Clarity on PLM

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 … how companies are meeting environmental regulations for their products, and doing so in a way that is sustainable to the business from a cost and risk perspective. As manufacturers face increasing pressure from regulations such as REACH and evolving regulations like the many flavors of RoHS, it is becoming more important to develop a platform and a capability to address compliance systematically as opposed to viewing it as a series of one-off projects by regulation. This study, Tech-Clarity Perspective: Product Environmental Compliance, combines interviews with three leading manufacturers with survey results from over 300 companies to help manufacturers understand environmental product compliance challenges and how companies are addressing them.

The Research Findings

This study was unique for Tech-Clarity because it involved both survey data and interviews with compliance leaders in several manufacturing companies. The report provides two perspectives. The first is a broad perspective on the approaches that companies are taking to address their product compliance challenges. The second is a more detailed look at how three leading companies – Motorola, APC, and Seagate – are addressing these challenges.

The results are very interesting. There are some interesting figures on how regulations are impacting manufacturers and where they are focusing. One finding that I thought was interesting is that REACH (Registration, Evaluation, Authorization and Restriction of Chemicals ) is now impacting products in manufacturers as frequently as RoHS (Restriction of Hazardous Substances). Both regulations were reported by 79% of respondents as impacting their products. As always, I suggest that you read the research for more information.

Beyond those results, however, the report also makes certain conclusions about how companies can address compliance challenges in a sustainable way. In summary, these recommendations are:

• Compiling a common set of product environmental performance requirements
• Gaining a better understanding of the substances that make up components
• Automating the analysis and monitoring of product structures and composition against requirements
• Documenting proof of compliance electronically

Implications for Manufacturers

Many manufacturers are struggling with choosing which regulations to address, how thoroughly to address them, and how to approach the problem. The study paints a clear picture of three manufacturers that have looked at the problem holistically, and developed a systematic approach to deal with the multitude of regulations. Manufacturers can’t afford the risk of stopped shipments, poor market perception of environmental stewardship, or losing access to markets. On the other hand, dealing with each regulation on a project basis will grind business to a halt and dramatically spike the cost of environmental compliance. The environmental product compliance challenge is here to stay, it will only get more difficult as customer requirements and regulations like REACH and RoHS expand and evolve, and will continue to drive unacceptable market risk and high compliance costs.

Manufacturers that develop a repeatable, systematic approach to address regulations will simultaneously reduce compliance risk and control total cost of compliance. As the examples in the report show, companies are leveraging enterprise software including PLM and specialized product compliance capabilities to meet these needs.

So that was a quick peek into some recent research on developing environmentally sustainable products in a commercially sustainable way, 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 compliance, PLM and other enterprise software for manufacturers from Tech-Clarity.

Note: The link provides access to a free copy of a report summary or to the full report which is made available by PTC (registration required).