Siemens PLM Software Underscores the Importance of Boosting ROI and Cutting Development Costs to Achieve Sustainability in Green Product Initiatives
New Delhi – Siemens PLM Software, a business unit of the Siemens Industry Automation Division and a leading global provider of product lifecycle management (PLM) software and services, today responded to the findings from a series of Industry Sector Insight reports unveiled by Aberdeen Group. The reports were based on the findings of benchmark research entitled “Greening Today’s Products: Sustainable Design Meets Engineering Innovation,” which identifies best practices for green product development. To further this research, Aberdeen looked at green product development strategies of five vertical industries and examined key themes for each industry.
Released in April 2009 and spanning Aerospace & Defense, Automotive, Consumer Packaged Goods, High Tech & Electronics and Machinery (Industrial Equipment Manufacturing) industries, the research identified key strategic initiatives and challenges specific to each industry’s product development strategy. Depending on the industry, strategies ranged from creating energy efficient products to using more recycled or eco-friendly disposable materials while simultaneously reducing costs.
“The rapidly-changing regulatory compliance demands, as well as escalating costs to go green are creating new levels of complexities for companies as they embark on green product initiatives,” said Leif Pedersen, vice president, industry marketing, Siemens PLM Software. “Now more than ever, manufacturers need to consider the right technologies and strategies to boost ROI and cut development costs across all green product initiatives.”
“Our research reveals that although many companies are making progress in creating green products, they are overwhelmed by the need to be in compliance with numerous regulations and the high costs and investments needed to take advantage of green technologies such as eco-friendly materials and improved power consumption,” said Michelle Boucher, research analyst, Product Innovation and Engineering Practice, Aberdeen Group. “By optimizing their green product development programs across the entire development lifecycle, manufacturers can reduce costs, meet product launch dates and drive new business.”
A summary of the Aberdeen Sector Insight findings follows:
Aerospace & Defense
Faced with constant scrutiny from a wide range of regulatory bodies, Aerospace and Defense (A&D) manufacturers report that compliance to green-related regulations required for market entry is driving green product development 50 percent more often than their peers in other industries. When compared to the industry average, A&D manufacturers have significantly more requirements for disposal, recyclability or substance compliance and address this with allocation of these requirements to specific product configurations – in fact 50 percent of A&D manufacturers compared to only 38 percent of the industry average do this. Design for regulatory compliance is the top strategy reported among A&D companies, where 27 percent of them are paying a high level of attention to designing products for low or zero-emissions, compared to 19 percent of the best-in-class.
Despite the high level of adoption of capabilities that support design for resource or emission efficiency, A&D companies are slow to adopt the software tools to effectively design for these regulatory requirements. In order for A&D manufacturers to meet product cost targets and product launch dates, while still addressing environmental concerns, A&D companies must clearly define their green requirements, ensuring they have a clear understanding of the bill of substances, generate and assess more concepts and ideas to meet green requirements, and teach products to “think green.”
Automotive manufacturers have been pursuing the quest to ‘go green’ much longer than their peers, which explains why 78 percent of these companies currently have a green initiative in place, compared to only 63 percent of their peers.
Interestingly, what originally began as a response to government regulations to reduce pollution or control emissions, soon grew into a mission to produce more fuel-efficient and eco-friendly vehicles that would attract more customers. However, while going green may represent a market opportunity for automotive manufacturers, it also increases complications to the product development process, especially in terms of the costs associated with developing new green technologies. For example, 40 percent of automotive companies cite the need to make a large capital manufacturing investment to support the development of greener materials and technologies as a challenge, compared to just 24 percent of their peers. Another top green concern for automotive manufacturers is minimizing fuel consumption or the emission of toxic gases. Here, the report finds that auto companies have a strong focus on innovation; in particular, 53 percent of the auto manufacturers are well ahead of their peers in terms of their ability to design control systems to reduce carbon emissions, compared to 30 percent of their industry average peers.
Overall, automakers stand to benefit most by examining their green initiatives from an ROI perspective. In short, in order to create green vehicles that customers want at a competitive price, automakers need to transform their green product development initiatives and practices in ways that create eco-friendly products while also cutting product development costs.
Consumer Packaged Goods
Nearly half of all Consumer Packaged Goods (CPG) respondents cite the ability to achieve greater competitive product differentiation through green product development as a top pressure. Similar to other industries, the biggest challenge reported by CPG companies is the high expense associated with developing new, green technologies. In particular, CPG manufacturers cite the cost of recycled materials and options as a challenge nearly twice as often as their peers – 30 percent of CPG companies compared to 17 percent of other industries. The reality is that although they are clearly committed to “going green,” CPG manufacturers lag behind their peers in their adoption of green capabilities. For example, only 27 percent of CPG companies adopted the explicit definition and documentation of requirements for product disposal, recycle-ability or substance regulatory compliance, compared to 67 percent of the best-in-class.
To achieve successful green product development, CPG manufacturers should leverage new technologies to automate the propagation of changes, provide real time visibility into product changes and regulatory compliance, and ensure that the bill of substance is generated directly from the formula and updated in real time as the formula changes.
High Tech & Electronics
High Technology and Electronics (HT&E) companies indicate that compliance to green related regulations required for market entry is the top pressure driving green product development. In fact, HT&E manufacturers are 63 percent more likely than their peers to report that they currently follow four or more regulations. Eighty-one percent of HT&E manufacturers have a green product development initiative in place, even more than other industries. Being able to brand energy efficient technology is the top strategy for HT&E manufacturers - 57 percent of HT&E companies compared to 38 percent of the industry average.
HT&E manufacturers are very likely to adopt simulation technologies, especially in electronics simulation and analysis – 63 percent of HT&E companies compared to 40 percent of the industry average. These tools enable companies to build a virtual prototype, enabling them to cut down on expensive, waste producing, energy consuming physical prototypes. HT&E manufacturers have gone to great lengths to meet multiple regulations. To support their ability to be in compliance, they are implementing requirements management solutions, leveraging simulation technologies and defining and documenting requirements for product disposal and substance regulatory compliance. It is clear, that while today HT&E manufacturers are focused on compliance to regulations like RoHS and REACH, they must look ahead and add strategies around green packaging and energy consumption to their sustainability efforts in order to capture and sustain competitive advantage.
Machinery (Industrial Equipment Manufacturing)
The top driver of green product development among machinery manufacturers is competitive differentiation and the top challenges they face are the burdens of the high cost of developing new technologies and the associated capital equipment investments, which affect the product cost targets. The top green product development strategy for this sector is developing and branding energy efficient technology – 54 percent of machinery manufacturers compared to 38 percent of the industry average.
Machinery manufacturers possess the greatest opportunity for improvement when it comes to the adoption of technology to support their green initiatives. Twenty-nine percent of machinery companies fall the furthest behind the 50 percent of best-in-class in the use of portfolio or idea management solutions that can be used to help them bring the right idea for energy efficient products to market. To be successful with their green product development strategies, machinery manufacturers must find ways to address the challenges that inflate costs or delay product development schedules by generating and assessing more concepts and ideas, defining content for green with requirements and teaching products to “think green.”
Aberdeen Group examined how more than 360 enterprises develop green product development programs that help maintain regulatory compliance and achieve competitive differentiation. To gain an understanding of how manufacturers successfully manage green product development, respondents were benchmarked according to their performance across five key performance indicators and divided among three performance categories: Best-in-Class (top 20 percent of performers); Laggard organizations (bottom 30 percent) and the Industry Average (the remaining 50 percent). These measures included the percent of products meeting launch dates, revenue targets, product cost targets, development cost targets and quality targets.
“As companies focus on new green initiatives, they must consider strategies that ensure products are environmentally compliant throughout the entire product lifecycle, as well as adopt the right technologies and tools to reduce development costs and boost ROI,” said Pedersen. “Developing green products that meet customer demands while maintaining competitive differentiation is the hallmark of sustainability.”
Comprehensive product strategy
Siemens PLM Software is helping customers address these issues through a comprehensive strategy supported by several of its PLM software solutions including Teamcenter® software for digital lifecycle management, NX™ software for digital product development and Tecnomatix® software for digital manufacturing.
Teamcenter provides a single source of product and process knowledge, enabling manufacturers to capture and trace compliance requirements and track program management compliance milestones across the entire product lifecycle. With Teamcenter, companies can also manage supplier environmental qualification as a part of the supplier sourcing, qualification, and quality control process. The Teamcenter environmental compliance capabilities allow manufacturers to validate their product compliance throughout the development process in accordance with multiple environmental guidelines established by U.S., European Union and Asian governments. The service lifecycle management capabilities in Teamcenter help extend the use-life of a product. At the end of a product’s lifespan Teamcenter can manage the end-of-life process, handling disassembly instructions for the product bill-of-material (BOM).
NX extends Siemens PLM Software’s focus on addressing its customers’ environmental initiatives in several ways. For example, it enables package designers to continuously visualize all aspects of a design in real time and make design decisions based on green requirements that are validated within NX. Packaging design can also help to lower or optimize logistics and transportation costs.
NX also helps reduce material usage through design optimization, weight validation and the simulation of assembly and disassembly – which is widely used in the machinery, aerospace and automotive industries. NX even facilitates the reuse of parts which reduces the need for new tooling. Less tooling means less raw material usage, which reduces machine time and leads to less energy usage and a reduced carbon footprint.
Finally, Tecnomatix helps companies design, implement and manage their manufacturing processes in a digital environment. By optimizing manufacturing processes and ensuring the efficient use of resources, Tecnomatix contributes to reducing waste in many ways. Examples include reduced emissions through the minimization of transport, avoidance of installing unnecessary equipment or “over configuring” lines, and the optimization of warehouses and storage areas to reduce space consumption.
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