How PLM is Enhancing Sustainable Procurement
Companies are constantly seeking ways to streamline their operations, reduce costs and minimise their environmental impact. Product Lifecycle Management (PLM) systems have emerged as a powerful tool to address these challenges, particularly in procurement.
Understanding PLM and Its impact on procurement
PLM systems are comprehensive platforms that manage the entire lifecycle of a product, from conception and design through to manufacturing, service and disposal. These systems infuse procurement throughout a product's lifecycle, ensuring that purchases align with overall product development strategies and company objectives.
By providing a centralised platform for managing product-related information, PLM enhances collaboration with suppliers and enables data-driven decision-making.
As sustainability becomes a top priority for businesses worldwide, PLM systems are proving to be invaluable tools in meeting environmental goals. These systems assist in meeting sustainability targets through strategic sourcing and comprehensive emissions management.
One of the most significant contributions of PLM systems to sustainability efforts is their ability to manage and track emissions data throughout a product's lifecycle. This capability enables companies to measure and monitor Scope 1, 2 and 3 emissions at various levels.
By leveraging these capabilities, companies can identify emission reduction opportunities, implement targeted strategies and track progress towards emission reduction goals.
Tackling Scope 1 & 2 emissions
PTC hosts a portfolio of software solutions that manage data throughout a product’s lifecycle – driving excellence in engineering and design, efficiency in manufacturing and supply chain, and optimisation in operations and services. PTC has worked with Volvo, Polaris and Schneider Electric. While not a Fortune 500 company, 95% of Fortune 500 discrete manufacturing companies use PTC's software.
Dave believes PLM systems can drive supplier improvement in Scope 2 emissions: "PLM tools can integrate to material and component supplier catalogues.
“Increasingly, these catalogues indicate overall carbon footprint of the materials or components, but generally at the Scope 3 level, which embed supplier Scope 2 but not exclusively.
“To push a supplier to specifically reduce Scope 2, this is done with sourcing policies for Science-Based Targets (SBT) commitments. PLM users in turn receive SBT-committed suppliers as 'approved' or 'preferred' in their interfaces. These SBT commitments effectively require rapid Scope 2 improvement by 2030 through renewable electricity purchases."
Life Cycle Assessment (LCA) in PLM: A key to lower emissions
Life Cycle Assessment is a systematic method for evaluating the environmental impact of a product, process or service throughout its entire life cycle, from raw material extraction to end-of-life disposal or recycling.
When integrated into PLM systems, LCA becomes a powerful tool for driving down emissions.
Dave notes that LCA is most valuable for discrete manufacturers in assessing upstream and downstream Scope 3 emissions, which typically account for 90-99% of a product's total emissions.
"Scope 1 and 2 are generally the emissions caused during manufacturing," he says. "Costing and design-for-manufacture simulation are better tools for identifying factory energy efficiency and electrification opportunities.
“Scope 1 and 2 may also be emitted from owned or leased service trucks (Scope 1 for petrol trucks, Scope 2 for EVs). FMEA and service planning helps reduce these more than existing LCA tools."
The LCA capabilities within PLM systems also support organisations' ever-increasing reporting requirements.
Optimising supply chains for sustainability
PLM provides a comprehensive approach to supply chain management, allowing sustainability to be factored in at each stage of the product life cycle.
It expands on the points made for Scope 2 emissions management further into sustainable sourcing of purchased goods and services, optimising material usage to reduce waste and driving efficiencies through other downstream and upstream value chain activities.
Advanced tracking and reporting capabilities
PLM systems help track emissions by integrating data from various sources — bringing together manufacturing processes, energy consumption and transportation — and monitoring in real-time.
This comprehensive view allows for more accurate and timely interventions to reduce emissions.
Dave says: "When manufacturing starts, IoT-enabled energy management solutions track the factory emissions and alert opportunities for fixing problems or moving towards better efficiency. Downstream (service trucks), asset-centric field service optimisation software can be aware of product configurations from PLM, asset health from IoT and remote software fixes from ALM.
“These systems can then better dispatch technicians as a last resort, leveraging remote triage and service capabilities and combining field visits where possible within Service Level Target constraints."
Driving innovation in sustainable procurement
Companies with effective PLM systems are well positioned to push the boundaries of sustainability in procurement.
Dave emphasises the importance of understanding the interconnectedness of emissions across the supply chain.
He says: "While most of an OEM or Tier 1's emissions are Scope 3, it's important to understand that their Scope 3 is the accumulation of their supply chains' Scope 1 and Scope 2.
“So, their Scope 3 reduction ultimately drives Scope 1 and Scope 2 improvement in their chains.
"A modular Bill of Material with strong supply chain attributes can feed LCA tools for iterative early analysis to reduce footprints aligned with Science Based Target commitments. Late-design-stage feeds to LCA from these BOMs can effectively automate the Environmental Product Declarations (EPDs), saving an otherwise expensive manual process."
As businesses continue to grapple with the dual challenges of operational efficiency and environmental responsibility, PLM systems are proving to be indispensable tools.
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