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A new era of product design: How engineers can lead the way

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We live in a culture defined by the concept of “take, make and waste”. We find ourselves battling against rapid product development and poor-quality products, which add little to no value to our lives and contribute to unsustainable growth. This, in turn, has led to over-commercialism – a concept defined by low costs, over-supply and a lax attitude towards sustainability.

So how can change be enacted? By empowering and enabling the right people. Product engineers want to create great, well-functioning products that have a low environmental impact. But they have historically lacked the required tools and support from the organisations they work for.

To achieve the sustainability goals businesses, consumers and regulators have put before us, the focus should be on making it better rather than making it faster. But to do that, the negative environmental impacts from the design and production process have to be removed.

The solution? New machinery. A tool that enables engineers to see the impact of material choices during the design phase of a product – a phase where, currently, some 80 per cent of the ecological impact of a product happens. A tool that enables speed, experience, performance and costs to be optimised and environmental impact to be removed. A tool that enables faster, smarter, greener decisions powered by the deepest understanding of your supply chain. A tool 50 times faster than traditional methods. That tool is a new piece of software – Product Lifecycle Intelligence, or PLI for short.

Product design led by an informed consideration of materials and the environmental footprint of our choices is a logical progression. This places the engineer in the spotlight. They not only understand the intricacies of design and manufacturing but also the broader ecological and socio-economic context in which they operate. However, there are challenges to overcome.

With projections indicating that the sustainability market could be worth $2 billion by 2030, there’s an evident rush among companies to gather necessary ESG and sustainability data and to meet regulatory benchmarks. But this often leads to a short-sightedness, with a disproportionate focus on reporting and little tangible improvement in actual practices.

We find ourselves at a moment where sustainability has crossed the chasm from afterthought to imperative. But in five years’ time, reporting will mean very little if no actual action is taken. Product development teams will be measured and held accountable for the changes they are able to systematically implement to drive the transition to a sustainable economy. To succeed, there needs to be a way to power this transformation at scale.

As it stands, the current machinery for product design is inherently rigid and not fit for purpose. Siloed data systems, an array of disconnected experts, a reliance on legacy systems, slow information exchange and a lack of proper strategy or understanding at board and executive level all result in poor product choices where the negative cost and supply chain impacts are not understood until it’s too late.

Far from facilitating rapid innovation, this situation inhibits inter-departmental collaboration and access to critical, real-time data – ultimately hindering informed decision-making.

However, we are standing on the edge of something new. Companies that embrace this new approach to product development will have a significant advantage over others. Adaptability is essential. The future belongs to an ecosystem of integrated systems that allow a seamless flow of data and an outcome where all relevant information is gathered in one place, informing decisions and enabling rapid course corrections.

If we present engineers with the data they need, they will use it – and use it well. No one wants to make a “bad” product, but “good” products can only be made with the right decisions informed by the right data. That is what will make the difference.

By placing engineers and product developers at the core of a data-centric approach, organisations can ensure that the products they design not only meet market demands but are also firmly anchored in sustainability. Combined with AI, a harmonised approach to data will provide full visibility into the manufacturing process, materials and supply chain during the design phase, enabling speed, experience, performance and costs to be optimised and negative environmental impacts to be limited.

But the product engineer cannot operate in isolation. Their perspective must be comprehensive, encompassing environmental, socio-economic and commercial considerations. To succeed in this mission, teams – from procurement and sustainability to supply chain management – must align.

Emerging platforms will play a pivotal role here. New solutions like PLI act as bridges that span knowledge gaps, fostering a culture of collaborative innovation and allowing easy access for all. PLI is a tool that not only helps the business to adhere to its core principles, but ensures visibility and transparency at every step, leading to better design choices and the creation of products that will stand the test of time.

Organisations need to rally their diverse teams – be they procurement, sustainability, engineering, or IT – under a shared, compelling vision, bringing about a dynamic ecosystem that is agile, adaptable and geared toward ethical, criteria-driven innovation.

The market is ready and waiting for a better approach. Some may argue that this is wishful thinking or is not worth the effort. However, a Bain & Company study found that, while only 40 per cent of businesses are on track to meet their sustainability goals, companies have an increasingly conscious and proactive base of consumers willing to pay 11 per cent more for sustainable products and employees that will help.

It’s not just blue-sky thinking for a greener future either. The most significant driver for companies to do anything has always been growing revenue. A 2022 report, the Sustainable Market Share Index by NYU Stern’s Center for Sustainable Business, examined what actually happened in the past decade. It found that the share of CPG products marketed as sustainable grew twice as fast as conventional products and accounted for one-third of the total revenue growth in the industry. Customers paid 27 per cent more for those products.

With a massive demographic shift bringing more environmentally conscious buyers into the market already well underway, the time never has been better to build better products.

This article first appeared on Business Reporter.

Forrester study offers crucial insight into competitive advantages of sustainable product development

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A note from Makersite CEO Neil D’Souza

Makersite is proud to announce the launch of our co-authored study with Forrester, titled “Transform Product Sustainability into Performance Initiatives with Product Lifecycle Intelligence”. Not only is it a pivotal moment in Makersite’s journey and growth as a company, but it is also a confirmation of our vision and a validation of the underlying goals and objectives that serve as the foundation on which our software has been built.

Makersite Forrester

Make it better, not make it faster

As a society, we have reached a critical turning point. More and more companies are producing high-profile, single-use products which, in turn, has created a new normal – a continuing acceptance that increased consumption and rapid wastage is fine. And that doesn’t even consider the fact that some 80% of the ecological impact of a product happens in the design phase alone.

We exist in a place and a time where “take, make and waste” has become the norm. But there is a different future, one based around “make it better” rather than “make it faster.”

In order to make that vision a reality, however, we have to give those leading the charge the right platform to succeed. That is the purpose of Makersite. I see a future where those people who make and manufacture products – our product engineers and product designers – drive strategic transformation underpinned by a shared, compelling vision, financial support based on more than just commercial imperatives, and a dynamic ecosystem that is agile, efficient and geared toward ethical, criteria-driven innovation.

The power of data

Empowered with the right tools and best practices to make better products faster, engineers can provide the solutions needed to collaborate and take the actions that will make a difference. Products can be more sustainable, more efficient and more cost-effective while still making money and ensuring a profitable, healthy business. However, we must give them a foundation to work from first.

If we present engineers with the data they need, they will use it – and use it well. No one wants to make a ‘bad’ product, but ‘good’ products can only be made with the right decisions informed by the right data.

Some may argue that this is wishful thinking or is not worth the effort. However, a 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.

A recent IBM report also noted 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.

It’s not just blue-sky thinking for a greener future either. The most significant driver for companies to do anything has always been growing revenue. A 2022 report – the Sustainable Market Share Index – by NYU Stern’s Center for Sustainable Business examined what actually happened in the last decade and found that the share of CPG products marketed as being sustainable grew twice as fast as conventional products and accounted for one-third of the total revenue growth in the industry. Customers paid 27% more for those products.

Now is the time

With a massive demographic shift bringing more environmentally conscious buyers into the market already well underway, the time never has been better to build better products. This is what our study with Forrester reiterates. We have seen it and we have talked about it and we have translated ideas into actions with some of our biggest customers – Microsoft, Barco, Cummins, Schaeffler. It is fantastic to see that validated here.

We are amidst an unprecedented revolution that is changing not just the products we make, but how we make them. Companies that are set up for rapid change are becoming the new leaders of tomorrow and we’re already witnessing this evolution. Unfortunately, companies have only a piece of the data needed to make decisions quickly – the internal view. Most of the data needed comes from the world outside – supply chains, costs, regulations, impacts and others. This is the external view. The ability to combine the two instantaneously to drive better decisions and tradeoffs will avoid costly mistakes, shorten time-to-market and create more sustainable and successful products.

Study findings

The study, which includes insights from 493 respondents with product design and sourcing decision-makers in manufacturing, found that the surge in customer expectations alongside stringent regulations is pushing leaders to revolutionize their approaches to product lifecycle management and supply chain operations.

These leaders are increasingly championing sustainability within their organizations. However, they face significant hurdles; they’re often without the backing of upper management to enact meaningful strategic transformation, and they lack the necessary tools to provide access to precise, detailed data on materials, components and suppliers. This scenario underscores a critical juncture for decision-makers in product design and sourcing, urging a radical shift towards integrated, sustainable practices that meet the demands of a dynamic global market.

Ultimately, the study offers compelling evidence for the hypothesis that we have long been promoting as a company: that harmonized access to a breadth of reliable data forms the foundation of efficient product design and sourcing, and that organizations that are able to leverage granular product lifecycle intelligence in product development will enjoy competitive advantage against their peers with a faster time to market and more successful and profitable products.

There is plenty more to uncover in the study itself – from a wealth of new data to in-depth insight on the importance of data quality to a selection of actionable key takeaways that organizations can apply to their own business operations. Take your time to read our findings in full here.

Thanks,

Neil

The end of the entrepreneur: Why engineers are the makers of the future

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Every hero needs a villain. It’s a narrative as old as time. And our story is no different.

In my previous article, I outlined our “take, make, waste” culture and the figureheads—our villains—who fuel it. I also spoke about how our future will be defined by collaboration, not individualism, where it’s still possible to be profitable, but success is not just measured by money or the value of shares.

We have irrevocably damaged our planet; however, there’s still time to reclaim our world and retool it for a better future. History has repeatedly shown us that by working together, we can achieve more than we ever could by working alone.

Lessons from the moon landing

July 1969 was a big month—as in “one giant leap” big. It was the month we went to the moon. Walter Cronkite described it as the “greatest adventure in which man has ever embarked.” It might have been more than half a century ago, but there’s still a lot we can learn from the Apollo 11 lunar landing.

While it exhibits the miracles of science and engineering and the drive and commitment of NASA, it also teaches us about teamwork, leadership and the importance of new ideas. About the importance of working together for a greater goal, of giving our engineers and innovators the support to succeed in their aims.

It takes a village. We’ve all heard that before. But in the case of the Apollo 11 landings, it was a very big village. Spanning government, private industry, astronauts and the American public—estimates have put the entire Apollo team at around 300,000 people. From planning to building to launch, millions of components were involved. Success was only possible because there was a collective realization and understanding that everyone involved had a duty to solve the problems and challenges they faced—and they knew they could only do that by working together.

Today—when it comes to fixing our planet and ending our culture of waste—the same thinking must apply.

Grand achievements aren’t built on the shoulders of a single person or by an unrelenting drive for profit. They’re built on encouragement of ingenuity and creativity, outstanding levels of commitment and an understanding that mistakes aren’t problems but lessons to learn from. After all, the great success of Apollo 11 was made possible in large part by the tragic failure of Apollo 1.

What engineers need today

So, how do we prevent our own “tragic failure” from happening? This is where our hero comes into the story. Research shows that approximately 80% of a product’s environmental impact is determined during the design phase. Empowered with the right tools and best practices to make better products faster, engineers can provide the solutions needed to collaborate and take the actions that will make a difference. Products can be more sustainable, more efficient and more cost-effective while still making money and ensuring a profitable, healthy business. However, we must give engineers a foundation to work from first.

“Build it and they will come.” Shoeless Joe Jackson might have been talking about a baseball field rather than product engineers, but the message resonates here. If we present engineers with the data they need, they will use it – and use it well. No one wants to make a ‘bad’ product, but ‘good’ products can only be made with the the right decisions informed by the right data. That is what will make the difference. Not so much “build it and they will come”, but rather “give them what they need and let them build it.”

With data and a goal, the engineer can fly. But the benefits don’t stop there. The market is ready and waiting for a better approach. Some may argue that this is wishful thinking or is not worth the effort. However, a 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.

A recent IBM report also noted 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.

It’s not just blue-sky thinking for a greener future either. The most significant driver for companies to do anything has always been growing revenue. A 2022 report – the Sustainable Market Share Index – by NYU Stern’s Center for Sustainable Business examined what actually happened in the last decade and found that the share of CPG products marketed as being sustainable grew twice as fast as conventional products and accounted for one-third of the total revenue growth in the industry. Customers paid 27% more for those products.

With a massive demographic shift bringing more environmentally conscious buyers into the market already well underway, the time never has been better to build better products.

Accordingly, there must be a stronger push for change. We are not there yet, but there are green shoots rising from the soil. Early adopters and innovators striving to make a difference. Schneider. Siemens. Estée Lauder. IKEA. Companies like these understand what’s at stake. They might remain the early majority, but they show us we are not hopeless.

The old tools and processes were defined by siloed data systems and slow information exchange. Now, we find ourselves in a new era defined by real-time data that facilitates inter-departmental visibility and collaboration, in turn leading to more informed—and more sustainable—decision-making.

We are shifting from “make it faster” to “make it better”, where product design is led by an informed consideration of materials and the environmental footprint of our choices. Now, more than ever, the spotlight turns to the engineer who not only understands the intricacies of design and manufacturing but also the broader ecological and socioeconomic context.

As the American engineer and educator James Kip Finch is credited with saying: “The engineer has been, and is, a maker of history.” With the right support and technology, and in a world where the balance between money and purpose is equal, the future is theirs to define.

 

A version of this article appeared on Forbes.com. You can also read the first part in the series here.

Top 5 LCA priorities for American automotive manufacturers

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The American automotive industry stands at a crucial junction where sustainability isn’t just a buzzword; it’s fundamental to continued profitability and regulatory compliance. With the clamor for eco-friendly vehicles rising in pitch, it’s imperative that manufacturers align themselves with the latest in sustainable practices. By zeroing in on Life Cycle Assessment (LCA) priorities, companies can not only enhance their environmental credentials but also ensure greater efficiency and accuracy too. 

Analyzing missteps in automotive Life Cycle Assessment practices 

Despite notable strides made by the automotive industry toward sustainability, significant areas of oversight within the realm of Life Cycle Assessment (LCA) practices remain. The industry’s focus has predominantly been myopic, concentrating narrowly on tailpipe emissions while overlooking the comprehensive environmental impact generated throughout a vehicle’s life cycle.  

This shortsightedness results in neglecting critical stages like raw material extraction, manufacturing processes, and end-of-life disposal or recycling procedures. Moreover, a prevalent undervaluation of the environmental footprint associated with electric vehicle batteries is evident, as it fails to consider the emissions and resource depletion linked to their production and ultimate disposal.  

Through the incomplete integration of LCA practices into decision-making processes, manufacturers unintentionally bypass opportunities for innovation in sustainable materials and practices. This shortfall hampers their ability to effectively mitigate the overall environmental impact. Recognizing and rectifying these deficiencies is not just advantageous; it is crucial for those aiming to take the lead in the forthcoming era of automotive manufacturing. 

This list dives into five pivotal LCA priorities that are essential to the modern American automotive manufacturer. From production phases to the hands of consumers, these strategies can redefine the industry’s standard for responsible vehicle manufacturing.

1. Embrace LCA beyond tailpipe emissions 

With a growing emphasis on eco-friendliness, many automotive manufacturers have solely focused on reducing tailpipe emissions to comply with regulations and consumer demands. However, this narrow outlook neglects the bigger picture of a vehicle’s environmental impact throughout its entire life cycle. By expanding their LCA analysis to include all stages – from raw material extraction to end-of-life disposal or recycling – manufacturers can make more informed decisions and develop more sustainable vehicles. 

An LCA-driven approach that encompasses the entire production process can identify areas for improvement and innovation, allowing manufacturers to reduce their overall environmental impact and gain a competitive edge.

2. Integrate LCA into design processes 

Innovation is at the heart of automotive manufacturing, and LCA needs to be integrated into this process from the very beginning. By implementing LCA principles during the design phase – such as using more sustainable materials, optimizing production processes, and considering end-of-life options – manufacturers can reduce the environmental impact of their vehicles without compromising performance. This approach also allows for the identification of potential trade-offs between sustainability and other key factors, enabling more comprehensive evaluation and informed decision-making. 

Advancements in technology have opened new opportunities for sustainable practices in automotive manufacturing. By embracing digital tools like simulation software and machine learning, manufacturers can optimize production processes and reduce waste and emissions. Additionally, innovation in electric and autonomous vehicle technologies presents opportunities for greater sustainability throughout a vehicle’s entire life cycle. By incorporating these advancements into LCA analysis, manufacturers can identify areas where AI can be leveraged to enhance sustainability and make informed decisions that align with their environmental goals and meet global regulatory compliance requirements.  

3. Consider battery environmental impact 

With electric vehicles rapidly gaining ground in the market, manufacturers must consider the environmental impact of their batteries. From raw material extraction to end-of-life disposal, these essential components can have a significant impact on a vehicle’s overall environmental footprint. By integrating LCA into battery production processes and exploring more sustainable battery materials, manufacturers can reduce emissions and resource depletion associated with this critical component.  

The shift towards electric vehicles introduces new environmental considerations, particularly regarding the production, use, and disposal of batteries. A thorough LCA of EV batteries is crucial to ensure that the environmental benefits of driving electric cars outweigh the impacts associated with battery manufacturing and end-of-life management. By focusing on sustainably sourced battery materials, optimizing battery life, and advancing recycling technologies, manufacturers can mitigate the environmental footprint of their EV offerings.  

This measure not only aligns with global sustainability targets but also addresses consumer concerns about the true eco-friendliness of electric vehicles. Manufacturers who lead in this area will not only contribute to a more sustainable future but will also gain a competitive advantage in a market that increasingly values environmental responsibility. 

LEARN MORE – Automated Lifecycle Analysis of 18650 Battery

 

4. Investing in sustainable supply chain management 

The automotive industry’s supply chain involves multiple stages, from material sourcing to vehicle assembly. By prioritizing sustainable practices and materials throughout the entire supply chain, manufacturers can significantly reduce their environmental impact. This includes seeking out suppliers that prioritize sustainability, implementing green logistics processes, and utilizing more sustainable materials in production. By working collaboratively with their supply chain partners, automotive manufacturers can establish a more sustainable ecosystem that benefits both the environment and their business. 

Prioritizing LCA in all aspects of vehicle production is crucial for automotive manufacturers to thrive in today’s sustainability-driven market. By expanding their focus beyond tailpipe emissions, utilizing sustainable materials and design processes, adopting circular economy principles, and considering battery environmental impact and supply chain sustainability, manufacturers can lead the way towards a greener and more sustainable automotive industry. 

Embracing automated LCA platforms, such as Makersite, and the provision of essential tools for developing innovative, eco-friendly vehicles will help American auto manufactures to secure a competitive edge. 

5. Invest in end-of-life options 

As vehicles reach the end of their life cycle, proper disposal or recycling is essential when it comes to reducing environmental impact. By investing in sustainable end-of-life options, such as recycling programs for batteries and other vehicle components, manufacturers can minimize waste and resource depletion while also showcasing a commitment to sustainability. 

By embracing these five LCA priorities, automotive manufacturers can position themselves as leaders in sustainability and innovation. It’s time for the industry to shift its focus from solely reducing emissions to considering the entire life cycle of a vehicle and making more informed decisions that benefit both the environment and their bottom line.  

It is imperative for all automotive manufacturers to prioritize LCA and integrate it into their supply chain and design processes to not only meet regulatory standards but also to stay ahead of the competition and establish themselves as responsible leaders in the industry. The time for change is now, and by working together, we can create a more sustainable future for the automotive manufacturing sector.  

It’s time to drive towards a greener tomorrow. 

Using AI for cradle-to-grave product lifecycle analysis (LCA)

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In an age where sustainability is no longer optional but crucial for business longevity and global well-being, product lifecycle analysis (LCA) stands as an invaluable tool for measuring and reducing the environmental impact of products. However, the complexities involved in traditional LCAs, as well as the dependence on specific expertise, often lead to time and resource-intensive processes, which can be barriers to widespread adoption, particularly for smaller businesses. 

Enter artificial intelligence (AI), with its capabilities to automate, analyze, and scale. The integration of AI into LCA processes offers a new horizon for manufacturers and sustainable innovators to conduct more thorough and frequent analyses, leading to more informed decision-making and, ultimately, greener products. This blog explores the role of AI in revolutionizing product LCAs, the benefits it offers, and the challenges it confronts, as well as real-world examples of AI-driven LCA in action. 

For a comprehensive look at navigating AI’s potential and pitfalls with LCA, and ensuring trustworthy results, we delve deeper into these topics in our latest whitepaper – The AI tightrope: Balancing automation, accuracy and trust in LCA/EPD

Understanding product lifecycle analysis 

Product Lifecycle Analysis (LCA) can be categorized mainly into two types: “cradle-to-gate” and “cradle-to-grave.”  

Cradle-to-gate LCA focuses on assessing the environmental impact of a product from the extraction of raw materials (the cradle) up to the point where the product leaves the factory gate, ready for distribution. It doesn’t consider the use and disposal phases of the product’s life cycle.  

In contrast, cradle-to-grave LCA encompasses a more comprehensive assessment, extending from raw material extraction through to the product’s end-of-life disposal, including its use, recycling, and landfill stages. 

The principal advantage of cradle-to-grave LCA lies in its holistic approach. By considering the entire lifespan of a product, this method provides a more accurate picture of its environmental impact.  

This thorough analysis enables manufacturers and businesses to identify potential areas for reducing environmental damage not just in production, but in product use and disposal as well, leading to more sustainable products and practices. Consequently, cradle-to-grave LCA is often regarded as superior for those aiming to make genuinely eco-friendly decisions. 

Challenges in conducting cradle-to-grave LCA 

Undertaking a cradle-to-grave life cycle assessment poses distinctive challenges for sustainability professionals. One major obstacle lies in the difficulty of acquiring precise and comprehensive data concerning the environmental impact of raw material extraction and processing. This data is crucial for conducting a thorough LCA but can prove elusive due to proprietary processes or the dispersed nature of supply chains. 

Another hurdle is the intricate nature of contemporary supply chains themselves. Products often traverse multiple countries and manufacturing stages before reaching the final disposal stage, complicating the tracking of their precise environmental impact. Moreover, standardizing this data for comparison purposes can be laborious, given the diverse production techniques and materials utilized across various industries. 

These challenges demand advanced expertise, significant resources, and frequently, innovative data collection and analysis methods, underscoring the intricacy and significance of conducting precise cradle-to-grave LCAs. 

Overcoming challenges in LCA with AI 

AI plays a pivotal role in revolutionizing cradle-to-grave life cycle assessment (LCA) by offering unparalleled advantages in data collection, processing, and mapping across diverse systems. Firstly, AI streamlines the collection process by automatically gathering data from a myriad of sources, such as online databases and enterprise systems. This automation not only saves time and resources but also guarantees the inclusion of up-to-date data in the analysis. 

Secondly, AI’s capability to handle vast datasets enables sophisticated mapping and processing, significantly bolstering LCA efforts by intelligently inferring and filling gaps in datasets, thereby providing a more complete and accurate picture of a product’s environmental impact. 

Manufacturers can proactively identify and address potential environmental risks through AI-driven simulations of various scenarios like material changes or production process adjustments, thus bolstering sustainability efforts. 

Moreover, AI facilitates real-time monitoring and optimization by providing continuous feedback loops. For instance, product data models built with AI can help engineers quickly identify alternative material or supplier choices, based on multiple criteria such as cost or environmental impact. This real-time insight empowers organizations to make informed decisions promptly, ensuring efficient resource utilization and environmental lifecycle thinking. 

Benefits for manufacturers and sustainable innovators 

AI brings a multitude of benefits to those invested in sustainable practices, ranging from efficiency and innovation to market competitiveness. 

Improved decision-making processes 

By enhancing the speed and accuracy of LCA, AI empowers decision-makers to develop and implement sustainability strategies more proactively. With AI insights, product teams can prioritize areas for improvement and make smarter choices that align with business and environmental goals. 

Enhanced product innovation and market competitiveness 

AI’s contributions to LCA enable businesses to innovate sustainably. Through a deeper understanding of their products’ lifecycles, companies can develop eco-friendly products that resonate with consumers’ growing environmental consciousness, thereby gaining a competitive edge in the market. 

Challenges and considerations 

While the prospects of AI in LCA are promising, there are challenges that need to be addressed. 

Data accuracy and reliability 

The effectiveness of AI-driven LCAs depends on the quality of the input data. Ensuring the accuracy and reliability of data sources, especially those feeding predictive models, is critical to generate meaningful and actionable insights. 

Integration with existing systems and workflows 

Adopting AI solutions for LCA needs careful integration with existing systems and workflows. For successful implementation of AI in LCA, it’s important to integrate product data from Product Lifecycle Management (PLM) systems and map this information to transaction data held in Enterprise Resource Planning (ERP) or purchasing systems, ensuring a seamless flow of information and heightened efficiency in sustainability analysis. 

Examples of AI-enabled LCA 

Several industries have begun to leverage AI for LCA: 

  • Amazon and Flamingo: With the assistance of Flamingo, an AI-powered algorithm, Amazon is now able to swiftly and precisely measure the carbon footprint of its products. In a specific trial, the algorithm decreased the time required by scientists to map 15,000 Amazon products from a month to just a few hours.
  • Microsoft’s LCA 2.0 powered Makersite: Microsoft is committed to reducing the environmental impacts of its products through structured Ecodesign approaches and LCA. Microsoft’s innovative approach involves leveraging AI and data analysis provided by Makersite to automate and scale the product modeling process, focusing on supply chain-specific environmental impact accounting. The transition to Version 2.0 has improved quality, increased accuracy, and better identification of environmental hotspots in their supply chain. The methodology shift aims to enhance transparency, collaboration, and consistency in LCA results, and product emissions, across Microsoft’s entire product portfolio 

These examples demonstrate the potential of AI to transform LCA into a more agile and strategic product carbon footprint environmental management tool. 

Conclusion 

AI will be a game-changer in many industries. Its role in accelerating and enhancing product design processes makes it a powerful solution for managing complex products and their supply chain. With its ability to clean, connect and enrich cross-departmental data with third-party sources, it removes the dependency on sustainability, cost and risk experts.

With AI, product engineers and designers are able automatically detect and connect product components and manufacturing processes to the right supply chain data from a harmonized and hyper-connected database, instantly solving one of the most time-consuming problems: mapping data to multiple sources at a granular level. The result is a detailed, extremely specific view into deep-tier supply chains, giving users a better understanding of environmental footprints, should-costing, and compliance risks at an unprecedented speed.

As manufacturers and innovators realize the benefits of AI-driven LCAs—better decision-making, deep-tier supply chain visibility, reduced environmental impact, and enhanced competitiveness, to name a few—it’s not a question of whether AI should be integrated, but instead of how quickly and effectively it can be done. 

The AI tightrope: Balancing automation, accuracy and trust in LCA/EPD

How to source materials more reliably, more efficiently – and more cost effectively

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In our collaborative white paper with Forrester – titled “Transform Product Sustainability into Performance Initiatives with Product Lifecycle Intelligence” – we take insights from 493 respondents, all of whom are product design and sourcing decision-makers in manufacturing. The overall aim of the white paper? To redefine how businesses approach sustainability. 

We’re diving into a series of key takeaways from the report across a number of blogs. You can read parts 1 and 2 in the series here and here, and below we’ll take a deep dive into the third takeaway: organizations must improve their materials sourcing reliability and efficiency. Let’s take a look at why. 

Sustainability remains a business priority. But it is not simply a case of ticking regulatory boxes and filing annual reports. A business equipped with a fully considered and smoothly functioning sustainable procurement plan will not only be able to maintain critical continuity – shielding itself against the impact of supply disruptions that would inevitably result in lost production – but will also be able to manage bottom lines in a tightening and ever more competitive business environment. 

Our report found that most manufacturers track product lifecycle management metrics regularly, although sustainability-related metrics are less automated. It goes without saying that stakeholders across product development, procurement, compliance, and sustainability need to collaborate closely to shorten product development cycles, reduce cost and risks in production, and lower environmental impact throughout the supply chain. However, this can only be done well with a finely tuned and automated data-driven approach. 

Although sustainability has an increasing number of champions with businesses, the lack of detailed, reliable data on materials, components and suppliers remains a critical hurdle that many still have to overcome. Harmonized access to a breadth of reliable data forms the foundation of efficient product design and sourcing, and organizations that are able to leverage granular product lifecycle intelligence in product development will enjoy competitive advantage against their peers with a faster time to market and more successful and profitable products. 

What are organizations doing – and how can they do it better? 

Despite the growing realization of the importance of sustainability metrics feeding into both cost efficiency and business continuity, it is clear that many organization’s sustainability activities remain primarily driven by regulatory obligations. The reality of incorporating sustainability in product lifecycle management is underpinned by the findings in the Forrester report. Ultimately, it comes down to data. Basic data usage is leaving a gap between vision and execution which is by no means insurmountable, but still some way from ideal. 

Sustainability metrics in product design and sourcing are inconsistently manually tracked. Over two-in-five of those surveyed confess to haphazard or nonexistent monitoring of critical sustainability metrics such as waste generation, Scope 1 and 2, and Scope 3 greenhouse gas emissions, and recycled or reused materials or components was either manual, ad hoc, or non-existent. Less than 35% of manufacturers boast fully automated, routine reporting for any specific metric and, perhaps most damningly from the perspective of the bottom line, 39% of respondents do not track change of materials cost (or, if they do, they track it manually). Just 32% have fully automated materials cost tracking. A manual approach is not only unreliable, but time consuming and a significant drain on resources too. 

From design, production, to maintenance, and end of life, sustainability across the product lifecycle is becoming business-critical and time-critical for manufacturers seeking to maintain a competitive cadence of successful new product launches. Stakeholders across functions must have access to granular, product-level data to rapidly and accurately make trade-offs as they design products, and source materials and components from suppliers. Those who don’t make this leap will be left behind. 

The issues surrounding data maintenance are one of the key issues for many companies experiencing a lack of executive-level support, as well as the struggle to raise required budgets. Difficulties maintaining data in material and component libraries make it harder to justify the impact of sustainability, despite access to that data remaining a top priority for many. 49% of those surveyed have the challenge of maintaining stock, cost, sustainability and performance data in their materials libraries, but they find themselves between a rock and a hard place. A lack of data means an inability to measure impact, which in turn means they lack funding and support in the areas of the business where it matters most. Only with access to the right data can that situation improve. 

As it stands now, 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 as one of their biggest issues, and over half experience difficulties measuring and quantifying the environmental impact of their products, which in turn is a significant factor in 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. 

Ultimately, the equation is quite simple: better access to better data equals more support and more funding, leading in turn to enhanced cost efficiency and stronger business continuity. 

How can Makersite help? 

In a volatile business environment, putting steps in place to limit supply disruptions and minimize losses in production can make all the difference between success and failure. A more secure supply chain is less prone to disruption, and an ability to source greener alternatives not only aids the bottom line in the long run, but also helps to grow market share through an adherence to emerging regulations and through catering to new, sustainability-focused customer segments. We worked with German manufacturing giant Schaeffler to achieve a similar outcome. 

To achieve a climate-neutral supply chain by 2040, the company aims to reduce the carbon footprint of its raw materials by 25% by 2030. The problem is that 90% of the raw materials used to make their electric motors are sourced from China with little-to-no deep-tier insight into emissions. It’s a common challenge faced by many manufacturers today.  

With our help, they optimized their supply chain. We detailed alternative sourcing options to China, from Australia to Norway to Canada. In a very short timeframe, we were able to implement new supply chains for Schaeffler for neodymium, disposium and electricity. In doing so, we were able to significantly lower their carbon footprint, particularly due to a better electricity carbon footprint in Norway. 

Schaeffler wanted to test whether their new, optimized supply chain was greener, more sustainable and more secure than their existing model. With Makersite, they were able to confirm their hypothesis. As their Manager of Sustainable Products & Advanced Materials Dr. Michael Kobes noted: “By teaming up with Makersite, Schaeffler can run ad-hoc automated analyses of environmental impacts from various supply chains in scope, for example for the use of materials. Together, we are able to compare difference product scenarios from sustainability perspectives.” 

Validating their results and findings gave Schaeffler the confidence that the changes they were implementing would result in a demonstrable improvement, allowing them to move from theory to practice. 

With a tool like Makersite’s procurement dashboard, sustainable procurement best practice becomes a day-to-day reality. Procurement teams have access to the data they need to make better trade-off decisions, in turn helping their organizations not only to remain steadfast in strong regulatory and economic headwinds, but to thrive in markets both old and new.
 

The ultimate guide to selecting enterprise-level sustainability software for global manufacturers 

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Selecting enterprise-level sustainability software either for regulatory reporting requirements or to drive product innovation is a pivotal step for global manufacturing companies looking to transition their sustainable practices. In an era where corporate environmental responsibility is a point of differentiation in markets worldwide, this decision can transform an organization’s approach towards what they sell, how they sell it, as well as what they make and where they source their materials from. 

This guide is tailored for sustainability and compliance managers in manufacturing sectors. Through a structured approach, it will walk you through the considerations of selecting sustainability software that not only meets current reporting requirements but is scalable as your organization grows and standards evolve. 

It’s also worth noting that we have another guide on sustainability SaaS options for manufacturers – a piece that functions as a market overview and as a round-up of what options are available. When searching for the right tool, it can be difficult to get a clear picture of what they are offering and if they fit what you and your company need. Accordingly, we run through key features (from Scope 3 reporting to LCAs) and pinpoint who does what – and how well. You can read that here.

Comparison-Table-List-Diagram-Brainstorm-2

Two types of sustainability software for product manufacturing with complex supply chains: 

Sustainability software can be broadly categorized into two main types, each designed to meet distinct aspects of an organization’s sustainability objectives: 

Sustainability software to meet reporting requirements 

The first type focuses primarily on reporting compliance, helping businesses to gather, manage, and report environmental, social, and governance (ESG) data in line with regulatory requirements. For example, software that facilitates spend-based Scope 3 or CBAM reporting falls into this category. 

Sustainability software to drive product innovation and decision-making

The second type of sustainability software is designed to leverage collected data from reporting efforts for strategic actions, such as decarbonization efforts or accelerating product development and innovation. Crucially, this category emphasizes the need for cradle-to-grave lifecycle analysis, ensuring a thorough understanding of a product’s environmental impact from inception to disposal.

It involves the functionality of gathering comprehensive sustainability, cost and compliance data and integrating this information seamlessly into existing product development workflows. The significant challenge lies in ensuring that designers, engineers, and procurement teams have timely access to these insights, thereby enabling them to make decisions that are not only informed but also aligned with broader business objectives.  

By effectively addressing the integration of cost, materials, process and supply chain data, this advanced software category empowers organizations to proactively utilize their sustainability efforts. 

Building the foundation: Understanding sustainability reporting needs for manufacturers 

As sustainability regulations grow in complexity, manufacturers must assess their ability to meet an expanding array of disclosure requirements. Consideration should be given to existing mandates like the Carbon Border Adjustment Mechanism (CBAM) and Corporate Sustainability Reporting Directive (CSRD), alongside potentially forthcoming obligations such as The Corporate Sustainability Due Diligence Directive (CSDDD) and Ecodesign for Sustainable Products Regulation (ESPR).

You must first reflect on the breadth of your reporting needs, factoring in the scale of your operations, the diversity of your product portfolio, and the depth of your data on suppliers and materials. For instance, Cummins’ proactive expansion of its ESG reporting capacity to 27 annual reports illustrates a strategic approach to data standardization and supply chain transparency through digitalization. 

Understanding the gaps in your product and supply chain data 

Conducting a thorough inventory of products and scrutinizing the existing data repository within your ERP, PLM and CAD systems is a crucial step towards establishing a robust sustainability reporting framework.

This process involves not only knowing the number of products and their individual components in your portfolio but also evaluating the depth and reliability of the data associated with each product. This data comes from a deep understanding of your supply chain, including the origin of materials, the sustainability practices of your suppliers, and the environmental impact of your production processes. By assessing the quality of information you possess on these fronts, you can identify gaps in your data collection methods and areas where improvements are necessary. 

Integrating sustainability reporting initiatives with the current IT ecosystem 

Integrating sustainability reporting initiatives with your current IT ecosystem is pivotal for streamlining and enhancing the efficiency of data management and reporting processes. This integration requires carefully evaluating how well sustainability reporting tools and practices mesh with existing IT infrastructures, such as Product Lifecycle Management (PLM) and Enterprise Resource Planning (ERP) systems.

The goal is to achieve seamless interoperability, ensuring that sustainability data flows smoothly across different platforms and supports real-time analysis and decision-making. Compatibility with PLM systems is crucial for tracking the environmental impact of products throughout their lifecycle, from design to disposal, while ERP integration facilitates the efficient management of resources, including energy and materials, and oversight of supply chain sustainability practices.

By ensuring a high degree of integration, companies can leverage automated reporting, reduce manual data entry errors, and gain a holistic view of their sustainability performance, thereby enabling more strategic and informed decision-making in support of their environmental objectives. 

Identifying common sustainability data challenges: 

Recognizing common challenges is vital for enhancing sustainability reporting. Key obstacles include ensuring data accuracy, the cumbersome nature of manual reporting, and a dependence on obsolete technology.

These issues can lead to inefficiencies and inaccuracies that undermine the integrity of sustainability initiatives. To mitigate these problems, it’s essential to explore diversifying data sources that can fill existing gaps. This might involve leveraging advanced technologies for automated data collection or tapping into emerging databases and platforms that offer richer, more reliable datasets.

By integrating these new data sources, organizations can improve the precision of their reporting, reduce the time and effort required for data gathering, and phase out outdated systems. 

Scalability and future proofing sustainability software investments 

Addressing scalability and preparing for future industry trends are crucial for a resilient sustainability reporting framework. To meet these needs, incorporating automated Life Cycle Assessments (LCAs) and Artificial Intelligence (AI) can significantly enhance the framework’s adaptability and scalability.

AI-enabled LCAs allow for efficient evaluation of environmental impacts from cradle to grave, while AI technologies offer recommendation engines and streamline data processing, accommodating expanding reporting requirements with precision.

These technologies not only ensure that the framework can scale with the organization’s growth but also keep it aligned with evolving sustainability standards and expectations. By leveraging automated LCAs and AI, companies can future-proof their sustainability efforts, ensuring they remain agile and responsive to both current needs and forthcoming industry developments. 

Aligning software capabilities with business objectives 

The next step is to align the features and capabilities of the sustainability software with your key business objectives. For instance, if your primary goal is to reduce time-to-market for new products as part of a broader sustainability agenda, you should look for software that integrates seamlessly with product design, development and sourcing processes. Other critical business objectives could include: 

  • Ecodesign and circularity to differentiate products in the market through detailed sustainability disclosures 
  • Keep your license to sell by strengthening regulatory compliance with in-built monitoring and reporting mechanisms 
  • Use product lifecycle intelligence to accelerate innovation at the design and sourcing stage through automation and data-driven insights. 

Those sustainability leaders who wish to go beyond reporting must demand software solutions that offer actionable insights to make tangible advancements in both sustainability and regulatory compliance. 

Navigating sustainability data integration: Ensuring a seamless product and supply chain data ecosystem 

A sustainability tool can only be as effective as the data it has access to. Ensuring that the chosen software can integrate with existing systems such as CAD, PLM, ERP, and other data management tools is crucial. Without this level of integration, the software will struggle to provide a comprehensive view of the product lifecycle and related sustainability and compliance metrics. The goal is a seamless data-sharing ecosystem: 

  • Ensure that the sustainability software allows easy and bi-directional data flow from these integrated systems. 
  • Look for RESTful APIs or other modern technologies that facilitate easy connections. 
  • Prioritize flexibility, as your IT landscape is likely to evolve over time. 

Making the business case: Securing senior buy-in for sustainability software 

To gain the necessary senior-level support for investing in sustainability software, you need a robust business case. This case should clearly outline how the software will contribute to: 

  • Growing revenue: By adopting sustainability software, businesses can identify and capitalize on eco-friendly opportunities, appealing to the growing market segment concerned with environmental responsibility. This alignment with consumer values can drive sales, open new market avenues, and enhance brand loyalty, ultimately contributing to revenue growth.
  • Improving the ability to innovate: Sustainability software enables companies to leverage data-driven insights for the development of new, eco-friendly products and services. This fosters innovation by highlighting areas for improvement and potential market needs, positioning the company as a leader in sustainable solutions. 
  • Enhancing operational resilience: Utilizing sustainability software helps businesses anticipate and adapt to environmental regulations and supply chain risks. This proactive approach reduces risks associated with resource scarcity and regulatory penalties, ensuring long-term operational resilience. 
  • Strengthening regulatory compliance: The software provides monitoring and reporting tools that simplify compliance with evolving sustainability regulations. By ensuring adherence to legal standards, companies can avoid fines, enhance their reputation, and secure a competitive edge in industries where sustainability is increasingly regulated. 
  • Accelerating product time-to-market: Integrating sustainability software with product development processes streamlines the design and launch of new products. This accelerates time-to-market by ensuring that sustainability criteria are met from the outset, reducing the need for costly revisions and speeding up regulatory approvals. 
  • Improving supply chain environmental sustainability: The software offers visibility into the environmental impact of supply chain operations, enabling companies to identify and mitigate negative effects. By optimizing supply chain sustainability, businesses can reduce waste, lower carbon footprints, and improve overall environmental performance, contributing to a healthier planet and a stronger brand image. 

Highlighting these benefits, supported by industry benchmarks and potential ROI calculations, can help decision-makers understand the long-term value of the investment. 

Ultimate checklist for procuring sustainability software 

Armed with the information above, your procurement process should include the following steps: 

  1. Conduct a thorough market analysis to identify potential vendors. 
  2. Develop a comprehensive, detailed Request for Proposal (RFP) based on your unique needs and the key features outlined above. 
  3. Evaluate proposals based on their alignment with your business objectives, integration capabilities, and the features and benefits of the software. 
  4. Shortlist potential vendors and engage in detailed discussions, including demos and pilot projects if possible. 
  5. Consider the total cost of ownership, including implementation, support, and maintenance, not just the initial software cost. 
  6. Assess the vendor’s commitment to ongoing development and compliance with global sustainability standards. 

In conclusion, the choice of sustainability software is a critical one for global manufacturing companies. It’s not just about ticking the box for sustainability reporting; it’s about creating a comprehensive, scalable, and actionable framework for driving real change.

By understanding your needs, aligning software capabilities with your objectives, prioritizing integrations, and steering clear of common pitfalls, you’ll be well on your way to selecting an enterprise-level solution that will set the gold standard for sustainability in your industry. 

Scope 3 and the SEC: What happens now?

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On March 6th 2024, the United States Securities and Exchange Commission (SEC) set in place new rules regarding climate disclosures, requiring many companies to disclose greenhouse gas emissions and climate change-related risk, including in their annual reports. Although the ruling was watered down considerably from the original proposal, it still met with considerable blowback from opponents.

Let’s take a look at what’s happened previously – and what happens now.

What were the SEC proposing?

Previously, companies only disclosed their climate impact information on a voluntary basis. There has been no standardised way to report climate data, and many companies used different metrics or chose not to report at all.

Although the SEC has been encouraging companies to disclose their climate-related risks since 2010, the voluntary nature of those disclosures has made it much easier for them to water down their data or simply avoid publicising it altogether. Accordingly, in recent years the SEC and its chair, Gary Gensler, have been taking bigger steps towards enshrining disclosure rules in an effort to drive accountability and transparency across the market.

In its original form, the proposed regulation would have required US-listed companies to disclose a range of climate-related risks and greenhouse gas emissions, including Scope 1 and 2 emissions. The proposal also required organizations to disclose the greenhouse gasses generated by their suppliers and partners, known as Scope 3 emissions (if the emissions are material or included in emission targets the company has set.)

What‘s the latest update?

In an attempt to pre-emptively placate likely opposition, the updated rules this March contained some striking omissions. It was, as Fortune noted, “as notable for what it contains as for what it leaves out.” Scope 3 emissions, which are created indirectly along the value chain and can make up a significant proportion of a company’s carbon footprint, were omitted from the final version. So was a direct emissions disclosure requirement for all public corporations.

Nonetheless, despite the dilution, the adoption of the rules marks something of a watershed moment. As Gensler stated before the vote: “Our vote today is on rules, not just guidance like we had in 2010 but on actual rules and ones that require disclosures. Bringing them into such filings I think will help make them more reliable.”

He continued: “I’m pleased to support this adoption because it benefits investors and issuers alike. It would provide investors with consistent, comparable, decision-useful information, and issuers with clear reporting requirements.”

SEC documents show that the disclosure will require companies to share how climate conditions affect their business strategy, operations, and financial condition.

Their reported information must include direct emissions like manufacturing and indirect emissions like energy use, but companies will not be required to report emissions from supply chains and product consumers (which we were part of the original proposal, but not adopted).

As expected, the rule drew what might be charitably described as a mixed response. 10 Republican-led US states – as well as the top US business group – vowed to sue the SEC. Meanwhile, several environmental groups applauded the rule but said they had hoped for stricter requirements.

Although the disclosure is not an environmental protection law, it will certainly serve to increase transparency, with Bryan McGannon, managing director of the non-profit sustainable investment forum US SIF, telling Business Insider that it was “a really good first step” in that regard.

“I think that it’s going to be very valuable for investors to use this information to get that better understanding — and understand if the company is taking it seriously,” McGannon continued. “Are they identifying all the risks?”

He noted that there is a lot of climate reporting that is not being done right now, and the disclosures will allow investors to better digest a company’s climate data and make good investment decisions.

What do companies need to do now?

Companies will not be required to report emissions from supply chains and product consumers, as per the SEC. The supply chain disclosures – Scope 3 emissions – were in the original rule proposal, but were not adopted. As Business Insider noted: “For companies that sell many products or finance infrastructure — like food companies, oil and gas majors, and big banks — these emissions are often the biggest chunk of their overall carbon footprint.”

So does that mean Scope 3 reporting is no longer important? Not quite, say business leaders. Alongside investor and stakeholder pressure on reporting, the latest SEC ruling means that “companies are now facing a wave of global requirements,” according to KPMG’s US ESG Leader Rob Fisher.

He continues: “Amidst these disclosure requirements, the organizations that view new reporting requirements as an integral part of their broader strategy will find themselves in a better position to realize the full value sustainability initiatives can bring to their business.”

“Scope 3 may be out of the SEC’s climate rule but it’s very much in scope for US multinationals and likely many private companies. The SEC’s rule followed actions of the EU, California and the ISSB, all of which require Scope 3 reporting. Regulatory relief in one jurisdiction does not alter the burden imposed in others.”

Sustain.Life’s Chief Sustainability Officer Alyssa Rade concurred, calling the omission of Scope 3 reporting requirements by the SEC an “irrelevant caveat.”

“Companies shouldn’t be lulled into a false sense of security. Existing regulations in California and the EU and resulting pressure from investors and consumers make the SEC’s decision to exclude Scope 3 from their emissions mandate an irrelevant caveat for most global corporations. We’re already witnessing a mad scramble for disclosure data. Companies of all sizes — irrespective of their geographic location — need to understand that climate disclosures will be the norm within the next decade.”

The common consensus seems to be that, regardless of Scope 3 featuring as part of the SEC’s latest ruling or not, organizations need to get their houses in order as a priority. And the benefits extend far beyond just “reporting compliance” as Makersite’s CEO Neil D’Souza says:

“Transparency around carbon emissions is a complex but necessary undertaking, yet many organizations are waiting for mandates before they get their house in order. It’s most often because they have not yet unlocked any business value beyond ‘reporting compliance.’ Creating better, more differentiated products that are priced better, have better win rates, improve brand performance, mitigate supply risks and reduce costs from efficiency measures are all much more powerful value propositions that are unlocked through the process. It just takes time and effort to get there and technology like AI can help solve many of the challenges in tracking, reporting, assurance and dissemination.”

More rigorous emissions regulations will continue to appear. It is only a question of time until Scope 3 reporting, for example, will be mandatory for companies. Countries worldwide have committed to emission targets and those targets will, sooner or later, reach industry level. Companies that take voluntary action now will thrive, but companies who don’t will be left behind. So how can they prepare? There are four key steps to take:

  • Conduct a data gap assessment: Check what data is available in-house and if the data is easily accessible for stakeholders. At the end of the assessment, you should be able to put together an inventory of climate-related data you already have in comparison to the data the rule requires – and then act on the differences.
  • Re-evaluate your approach to data collection: Is your sustainability reporting scalable and cost effective? Have you committed to Net Zero goals and can they be backed up with trustworthy data? How long will it take you to have full Scope 3 reporting across all products?
  • Support your key stakeholders: Key champions for reduction initiatives in an organization will most likely sit across procurement, product management and product design teams. To be able to move forward and hit emissions targets, you need ensure that these stakeholders have everything they need to work efficiently.
  • Don’t do it alone: Scope 3 reporting is different: The vast majority of data you need does not sit within your company. Tools are invaluable for saving time, increasing credibility for auditors and, most importantly, critical in order to achieve meaningful progress with the data you are collecting. The right tools can help you to report on existing and future products at scale. The reporting obligations of the future are a complex issue that will take companies a long time to solve. Starting now will put your company ahead of others and help you prepare for prospective challenges.

If you’d like more information on how to stay up to speed with the latest regulatory developments, speak to our sustainability experts today.

How increasing your carbon footprint reporting can drive sales – and profits 

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Makersite and Forrester’s collaborative thought leadership paper has, at its heart, a simple objective: to redefine how businesses approach sustainability. 

Makersite commissioned Forrester to evaluate the state and impact of sustainability in product lifecycle management in the manufacturing industry. In order to do so, they surveyed 493 organizations, liaising directly with product design and sourcing decision-makers in manufacturing to build the fullest possible picture of the opportunities – and challenges – that lie ahead. 

In a series of blog posts designed to compartmentalize the report, we’re taking a deeper look at 5 of the key takeaways for manufacturing businesses based on the research. 

You can read part one in the series here. For this instalment, we’ll outline why increasing the carbon footprint reporting of your products will be a key driver for sales and profits in your organization. 

Sustainability, without doubt, remains a critical business issue. Whether from a regulatory, reputational or financial perspective, an organization with its house in order is better primed for success. For some, sustainability and the regulations surrounding its proper implementation have been seen as little more than a fad. A box to tick in order to satisfy stakeholders and regulators. But now we have irrefutable evidence that better and more complete carbon footprint reporting serves as an essential catalyst for supporting – and driving – sales.  

Within the manufacturing industry, key decision makers in product design and sourcing are taking action to balance sustainability, resilience, and top and bottom-line improvements. There is a growing realization that manufacturers must become quicker, smarter, and more sustainable to survive. They can leverage material, component, and supplier intelligence to improve data visibility, to guide better design and sourcing decisions. With a stronger foundation and a more granular approach, carbon footprint reporting is no longer such a burden. 

Why do organizations need to do this? 

When it comes to carbon footprint reporting, now is not the time to stand still. Good intentions will get you nowhere. In a competitive marketplace, meeting reporting obligations is an absolute minimum. Moreover, companies who neglect to accelerate their carbon footprint reporting will find themselves rapidly losing their share of the market to those who have been more agile and innovative in their approach. Efficiency and data granularity are key. Without a solution that ticks both boxes, you will very quickly find yourself losing position to a competitor who is able to move faster than you. And once you’ve fallen behind, it becomes twice as hard to get back. 

Similarly, a more proactive approach to carbon footprint reporting will leave you poised for greater success going forward. Better product reporting can open your organization up to new markets and new audiences, which in turn will increase sales and profitability. It will also likely open up new territories where, previously, different reporting obligations may have meant that prior attempts at entry into that marketplace were stymied. The potential is enormous. You don’t have to make new products to access new markets and new customer segments – you simply have to report better, and report faster. 

As the Forrester paper notes, manufacturers with a more mature approach to their carbon footprint reporting – those who sought out and actively implemented a solution designed to enhance previous practices – are likely to see greater success. Those who integrate a material, component, and supplier intelligence solution into their PLM practices expect to see high gains across a number of important KPIs. Most prominently, manufacturers equipped with the right solution saw a 25% improvement in win rate, with 26% also identifying the opportunity to command a greater price premium. 

The hypothesis speaks for itself: manufacturers that integrate PLM processes with material, component, and supplier intelligence will enjoy time to market advantage over less mature competitors and have the opportunity to scale their scarce design and supply chain expertise over a wider range of product variants. 

How can Makersite help? 

Transparency is central to accurate, detailed carbon footprint reporting. With Makersite, organizations are able to rely on deep-tier, up-to-date and consistent data that allows them to demonstrate their decarbonization strategy in absolute detail. 

Depending on the nature of the product being manufactured, reporting across numerous product groups can be a painstaking task – particularly if it’s being done manually. However, with Makersite’s AI-driven solution, organizations can use product and supply chain data – sourced from the largest product and supply chain database with 36,000+ industrial processes, 600,000+ environmental impacts, and 100,000+ materials – to automate reporting across all products groups. 

Additionally, Makersite’s dedicated eco-design dashboard allows users to make data-driven product optimization decisions across sustainability, costing, risk and compliance. With some 80% of ecological impacts occurring in the design stage of a product, full oversight is critical when it comes to achieving sustainable design goals and hitting reporting parameters.  

Users simply have to upload their BOM and, once uploaded, they will receive automated, AI-driven recommendations for switching out key product components, in turn optimizing carbon footprint while lowering costs, giving them the depth of knowledge they need to make crucial design decisions at the click of a button. 

At Makersite, several of our key clients have experienced this revolutionary approach to optimizing carbon footprint reporting first-hand. 

Belgian technology giant Barco faced challenges in efficiently reporting SKU-level environmental data due to data being siloed and scattered across the supply chain, resulting in slow and costly manual efforts.  

To solve the problem, Makersite provided Barco with automated Life Cycle Analysis (LCA) and Product Environmental Footprints (PEFs) at the SKU level, allowing them to accurately offset their emissions, comply with EU taxonomy reporting requirements, and implement more targeted eco-design principles across their product portfolio 

By doing so, Barco were able to consolidate and enrich their data, perform comprehensive environmental reporting, and make data-driven decisions to minimize their environmental impact while lowering costs. 

Automating their LCAs allows Barco to accurately offset their emissions and further promote their climate-neutral ambitions, as well as strengthen communication on sustainability with external stakeholders – all based on data. 

In a similar vein, the cosmetics pioneer Lush wanted to double down on their already impressive sustainability and carbon footprint reporting credentials. As a company, Lush are closely aligned with and well-known for their commitment to sustainable processes. Customers and stakeholders alike expect them to lead from the front. Falling behind would not only have an impact reputationally, but financially too. 

The team at Lush felt they were not doing enough to measure supply chain impacts from an environmental point of view. They lacked visibility around carbon emissions produced as a result of their supply chain activity, and needed more detailed insight into where the problems lay. They lacked harmonized, integrated data, which hampered their ability to plan and hit their target of being “carbon neutral, climate positive” by 2030. 

Makersite’s integrated data software provided the solution Lush were looking for. With relevant data on supply chains typically siloed away in different databases, Makersite’s ability to bring together the 3,000 ingredients the company purchased worldwide in one platform made a big difference, giving them “all of the emission factors and LCA databases at our fingertips.” Lush were able to analyze various impacts at a much deeper, more granular level, and had all of their choices laid out directly and simply in front of them, allowing them to make sense of complex data and measure it more easily. 

Makersite’s modelling capabilities gave Lush significantly deeper insight into their supply chain data. From energy sources to waste management, a better understanding of how their supply chain operated gave Lush the ability to go back to suppliers and suggest changes in order to help them achieve their goals. The company now has an automated and scalable way to manage and understand their supply chain in greater detail, giving them the speed, scale and granularity that they were seeking and a much better chance of hitting their ambitious 2030 targets. 

Lush are preparing to release their first TCFD report based on modelling powered by Makersite. Their supply chain makes up 42% of their total emissions – by far the biggest impact in their business. With Makersite they’ve been able to assess the impact of more than 3,000 materials this year, including remodelling FY21 materials based on better data that more closely reflects the practices in the suppliers they buy from. Doing so has shown that Lush have reduced their carbon impact by 25% against emissions in 2021 – and all because of increased data accuracy and improved granularity provided by Makersite’s software. 

Being smarter with data – and being able to accurately measure it – not only allowed Lush to see where they needed to do work, but also gave them the platform to increase their transparency efforts and advance their goals. 

Ultimately, as a result of using Makersite’s solution, both companies were able to use more detailed, more granular product and supply chain data to not only automate their carbon footprint reporting, but to position their organizations as pioneers in their industry, giving them a distinct advantage in markets both old and new. 

How to meet increasing sustainability regulations 

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Makersite and Forrester have collaborated on a thought leadership paper with a grand – but simple – goal: to redefine how businesses approach sustainability. 

Makersite commissioned Forrester to evaluate the state and impact of sustainability in product lifecycle management in the manufacturing industry. In order to do so, they surveyed 493 organizations, liaising directly with product design and sourcing decision-makers in manufacturing to build the fullest possible picture of the opportunities – and challenges – that lie ahead. 

We’ll delve further into the report in future blog posts, starting off with a series on 5 key takeaways for manufacturing businesses based on the research. 

The first takeaway: organizations must be able to keep pace with and meet the increasing number of sustainability regulations. Let’s take a look at why. 

It is clear from our research that sustainability – now more than ever – is business critical. For many organizations, its importance lies on par with revenue growth. A huge increase in sustainability regulations, heightened customer expectations around supply chain transparency, compounded with complexities in the supply chain of materials and components, are compelling manufacturers to transform their product lifecycle management and supply chain processes. 

Within the manufacturing industry, product design and sourcing leaders are addressing the intersection of sustainability, resilience, and business performance, prioritizing initiatives such as enhancing sustainability reporting for compliance and to support sales, as well as optimizing materials sourcing reliability and efficiency. 

Why do organizations need to do this? 

Most importantly, however, companies who seek to increase regulatory sustainability reporting of their products and operations will reap two particular benefits. 

Firstly, no matter the size of your organization, you need to abide by the regulatory requirements of the region, or regions, in which you’re seeking to operate. With an enhanced focus on and alignment with regional regulatory obligations, businesses give themselves a license to sell in the market they’re targeting. With some 80% of emissions coming in the design phase of a product, it’s crucial that each stage of the process is rigorously mapped and evaluated. 

Secondly, a firmer grasp on sustainability reporting goes a long way to establishing – and maintaining – business continuity. In an environment where marginal gains and a keen sense of foresight can offer major advantages over peers and competitors, a lackadaisical approach to sustainability reporting can quickly result in major supply disruptions (for example, having to find supply chain alternatives at the last minute, or at much greater cost), ultimately leading to lost production and severe impacts on revenue. In a competitive environment, such missteps can be hard to recover from. 

What are organizations doing currently? 

The Forrester research underlines these findings. 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. 

Despite that figure winning out, however, the relatively low number indicates there is some way to go before there is a proper acceptance 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. A successful organization in 2024 and beyond will be defined by its ability to cut through the noise, manage competing expectations, and execute a vision firmly focused on removing the biggest barriers to market entry and success as a priority. 

How can Makersite help? 

Whilst there are many benefits to regulation – from better risk management to increased transparency to greater innovation to enhanced efficiency – the increase in reporting requirements comes with some obvious downsides. They put a greater strain on teams and distract from the important work at hand. In many cases, organizations simply do not have enough people to actually put together the reports. This results in a scenario where the time spent on reporting adds little-to-nothing to business value. 

At Makersite, some of our biggest clients experienced that exact dilemma.  

We partnered with Microsoft to transform their LCA methodology from directional modeling to a supply chain-specific environmental impact accounting process. In doing so, Microsoft were able to automate and scale the modeling of complex electronic products with an unprecedented level of primary data coverage. 

Of the multiple benefits, perhaps the most valuable was the reduction of the modeling time, allowing Microsoft to focus their efforts on collecting and processing suppliers’ primary data and performing data quality assurance and data analysis. As Kelly Stumbaugh, Microsoft’s Director of Devices, Ecodesign, Ecolabels, and Carbon Emissions, noted: “[With Makersite] we are efficiently scaling up our LCAs so our engineers can focus on designing the best and most sustainable products instead of only focusing on disclosures.” 

Similarly, with Cummins Inc., the company had a clear goal that they needed help in executing. They wanted to grow and create a circular lifecycle plan for every part of their reports so that they could, as Mousumi Mukhopadhyay, their Manager of Circular Economy, stated: “Use less, use better and use again.” 

They were looking to take the next step in their sustainability journey. For them, this included keeping pace with the growth in annual ESG reporting obligations (including scaling their reporting capabilities to handle 27 ESG reports annually), standardizing their data and enhancing supply chain transparency through digitization.  

With Makersite, Cummins were able to digitize their supply chains to show multitiered data aggregation layers, including data assurance, traceability and transparency as well as the collection and inspection of specific domains. With our solution, they were able to show how a product was generated, trace its journey through the supply chain and translate that information into the required sustainability reports, setting them on their way towards achieving their ambitious 2050 goals: reducing Scope 3 absolute lifetime GHG emissions from newly sold products by 25% and reusing or responsibly recycling 100% of packaging plastics or any other goal. 

Ultimately, thanks to Makersite, both companies were able to use product and supply chain data to automate reporting across all product groups, saving time, greatly increasing efficiency and giving their teams a priceless opportunity to execute their key tasks undistracted and to the best of their abilities.