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FeedsHome: Issue 3 2008 › Lead Story › THE GREEN AGENDA
THE GREEN AGENDA
30/04/2008 | Channel: Manufacturing, E-Business / IT
THE THREE FLAVOURS OF GREEN AND HOW PLM CAN MAKE THEM ALL TASTE BETTER.BY MIKE SPRAGG, INFOR'S DIRECTOR OF PRODUCT MARKETING FOR THE PROCESS INDUSTRY
An increase in environmental awareness and the incorporation of the 'green' agenda is one of the most recent shifts in the business landscape. From laptops to lipstick, manufacturers are having to reassess their production, supply chains and even their product portfolios, often resulting in profound changes.
As part of a strategy for handling this change, product lifecycle management (PLM) has much to offer manufacturers. PLM begins at the earliest possible stages of design, meaning these new green considerations are factored in long before products are manufactured and then enter the supply chain. This can save costs that would have to be borne were the products reworked at a later date.
PLM also brings a wide range of other benefits - a faster time to market, improved design processes with lower costs and a more efficient interaction between product and distribution.
However to maximise these additional benefits, and ensure PLM brings the best alignment of operational achievement and environmental consideration, it is first necessary to understand the drivers for adopting green PLM in the first place. There are three main primary drivers, with a fourth 'secondary' consideration:
Legal green
The past two to three years have seen an unprecedented awareness of environmental issues,much of it driven by new legislation such as the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) directive, the Restriction of Hazardous Substances (RoHS) directive and the Waste Electrical and Electronic Equipment (WEEE) Directive.
The European scope of this legislation means that entire chains of production are affected, not just isolated operations in one country.Much of this legislation has been aimed at the reduction - if not elimination - of hazardous materials included in many products. Lead, mercury and bromine are all examples of substances that have been targeted. There is not only the issue of removing these substances but also the byproducts of these substances.
For discrete manufacturers, this is often a simple case of reducing or replacing a given component. For process manufacturers, however, this legislation has already caused a great deal of change as the impact of replacement 'ingredients' is felt throughout the production chain.
PLM helps mitigate these potentially detrimental changes, for example aiding a smooth change from one older product containing hazardous materials, to a newer
greener alternative. Indeed, PLM can then assist a company in getting ahead of the legislation curve, for example, trialling and implementing lighter packaging to reduce transportation weight, landfill and improving the percentage of recyclable material included.
Legislation is likely to becoming increasingly stringent across many areas of manufacturing. There has already been talk of taxation based on environmental performance, and the likely basis for this will be the carbon footprint of an organisation.
There is a tax already in place in the Netherlands based on the carbon footprint of product packaging. The challenge many manufacturers face is not simply adapting to the new demands but also ensuring their product is still safe, effective and profitable.
For products in development, these new pieces of green legislation may cause more than change - they can cause a product to be pulled indefinitely, causing heavy losses. Again PLM can help in mitigating this cost and even salvaging a product.
Financial green
Contrary to many expectations, a lot of environmental practices also go hand in hand with lower operating costs, greater efficiencies and improved profit margins. For example, a reduction in the use of energy throughout a company, from its head office to its data centre, causes lower electricity bills. For a manufacturing plant, reducing electricity use by a small percentage can yield big savings quickly.
For manufacturers, this has a two-fold appeal - the ability to compete better with offshore manufacturers because of lower costs, but also to maintain a distinct USP over the offshore competition because of improved green credentials. Research commissioned by Infor has already identified that 32 per cent of UK manufacturers are either concerned or very concerned about reducing their carbon footprint and a similar 31 per cent are confident they know the size of their carbon footprint. This third of manufacturers may gain a critical early mover advantage, especially if they roll PLM into their carbon footprint reduction campaigns.
PLM is critical here in order to ensure a program of energy saving does not adversely impact production. For example, food manufacturers may move across to a more energy-intensive, yet seasonal product and then move back over again. This necessitates different production tools and techniques and phase in and phase out of products - all hallmarks of PLM.
The same discipline also applies to many areas of product design and again, improvements to both a green profile and the bottom line can be brought about using PLM.More intelligent packaging means lower transportation costs per unit as either the amount transported can be increased or the amount of transport needed can be reduced. The move over to 'concentrated' detergents has already raised this possibility of fewer road vehicles and has even been used in major television advertising campaigns in the UK.
Manufacturers and logistics providers have also long been aware that a reduced inventory or stock means less cash tied up in assets that incur storage costs, from rent on premises to the payment of security personnel. In the case of chemical manufacturers, there can be a huge saving on the costs of insuring storage alone.
These savings can be made in the factory as well as the warehouse. The use of fewer chemicals or hazardous substances in the production environment means less cleaning/extraction is needed. This means fewer additional services are required and the costs of production are decreased.
Bonus green
Another key driver for adopting green strategies and practices at the point ofproduction is to positively impact the associated, though indirect, elements of operations or sales.
The most obvious example of this is of course the feedback from customers that they want greener products. This can be something as simple as end-users demanding less lead in their laptops, or the ongoing 30 per cent a year growth in demand for organic food. This demand is being felt across many industries, and now
features heavily in both inbound and outbound marketing communications.
For many manufacturers, this communication comes 'via' retailers, who are themselves looking to ensure they have a comprehensive and solid green profile. As suppliers to big name retailers, many manufacturers have already had to adjust their production in order to keep lucrative contracts.
Recent research commissioned by Infor showed that the two main barriers to manufacturers going green were apathy and ingrained culture. Customer demand will go some way to changing this.
However as these indirect impacts spread throughout the production chain, more partners will push, and be pushed for greener alternatives. Implementing PLM can even alter the use of the product by the end-user or consumer themselves. For example reducing phosphates in household detergents means that fewer detergents then enter the waste water. PLM is critical here to ensure that these positive green impacts do not detrimentally affect the end-user experience or the performance of the product.
Conclusion
Much of the impact of green strategies upon manufacturers is felt at the product level and PLM is by far the most preferable method of making these changes as other strategies require the removal or expensive alteration of goods within the supply chain.
Many manufacturers will need to partner with experts to ensure they have access to
the necessary knowledge and expertise needed to make the changes smoothly and without adverse impacts upon existing production. One of the key risks in making these changes lies in protecting the intellectual property of the manufacturer before, during and after the alterations to the product and its lifecycle.
Keeping products and entire brands intact throughout such changes is paramount. There is no point making huge energy savings, developing a new cleaner and greener product and liaising with suppliers if, once the product gets out into the market it fails. PLM is the strategy that can ensure this success - leading to a better product and profits.
As part of a strategy for handling this change, product lifecycle management (PLM) has much to offer manufacturers. PLM begins at the earliest possible stages of design, meaning these new green considerations are factored in long before products are manufactured and then enter the supply chain. This can save costs that would have to be borne were the products reworked at a later date.
PLM also brings a wide range of other benefits - a faster time to market, improved design processes with lower costs and a more efficient interaction between product and distribution.
However to maximise these additional benefits, and ensure PLM brings the best alignment of operational achievement and environmental consideration, it is first necessary to understand the drivers for adopting green PLM in the first place. There are three main primary drivers, with a fourth 'secondary' consideration:
Legal green
The past two to three years have seen an unprecedented awareness of environmental issues,much of it driven by new legislation such as the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) directive, the Restriction of Hazardous Substances (RoHS) directive and the Waste Electrical and Electronic Equipment (WEEE) Directive.
The European scope of this legislation means that entire chains of production are affected, not just isolated operations in one country.Much of this legislation has been aimed at the reduction - if not elimination - of hazardous materials included in many products. Lead, mercury and bromine are all examples of substances that have been targeted. There is not only the issue of removing these substances but also the byproducts of these substances.
For discrete manufacturers, this is often a simple case of reducing or replacing a given component. For process manufacturers, however, this legislation has already caused a great deal of change as the impact of replacement 'ingredients' is felt throughout the production chain.
PLM helps mitigate these potentially detrimental changes, for example aiding a smooth change from one older product containing hazardous materials, to a newer
greener alternative. Indeed, PLM can then assist a company in getting ahead of the legislation curve, for example, trialling and implementing lighter packaging to reduce transportation weight, landfill and improving the percentage of recyclable material included.
Legislation is likely to becoming increasingly stringent across many areas of manufacturing. There has already been talk of taxation based on environmental performance, and the likely basis for this will be the carbon footprint of an organisation.
There is a tax already in place in the Netherlands based on the carbon footprint of product packaging. The challenge many manufacturers face is not simply adapting to the new demands but also ensuring their product is still safe, effective and profitable.
For products in development, these new pieces of green legislation may cause more than change - they can cause a product to be pulled indefinitely, causing heavy losses. Again PLM can help in mitigating this cost and even salvaging a product.
Financial green
Contrary to many expectations, a lot of environmental practices also go hand in hand with lower operating costs, greater efficiencies and improved profit margins. For example, a reduction in the use of energy throughout a company, from its head office to its data centre, causes lower electricity bills. For a manufacturing plant, reducing electricity use by a small percentage can yield big savings quickly.
For manufacturers, this has a two-fold appeal - the ability to compete better with offshore manufacturers because of lower costs, but also to maintain a distinct USP over the offshore competition because of improved green credentials. Research commissioned by Infor has already identified that 32 per cent of UK manufacturers are either concerned or very concerned about reducing their carbon footprint and a similar 31 per cent are confident they know the size of their carbon footprint. This third of manufacturers may gain a critical early mover advantage, especially if they roll PLM into their carbon footprint reduction campaigns.
PLM is critical here in order to ensure a program of energy saving does not adversely impact production. For example, food manufacturers may move across to a more energy-intensive, yet seasonal product and then move back over again. This necessitates different production tools and techniques and phase in and phase out of products - all hallmarks of PLM.
The same discipline also applies to many areas of product design and again, improvements to both a green profile and the bottom line can be brought about using PLM.More intelligent packaging means lower transportation costs per unit as either the amount transported can be increased or the amount of transport needed can be reduced. The move over to 'concentrated' detergents has already raised this possibility of fewer road vehicles and has even been used in major television advertising campaigns in the UK.
Manufacturers and logistics providers have also long been aware that a reduced inventory or stock means less cash tied up in assets that incur storage costs, from rent on premises to the payment of security personnel. In the case of chemical manufacturers, there can be a huge saving on the costs of insuring storage alone.
These savings can be made in the factory as well as the warehouse. The use of fewer chemicals or hazardous substances in the production environment means less cleaning/extraction is needed. This means fewer additional services are required and the costs of production are decreased.
Bonus green
Another key driver for adopting green strategies and practices at the point ofproduction is to positively impact the associated, though indirect, elements of operations or sales.
The most obvious example of this is of course the feedback from customers that they want greener products. This can be something as simple as end-users demanding less lead in their laptops, or the ongoing 30 per cent a year growth in demand for organic food. This demand is being felt across many industries, and now
features heavily in both inbound and outbound marketing communications.
For many manufacturers, this communication comes 'via' retailers, who are themselves looking to ensure they have a comprehensive and solid green profile. As suppliers to big name retailers, many manufacturers have already had to adjust their production in order to keep lucrative contracts.
Recent research commissioned by Infor showed that the two main barriers to manufacturers going green were apathy and ingrained culture. Customer demand will go some way to changing this.
However as these indirect impacts spread throughout the production chain, more partners will push, and be pushed for greener alternatives. Implementing PLM can even alter the use of the product by the end-user or consumer themselves. For example reducing phosphates in household detergents means that fewer detergents then enter the waste water. PLM is critical here to ensure that these positive green impacts do not detrimentally affect the end-user experience or the performance of the product.
Conclusion
Much of the impact of green strategies upon manufacturers is felt at the product level and PLM is by far the most preferable method of making these changes as other strategies require the removal or expensive alteration of goods within the supply chain.
Many manufacturers will need to partner with experts to ensure they have access to
the necessary knowledge and expertise needed to make the changes smoothly and without adverse impacts upon existing production. One of the key risks in making these changes lies in protecting the intellectual property of the manufacturer before, during and after the alterations to the product and its lifecycle.
Keeping products and entire brands intact throughout such changes is paramount. There is no point making huge energy savings, developing a new cleaner and greener product and liaising with suppliers if, once the product gets out into the market it fails. PLM is the strategy that can ensure this success - leading to a better product and profits.
