Quality data allows manufacturers to profit from sustainabilityBy John Wagner, AEM Director, Materials Management, and Michael Wurzman, President, RSJ Technical Consulting

(This is the 9th in a series of articles that assist AEM members in meeting today’s sustainability goals and compliance-reporting requirements; reducing financial risks; and generating financial opportunities from their sustainability and compliance activities.)

Background

The previous article in this series delivered really good news in regard to turning your Extended Producer Responsibility (EPR) compliance activities into a Compliance Value Proposition. This article delivers even better news. It highlights a few of the many additional opportunities for your company to further reduce its costs and further increase its sales, marketing, sourcing and other opportunities.

Background

Because “EPR compliance” requires the participation of your entire supply chain, it has been a corporate migraine since the EU enacted its End-of-Life Vehicles directive nearly 20 years ago. Today, however…utilizing AEM’s Market Access Pathway program – including HPE’s tremendously flexible, third-party data exchange platform - you can now collect high-quality substance data from your suppliers.

Remember the phrase “black gold,” which refers to crude oil? Similarly, accurate and complete material and substance information is “data gold.” You can use data gold to satisfy your EPR-compliance legal and/or business requirements; to unleash a competitive sales and marketing advantage over competitors; and to position your firm to capitalize on the coming wave of sustainability threats.

Compliance and Sustainability

“Compliance” is something every company has to do. “Sustainability” is something every company should want to do, and will need to do, because of its applicability to today’s global business landscape.

“Sustainability” is a term that dates back to 1992 in regard to the global economy. Since then, it has gained traction in the corporate world because – when understood correctly it provides a framework that addresses so many of the challenges that equipment companies face today, e.g.; governments with aggressive social, economic and environmental agendas; the growing potential for trade wars; extreme weather disruption of supply chains; and shortages in water, metals, critical minerals and other resources that will drive up costs and threaten material supply.  Furthermore, sustainability meets those challenges while containing costs and improving overall profitability.

As companies have become increasingly familiar with “sustainability,” they have appointed Sustainability Officers, published Sustainability Reports and, most importantly, set sustainability goals. These activities have been excellent Phase One, “less-bad activities,” whereby forward-thinking companies – whether large firms or SMEs - have been early adopters, who 1) comply with current and future global laws, while 2) saving millions of dollars by reducing their water, energy, waste and toxicity.

“Sustainability – Phase Two” increases the range of cost-saving opportunities, as OEMs and suppliers a) implement life-cycle analyses to determine the most-cost-effective material trade-offs; b) capitalize on return-of-capital possibilities when their products are decommissioned and sold for scrap; c) lower shipping costs due to lighter-weight materials; and many others. It also throws open the door on revenue-generating opportunities. Already, major companies like BMW, Caterpillar, Heineken, IBM, Interface, Philips, P&G, Renault, Unilever and many other companies across virtually every industry are pioneering these opportunities.

Furthermore, as more governmental policies like the EU’s Circular Economy get enacted…more companies are incorporating Cradle-to-Cradle, Zero Waste, Remanufacturing, Leasing, Product-as-Service, Thinking Longer and Broader and other existing and emerging business models within their core manufacturing strategy…and as an ever-growing list of customers demand products that fit within their own sustainability requirements…sustainability advantages are becoming mainstream and will continue to do so.

What is the Key to Capitalizing on Sustainability Activities?

As with “compliance”, the key is high-quality material and substance data, in a form that businesses can act upon. How could it be otherwise? Whether required by governments or by customers, companies will increasingly have to collect complete and accurate data in regard to water, energy use, diverted waste and a growing number of data sets. Those companies who are implementing the Regulatory Compliance Management Process that AEM has advocated will have a substantial head start in turning their compliance activities into a Sustainability Management Process. In doing so, they significantly improve their ability to address today’s business challenges and achieve ongoing and future business success.

For More Information

For further information about how AEM and RSJ Technical can assist your company with designing and launching its RCMP, contact John Wagner, AEM director, materials management (jwagner@aem.org, tel: 414-298-4164).

Click on headlines below to read other articles in this series:

What's Needed to Achieve Quality Compliance Data? An Integrated Compliance Process

What’s Needed to Achieve Quality Data? Ubiquitous Training

To Achieve Quality Data, Collection Infrastructure Must Fit Needs

AEM's MAP Program: An Integrated Approach to Achieving Quality Data

Supply Chains Pose Obstacle to Quality Data

Chemicals in Products: The Next Big Risk for OEMs, Suppliers

How Quality Data Reduces Risk and Cost

Quality Data Allows for a Compliance Value Proposition

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