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Scaling up Life Cycle Assessments (LCAs) involves expanding their scope while ensuring they remain reliable, transparent, and verifiable. This requires a disciplined approach to maintain the integrity of LCAs as they grow in complexity. Emphasizing the importance of scaling LCAs is essential for companies aiming to achieve meaningful sustainability outcomes and enhance stakeholder trust.
Three Foundational Pillars for Successful LCA Scale-Up
The three pillars essential for scaling LCAs are:
Robust Data and Data Landscapes: Ensuring high-quality, comprehensive data is crucial for accurate assessments.
Consistent Methodologies: Standardizing methodologies across assessments to maintain consistency and comparability.
Comprehensive Documentation: Detailed documentation is necessary to provide transparency and facilitate verification processes.
Challenges and Misconceptions
There is a common misconception that LCAs at scale are of lower quality compared to traditional LCAs. It was clarified that while LCAs at scale may be perceived as less transparent, they can actually provide higher accuracy and representativeness. The key is to address documentation and transparency challenges effectively.
Data Collection and Integration
Traditional LCAs often involve manual data collection and adjustments, which can introduce errors and inconsistencies. LCAs at scale, however, use automated data collection directly from ERP and PLM systems, ensuring higher accuracy and reducing human error. This approach allows for more precise and reliable data integration.
Modeling and Mapping
In traditional LCAs, modeling and mapping are manual processes prone to errors and variability. LCAs at scale automate these processes, enhancing reproducibility and consistency. Automated modeling and mapping eliminate the variability and errors associated with manual data handling, leading to more accurate and reliable assessments.
Documentation and Verification
Documentation and verification are critical bottlenecks in scaling LCAs. Innovative approaches are needed to streamline these processes. This includes developing new standards and practices to ensure that LCAs at scale meet the required documentation and verification standards without excessive manual effort.
Quality Assurance and Transparency
Achieving high-quality results in LCAs at scale requires ensuring that the data and models are well-documented and transparent. This involves creating detailed quality assurance reports and maintaining consistent documentation practices. Transparency is key to building trust and credibility in the results.
Leveraging Technology for Efficiency
The use of technology, such as automated data integration and modeling, significantly reduces the time required for LCAs. This efficiency allows for more frequent updates and continuous improvement, which are essential for maintaining accurate and up-to-date assessments. Technology enables companies to scale their LCAs without compromising quality.
Addressing Data Gaps
Handling data gaps is a critical challenge in LCAs at scale. Strategies for filling these gaps include using standard components and merging data from different sources. Ensuring comprehensive and accurate assessments involves identifying and addressing data gaps effectively.
Future Directions and Best Practices
The future of LCAs at scale involves ongoing innovation and improvement to meet evolving sustainability goals. Emphasizing the need for best practices in documentation and verification, continuous collaboration with partners and stakeholders is essential for developing and refining these practices.
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Sustainability reporting has moved from being a niche requirement to a central element of modern corporate strategy. For many organizations, the focus on Scope 3 emissions — which account for most of their product’s carbon footprint — presents an opportunity to lead in environmental responsibility and drive innovation. Yet, most companies still rely on spend-based methodologies that provide limited accuracy and fail to capture the full picture of their impact. As stakeholders demand greater transparency and regulators implement stricter compliance measures, businesses must evolve their approach to ensure they remain relevant and resilient in a competitive landscape.
In a recent Makersite Masterclass, our data experts Fabian Hassel, VP of Services and Pablo Downer Päster, Principal Sustainability Engineer, provide a roadmap for organizations looking to transition away from spend-based approaches.
The session emphasized the need for robust, data-driven strategies that go beyond surface-level reporting, providing organizations with the tools and strategies needed to begin the transition.
Below are 10 key takeaways you can use to optimize your sustainability practices. By implementing these strategies, businesses can not only meet compliance requirements but also unlock long-term value in their operations.
Top 10 Key Takeaways
Understand the Limitations of Spend-Based Reporting
Spend-based reporting has been a common practice due to its simplicity and scalability, but it is heavy with drawbacks that limit its effectiveness in meeting modern sustainability goals. We highlighted three major weaknesses of this approach:
Lack of Accuracy: Relying on industry averages often fails to capture the complexity and uniqueness of individual supply chains.
Overlooked Factors: Key variables, such as material choices, product design, supplier energy sources and production efficiencies, are ignored.
Regulatory Risks: Increasingly stringent regulations demand more product level granularity and transparency, making spend-based methodologies insufficient.
To keep up with global standards, businesses must transition to data-driven methods that go beyond high-level estimates.
The Power of Granular Data in Scope 3 Reporting
Accurate, granular data is a necessity for sustainability reporting. Transitioning from general estimates to detailed, material-specific information allows businesses to make better decarbonization decisions and take targeted actions.
Granular data provides:
Material-Level Insights: A clear understanding of the impact of each material in the supply chain.
Product-Specific Assessments: Precise measurements of emissions tied to specific products.
Supplier Data Integration: A more accurate and strategic approach to managing supplier emissions.
This actionable level of detail equips businesses to develop proactive sustainability strategies rather than merely meeting reporting requirements.
Digital Twins as a Game-Changer
Digital twins are virtual data models that replicate real-world products, processes, and supply chains. We emphasized their transformative potential for Scope 3 reporting.
Digital twins enable companies to:
Simulate scenarios to evaluate sustainability interventions.
Identify “hotspots” of emissions in supply chains to focus on reduction strategies.
Foster greater collaboration among procurement, research, and engineering teams to align sustainability goals.
For example, a manufacturer of complex systems like wind turbines could use digital twins to visualize emissions across thousands of components and adapt processes accordingly.
Navigate Transition Challenges
Moving beyond spend-based reporting is rewarding, but it isn’t without challenges. As we identified the most common roadblocks and how to address them:
Data Gaps: Ensuring suppliers provide accurate and comprehensive data.
Integration Barriers: Streamlining fragmented data systems into a unified platform.
Cost and Complexity: Investing in advanced tools and frameworks for long-term gains.
Despite these obstacles, high-impact organizations have successfully overcome these barriers with meticulous planning and the right tools.
Industry-Specific Insights for Scope 3 Reporting
Different industries face unique challenges and opportunities in Scope 3 reporting.
Here are some examples discussed in the masterclass:
Automotive: High supply chain complexity coupled with strict emissions regulations.
Electronics: Significant impacts from raw materials requiring circular practices.
Heavy Machinery: Long product life cycles and complex components necessitate precise data collection.
Tailoring reporting strategies to industry-specific needs is essential for achieving both accuracy and actionable insights.
Build traceable and robust supply chain mechanisms.
Adopt methodologies that exceed regulatory expectations to ensure long-term compliance and readiness for future standards.
Organizations that begin adapting now will gain a head start over competitors once these regulations are fully enforced.
Advanced Master Material’s Approach to Scope 3 Reporting
To achieve your Scope 3 reporting goals, the importance of integrating an AI or tech tool to simplify and assist in the transition to more accurate Scope 3 reporting.
What you should look for in a tech tool to help you achieve your goals in Scope 3 Reporting:
Automated Data Integration: Seamless integration with ERP and PLM systems consolidates disparate data sources.
Material and Supplier-Specific Modeling: Detailed emissions data to guide informed decision-making.
Collaboration Tools: Enables real-time engagement between cross-functional teams, such as procurement and sustainability managers.
By addressing key challenges of data granularity and system integration, you should look for a tool that supports businesses in meeting their sustainability goals effectively.
Turning Scope 3 Reporting into a Competitive Advantage
Far from being a regulatory burden, Scope 3 reporting can be a strategic opportunity.
We highlight its potential to drive business growth by:
Market Differentiation: Establishing leadership as a sustainable brand.
Data-Driven Innovation: Creating better products informed by actionable insights.
Supply Chain Resilience: Building transparency to adapt to disruptions and mitigate risks.
Forward-thinking companies are leveraging Scope 3 as a catalyst for innovation and lasting competitive advantage.
Real-World Scenarios
We discussed two different global manufacturing companies we worked with faced the common challenge of inconsistent and missing Scope 3 data, which led to inefficiencies in their product design and cost analysis.
The solution involved:
Enhanced Precision: Transitioned from generalized spend-based estimates to precise, material-level reporting, empowering data-driven decisions.
Cost Efficiency: Identified inefficiencies and optimized procurement strategies, driving measurable savings and sustainable growth.
Compliance Assurance: Secured full regulatory readiness, ensuring confidence and adherence to the highest industry standards.
For a deeper dive into our success stories click here.
Actionable Steps to Get Started
If your organization is ready to evolve beyond spend-based Scope 3 reporting, here are four practical steps to take today:
Assess Your Current Process: Identify gaps and areas for improvement in your current reporting practices.
Engage Stakeholders: Collaborate across departments—procurement, sustainability, engineering—to align goals and define data needs.
Adopt Advanced Tools: Leverage advanced data management and integration tools, specifically, sustainability or environmental focused reporting platforms for accurate data integration and emissions modeling.
Pilot and Scale: Launch pilot projects to refine methodologies before scaling them across the organization.
Unlock the Full Potential of Scope 3 Reporting
Accurate Scope 3 reporting is more than just a regulatory requirement—it’s a pathway to innovation, efficiency, and sustainable growth. Companies willing to embrace advanced methodologies and tools will not only meet compliance standards but also position themselves as leaders in a rapidly evolving market.
By taking incremental steps, businesses can gradually transition to more advanced reporting practices without overwhelming existing systems.
Curious to learn more about overcoming the Scope 3 Reporting challenges?
The construction industry is at the heart of sustainability efforts in Europe, with regulatory frameworks playing a critical role in driving innovation and compliance. The Construction Products Regulation (CPR) is a cornerstone of these efforts, ensuring the quality, safety, and sustainability of construction products across the European Union.
Here’s a quick guide to understanding CPR, its updates, and its significance for businesses.
What is Construction Products Regulation (CPR)?
CPR is a European Union regulation that establishes harmonized rules for marketing construction products. Adopted in 2011, it replaced the Construction Products Directive to simplify and strengthen the framework for assessing the performance of construction materials. Its main aim is to ensure that reliable information is available on the performance of construction products, enabling better decision-making for stakeholders across the value chain.
For example, under the CPR, a manufacturer of thermal insulation materials must ensure their products meet energy efficiency standards and provide clear documentation of performance. This guarantees that builders and architects can confidently choose materials that comply with energy codes and enhance building performance.
Key Objectives of CPR
Harmonisation of Standards
The CPR ensures that construction products across the EU are assessed and declared using a unified set of rules. This harmonization simplifies trade within the EU market and reduces barriers for manufacturers. For example, a window manufacturer in Germany can market its products in France without additional testing, provided they comply with harmonized EU standards.
This consistency not only facilitates cross-border trade but also reduces costs and administrative burdens for manufacturers.
Product Safety and Performance
By enforcing essential safety and performance requirements, the CPR ensures that products meet high standards in areas such as mechanical resistance, fire safety, energy efficiency, and environmental sustainability. For example, a fire-resistant door must meet stringent criteria to ensure its effectiveness in emergencies, safeguarding both lives and property.
These standards also promote innovation, encouraging manufacturers to develop products that exceed baseline requirements.
Market Transparency
The CPR mandates clear and reliable performance data for construction products, empowering stakeholders to make informed decisions. For instance, contractors choosing concrete products can compare compressive strength, durability, and environmental impact using standardized performance declarations.
This transparency fosters trust in the construction supply chain and helps professionals select products that align with project specifications and sustainability goals.
Environmental Accountability
The CPR integrates sustainability into its framework, particularly with the inclusion of Environmental Product Declarations (EPDs). These declarations provide critical information about a product’s lifecycle impacts, such as carbon emissions and resource efficiency, enabling the construction industry to advance toward climate neutrality.
What CPR Means for EU and Non-EU Manufacturers
CPR has implications not only for manufacturers within the EU but also for those outside the bloc who wish to access the European market. Here’s what it means for both:
For EU Manufacturers:
Streamlined Market Access: Harmonized standards make it easier to market products across all member states, reducing the need for multiple certifications.
Focus on Sustainability: EU manufacturers must align their production processes with new environmental requirements, such as providing EPDs and adhering to circular economy principles.
Digitalisation: The adoption of Digital Product Passports (DPPs) means manufacturers must invest in digital tools to manage compliance data efficiently.
For Non-EU Manufacturers:
Regulatory Alignment: Non-EU manufacturers exporting to the EU must ensure their products comply with CPR requirements, including harmonised standards and sustainability criteria.
Additional Documentation: Exporters must provide DoPs and EPDs, along with any other documentation required under the CPR, to prove compliance.
Increased Scrutiny: Enhanced market surveillance under the updated CPR means non-EU manufacturers must maintain high standards of transparency and accuracy to avoid penalties or market exclusion.
For example, an American manufacturer of steel beams looking to sell in the EU must align with harmonized standards for mechanical resistance and provide lifecycle environmental data through EPDs. This ensures their products are competitive and meet EU sustainability expectations.
Overview of the New CPR Timeframe
The European Commission proposed updates to the CPR in March 2022 to modernize the framework, address gaps in current practices, and integrate sustainability requirements. Here’s a breakdown of the timeline:
2023: Discussions and consultations with stakeholders, including manufacturers, policymakers, and environmental groups.
January 7, 2025: The revised CPR is expected to come into force, 20 days after its publication in the Official Journal.
January 8, 2026: Key applications begin, with manufacturers required to comply with updated provisions for specific product categories.
2028: Full compliance expected for priority categories, including mandatory integration of Digital Product Passports (DPPs) and environmental data.
2030: Comprehensive lifecycle environmental reporting becomes mandatory across all categories.
This phased timeline provides businesses with ample time to adapt while ensuring steady progress toward sustainability goals.
How to Navigate the Transition to the Updated CPR
The revised CPR is a significant shift, particularly for manufacturers, as it introduces new sustainability and compliance requirements. To successfully navigate this transition:
Familiarise Yourself with Priority Deadlines
While the regulation formally applies from 2025, compliance timelines will vary by product category. Manufacturers of concrete, steel, and insulation should prioritise preparations as their standards are likely to be updated first.
Invest in Digital Tools
With the introduction of Digital Product Passports (DPP), adopting digital solutions early can streamline compliance processes and give manufacturers a competitive edge. For instance, using platforms like Makersite can simplify the integration of environmental data into product documentation.
Collaborate Across Supply Chains
Meeting the new requirements will require greater transparency and collaboration with suppliers, especially for gathering and validating lifecycle environmental data.
Prepare for Market Surveillance
Stricter enforcement means businesses must ensure all documentation, from DoPs to EPDs, is accurate and up to date to avoid penalties.
The Construction Products Regulation is more than a compliance framework; it’s a catalyst for sustainability and transparency in the construction industry. With the anticipated updates emphasizing environmental performance, now is the time for businesses to prepare and align with these transformative changes.
To learn about how Makersite can support your CPR compliance and sustainability goals, contact us today.
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In a rapidly evolving business landscape, managing sustainability data has become a critical challenge for industries worldwide. During our recent masterclass, Solving Sustainability Data Challenges, Makersite’s data experts Sophie Kieselbach and Niclas Rabel explored the hurdles organizations face in aligning their sustainability efforts with robust data practices.
From understanding different maturity levels across industries to tackling common data management obstacles, this session provided actionable insights to help businesses enhance their sustainability journeys. Below are 10 key takeaways from the masterclass that can guide companies in improving their sustainability data practices and integrating them into long-term strategies.
10 Key Takeaways
Sustainability Maturity Levels Across Industries
By using data gathered through our Maturity Index submissions the data experts analysed and presented how various industries are at different stages in their sustainability journeys. They were categorized into three maturity levels:
Novice (76.06%): This group comprised industries like automotive (19.72%) and consumer durable goods (23.94%) that are just beginning to integrate sustainability efforts. They are largely unaware of their entire value chain and tend to have limited visibility into sustainability data beyond Tier 1 suppliers.
Intermediate (19.72%): These industries have started to address sustainability but are still in transition. Automotive and building materials make up a portion of this group, where data integration is underway, but decision-making is hindered by inconsistent and siloed data.
Advanced (4.23%): These are the most mature companies in terms of sustainability data, often found in consumer packaged goods. They have harmonized data and an end-to-end view of their supply chain, allowing them to make informed decisions and leverage sustainability as a profit driver.
These maturity levels indicate that most companies are still in the early phases, struggling with integrating sustainability into core business processes.
To find out where you sit on the maturity ladder and how you compare to companies similar to yours fill out our Maturity Index.
Data Challenges
These are some of the most common challenges businesses face when managing sustainability data:
Internal Awareness Gaps: Many companies are partially aware of their internal data but lack insight into the entire value chain. This creates blind spots beyond Tier 1 suppliers and disrupts accurate decision-making.
Supply Chain Visibility: Limited data visibility can lead to delayed decisions, supply chain disruptions, and missed regulatory requirements.
Data Silos: Inconsistent and siloed data across departments (product development, procurement, etc.) makes it harder to drive sustainability initiatives. The inability to share and integrate data from different sources prevents a holistic view of sustainability impacts.
The goal here is to shift from fragmented, inconsistent data management to a fully integrated, transparent data landscape that supports sustainability efforts across the entire supply chain.
Sourcing Challenges
Sourcing data for sustainability presents several key issues:
Data Accessibility: Difficulty in accessing data due to proprietary restrictions and varying data quality standards from suppliers.
Missing Descriptions: Purchased parts often lack proper descriptions, leading to inefficiencies in understanding their sustainability impacts.
Integration Complexity: The complexity of integrating internal databases with third-party providers and IoT devices can lead to fragmented data management systems.
Inaccuracy and Inconsistency: Manual data entry errors, outdated information, and inconsistent data formats further exacerbate the problem. Companies often find that the same data point varies across different systems, making it difficult to trust the data.
Addressing these sourcing challenges requires robust data integration tools and governance frameworks that standardize the collection and storage of data.
Real-World Scenario
We discussed a real-world scenario where a company we worked with faced the common challenge of inconsistent and missing data, which led to inefficiencies in their product design and cost analysis. The solution involved:
Data Governance Framework: Implementing a data governance framework to harmonize data from various ERP (Enterprise Resource Planning) and PLM (Product Lifecycle Management) systems.
Enhanced Data Quality: Improving data quality through integration tools helped the company make better decisions, reduce costs, and design more sustainable products.
The use case emphasizes the importance of unified data governance to overcome fragmented data systems, highlighting the role of tools like Makersite in ensuring smooth integration and accuracy of data.
For a deeper dive into our success stories click here.
Data Management
Systematic data management is a vital ingredient for a successful business, it includes organizing, storing, and maintaining data. Three core benefits are:
Driving Business Decisions: High-quality data enables businesses to make informed and timely decisions, especially regarding sustainability.
Enhancing Operational Efficiency: Proper data management reduces errors and inconsistencies, leading to streamlined operations.
Fostering Innovation: Accurate data supports research, product development, and innovation, particularly in creating sustainable products.
There is often a high cost of poor data quality. For instance, Gartner estimated that poor data quality costs businesses $12.8 million annually, and 95% of organizations acknowledge its negative impact on business performance.
Competitive Advantage
Prioritizing data quality and management gives companies a competitive edge. We looked at how with accurate and comprehensive data, businesses can:
Stay Ahead: Beat the competition by enabling better decision-making, efficient resource allocation, and long-term planning.
Consolidate Data: Understanding their data landscape empowers businesses to consolidate information across departments, leading to more integrated and effective sustainability strategies.
Enable Planning: Accurate data allows for stable long-term planning, which is crucial for efficient resource allocation and maintaining a competitive advantage.
By focusing on data quality, companies not only comply with regulations but also turn sustainability into a key driver of profit and innovation.
Best Practices for Data Management
These are some of the best practices to ensure high-quality data governance:
Clear Policies: Developing and enforcing data management policies to maintain data integrity across systems.
Training and Awareness: Conducting training sessions and raising awareness about the importance of data governance within the organization. This helps foster a culture of responsibility for data quality.
Continuous Improvement: Monitoring data maturity and striving for continuous improvement, such as through regular data audits, validation, and cleansing processes.
Integration Tools: Using advanced data management and integration tools to standardize and simplify data handling.
These practices ensure that businesses can maintain high-quality, accurate data, which is essential for driving sustainability efforts and making informed decisions.
Before You Begin
It is necessary to initiate engagement with both internal experts and external stakeholders to address data challenges from the very beginning. Key actions would include:
Data Workshops: Conducting workshops to align on data requirements, sources, and quality expectations early in the project lifecycle.
Collaborative Approach: Ensuring close collaboration with stakeholders to resolve data issues promptly.
Proactive Data Quality Maintenance: Identifying and addressing data quality issues before they escalate, and involving the right stakeholders, such as sustainability experts, from the start.
Early engagement and alignment on data management practices ensure a smoother, more efficient sustainability data integration process.
Preparation is Key
To prepare for successful sustainability data management you should first focus on:
Data Discovery: Starting with a thorough review of the company’s existing data, its sources, and stakeholders involved.
Pilot Projects: Running a pilot or Proof of Concept (POC) project to test the integration of the source data into the system, which helps prepare for a full rollout.
Workshops and Feedback: Conducting detailed workshops with IT teams to identify all data points, receive feedback, and suggest improvements. Data enrichment processes ensure the data is ready for system integration.
ETL Process: The Extract, Transform, Load (ETL) process connects raw data from various sources to the system. After user training and acceptance testing, the project can go live.
By focusing on data quality and system readiness early on, companies can achieve smooth integration and reliable sustainability outcomes.
Actions You Can Take Now
Throughout the Masterclass our data experts emphasized the need for a robust data strategy. These are some of the key action points to kick of a successful data strategy:
Data Awareness: Understand the organization’s system landscape and ensure data completeness and accuracy.
Leadership Involvement: Prioritize data governance and quality, with leadership setting the tone for an organization-wide focus on data integrity.
Regular Audits: Perform regular data audits and implement validation processes to maintain data quality.
Employee Education: Train employees on the importance of data quality and management, which is crucial for long-term success.
Advanced Tools: Leverage advanced data management and integration tools to stay ahead of data governance challenges.
Sustainability data challenges can hinder a company’s ability to make informed decisions, drive innovation, and stay competitive. By addressing these challenges with structured data management strategies, clear governance frameworks, and continuous improvement efforts, businesses can unlock new opportunities.
Prioritizing data quality not only supports sustainability goals but also positions companies for long-term success and profitability.
Want more information on how to overcome the sustainability data problem? Read our playbook on that and more now.
Writing an effective RFP can be a challenge. Your company will have specific goals and objectives, and you’ll need to be able to put together a logical yet thorough question set that enables you to identify the best vendor for the project. With that in mind, we’ve worked to build out what we consider to be the ideal RFP template – and, given that we’ve seen a fair few, we like to think we know what we’re talking about.
Our rationale was as follows:
The RFP template should be simple in format and execution, but adequately thorough
It should help your company to ask qualified questions that unlock the right answers, rather than relying on generic question sets that more often than not produce inadequate answers
The question set should always consider the fact that the customer has a specific goal in mind
Wherever possible, questions should be open rather than closed, allowing for more detail. If closed questions are deemed necessary, they should be at the bottom of the list
We’ll use our expertise as a company to accurately reflect what top tier manufacturers are asking. The RFP template is designed to replicate the RFP processes of leaders in their respective fields
To create a template that negates the need for external consultants, who don’t necessarily know what the company needs or how to articulate those needs
There are 123 questions across 13 separate sections that represent an ideal baseline. The template does not have to be set in stone. Certain manufacturers or users will have other questions they may wish to add, or will find questions in this template that they don’t consider necessary. However, its purpose is to help anyone struggling with putting together an RFP to ask the necessary questions rather than relying on a generic question set that any supplier can fulfil.
This is what the best in their fields seek to create when it comes to building an RFP. In creating this template, our aim was straightforward: make it simple, and help users to design their solution based on what leaders are doing.
You can view the template for reference in the embed at the bottom of this page, or you can download the Excel version to use and edit for yourself at the link at the top.
What makes a ‘best in class’ RFP?
What does the ideal RFP (Request for Prospoal) look like? It’s a common question, but one without a definitive answer. No two are the same and many manufacturers remain unsure of what they need, relying on basic templates to communicate often complex needs and requirements. Often, unfortunately, those templates are not up to scratch. But that’s not to say that the perfect example doesn’t exist.
RFPs, without doubt, remain an important part of the manufacturing process – an essential tool when it comes to completing a project that you need outside help with. An RFP done correctly not only enables your organization to find the best solution to the task (given that different companies might have different ideas or ways to tackle it), but also helps you to compare the costs of different providers and find the right option for your budget.
RFPs also help to negate an element of risk early on in the manufacturing process, allowing you to be sure that the company you choose to do the work knows what they’re doing and can deliver what you need.
For many, the process of putting together an RFP can be a challenge – a drain on both time and resources. From a lack of initial clarity (meaning that proposals may come back incomplete or unaligned with company needs) to scope creep (where the scope of the project changes during the RFP process due to a lack of forward thinking and due diligence), initial hurdles can make the desired outcome significantly harder to achieve for all concerned.
Companies also struggle to find the right balance of information. Too much detail can overwhelm potential bidders, while too little may leave vendors guessing. From writing the requirements to reviewing proposals, building out an RFP is a time-consuming process, one often further hindered by vendor management issues (where keeping track of questions, updates, and proposal submissions requires careful organization), budgetary concerns (where companies may have a hard time estimating the right budget for the project, and sometimes don’t include budget information in the RFP) and a lack of defined evaluation criteria (where companies may not have a structured approach for comparing different aspects like price, experience, and quality.)
When these challenges are made clear and are proactively addressed, companies can begin to streamline the RFP process and increase the chances of selecting the best partner for their project.
“An RFP done correctly not only enables your organization to find the best solution to the task (given that different companies might have different ideas or ways to tackle it), but also helps you to compare the costs of different providers and find the right option for your budget.”
Why getting it right matters
A good RFP template helps to tick a number of boxes. It saves time, facilitating a faster turnaround in creating and distributing RFPs, reducing delays in project timelines. It ensures consistency, making it easier for vendors to understand what’s required, regardless of the project. Done correctly, it reduces the risk of missing critical information, ensuring vendors have all the details needed to create a thorough proposal. It helps to avoid miscommunication or confusion, leading to proposals that better align with the company’s needs, whilst also simplifying the evaluation process, as the company can quickly compare key factors like costs, timelines, and experience side by side.
Furthermore, it helps to prevent scope changes and misunderstandings that could arise during the project and has the added benefit of making sure that vendors know exactly what to address in their proposals, reducing back-and-forth and ensuring more complete responses.
Ultimately, the organization issuing the RFP is seeking help because they need expertise or resources they don’t have internally. The RFP process allows them to gather multiple solutions, ensure fairness, manage costs, and reduce risks, thereby helping them choose the best provider to achieve their project goals.
What does the ‘Age of the Engineer’ – the term I use to describe our need to empower better product design and manufacturing – look like in reality, and how do we make it possible? I see three first steps:
Getting engineers back into the boardroom
I’ve talked before about entrepreneurs as the ‘villain’ of this narrative because it simplifies the framing. However, it might be better in this instance to specify that I’m talking about a non-founding CEO. As a company grows the need for a generalist – a safe pair of hands – arises. There are many benefits to that approach, of course, but too often the spark is lost – the company stops building great things, and the focus shifts to managing what it does well. We’re in need of something else now – we need to rebuild our products and the infrastructure we use to make and utilize them. We need builders. The founders and early engineers of some of our greatest companies were – and still are – engineers by trade and I think it’s time we put them back in the boardroom. For those starting out, my recommendation is to give their technology leader a seat at the board.
Why? My contention is that businesses who want to succeed in a future likely to be defined by seismic change need to spend more time on innovation-led growth than most large enterprises do now. This requires a different mindset towards risk and reward and one can only achieve that through a voice being present at the highest levels of decision making. A overarching vision of what is possible and the technical understanding of how to achieve it results in speed of execution and that combination is often found with engineering leaders. In business, speed is everything and businesses that do this will innovate out of their current situation faster and more successfully.
Adding sustainability as a core metric to product design
A company is its products. If we want to build more successful companies of the future, we’ll need them to have great products that are sustainable. That is not possible unless we embed sustainability into design, just as we do performance, risk and cost.
Every company is different and even within a company, different product lines may cater to different market segments with different preferences. There are no perfect products because there are no perfect customers or infrastructure to build or use these products, so there will always be trade-offs. I do believe, however, that unless these trade-offs are made consciously, products will continue to diverge from sustainability. This will create a widening gap to market requirements.
I’m already seeing advanced organizations who are most of the way there. They’re what we might call ‘mature’ in their approach, set apart from the ‘novices’ because they have made sustainability a design parameter. For them it is another metric, defined by a series of non-negotiable targets that must be hit in order to unlock the rewards – from growth in new markets to better productivity and efficiency to how people are compensated.
Integrating data and enriching operational systems with it
When it comes to engineering, we don’t need to be doing the same things faster. We need to be doing them better. And to do things better, we don’t need more data – we need smarter data.
Our observations show that up to 90% of the data required to understand how to make and sell products doesn’t sit within a company’s systems. The reason for that is that most products are increasingly becoming “assemblies” with large portions being built in complex upstream supply chains. An average car for example has 70% of its components built in this way. Use and End-of-Life data also typically do not sit in company systems. How could one understand the cost, risk or sustainability impacts from these stages? The solution is to collect and combine this “value chain” information from external sources with company data about the product and operations to allow for full-life-cycle view of the implications of design across all the key design criteria. I call this product lifecycle intelligence.
But it doesn’t stop there. This enriched information needs to be available not in data lakes, expert systems and BI tools, but in operational systems like CAD, PLM and ERP so that engineers can use this information in trade-off analysis, within their existing workflows. This “shifting left” of data and insight, to have it available early on and at every stage of the development process, has long been known to reduce development time and avoid costly mistakes. Technology now allows for this.
Conclusion
The ‘Age of the Engineer’ signifies a pivotal transformation in how we approach innovation and sustainability in business. By reinstating engineers into the boardroom, we leverage their unique expertise to drive not just technological advancements but strategic decisions that prioritize long-term value over short-term gains. By integrating comprehensive data into operational systems to enhance decision-making and efficiency, we will empower businesses to build smarter, more sustainable products that meet the demands of a rapidly changing world.
The ‘Age of the Engineer’ is not just an ideal; it is an imperative, charting a course towards a future where technological prowess and sustainability go hand in hand. By giving engineers the spotlight, and by doubling down on sustainable practices, we’re no longer dreaming about a better tomorrow – we’re actively creating it.
In today’s business landscape, sustainability is no longer a buzzword — it’s a necessity. Companies are increasingly under pressure from consumers, investors, and regulatory bodies to adopt more sustainable practices. One critical solution to this is Life Cycle Assessment (LCA) software, a tool that transforms complex data into actionable insights, driving sustainable growth and operational efficiency. Let’s explore how LCA software addresses common pain points and empowers businesses to make informed, sustainable decisions.
Automating Life Cycle Assessments
One of the primary challenges companies face is the labor-intensive nature of conducting life cycle assessments. Manual LCA processes involve collecting data from various sources, analyzing it, and then interpreting the results — a time-consuming and often error-prone undertaking. LCA software (as seen in Makersite’s work with Microsoft), however, automates these processes, significantly reducing the workload, accelerating the data assessment process and enhancing accuracy by minimizing human error. This allows businesses to conduct LCAs more frequently and efficiently, ensuring that sustainability is able to remain a continuous, integrated part of their operations.
Example:
A consumer goods manufacturer can use LCA software to automate the assessment of thousands of products across different regions. This not only speeds up the process but also provides more reliable data for making strategic decisions on product design and material sourcing.
Enhancing Sustainability Reporting
Sustainability reporting is critical for transparency and compliance with an ever-growing slate of regulations. However, compiling comprehensive and accurate reports manually can be daunting. LCA software simplifies sustainability reporting by providing a centralized platform for data collection and analysis. The software can automatically generate reports that comply with various standards and frameworks, not only saving time but also ensuring that reports are accurate and consistent, bolstering both the company’s credibility and compliance.
Example:
A large retailer can use LCA software to streamline its annual sustainability report, ensuring that data from all departments is consistent and compliant with international standards. This has the added benefit of enhancing the retailer’s reputation among environmentally conscious consumers and investors.
Scaling Sustainable Business Practices
For businesses looking to scale their sustainability efforts, LCA software is indispensable. As companies grow, so do the complexities of their supply chains and operations. Manual approaches to LCA are almost impossible to scale accurately, often leading to fragmented and inconsistent sustainability practices. LCA software, on the other hand, provides a scalable solution that can handle large volumes of data across multiple sites and products. This scalability ensures that sustainability efforts are uniform across the organization, facilitating broader and more impactful environmental initiatives.
Example:
An automotive company can use LCA software to evaluate the environmental impact of its product lineup across multiple markets. This allows the company to implement standardized sustainability practices globally, ensuring that all operations contribute to the company’s overall environmental goals.
Making Sustainable Manufacturing More Efficient
Manufacturing is a resource-intensive process (research shows that approximately 80% of a product’s environmental impact is determined during the design phase), and making it sustainable is a significant challenge.
LCA software helps manufacturers identify inefficiencies and areas for improvement by providing detailed insights into the environmental impacts of their processes. By analyzing data on energy use, waste generation, and emissions, companies can implement targeted strategies to reduce their environmental footprint. This not only helps in achieving sustainability goals but also often results in cost savings through improved efficiency and resource management.
Example:
A packaging company can use LCA software to analyze the lifecycle of its products, identifying opportunities to reduce material waste and energy consumption in production. This leads to both cost savings and a reduced environmental footprint.
Overcoming the Limitations of Manual LCA
Manual life cycle assessments are fraught with limitations. They are time-consuming, prone to errors, and often lack the granularity needed for precise decision-making. Furthermore, different business units operating in siloes can lead to inconsistent data and fragmented sustainability efforts. LCA software addresses these issues by providing a unified platform for data integration and analysis. This ensures that all business units are aligned and working with the same accurate, up-to-date information. The result is a more cohesive and effective approach to sustainability.
Example:
A multinational corporation can use LCA software to integrate data from various departments, ensuring that sustainability metrics are consistent across all regions and product lines. This unified approach facilitates better strategic planning and resource allocation.
Assisting with Scope 3 Calculations
Scope 3 emissions, which include all indirect emissions that occur in the value chain of the reporting company, are notoriously difficult to measure and manage. Traditional methods of calculating these emissions are complex and often inaccurate due to the vast amount of data required. LCA software simplifies scope 3 calculations by automating data collection from suppliers and other value chain partners. This leads to more accurate and comprehensive assessments of a company’s total carbon footprint, enabling more effective strategies to reduce emissions.
Example:
A food and beverage company can use LCA software to track emissions across its supply chain, including agricultural practices, transportation, and packaging. This comprehensive view helps the company identify and target high-emission areas for improvement.
Addressing Issues with Manual Data Processing
Manually processing the vast amounts of data required for LCA is not only tedious but also increases the likelihood of errors. Data discrepancies, incomplete information, and the sheer volume of data can overwhelm sustainability teams. LCA software mitigates these issues by automating data processing, ensuring that data is accurate, complete, and consistent. This automation allows sustainability teams to focus on interpreting the data and making strategic decisions rather than getting sidelined by data entry and verification.
Example:
A technology company can use LCA software to automate the processing of data from its global supply chain, ensuring that all environmental impacts are accurately recorded and analyzed. This allows the company to quickly respond to sustainability challenges and opportunities.
Scaling Accurate and Granular Data
Accurate and granular data is crucial for effective sustainability initiatives. Without precise data, companies cannot accurately measure their environmental impacts or the effectiveness of their sustainability strategies. LCA software provides the tools needed to collect, process, and analyze detailed data on a large scale. This granularity enables companies to pinpoint specific areas for improvement and track the progress of their sustainability efforts with a high degree of accuracy.
Example:
A chemical company can use LCA software to gather detailed data on the environmental impacts of each stage of its product lifecycle, from raw material extraction to disposal. This level of detail enables the company to implement more precise and effective sustainability measures.
Common Problems Faced Without the Right LCA Software
Businesses that do not use the right LCA software often face a myriad of challenges. As discussed above, these include inefficient and error-prone manual processes, inconsistent data across different business units, difficulty in scaling sustainability efforts, and challenges in meeting regulatory compliance. Without LCA software, companies struggle to conduct comprehensive and accurate life cycle assessments, leading to missed opportunities for improvement and potential reputational damage.
Let’s recap the most common problems:
Inefficient Manual Processes
Manual LCA processes are labor-intensive and slow, often resulting in delays and increased costs. The time and resources required to collect and analyze data manually can be prohibitive, especially for large companies with complex supply chains.
Inconsistent Data
Different business units operating in siloes often lead to inconsistent data collection and reporting. This fragmentation hampers the ability to get a clear, unified view of the company’s overall environmental impact, making it difficult to implement cohesive sustainability strategies.
Difficulty in Scaling
As businesses grow, so do the complexities of their operations. Without the right LCA software, scaling sustainability efforts becomes challenging. Manual processes simply cannot keep up with the increased data volume and complexity, leading to inefficiencies and gaps in sustainability initiatives that will only increase and become harder to tackle effectively with time.
Regulatory Compliance Challenges
Meeting regulatory requirements for sustainability reporting is critical but can be difficult without the right tools. Manual processes increase the risk of errors and non-compliance, potentially resulting in fines and reputational damage. LCA software ensures that all data is accurately collected and reported, helping companies stay compliant with environmental regulations.
Missed Opportunities for Improvement
Without accurate and comprehensive data, companies may miss opportunities to improve their sustainability practices. LCA software provides the detailed insights needed to identify inefficiencies and areas for improvement, enabling more effective and impactful sustainability strategies.
Driving Growth Through Sustainable Practices
LCA software is not just a tool for compliance; it’s a strategic asset that drives growth through sustainable practices. By providing detailed insights into every aspect of the product lifecycle, LCA software helps businesses innovate and improve their products and processes. This leads to the development of more sustainable products that meet consumer demand and regulatory standards, opening new market opportunities and enhancing brand reputation.
Innovation and Product Development
LCA software enables companies to explore different materials and production methods, assessing their environmental impacts before implementation. This fosters innovation in product development, leading to more sustainable products that can attract eco-conscious consumers and differentiate the company in the market.
Market Differentiation
Companies that can demonstrate their commitment to sustainability through rigorous LCA practices can differentiate themselves in the marketplace. This not only attracts environmentally conscious consumers but also appeals to investors looking for responsible and future-oriented businesses.
Cost Savings and Efficiency
Sustainable practices often lead to cost savings through improved resource efficiency and waste reduction. LCA software helps identify these opportunities, ensuring that sustainability initiatives are also financially beneficial.
Regulatory and Compliance Benefits
Proactively managing sustainability through LCA software helps companies stay ahead of regulatory changes and avoid potential fines or sanctions. It also enhances the company’s reputation with regulators and stakeholders.
Conclusion
LCA software is a powerful tool that transforms data into actionable insights, driving sustainable growth and enhancing operational efficiency. By automating life cycle assessments, better facilitating sustainability reporting, and enabling the scaling of sustainable business practices, LCA software addresses many of the common pain points faced by companies today.
It makes sustainable manufacturing more efficient, assists with scope 3 calculations, and ensures accurate and granular data processing. In an era where sustainability is paramount, investing in the right LCA software is essential for businesses looking to thrive while minimizing their environmental impact.
The right LCA software not only simplifies and streamlines sustainability efforts but also provides a competitive edge by enabling companies to operate more efficiently and transparently. As the demand for sustainable practices continues to grow, leveraging LCA software will be crucial in helping businesses make informed decisions that benefit both the planet and their bottom line.
In recent years, legislators have passed down a glut of regulations that organizations have had to figure out how to deal with. While all have their merits, it’s almost a given that some get a little lost in the noise. However, every now and then a regulatory development occurs that has the power to change the design and manufacturing landscape as we know it, and for good.
That happened on 23rd April 2024. The European Parliament approved a new Ecodesign Regulation to make products sold in the EU more reusable, repairable, upgradeable, and recyclable.
Let’s take a look at what it means, who it will impact, and the actions you need to take.
What is the new Ecodesign Regulation?
After a somewhat tumultuous journey through the legislative corridors of the European Parliament, the version of the Ecodesign Regulation for Sustainable Products (ESPR) that passed on 23rd April was both final and unanimously agreed upon. It is a framework that will significantly alter how goods are introduced and sold in the EU.
The intention behind it is clear. As Italian lawmaker Alessandra Moretti said, it is “time to put an end to the ‘take, make, throw away’ model that is so harmful to our planet, our health and our economy”.
The new rules will update the current 2009 directive, which exclusively concerned energy-related products, in terms of efficiency and circularity. They call on the Commission to give priority to resource-intensive sectors such as iron, steel, aluminium, textiles, furniture, tyres, detergents, paints, lubricants, and chemicals. It’ll also enforce a Digital Product Passport to aid informed consumer choices.
A key element of the Green Deal, ESPR is part of the broader circular economy package, which aims for the EU to use and reuse materials far more efficiently. The package also contributes towards the EU’s goal of having net zero greenhouse gas emissions by 2050 and should reduce harm to the environment.
As Moretti summarized: “Sustainable products will become the norm, allowing consumers to save energy, repair and make smart environmental choices when they are shopping.”
The text now needs the final approval from national governments to enter into EU law.
Monique Goyens, director general of BEUC, the European consumer organisation, concluded that “the framework needs to be implemented quickly. It is essential that the European Commission and member state market surveillance authorities allocate resources to the development and application of the new rules.”
What happens next?
ESPR is due to be published in the Official Journal of the EU and enter into force by July 2024. The first delegated acts spelling out specific ecodesign requirements may not come into force until the second half of 2025. The first ecodesign requirements are expected to apply to textiles and steel, and are likely to enter into force by mid-2027.
In addition, the EU is expected to publish a three-year working plan prioritising ecodesign requirements per product in March 2025, providing further guidance as to when products will come under increased scrutiny.
However, given design and production cycles, manufacturers of products, especially those on the European Commission’s priority list, should begin to familiarise themselves with the ESPR’s requirements now and assess what needs to be done to ensure their products are compliant. If they don’t, they could risk losing access to the EU market as well as losing significant ground to better prepared competitors.
Without doubt, these requirements represent a pivotal moment for the manufacturing industry, challenging stakeholders across businesses to rethink their production methods. Those companies who are able to adopt a proactive approach to ecodesign will be ahead of the curve. Companies who leave it leave to the last minute – those who lack urgency until the regulation is live – will find it hard to catch up.
Indeed, at Makersite, we’re already seeing mature companies like Microsoft taking the necessary steps. For the last two years they’ve worked to rebuild and refine their Surface Pro 10, using Makersite’s automated LCA models to identify and evaluate hotspots in their supply chain. In doing so, they reduced its carbon footprints by up to 28% within a 24-month timespan.
This is the gold standard. It is what all businesses should be aiming for. It takes a long time to get to where you need to be. If we look back at similar regulatory developments that went on to facilitate a sea change in manufacturing approaches and consumer awareness (like nutrition labels in the early 1970s, for example), it’s obvious that it won’t take long for something like ESPR to reach critical mass.
Within a decade, it’s extremely likely that it will have reached mass adoption in Europe. It’s a plan as ambitious as it is comprehensive. And it’s one where a forward-thinking approach – utilizing a solution where environmental impacts can be determined in just minutes – will make all the difference.
What actions should you take – and when?
Now is not the time to hold back. Those organizations who wait for final approval will find themselves firmly on the back foot. Businesses who seek to get their houses in order immediately will reap the rewards further down the line.
The impact of ESPR on companies’ core operations will be significant. Beyond specific traceability elements, the requirements will directly affect products at all stages in the value chain, including recyclability, the use of recycled contents, and durability.
ESPR will require that companies look at products and their value chains, create transparency and evaluate impacts at that level, and report on that – all on a regular basis. It’s not something that can be done one product at a time. It needs a different approach.
Today, most organizations are not set up to deal with reporting on that scale. But in order to succeed, they need to equip their engineers and designers with tools that offer instantaneous feedback on the environmental impact of design alterations in order for them to ensure that sustainable products not only adhere to the new regulations but become the norm.
In order to comply with the regulation, businesses now need to take the proper steps to collect realistic data and create the necessary infrastructure to drive innovation, all while obtaining real-time insights into the impact of changes on the environmental impact of products.
In order align with ESPR and reduce a product’s environmental impact quickly, organizations need to be able to immediately see how material, manufacturing processes or supplier changes impact a product’s sustainability. Outdated methods – like manually conducted LCAs – will invariably fall short of providing those essential real-time insights which are critical when it comes to making efficient and significant progress in product sustainability.
As we stated earlier, ESPR aims to improve products by emphasising durability, energy efficiency, recyclability, and more. With access to immediate insights, design teams can align their efforts with ESPR objectives, in turn enabling them to test and discover a significantly higher number of possible solutions to improve their products. Those who do so are likely to dramatically outpace peers yet to embrace a new approach, with those lagging behind likely to find themselves waiting weeks or even months to find out if their new ideas positively affect their products’ environmental impact.
The journey to sustainable product design is paved with challenges, but each obstacle is an opportunity to innovate. Whilst new regulations might seem daunting, time consuming and even frustrating they also represent a chance to make meaningful change and to take alead over competitors not ready or aware enough to act quickly.
Don’t let poor data, slow LCA execution speeds and external dependencies stop you from discovering the most sustainable version of your product.
Makersite CEO Neil D’Souza recently sat down with The Scope 3 Podcast’sTom Idle and Oliver Hurrey to discuss the key supply chain challenges facing organizations today – and how Makersite can help to solve them. You can listen to the full episode below or using the link here.
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Five key takeaways on product sustainability and scope 3
The real impact comes from products
It might sound simple, but when it comes to Scope 3 we need to take things back to the source. As Neil notes, “100 % of the impact that we see in the world today comes from the products we make and use. If you really think about it, whether you’re a service company and you’re flying around, well, it’s the plane that’s creating the impact, right? If you’re on your desk, then it’s the laptop and the electricity you use to run it.”
Just reporting isn’t enough. If you truly want to fix something and resolve the problem of the impact that’s being created, then you need to do your homework and properly understand the implications of designing a product in a certain way – from the raw materials you use to where you source them from to the end of life of that product.
Sustainability isn’t about ‘being green’
It’s all very well for a company to want to flex its green credentials. But if you want to properly affect the product you make, then you need to go deeper. “Out of 250 odd projects that I’ve worked on,” Neil says, “there is not a single project that was implemented just because it was green.”
So what is it about? Business is about making trade-offs. It’s about asking yourself the right questions. “What will I get if I were to reduce its impact by 30%? What will I get in terms of, ‘will I be able to sell more in more jurisdictions?’ Would it address a different market? What would be the cost implication of it? Would I still be able to sell it given compliance problems that I may have? Would it still be safe?”
The design must be separated from the implication or the understanding of the implication.
Facilitating the demand for better products
Now more than ever, manufacturers in a variety of markets are facing an increasing pressure to make better, more sustainable products. But not only is there a greater demand from consumers and stakeholders for this approach – there’s also a greater propensity to pay higher premiums for better design.
However, these markets (from building and construction to automotive to chemicals) generally have very complex supply chains and products, and traditional tools and traditional approaches can’t solve the hurdles they need to overcome in order to meet those demands.
Makersite powers the systems used by the people (from engineers to procurement) in organizations who can make the difference – the CAD tools, the PLM tools, the ERP tools, the procurement tools.
With that help, they can ensure that the product that is being designed follows the rules of the region in which they’re trying to sell it.
2030 is too soon
Many companies have positioned ambitious Scope 3 and Net Zero targets for 2030. But, says Neil, that’s not giving anyone enough time. “In reality, if you think of this from an engineering standpoint, an average technical product takes five to seven years to go to market. 2030 is six, seven years away. You’ll be able to make one product change. That’s about it. There’s not a lot you can do with one product iteration.”
For Makersite, it’s about the bigger picture. The longer term. And it’s about stopping the same mistakes being made over and over again: “What we want to do is every iteration from now until 2050, every iteration of every product that is new, that is innovative runs through Makersite. If we do that, then we’re not making the mistakes that we’ve continuously made over time.”
The tools we have now are smart – but not smart enough
In order to properly service the market and the demand from consumers, the tools we have now need to be refined. They are good, but they could be better.
Neil D’Souza: “The first is engineering tools. Engineering tools need to become smarter in order that we make the right decisions during design. The second is procurement tools. Procurement tools themselves also need to become smarter. We need to be able to not just quantify what are the impacts of the products that we’re buying, but identify where are the low carbon products that we can buy. And the connection of these two tools is important for that to happen.”
Ultimately, if organizations want to decarbonize, then they must provide their procurement teams with the flexibility to look at the market for low carbon solutions, as well as the level of information to not buy the wrong thing. This is a connection that can only happen when you connect product development tools with procurement tools.
With that, there will then be an understanding of the material constraints and the production constraints that you need to have to make that product successfully.
Sustainability is a buzzword. Sustainability is just about annual reports. Sustainability is a tool to appease investors. We could write a whole blog on the common objections – or dismissals – that are raised when it comes to implementing a more sustainable approach to product design and manufacturing.
There will always be critics. Doubters. People who see sustainability as an obstacle in the way of progress, rather than a catalyst for it. But the numbers don’t lie. Businesses who are embracing sustainability are on the front foot. Those who aren’t are in real danger of being left behind.
Running the numbers
A recent Bain & Company study found that while only 40% of businesses are on track to meet their sustainability goals, companies have an increasingly conscious and proactive base of consumers willing to pay 11% more for sustainable products and employees that will help.
IBM noted in a recent report that organizations that embed sustainability in their product design processes experience a 16% higher rate of revenue growth. They’re 52% more likely to outperform their peers on profitability. And they’re two times more likely to attribute great improvement in operating costs to sustainability efforts.
NYU Stern’s Center for Sustainable Business found in 2022 that the share of CPG products marketed as being sustainable grew twice as fast as conventional products, accounting for one-third of the total revenue growth in the industry. Customers paid 27% more for those products.
There is a need for a more sustainable approach – and there is a willing audience too. But in order to get there, there are still a few hurdles left to overcome.
Internal challenges
An organization with a fully functioning and proactive sustainability function is likely to reap many benefits. But getting that sustainability function set up in the first place is, for many, the more significant battle.
Our recent study with Forrester showed that 27% of respondents placed ‘create a dedicated sustainability function within the organization’ as their top initiative to prioritize over the next 12 months. The need is clear and well understood. However, 18% of respondents to the study saw breaking down data siloes to enable cross-functional collaboration as among their biggest headaches. Such data siloes are the hallmark of organizations not yet ‘mature’ enough to fully realize the benefits of embracing an approach with sustainability front and center.
It’s also clear that, at least in part, there is still some way to go before there is proper acceptance of the role sustainability has to play in a business, particularly when it comes to reporting.
In the study, 66% of respondents showcased an awareness and understanding of the potentially severe impact on product and operations that not toeing the regulatory line would bring about. Furthermore, a full 10% of respondents ranked ‘strengthening regulatory compliance’ as their greatest business priority during the next 12 months, while 35% in total ranked it as being within their top 3 priorities. Out of the 10 options given to those surveyed, ‘strengthening regulatory compliance’ came top of the list.
However, that relatively low number indicates there is some way to go before there is a full understanding of the importance of increasing regulatory sustainability reporting. With only 35% of organizations having the initiative to solve the challenge, the research suggests an element of indecision and uncertainty, exacerbated by competing priorities coming from different angles.
The struggle to gain momentum
Currently, in more ‘immature’ organizations at least, sustainability advocates are struggling to gain momentum at the top table. And it’s not just competing priorities that are causing the problem. Interconnected governance issues continue to dominate top PLM challenges, with maintaining data, securing executive buy in, and breaking siloes causing the biggest headaches.
53% of respondents to the Forrester study struggle with securing executive support for incorporating sustainability in product lifecycle management, while half find it hard to obtain budget to gather material, component, and supplier intelligence integral to optimizing their product’s quality, cost, and sustainability. Over half experience difficulties measuring and quantifying the environmental impact of their products which can be a factor for the lack of leadership alignment. These governance challenges are a manifestation of poor maintenance of availability, cost, sustainability, and performance data in manufacturer’s material and component libraries – an issue for 49% of decision-makers.
Lacking the necessary data means that sustainability advocates are unable to take the necessary measurements, ultimately meaning that the support and budget they need to continue their work is not forthcoming. It’s a cycle many are finding hard to break.
It’s also a problem not limited by borders. Across US and European markets, governance obstacles are widespread. European respondents in particular highlighted their struggles influencing a strategic shift to sustainability, commonly citing a lack of management commitment when it comes to driving substantial changes (46%) and difficulties developing a business strategy for sustainability (44%).
Data management challenges remain fundamental and acute. When asked which three challenges create the most profound impact, leaders hone in on their data shortfalls: one-in-five decision-makers rank maintaining libraries with up-to-date data rises as one of their biggest issues.
Data siloes hinder stakeholders across functions as they balance costs, risks, and sustainability criteria in product design and sourcing. An inability to embed multi-criteria data around sustainability and resilience in their generative design processes handicaps manufacturers with less mature PLM processes. Even more advanced manufacturers are challenged by the ongoing maintenance of aspects of their materials and components libraries.
Remedying the problem
Solving the problem again comes down to one key thing: data. A better and more reliable collation of availability, cost, sustainability and performance data eases the burden of obtaining budget in order to gather material, component and supplier intelligence. Similarly, better data libraries, ensuring up to date data and breaking down data siloes are all key when it comes to enabling cross-functional collaboration and ensuring that sustainability-focused voices are heard.
A business looking to succeed and grow should understand that building high-performance, cost-effective, sustainable products will create a competitive advantage. Sustainability, implemented correctly, can be a significant differentiator when positioning and marketing products.
Manufacturers must become quicker, smarter, and — given the urgency of sustainability — more environmentally conscious to thrive. They need to become more efficient and effective as they design and source products.
Data quality and accessibility form the foundation of efficient product design and sourcing, and both are significantly improved when adopting a product lifecycle intelligence solution. By modernizing product innovation processes and platforms, senior leaders at manufacturers will not only be able to satisfy regulatory mandates for product-level sustainability, but will also be able to empower designers with product lifecycle intelligence in order to modernize product innovation and achieve balanced product cost, performance, and sustainability goals.
Whether it’s people, processes, LCA software data or technology – or a combination of all four – that currently present the biggest obstacles to embedding sustainable practices in an organization, one thing is clear: those who are able to move those obstacles will thrive. Those who don’t – or won’t – will find themselves facing an uphill battle.
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