Clarity on PLM

Hear Jim Brown share his views on … efficiently and effectively meeting product environmental compliance demands using PLM software. This episode shares some interesting findings from Tech-Clarity’s Understanding Product Development Tradeoffs: Designing Products for Sustainability, Cost, and Compliance.

This is the latest edition of Tech-Clarity TV, let us know what you think.

The topics included in this episode include:

• Continued regulatory pressure from multiple sources
• Top 10 environmental regulations faced by global manufacturer
• Common negative business impacts from difficulty designing products for compliance, cost, and sustainability (including time to market and missed shipments)
• Increasing frequency (trend data) of these damaging business impacts
• Framework for environmental product compliance that shows the steps and capabilities required to design for compliance
• Discussion of how PLM meets the Tech-Clarity Compliance Framework

Let us know what you think. Do you agree? Disagree? Have a great example to share? Please see the related post, download the report, or review more free research and white papers about PDM, PLM and other enterprise software for manufacturers from Tech-Clarity.

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I had the chance to talk with … Prashant Jagtap, CEO of Trayak, about designing products for sustainability. Prashant is a veteran of the PLM industry, and he and I had a great discussion about how design for sustainability fits into PLM. This post will share a bit of that discussion as well as a bit about Trayak.

Why is PLM the Place for Sustainable Design?

First, I want to share some of my discussion with Prashant on a general basis. I am a big proponent of getting compliance and sustainability right during product design. Why? Because like so many other product attributes, sustainability is really hard to accomplish once the design is locked in. Material choices and manufacturing process decisions clearly have a significant influence on the environmental impact of a product. They are also very difficult to change after a product has bee designed because late product changes often sub-optimize a lot of previous design decisions which can increase cost, degrade product performance, or at a minimum cause a lot of disruption through engineering changes (ECOs).

So earlier is better. But why in PLM?  Simply put, PLM is where the product data is. PLM has the bill of material (BOM) early in the product lifecycle. As PLM has matured it has extended to capture the manufacturing processes in a bill of process (BOP) as well. That is the right core of information required to conduct an effective lifecycle analysis (LCA). As the Tech-Clarity compliance/sustainability diagram above shows, making the right decisions requires a combination of product information and impact data. To me, this is an obvious extension of PLM. In fact, environmental compliance and sustainability is the example I use most frequently when I discuss the four dimensions of PLM expansion.

What does Trayak Do?

So other than sharing some common philosophy about how manufacturers can design more sustainable products, Prashant was excited to tell me about the progress Trayak is making. Their goal is to “make sustainable product design mainstream.” The idea is to put the right tools and information into engineers’ hands (or at least their desktops) so they can understand the environmental impact of their design decisions. Trayak believes that the current LCA tools are too complex, too expensive, require experts, and are too separated from the design process. I believe changing that could have a profound effect. Engineers would love to make more eco-friendly products, but face a myriad of tradeoffs and typically don’t have the right information at hand. How can you optimize what you don’t understand? How can you design for sustainability when you don’t know the impact of your decisions until after the fact? To me, solving those problems is the value Trayak has to offer.

What do they Offer?

Trayak offers three products:

• EcoDesigner – helping engineers design for compliance using LCA techniques
• EcoLabel – a tool to help grade BOMs and provide labeling information for compliance (for EPEAT regulations)
• EcoScore – a broader solution that collects a wide range of factors/criteria about environmental impact (which could include LCA results) which could also be used to create scoring mechanisms to rate their product portfolio as they evaluate greener design options

Who do they Work with?

Here, to me, are two valuable facts about Trayak:

• They understand CAD and PLM, and have integrated into Siemens PLM tools (including Teamcenter and Solid Edge) – Prashant’s history and experience play a big role here
• They are LCA agnostic – Trayak does not believe that there is one right way to do LCA. In fact, they believe that some companies may already have a source of LCA information. Trayak is partnering with EcoInvent for data, but is built with the expectation that they will work with multiple sources of information. A very interesting approach. As more OEMs start to demand LCA information, what are the chances that suppliers will have to support more than one set of LCA calculations? Pretty good, I bet.

So that’s what I hear from Trayak, I hope you found it useful. What do you think? What else should I have asked them? Do you think the open approach to LCA will make a difference?

A quick peek into some research on … how companies design their products to meet product environmental compliance, sustainability, and product cost targets. The report, Understanding Product Development Trade-offs: Designing Products for Compliance, Cost, and Sustainability, discusses how engineers and product developers can address these important aspects of their products early in the product lifecycle when designs are still flexible. Survey results and interviews show that while the market understanding of compliance and sustainability has matured, manufacturers are still facing the same challenges – and it has not gotten any easier.

The Research Findings

The report first talks about the challenges and the impacts that manufacturers face. By comparing to results in our 2009 report on Product Environmental Compliance, we were able to characterize some trends. From a compliance perspective, the regulations facing companies are relatively unchanged. The EU’s REACH and RoHS still top the list. To be clear, the regulations that companies are focusing on are the same regulations – but the regulations themselves have grown more challenging as they grow in scope and cover more substances.

One interesting finding is that more companies reported significant business impacts from these requirements. The table below, in fact, is a clear indication that more companies are suffering. One of the most interesting facts is that the only category that shows fewer people in it is “None” – which is down by 70%. Not a good sign!

So what is making this challenging for manufacturers? I will try to summarize the findings here:

• About one-half (51%) have difficulty understanding design tradeoffs
• Companies have a hard time collecting information on compliance, sustainability, and cost
• Survey respondents had difficulty making the right information available to decision makers in a timely manner

There is more detail on each of the individual areas in the report, it is worth a read (or at least a skim to look at the charts and callouts).

Implications for Manufacturers

So what does this mean for today’s manufacturer? The job is getting more difficult, and gathering and sharing information so people can make good design decisions is a huge challenge. But there is hope. As the report says, only 11% of the companies surveyed have information on cost, compliance, and sustainability in a single system. In fact, 41% have disconnected systems for each. No wonder companies have difficulty making tradeoffs. As you have heard me say before, there is a significant opportunity for manufacturers to address compliance as a part of their PLM implementation. This is also true for other product analytics and “design for” processes such as cost and sustainability that rely on good product data.

So that was a quick peek into some recent research on designing products for compliance, cost, and sustainability. I hope you found it interesting. Does the research reflect your experiences? Do you see it differently? Let us know what it looks like from your perspective. Please feel free to review more free research and white papers about PLM and other enterprise software for manufacturers from Tech-Clarity. In particular, you might be interested in my views on designing for product cost and product cost management (PCM) or my post on the need to reduce the compliance tax on product innovation.

A quick peek into some research on … designing products for environmental compliance from our 2009 report. And maybe more importantly, here is the link to participate in the 2011 study on designing for compliance, cost, and sustainability. This year, I am expanding the research to recognize the trade-offs sometimes required between cost and compliance. Please share the link with your friends in engineering and manufacturing.

Note: For my blogging friends and those in the press, let me know if you are interested in helping gather responses, I will return the favor with some contributed content.

Research Findings – 2011

OK, it is a trick heading. There are no findings yet, take the survey and help me gather a broad perspective on the issue. If you are a consultant or a vendor, please feel free to pass along the link to an engineer or manufacturer. I will share some of the data back on this blog in return.

Research Findings – 2009

One of the most interesting findings from the last report was the broadening view of sustainability. The focus on environmental compliance information was getting the most attention in data collection from suppliers (no surprise) but the growth in focus on a broader view of sustainability was much higher (including carbon footprint, energy usage, waste/recycling). We are looking into that question again in the current survey, it will be interesting to see what has changed in the last year or so. See more of the report findings in my post on making environmental product compliance sustainable.

Cost and Sustainability

I have written about compliance before, and the need to reduce the compliance tax on product innovation. While the prior survey focused primarily on environmental product compliance, the research shows a growing interest in sustainability. But the business reality is that compliance and sustainability can’t always command a higher price, so companies have to continue to focus on controlling product cost to be commercially sustainable. You may have heard my views on designing for product cost and product cost management (PCM) before, it is something I am passionate about. So now is the opportunity to look at these issues in a holistic way.

So that was a quick peek into some recent research on compliance and a request for help in learning more, I hope you found it interesting. Let us know what it looks like from your perspective.

Please feel free to review more free research and white papers about PLM and other enterprise software for manufacturers from Tech-Clarity.

I had the chance to talk with … the team at regulatory compliance solution provider Atrion International earlier in the year about their product sustainability solutions. It was a great opportunity to get an update on the company and hear more about some interesting announcements they made earlier in the year. The updates have to do with technical architecture and industry partnerships, and point to some significant progress since the last time I spoke with them.

What do they Do?

In short, Atrion helps manufacturers develop sustainable products and comply with product-related regulations. The company offers everything from generation of materials documentation such as MSDS (material safety data sheets) to solutions aimed at helping companies design for compliance in a more lifecycle oriented approach. Atrion is a vendor that not only understands compliance, but also broader product lifecycle management (PLM), enterprise systems, supply chain, and sustainability perspectives.

What did they Announce?

Atrion made two announcements earlier this year:

• The introduction of “ACE” – Atrion has created the ACE architecture to decouple their compliance content from their software applications. In this way, third party applications can use an SOA approach to access compliance information when they need it. This allows the Atrion functionality and data to be readily incorporated into the applications manufacturers already use, such as ERP or PLM. One of the ways that Atrion describes this is as a “compliance hub,” which I think is a good description. The result is that the users stay in the application they are comfortable with, but gain the advantages available from real-time product compliance checks to enable processes like “design for compliance.”
• A partnership with Microsoft – Atrion has partnered with Microsoft to provide sustainability and product regulatory compliance capabilities to users of Microsoft Dynamics. This extends the value of Atrion’s solutions to more users and allows them to access the information in the context of their ERP environment (thanks to ACE, I believe). More information on the announcement can be found in this press release

The two announcement are related, of course, because the encapsulation of compliance capabilities in ACE makes the Atrion data and solutions more readily consumed by third party applications. It’s important to note that Atrion has developed integration with SAP as well as Microsoft.

Implications for Manufacturers

Product sustainability and environmental compliance are increasingly important to manufacturers. My past research at Tech-Clarity and with Aberdeen Group shows that manufacturers are taking wildly different approaches to ensuring their products meet regulatory needs. Leading companies are developing a product compliance framework that helps automate product compliance activities (see graphic). My research shows that those that are taking a more systematic approach are gaining higher levels of compliance at significantly lower cost. Given the increasing demands from REACH, RoHS, GHS, and other regulations, companies can no longer afford a “brute force” approach or handle compliance on a regulation-by-regulation basis. Solutions like Atrion’s can help achieve the automation to comply with regulatory demands, customer requirements, and corporate “green” or sustainability initiatives.

So that’s what I hear from Atrion, I hope you found it useful. What do you think? What else should I have asked them?

What I learned this week … came from a conversation with Jeremy Johnson from IHS. Jeremy opened my eyes to a new way to make manufacturing more sustainable and ecologically friendly. I have written in the past about how companies are making their products compliant in Product Compliance – Hidden Tax on Innovation and  Making Product Compliance Sustainable. One way this is different is because it is not about the products, but the plant. But here’s the catch that makes this the most interesting to me. While product compliance helps to protect top-line revenue and market access across the globe, it is an activity that costs manufacturers money. As Jeremy explained, getting in control of the chemicals in the plant helps reduce environmental impact and increase employee health and safety - and also helps reduce cost at the same time. Now that sounds like something most executives would sign up for, regardless of whether their “green” philosophy focuses more attention on a greener planet or a greener wallet.

NOTE: Graphic from IHS White Paper, “IHS Chemical Inventory Greening”

Chemicals for MRO (Maintenance, Repair, and Overhaul)
Manufacturers use a lot of chemicals. Most plants are filled with greases, solvents, and cleaners to name a few. These “indirect” materials frequently fall under lower levels of purchasing rigor, and companies tend to have a large number of similar products. This duplication offers a pretty straight-forward inventory reuse/consolidation opportunity. By gaining visibility and control over what chemicals a company uses (particularly if they are running multiple plants), companies can reduce procurement and handling costs. Simply consolidating from twenty hand cleaning products to a few could offer savings through bulk procurement contracts, reduction of duplicate inventory, and reducing other inventory handling costs including disposal.

Beyond cost savings, IHS acquired technology from a company called Dolphin Software. The Dolphin solution goes beyond part reduction to address employee health and safety and toxicity concerns. By using publicly available data, they pull together a “hazard profile” that indicates whether products contain known dangerous or environmentally unfriendly ingredients. When looking for opportunities to eliminate items, the decision can be made on cost, sustainability, and safety perspectives. By reviewing objective rankings of hazards in combination with spend, manufacturers can “green” up their operations while saving money.

Implications for Manufacturers

The opportunity for manufacturers is clear. Save money, and help save the planet. Most manufacturers I speak with would love to be more eco-friendly, but find themselves as cross purposes with making a profit. This initiative helps them operate in a more sustainable way without a big price tag. In fact, it comes with money back! Of course Jeremy points out that chemicals can’t be rationalized blindly, they have to meet the operational needs they are currently being purchased for. The approach is sound, and IHS has a number of case studies they shared with me that back up the approach.

So companies can go green without having to sacrifice profits, I hope you found it interesting. It’s a pretty compelling opportunity. Who knew? I didn’t, if you did let us know about it.

What I learned this week … came from a post that I found in a Consumer Reports blog. The article,  Tailgating Alert: Gasoline-powered blender banned by California Air Resources Board could have come out of the Onion because it is pretty over the top (who needs a blender with handlebars!?). But the punch line is not funny for the manufacturer in Phoenix, who probably had no idea that they were violating a California law and got slapped with a $240,00 fine.

The Lesson Learned?

I am not going to go into detail on this particular case, as much as anything I liked the picture. But the implications are real, and can serve as a wake up call to manufacturers. Compliance is serious business, and getting it wrong can cost a lot of money.

More to Come – Upcoming Research

I am in the process of finalizing a research report on product environmental compliance that deals with RoHS, REACH, and other product-related compliance issues. I will share more when I roll that out. Coincidentally, one of the biggest challenges identified with REACH was understanding the regulations. As one Phoenix-based manufacturer just found out, ignorance of the law is not an excuse. I hope that the regulators don’t make too big an example of them, I picture two guys in a garage trying to figure out how to keep from losing their shirts. But the regulators are clearly sending a message that they are ready and willing to enforce their mandates.

So I will share more of my thoughts (and a framework for product compliance) soon. For now, that is one heck of a blender! I hope you found it interesting. Who knew? I didn’t, if you did let us know about it.