manufacturing industries, there is a level of immaturity. Because what has been enough for a long time has been static models. Once you have your product, you define what are the important attributes to take count of across the supply chain. That was the static moment; you could keep that digital twin for a much longer time.
Something happened back in 2018 and 2019 that very few are aware of. Back in 2018—and it’s a small little anecdote but it explains my whole point—Hawaii had the first ever statewide ban on a little ingredient called oxybenzone and octinoxate. And why is that interesting? Well, it’s because suddenly there was someone who figured out that you could actually see a breaching negative effect on coral reefs. And you figured out that it probably came from sunscreen. Sunscreen that has those two ingredients, oxybenzone and octinoxate, was then overnight in 2018 with full effect from 2021 made illegal and state of Hawaii. By the way, also in Australia.
Suddenly, you have this requirement to have an elastic data model, where you within relatively short time had to go all the way upstream in your supply chain to figure out, “Do I have this ingredient or not?” And even if I didn’t, I still have to declare, I still have to be transparent about whether I had it or not. It had to be printed on the on the packaging because otherwise you couldn’t even sell it.
We began seeing legislators with very good intentions and very good reasons—I don’t think anyone is saying that was a bad idea—having clear opinions about what shall we declare in terms of the attributes we have in a product. That level of elasticity, as we call it in inriver, is something new. And I think we’re going to see much more of that whether we’re looking at the new California legislation, the digital product passport coming up in Europe, looking at some of the great things they’re doing in the Middle East.
This level of “You need to track a new attribute, get it upstream, be able to present it downstream,” and even further downstream in the sense that you also need to document [whether or not you] complied with this set of legislation—that requires things that we haven’t seen before.
And therefore, I dare declare, it’s not “the wolf” coming; it is legislators coming with good intention to make sure that consumers, at the very end, can take the right informed decisions. And whether you look at that from a pure manufacturing perspective, partial manufacturing or other parts, it’s the same requirement. You need to be able to document to whatever requirements will come downstream from a publishing perspective. But it all starts upstream.
Fussner 7:54
It’s coming. We’re going to see more and more of this transparency required of all those invested within a supply chain. It may not just be at the manufacturer, but you’re going to have to go through the entire process and be able to document and understand exactly what is and is not accounted for within that product’s journey.
Stenfeldt 8:17
If you look at the digital product passport that is right now being debated in the European Union, which is much about how can the Europeans make an internal market or green market where you can only sell products that are perceived or at least told to be environmentally friendly if and when they fulfill a set of generic requirements of information that you have to disclose moving forward. By 2030, if you want to sell a piece of textile on European soil, that individual piece of textile will have to have a digital product passport where you can scan with a QR code, or whatever the carrier of that information will be, the digital journey of that product.
And that is the product with all the attributes: Where does it come from? What fabric was it? How much dye was in it? What amount of water was used to get that particular wash? That is information that legislators will ask, actually, force manufacturers on something as relatively simple as textile. There is already now battery legislation coming for all batteries with more than two kilowatt hours. If that is to be sold in Europe, there will be specific requirements for that that will be effective around 2027, 2028. Meaning all global manufacturers of batteries are looking into this. This will impact the car industry. Same goes for a number of other product areas that have been taken up by European council to say, “Here’s where we need to start,” and get to this level of, “Here’s a minimum set of requirements that you have to give information about to sell these products within Europe.” And Europe is a big market. I think we do have some benefit being not only a Scandinavian and a European based company, but up until recently, I was also advising the Danish government on how to take and implement these types of legislation into Danish legislation.
Fussner 10:29
It sounds like accounting for all of that information may be overwhelming. From the consumer perspective, I think it’ll get facilitated down to a single scan or QR code or something like that, that can show you that entire journey in a nice little condensed package. But being an organization invested within that product’s journey, it seems like there’s so much to account for and there’s going to be a lot of changes in the way that you implement any of your practices and move products throughout its supply chain. With that in mind, what are some of these transparency practices or sustainability practices that organizations should be learning and implementing into their supply chain so they’re not left behind and that they are able to accommodate these new requirements coming up down the road?
Stenfeldt 11:18
It is a super relevant question because I don’t think there is one simple answer. I could give you 700 different short abbreviations of legislation and different types of ESG reporting requirements. And now, this is Niels Stenfeldt talking, not talking on behalf of inriver, I personally believe we have to take a very close look at all those requirements. Because if you take a manufacturer today, I was speaking with one of our large global clients the other day, the amount of information they are supposed to be declaring on an ESG basis is overwhelming. And I’m not sure that there is value in all that.
I hope that legislators within a reasonable timeframe will come to the conclusion maybe we overdid certain areas. But I strongly believe at the same time that the product information, when the day is over, imagine you do your CO2 footprint calculation which is part of many different types of ESG reporting, in a structured way at a product level, which is not impossible.
With the right data model, and that’s what we work with our customers around, that is not the hardest thing on earth. You of course need to know the variances; you need to know the various generations. This links into what’s coming with digital product passport and some other specific requirements in other countries. But once you have it at that level, then it is just “a matter of aggregation.” Now the question of course will become will it then replace the other ESG reports? Personally, I don’t think it would replace all of it. Because I still believe the market side or the owner side would like another kind of view. But I do think that one of the big tasks for the next decade or this decade or the end of this decade is to make sure that we don’t double count, in the meaning that we have multiple ways of counting the same thing.
But I do believe that the product information is what will be the source. And then we can basically just begin aggregating. Because when the day is over, if we managed to account for the CO2 emission at the product level, we just need to tell how many products that we sell—this is where we have an ERP system. They will be super fine in doing that level of calculation.
However, you need to have that digital twin sitting somewhere where you’ve aggregated all the various sources. And for me, that is in the product information management system and one of the main reasons why we and our owners have been significantly investing in this area. We think it is the natural place. This is as close to the fact that you can get and is the easiest to aggregate. Hence, it will be the one that gives you the best level of specificity.
You can then begin looking at, “How do I get the best yield for the polluting element?” or wherever it is you want to take measures on. There is a positive impact on that. The second you begin understanding at product level, “What is my waste? What are my emissions?” – once I understand my waste and I understand, for instance, also, “What is the reuse? How can I get some of the materials back and be part of a refurbishment?” – then suddenly you can begin reducing your costs of goods. And for manufacturers that is super relevant. The more heavy machinery you have, the more interested you are in seeing, “Is there a way that I can get some of this material back, repurpose it, redo things around it, make additional services around it,” and then the product journey is no longer this one line—produce, buy and dispose—but then it becomes a circular product journey.
Our focus as a vendor in product information management is to build our data model in such a way that you as a customer can power the entire journey. Also the circular journey, where you begin having additional services, get the reused parts, and can account for that in the entire environmental and sustainability and circularity points of view, which is exactly what we see more and more manufacturers want to move into that direction. And then this focus on getting to the core of the problem around circularity and product information becomes your source to significantly improve your bottom line because suddenly, you can reduce waste.
And if there is one thing most businesses right now are focusing on is, “How can we reduce waste in our overall production?” And once you begin understanding the breakdown of your products and even at a higher level of detail, then you will also understand the decompensation of your product. The information you have there can lead to overcome potential environmental malpractices and other weaknesses in your supply chain. It might be that you figured out that when we get this product from this supplier, we are far from the norm. In a year or two or three, when legislators are going to have opinions about the maximum values and minimum values or just being able to disclose, if you haven’t built that data model that can capture this now, you’re going to have a big challenge because it takes time.
Fussner 17:12
You wrapped it up succinctly there at the end. There’s going to be a limitless number of different datasets that you can capture. But without implementing some sort of data-driven technology to have in place to be able to navigate the overwhelming amount of data that will need to be accounted for, you’re going to be left behind.
Stenfeldt 17:35
Just in Europe, we’re talking about the fact that you have these sustainability and environmental impacts and recyclability, the belief in Europe, one of the most recent reports I saw, was that that alone was a $4.5 trillion dollar opportunity from a circular economy. And that is waste. For me, that’s a waste when you have such a big opportunity. That is the waste that is in the ecosystem. And if we can tackle that by providing a data infrastructure where you can have that granular view of your product information from also a circularity perspective, then I’m not just a software vendor. I’m also a dad who does something great for my kids, which is something that I hope they will be proud of one day and not just that dad is sitting in and being part of a fast-growing software company.
Fussner 18:37
Niels, we’ve covered a lot on how the data really drives decision making and making sure that we have actionable data in place and the models in place to be able to use that. But can you explain, with data driven technologies such as PIM, how does that help facilitate this level of accountability that’s going to be asked of organizations of the future?
Stenfeldt 19:02
I think it’s great to have the question put in a different way because for me, every question starts with a “why.” And what new technology is about and why we need it is because the entire global supply chain somehow needs to be recalibrated.
I did mention the part about textiles; every piece of textiles sold in Europe in 2030 will have a digital product passport that will have a predefined set of attributes. That could be CO2 emission; could be the overall footprint; materials used; how to treat the item; where it comes from. And if you’re buying a T shirt, and consider the raw materials of that fabric, you want to know how much water was used for the tree? What was the wash of the fabric? What chemicals were used to bleach it? If it was bleached, well, obviously it was probably not an organic cotton, then it was a conventional cotton… All that information, as a retailer who needs to show this together with a product to the buyer, you need to get that for the producer of that T shirt, that manufacturer of the T shirt needs to have it upstream from the various sourcing partners he or she had had in wherever in Far East this likely has been produced. You need to have verification of all that information. And you need to have a model around it because what was in batch number one may be different to what is in batch number 10.
If you do not create a common infrastructure to keep track of all those moving parts, aka the attributes of the product, there is no way you can be ready for the future with the legislating requirements and the consumer requirements. Because tomorrow a consumer might want to know something else than what you thought they needed to know today. And if there are enough of them, you will see it in your sale. Because if you cannot fulfill their information requirement, they will put their dollars somewhere else. That’s why you need these new platforms to cater for the reality that is soon to come. And you cannot sit with Excel spreadsheets and go back and figure out where is this information and then republish it all because the cost, the transaction cost, will then simply just expand to a level where you have no way of running a profitable business. You need to get that fully automated.
Fussner 21:57
When you touched on the closing of that transaction—where’s that consumer going to spend their dollar—it’s going to be the places that they feel comfortable having that information accessible and navigable from their perspective. It ties into something else I wanted to ask you. With organizations today that are putting in these transparency and accountability practices, organizations that are publishing their product information data to their consumers, are they able to notice any measurable changes in consumer or purchasing practices from those that do choose to engage with them? What are we seeing today that these organizations are really benefiting from in terms of customer engagement?
Stenfeldt 22:47
There are a number of research reports already made across multiple universities and businesses focused on consumer behavior. They all point in one clear direction. A) The segment who are interested in environmental inflammation generally have a tendency to be willing to pay a slightly higher price. Secondly, the fact that you care about your consumer and what interests them. And that may not necessarily only be environmental—and I can give you examples of products where the bare fact that you are disclosing information and telling a story based on true facts may actually still be what is right for that individual consumer to take the decision. Because not everybody is equally voting with their dollar. For some, it is much more important that the animal, if we’re looking at food if you’re a food manufacturer or producer of food, that the animal was in a good shape and had good healthy life than the CO2 emission being the most important criteria for the purchase.
But what we do see in most of the buying analyses is that the better you managed to tell not just your story, but to give your consumers the ability to choose, the more informed they are, the more loyal they stay with you as a brand. As long as of course you’ve stated the truth. Because we’ve also seen numerous examples of businesses wanting to tell the good story, but ended up telling a story that wasn’t accurate and then usually have the effect of a very hot returning boomerang that will hit them right in the face.
Fussner 24:44
It sounds like it’s just getting started and this journey of being able to make that information forward-facing to your consumers to your customers—it’s going to benefit you eventually because you’re able to tell that story. You’re able to present a choice. You’re able to provide that information based on true information. You don’t have to come up with a narrative. You just do have to account for the product’s entire journey.
Stenfeldt 25:11
Absolutely. If we take a classic attribute that I think everybody can understand, “Does this product have traces of peanut—yes or no?” For an allergic, that is super important. It’s probably more important than anything else when that individual is buying a product. Others may have a gluten issue; it might be that they have figured out, “This is not good for my body.” Others have an intolerance for it, at least proven by doctors, that they should definitely not have it. There can be reasons why some attributes—very obvious—this is number one on my buying criteria.
Then you have younger generations, and that varies from country to country, “What is the most important thing?” And I think when we look towards the European Union, you look towards what they’re doing in California with the latest act there, and then what else has been coming, is that they’re saying, “What are those attributes that potentially could have the best possible impact on the environment if we declared it and put it out to the consumer and said, ‘Now, you choose.’”
Because I’m not in favor of trying to say, “Well, you can’t buy something that is not good.” And we can’t be the judges. I think it’s super important that neither we as a product information management business or the manufacturers should be the judges. But I think it’s fair to say, we want to put out some requirements on how they can declare what is in their product in an honest way. Yes, they will get a fine if they don’t do it properly. But the negative publicity that they will likely get if and when it gets somehow sorted is usually much bigger than any fine. So, there is a good idea in actually being honest and transparent with your consumers, or customers if you take someone in industrial manufacturing it’s equally important because it usually is part of the supply chain that ends up with somebody buying something at the very end.
It has to be accurate, whatever you do, because there will be a stakeholder who’s buying based on an opinion that is tied to an obligation he or she has somewhere. Whether that is a legal requirement or a personal buying trait (less important). The company, when it wants to sell a product, has to be able to honestly tell what’s in it. That’s not too much to ask for. The requirements will have to be more and more flexible; we call that elastic. Because what we think we will tell tomorrow might change the day after.
That flexibility is the hard part. Anyone who has tried to go figure out, “What is this attribute? How am I going to get that information?” – like all the sunscreen protection companies had to figure out in 2017, 2018 when the Hawaii act came up – they all know the pain of this. And if you know anyone in that industry, ask them how it was to find one attribute. Very soon the European legislators will come up with maybe 15, 20 attributes they want to know about from a certain date for you to even sell the product. And those too may change over time. Now, do you have an elastic model that allows you to change what you’re searching for upstream and ask all your suppliers to provide you with that information so that you can offer it downstream as per coming regulations, or per common consumer requests? That’s the big ask.
Fussner 28:57
You nailed it there with the elasticity perspective. Even if you are an organization that is just getting started on accounting for these different measurements and these different data points that you have to capture, you can’t keep a static model in place that’s just going to account for what is being asked of you today. If you are getting into this journey, it’s of paramount importance to be able to establish a model that is able to adjust with the needs of both your organization and the outside pressures asking for that information that is relevant at that time.
Stenfeldt 29:30
That is the key for the future. That is to provide you that automated elasticity where you as an organization can say, “Now I need this. I need to adjust my data model.” And I can only say if you haven’t started preparing for this, you should get started now.
Fussner 29:53
Niels, I noticed you said that you are focused on the new breed of product information management? What exactly is the “new” aspect to that?
Stenfeldt 30:02
Great question. Thank you. Well, when PIM started, as I said, it was much about the ecommerce scenario, and many were thinking it was about, “How do I put my products live on a commerce platform?” Well, we believe at inriver, the new breed is where you are looking at multiple digital properties that need this information. Yes, you still need it for your commerce. But if I’m a manufacturer, not a retailer, but think of it as a manufacturer, reality is that somewhere between 40–50% of all product searches start on the marketplace, not necessarily with your retailers.
You need to make sure that all the information you have around your product is displayed not just with your retailers or your wholesalers or whatever you have in your downstream go to market strategy, but you also need to think about, “What’s my location on marketplaces?”
You may also have some instances where your products are part of a larger product. That could be a tire that is on a car. Tires will have a digital product passport. You need, as a supplier or manufacturer of tires, to not only be able to cater for your digital product passport on your four tires that goes into this particular car, but the car manufacturer is constructing a car that includes your four tires that then needs to go into car sales. So, how do you get that level of information also sent out?
Lastly, if you manufacture fertilizer (one of my favorite examples)—there is the new fertilizer directive. The new fertilizer directive demands manufacturers of fertilizing information to send data to specific European legislators that have unique traits, meaning that the product information needs to now be distributed to some conformity areas. And then suddenly, that means your downstream is many, many more endpoints than it was in the past.
So, when we talk about the new breed of PIM, we talk about, “How do you take all that information that you have gotten upstream? How do you secure that that is correct on all the inputs?” Because you don’t want to put something to a conformity area and have a different story being told from a vendor who has parts of your products included, and definitely not have discrepancy between your own commerce and your marketplace presence.
But it doesn’t stop there when we talk about the new breed of PIM, because as a manufacturer, you may also want to make sure that all the information that you then have distributed is actually adequately published. You can syndicate as much as you want out, but you’re very rarely in control of what a marketplace actually ends up publishing, which is why we also have digital shelf analytics as part of our built-in solution. Once you have done all the distribution of your information (we call that syndication), once you have it out there, we have a large number of “spiders” that sit and scrape, every day, around 50,000 URLs for product-specific content and feedback to that the vendor so he or she can see what types of products—with which digital endpoint—is out of stock, is incorrectly positioned, has the wrong pictures, may not be categorized the right way. All that type of information, we feed back on the product.
That’s also relevant from a legislative perspective because what if a sales channel does not publish the right information? Is that then the problem of the retailer or is it the problem of the manufacturer? Time will show when the final legislation is coming out. But imagine you have the capability to prove it and correct it right away. You would definitely want that because believe it or not, you know that all your end customers will have the opportunity to have those facts you wanted them to see. We can give them that back and say, “This is how it looks on all those websites where your products are out.” This is what we refer to when we talk about the new breed of PIM.
Fussner 34:39
The new breed certainly seems to be far more dynamic and wide reaching in the amount of data that it is accounting for and making sure that is available to any stakeholder along that supply chain journey.
Stenfeldt 34:52
That’s a very good way of summing up because very soon we will most likely see legislators also having an opinion about, “Can you prove what you presented to whom, when?” And if not, how do you know as a vendor or manufacturer that you are in control of your digital supply chain downstream? You cannot.
Not having thought about that when you think about the new breed of PIM, in our opinion, is equally important as thinking about how I secure that I have enough elasticity in my data model. You need to have the elasticity in your data model to make sure that you can change quickly, effectively and in a cheaper way with a set of costs that are manageable for the ever-changing needs for new information and new attributes for your product. But you also need to make sure that all that information gets all the way downstream. This is the syndication. Then you can document that it got all the way downstream. This is where digital shelf analytics put a beautiful red line around it, and it looks like a nice present. This is what it should be. You need to optimize your way of handling product information management. And I believe we at inriver are all about just that.
Fussner 36:18
I think the future is going to be interesting. What exactly is determined on what needs to be accounted for? Who is going to be responsible for reporting? There’s going to be a lot that only time will tell.
Stenfeldt 36:33
Only time will tell but get started now. That would be my advice.
