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From Data to Decisions: How LCA Software Powers Sustainable Growth

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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. 

Examining the new Ecodesign Regulation

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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.

How to create a dedicated sustainability function in your organization

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In “Transform Product Sustainability into Performance Initiatives with Product Lifecycle Intelligence”, our collaborative white paper with Forrester, we took insights from 493 product design and sourcing decision-makers in manufacturing. Our aim in commissioning the study? To redefine how businesses approach sustainability, and to map a path forward for those who are beginning to take on the challenge. 

We’re diving into a series of key takeaways from the report across a number of blogs. You can already read parts 1, 2, 3 and 4, and below we’ll take a deep dive into our next takeaway: why it’s imperative that a business creates a dedicated sustainability function within the organization. 

The gains that stand to be made from a more sustainable approach to product design – whether financially, reputationally or from a regulatory perspective – are already clear to more ‘Advanced’ manufacturing businesses. Whether driven by changing customer expectations, an increased emphasis on supporting a circular economy, a need for greater transparency in supply chains or a variety of other factors, the reasons for implementing a more sustainable approach to product design are numerous. 

But there is a world of difference between ideas and action. Sustainability must move beyond being a mere concept or being seen as a reporting burden in order for its benefits to be fully realized. In order to do this, there is a strong need for advocates within a business. An organization with a fully functioning and proactive sustainability function is likely to reap many benefits, not least from a cost efficiency perspective. 

Managing bottom lines in a tightening business environment is critical when it comes to ensuring continued growth. A dedicated sustainability function, accordingly, encourages not only collaboration but a sharing of resources – both of which save money. Businesses hampered by a more siloed approach to sustainable practices are likely to incur more costs not only through lost time and productivity, but also through a continued reliance on outdated manual processes and expensive, unnecessary equipment and resources. 

Ultimately, cross-functional collaboration – combined with a single source of truth – is critical in enhancing product design, sourcing, and gaining a competitive edge. The adoption of product lifecycle intelligence drives sustainability improvements, faster time-to-market, higher profits, and operational enhancements for manufacturers. 

Data quality and accessibility forms the foundation of efficient product design and sourcing and product and operations improve with the adoption of a material, component, and supplier intelligence solution. 

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

Our study makes this point abundantly clear. The need for such a dedicated sustainability function is obvious and well understood. As the study shows, 27% of respondents placed ‘create a dedicated sustainability function within the organization’ as their top initiative to prioritize over the next 12 months.  

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 

With a dedicated sustainability function within an organization, procurement and supply chain leaders can utilize environmental sustainability procurement technology to address the challenge of measuring the environmental impact of the supply chain. Organizations deploying procurement technology are making significant organizational changes to enable them to understand their supply chains to measure, reduce, and report their Scope 3 emissions and to honor their sustainability commitments. 

However, obstacles remain. 18% of respondents to the study saw breaking down data siloes to enable cross-functional collaboration as among their biggest headaches. There is work still be done. These data siloes are the hallmark of organizations not yet ‘mature’ enough to fully realize the benefits of embracing such an approach. 

The study indicates that immature enterprise manufacturers have a steep hill to climb. A typical Novice manufacturer (those with the lowest maturity on the PLM maturity model that Forrester created) find themselves hamstrung by manual processes, data and decision-making silos, a lack of collaboration, and they struggle to track and verify the sustainability credentials of their suppliers. 

Regulatory compliance and sustainability are secondary considerations for Novices, with cost reductions and product improvements being of primary importance for them. Whilst understandable in the short term, this lack of forward-thinking could come back to sting them – and prevent them from growing as a business. 

In contrast, Mature companies are collaborative, take sustainability seriously, and understand the importance of systematic and automated processes. Novices remain inhibited by silos and manual processes and are yet to fully grasp the strategic and competitive importance of integrating sustainability across the product lifecycle. 

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. 

Ultimately, maturity drives agility. 

How can Makersite help? 

The benefits of giving sustainability a platform within an organization are particularly clear when it comes to two of our customers – Barco and Microsoft. By embracing a collaborative, ecodesign-led approach to manufacturing, both have reaped significant rewards. 

At Microsoft, the team were able to efficiently scale up their LCAs so their engineers could focus on designing the best and most sustainable products instead of only focusing on disclosures. While their LCA experts are still involved in the process, they can now focus on completing the model with suppliers’ primary data, performing the quality analysis, and ensuring the model is representative. 

With Makersite’s help, the benefits of their new methodology were huge. They included improved quality and representativeness of the modeling of the product’s composition, better identification of environmental impact hotspots in the supply chain, and increased accuracy by reducing the inconsistencies associated with the LCA practitioners’ decisions. 

Empowered by Makersite’s AI-powered Product Lifecyle Intelligence software, lca software Microsoft were able improve the efficiency of collecting and modelling both product and supplier data, ultimately saving time and money and eliminating data siloes in a more collaborative, sustainability-led environment. 

Similarly, 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. 

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. 

They were able to consolidate and enrich their data, perform comprehensive environmental reporting, and make data-driven decisions to minimize their environmental impact. 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. 

By leveraging Makersite’s automated Life Cycle Assessments (LCAs), Barco gained insights into the environmental impact of different design choices, enabling them to perform scenario analysis and evaluate the impact of various design changes on their products. The implementation of Makersite’s software allowed Barco to bring together the various elements of their product data in one place, enabling them to identify opportunities for sustainable design changes across their product line and make data-driven decisions to minimize their environmental impact. 

Makersite’s one model, multi-output approach enables users to integrate multiple data sources and easily deliver reporting and analytics to multiple teams including compliance reports, EPDs, PCFs, Scope 1,2 & 3, forecasts and should costs. 

With our digital twin technology, we’re able to put the burden of data siloes to rest. We connect best-in-class data for costs, markets, risks, materials, regulations, environment, health, suppliers and more to create a “digital twin” of a product design or formulation. Tools are built-in to create reports, apps, and maps to clearly visualize the data that matter, making it easier – and significantly quicker – for all involved. 

Similarly, with Makersite’s ecodesign dashboard, customers can use product data models to make smarter design, material and sourcing decisions throughout their product development process, allowing them to make better decisions based on multiple criteria whilst supporting decision-making with clear and actionable insights considering multiple criteria like carbon and cost simultaneously. 

Less than 1% of new products consider sustainability in their design, but there’s no longer any need for it to be an afterthought. That’s why we make it easy for you to make better decision choices with the data you need, fostering collarboration and enabling the building of a dedicated sustainability function in your organization with ease. 

How to build and grow supplier engagement programs in order to meet your sustainability goals

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In “Transform Product Sustainability into Performance Initiatives with Product Lifecycle Intelligence”, our collaborative white paper with Forrester, we took insights from 493 product design and sourcing decision-makers in manufacturing. Our aim in commissioning the study? To redefine how businesses approach sustainability, and to map a path forward for those who are beginning to take on the challenge. 

We’re diving into a series of key takeaways from the report across a number of blogs. You can already read parts 1, 2 and 3, and below we’ll take a deep dive into our next takeaway: why organizations must seek to initiate – or expand – their supplier engagement programs to meet sustainability goals. 

Sustainability improvements already sit top of mind for the vast majority of manufacturing businesses. Whether driven by changing customer expectations, an increased emphasis on supporting a circular economy, a need for greater transparency in supply chains or a variety of other factors, the reasons for implementing a more sustainable approach to product design are numerous. 

But ‘being sustainable’ is not simply a case of ticking regulatory boxes and filing annual reports. Taking the next logical step when it comes to your supply chain can make a world of difference. A better functioning supplier engagement program will not only help with cost efficiency – enabling you to better manage bottom lines in a tightening and ever more competitive business environment – but it will also assist with business continuity, helping you to ensure the smooth running of day-to-day operations and minimizing disruptions that would otherwise result in lost production. 

Manufacturers who are quicker, smarter, and more sustainable will thrive. Those who are able to leverage better supplier intelligence will benefit from improved data visibility, which in turn will guide better design and sourcing decisions. They 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. 

More advanced organizations are defined, at least in part, by the structure of their supplier engagement programs. Hallmarks of a refined system include an ability to track the ESG status of approved-for-purchase suppliers automatically using software, a fully documented, centralized onboarding process that all suppliers must follow and a defined process where the sustainability credentials data provided by suppliers is verified by a risk management or supply chain certification platform. 

Without such processes in place, delays in the material supplies by the suppliers often lead to a change in plans which can have a serious knock-on effect on other areas of the operation. This is a scenario every manufacturer would like to avoid. 

What are organizations doing – and what challenges are they facing? 

The study results clearly highlighted an ongoing move towards the establishment and development of better supplier engagement programs, although there is still work to be done. 27% of respondents are prioritizing supplier engagement programs as a response to external impacts to their product development process, a sure sign that decision-makers in organizations realize how critical a step this is when it comes to taking action to balance sustainability, resilience, and top and bottom-line improvements. 

However, there are still challenges which remain more difficult to overcome. A full 50% of survey respondents face significant obstacles when it comes to obtaining funding and budget to obtain material, component, and supplier intelligence solutions. Governance issues are a prosaic but all-too-real issue for those seeking to implement better PLM practices within their organization. 

Stakeholders responsible for PLM are the strongest proponents of sustainability within their organizations, but the battle with resistance internally and an ongoing wrangle with people, process, and technology complexities can take its toll. 

53% of respondents struggled with securing executive support for incorporating sustainability in product lifecycle management processes, alongside the 50% we identified above who find it hard to obtain budget to gather material, component, and supplier intelligence which is integral to optimizing their product’s quality, cost, and sustainability.  

Furthermore, 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. 

Respondents find themselves in a scenario that underscores a critical juncture for decision-makers in product design and sourcing, one that urges a radical shift towards integrated, sustainable practices that meet the demands of a dynamic global market. The battle against overzealous governance practices is one well worth fighting. 

How can Makersite help? 

The differences between Advanced and Novice organizations when it comes to supplier engagement programs are stark. Where Novices struggle to track and verify the sustainability credentials of their suppliers, Advanced firms embrace more sustainable supply chains as a differentiator. We have seen that in practice with our own customers. 

Let’s take Schaeffler as an example. They want to achieve a carbon-neutral supply chain by 2040, but in order to do that, they need to reduce the carbon footprint of their raw materials by 25% by 2030. However, 90% of the raw materials used to make their electric motors are sourced from China with little-to-no deep-tier insight into emissions. 

Makersite optimized Schaeffler’s supply chain by detailing alternative sourcing options to China, from Australia to Canada to Norway. In a very short timeframe, we were able to implement new supply chains for neodymium, disposium and electricity. In doing so, we were able to significantly lower Schaeffler’s carbon footprint, particularly due to a better electricity carbon footprint in Norway. 

Consequently, they were able to test whether their new, optimized supply chain was greener and more sustainable than their existing model, and with Makersite’s help they were able to confirm their hypothesis, giving them confidence that the changes they were implementing would result in a demonstrable improvement. In the simplest of terms, we helped them to move from theory to practice. 

Their supply chain was greener, more secure, less prone to disruption and ensured – as well as enhanced – business continuity going forward. 

Additionally, in our work with Microsoft, we helped them to use LCA to identify where primary data is needed to drive and understand improvements, which in turn influenced how they work with technology and their suppliers – even at tier 3 or 4 – to collect that data and implement changes. 

As Microsoft’s Ecodesign Program Manager Xavier Vital has said: “Makersite includes an AI that was trained to read the bill of material and composition of our products and associate manufacturing processes. By not spending all this time on modelling, we were able to spend the time on getting data from suppliers.” 

“Makersite’s AI helped us improve the efficiency of the process and save a lot of time, meaning that we could use this data not only for ecodesign improvement, but for supply chain improvement. Without AI we would clearly not be able to do it with this level of detail today.” 

With our AI capable of the enrichment and intelligent mapping of both internal and external data sources and a data foundation that comprises the largest product and supply chain database with 36,000+ industrial processes, 600,000+ environmental impacts, and 100,000+ materials, and their physical properties, all in one system, Makersite is primed to not only solve but to evolve the nature of supplier engagement programs. 

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. 

Forecasting the future: From tightening budgets to the rise of Gen AI

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We might not have a crystal ball, but we do have a very good idea of where the worlds of manufacturing and product development are heading in the months and years ahead. 

The pace of change – and the regulatory, market and stakeholder demands that accompany it – has, and will continue to be, rapid. For all of these predictions it is not a case of ‘if’, but ‘when’. 

For businesses looking to capitalize on this momentum, the time is now. Being ahead of the curve is much easier than catching up. 

Below, we offer some insights of our own alongside contributions from a couple of our closest collaborators.  

Predictions from Makersite: 

Supply chain disruptions will subside

Contrary to the fearmongering that we’ve seen in the news lately, we believe that disruptions will continue to subside in 2024, bringing immense relief to manufacturers and customers. Most of the supply chains have recovered from pandemic era disruptions, both in terms of production and logistics. While recent challenges in the Red Sea have caused concern, logistics have largely adapted with marginal increases in delivery times and costs thanks to the overcapacity that was created after the pandemic. 

Generative AI will not take our jobs, yet

This topic isn’t quite our wheelhouse, but as there is so much hype about GenAI we felt we had to say something. While a quarter of CEO’s anticipate significant AI-related job losses this year (Source: PwC, Global CEO Survey), we feel this is massively overblown. The truth is that these things take time in most functions where its applications are still immature. 

Companies will remain carbon neutral , experimenting with the use of generative AI to create marketing content, summarize customer service calls, unlock domain-specific knowledge via chatbots and generate workflows and apps. Jobs in supply chains are not going anywhere. In fact, it’s never been cooler to be in this space.

It’s also worth keeping a close eye on how some of our biggest and most innovative companies are embracing the possibilities of generative AI. Look to Autodesk and PTC’s use of generative design – “a form of AI that produces myriad solutions to defined engineering problems” – and its ability to boost innovation, reduce waste, and accelerate time-to-market. Both showcase a potential future where engineers and AI work in tandem to create something demonstrably better. As PTC puts it: “[With generative AI] engineers can interact with the technology to create superior designs and drive product innovation more quickly.”

Budgets will continue to tighten

While there is a lot more optimism amongst business leaders (PwC Global CEO Survey) and consumers (Source: Ipsos, Global Advisor Predictions 2024) than in 2023, Makersite CEO Neil D’Souza predicts that for the most part, 2024 will be a year when companies have to “do even more with even less.” There is still a lot of ambiguity in the EU,” he notes.

“The economy is growing in the US, but in the EU it’s stagnating. Across manufacturing, budgets are still getting cut and I don’t think that’s going to change any time soon.” Unfortunately, most of the primary levers of efficiency have been exhausted, so companies will need to make investments to drive the next level of savings.  

The “S” in ESG will become more important

When it comes to an increasing onus on rules, regulations and political optics, Sophie Kieselbach, Makersite’s Experts Team Lead, believes that the ‘S’ in ‘ESG’ is going to increase in prominence. “Driven by the Corporate Sustainability Reporting Directive (CSRD), 2024 will be the year when social indicators really begin to permeate business decisions along the supply chain. Businesses will need to start implementing more concrete methodologies that allow them to track human rights issues such as slavery or child labour or gender inequality more accurately.”  

Future Forecasting Quote

Predictions from friends of Makersite: 

We also reached out to a few close friends of Makersite for their input on what the future holds. Here are their predictions:

Leaders in sustainability will finally get to shine

Capgemini’s Lukas Birn, VP of Sustainability believes that as we navigate through 2024, the disparity between sustainability leaders and laggards will become starkly evident. Those lagging behind will find themselves grappling with increasingly stringent legislation designed to curtail unsustainable practices.

In contrast, sustainability frontrunners will intensify their investment in innovative products and services that bolster their commitment to a Net Zero future. With the likelihood of an economic downturn, there will be a heightened emphasis on cost-efficiency and the maximization of impact. Budget constraints will prompt a more judicious allocation of resources, ensuring that only the most effective sustainability initiatives are pursued.  

Customers and regulators will amplify calls for transparency

 67% of chief supply chain officers now oversee environmental and social sustainability KPIs, with many setting ambitious targets for carbon neutrality within five to 10 years. To achieve green and circular supply chains, companies are building ecosystems that extend beyond their internal operations and Tier 1 suppliers, driving change across the entire value chain. This will require a greater level and quality of transparency internally – to drive better decision making – but also externally, due to regulations

As Microsoft’s Kelly Stumbaugh, Director Devices, Ecodesign, Ecolabels, and Carbon Emissions, says: “Something that is top of mind for me is growing demand for transparency around sustainability metrics, especially GHG emissions and circularity (at least for my industry, electronics). To accomplish this in an ethical manner, companies will need to continue to increase rigor around how these metrics are calculated and the input data that they are collecting, and to include these details and explanations of methodology along with the metrics themselves. Regulations and initiatives in Europe such as SPI, CSRD, and CBAM will drive much of this, but so will customer demand.”