Going green faces growing costs

Aberdeen Group says 'Going green' is becoming more expensive and regulated.

'Going green' is becoming more expensive and regulated, according to a new series of industry sector insight reports unveiled by information technology researchers the Aberdeen Group. "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 optimising their green product development programmes across the entire development lifecycle, manufacturers can reduce costs, meet product launch dates and drive new business."

Best green practices

The Aberdeen 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.

The Aberdeen Group examined how more than 360 enterprises developed green product development programmes that helped maintain regulatory compliance and achieved competitive differentiation.

The research considered five sectors and, in summary, found that:

• Aerospace and defence: Manufacturers report that compliance, to green-related regulations required for market entry, is driving green product development 50 per cent more often than their peers in other industries.

• Automotive: Manufacturers have been pursuing the quest to 'go green' much longer than their peers, which explains why 78 per cent of these companies currently have a green initiative in place, compared to only 63 per cent of their peers.

• Consumer packaged goods (CPG): CPG manufacturers cite the cost of recycled materials and options as a challenge nearly twice as often as their peers--30 per cent of CPG companies compared to 17 per cent of other industries.

• High tech and electronics (HT&E): Being able to brand energy-efficient technology is the top strategy for HT&E manufacturers--57 per cent of HT&E companies compared to 38 per cent of the industry average.

• Machinery (industrial equipment manufacturing): The top green product development strategy for this sector is developing and branding energy-efficient technology--54 per cent of machinery manufacturers compared to 38 per cent of the industry average.

Recommended sustainability approach

In response to the Aberdeen reports, Leif Pedersen, vice president, industry marketing, Siemens PLM Software, emphasised the importance of boosting ROI and cutting development costs to achieve sustainability in green product initiatives .

Pedersen said that Siemens' product lifecycle management (PLM) software and services were helping customers address these issues through a comprehensive strategy supported by several of its PLM software solutions. Solutions included Teamcenter software for digital lifecycle management, NX software for digital product development and Tecnomatix software for digital manufacturing.

"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," Pedersen said.

"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.

"As companies focus on new green initiatives, they must consider strategies that ensure products are environmentally compliant throughout the entire product lifecycle, as well as adopt the right technologies and tools to reduce development costs and boost ROI," said Pedersen. "Developing green products that meet customer demands while maintaining competitive differentiation is the hallmark of sustainability."