New Aberdeen Reports Find Companies Wrestling with Increasing Regulatory Compliance and High Expenses When ‘Going Green’

PLANO, Texas — (BUSINESS WIRE) — April 22, 2009 Siemens PLM Software, a business unit of the Siemens Industry Automation Division and a leading global provider of product lifecycle management (PLM) software and services, today responded to the findings from a series of Industry Sector Insight reports unveiled by Aberdeen Group. The reports were based on the findings of benchmark research entitled “Greening Today’s Products: Sustainable Design Meets Engineering Innovation,” which identifies best practices for green product development. To further this research, Aberdeen looked at green product development strategies of five vertical industries and examined key themes for each industry.

Released in April 2009 and spanning Aerospace & Defense, Automotive, Consumer Packaged Goods, High Tech & Electronics and Machinery (Industrial Equipment Manufacturing) industries, the research identified key strategic initiatives and challenges specific to each industry’s product development strategy. Depending on the industry, strategies ranged from creating energy efficient products to using more recycled or eco-friendly disposable materials while simultaneously reducing costs.

“The rapidly-changing regulatory compliance demands, as well as escalating costs to go green are creating new levels of complexities for companies as they embark on green product initiatives,” said Leif Pedersen, vice president, industry marketing, Siemens PLM Software. “Now more than ever, manufacturers need to consider the right technologies and strategies to boost ROI and cut development costs across all green product initiatives.”

“Our research reveals that although many companies are making progress in creating green products, they are overwhelmed by the need to be in compliance with numerous regulations and the high costs and investments needed to take advantage of green technologies such as eco-friendly materials and improved power consumption,” said Michelle Boucher, research analyst, Product Innovation and Engineering Practice, Aberdeen Group. “By optimizing their green product development programs across the entire development lifecycle, manufacturers can reduce costs, meet product launch dates and drive new business.”

A summary of the Aberdeen Sector Insight findings follows:

Aerospace & Defense

Faced with constant scrutiny from a wide range of regulatory bodies, Aerospace and Defense (A&D) manufacturers report that compliance to green-related regulations required for market entry is driving green product development 50 percent more often than their peers in other industries. When compared to the industry average, A&D manufacturers have significantly more requirements for disposal, recyclability or substance compliance and address this with allocation of these requirements to specific product configurations – in fact 50 percent of A&D manufacturers compared to only 38 percent of the industry average do this. Design for regulatory compliance is the top strategy reported among A&D companies, where 27 percent of them are paying a high level of attention to designing products for low or zero-emissions, compared to 19 percent of the best-in-class.

Despite the high level of adoption of capabilities that support design for resource or emission efficiency, A&D companies are slow to adopt the software tools to effectively design for these regulatory requirements. In order for A&D manufacturers to meet product cost targets and product launch dates, while still addressing environmental concerns, A&D companies must clearly define their green requirements, ensuring they have a clear understanding of the bill of substances, generate and assess more concepts and ideas to meet green requirements, and teach products to “think green.”


Automotive manufacturers have been pursuing the quest to ‘go green’ much longer than their peers, which explains why 78 percent of these companies currently have a green initiative in place, compared to only 63 percent of their peers.

Interestingly, what originally began as a response to government regulations to reduce pollution or control emissions, soon grew into a mission to produce more fuel-efficient and eco-friendly vehicles that would attract more customers. However, while going green may represent a market opportunity for automotive manufacturers, it also increases complications to the product development process, especially in terms of the costs associated with developing new green technologies. For example, 40 percent of automotive companies cite the need to make a large capital manufacturing investment to support the development of greener materials and technologies as a challenge, compared to just 24 percent of their peers. Another top green concern for automotive manufacturers is minimizing fuel consumption or the emission of toxic gases. Here, the report finds that auto companies have a strong focus on innovation; in particular, 53 percent of the auto manufacturers are well ahead of their peers in terms of their ability to design control systems to reduce carbon emissions, compared to 30 percent of their industry average peers.

Overall, automakers stand to benefit most by examining their green initiatives from an ROI perspective. In short, in order to create green vehicles that customers want at a competitive price, automakers need to transform their green product development initiatives and practices in ways that create eco-friendly products while also cutting product development costs.

Consumer Packaged Goods

Nearly half of all Consumer Packaged Goods (CPG) respondents cite the ability to achieve greater competitive product differentiation through green product development as a top pressure. Similar to other industries, the biggest challenge reported by CPG companies is the high expense associated with developing new, green technologies. In particular, CPG manufacturers cite the cost of recycled materials and options as a challenge nearly twice as often as their peers – 30 percent of CPG companies compared to 17 percent of other industries. The reality is that although they are clearly committed to “going green,” CPG manufacturers lag behind their peers in their adoption of green capabilities. For example, only 27 percent of CPG companies adopted the explicit definition and documentation of requirements for product disposal, recycle-ability or substance regulatory compliance, compared to 67 percent of the best-in-class.

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