Vantage Point: Requirements for Implementing a Successful Sustainability Strategy

By Rosemary Grabowski, VP, Global Market Development, CPG, Dassault Systèmes, ENOVIA

 

Sustainable business practices continue to be a core focus for the CPG industry, especially with increasing customer interest and growing government regulations. For CPG brand owners, the choices around sustainability are clear: ignore sustainability and perish; embrace sustainability and survive; or lead with sustainability and thrive.

One way to lead sustainability initiatives is through eco-design, an environmental strategy that manages the environmental impact of a product's design throughout its entire lifecycle. Increasingly, CPG companies are embracing eco-design because of consumer's heightened demand and government driven regulations to reduce a product's impact on the environment. As compliance regulations increase, companies that can point to how they track and measure their environmental footprint will have an advantage over their competition. Whether companies institute energy saving policies in their facilities, produce environmentally friendly products, or align with charitable activities that support environmental concerns, consumers want proof of these efforts. Using eco-design as part of a green or environmental sustainability mission becomes a competitive differentiator.

 

Companies pursuing an eco-design approach supported by a cohesive technology framework will have the tools and processes for measuring, tracking and improving the company's environmental footprint.

Not surprisingly, those CPG companies that include environmental sustainability in their business strategy have a greater opportunity to grow market share, speed innovation, enhance their brand image and increase profitability. Here are 10 requirements for implementing a sustainability strategy that can serve as a strategic business driver and help improve an organization's bottom line:

1. Open Collaboration
Achieving sustainability starts at product creation and carries on to the product's disposal at its life's end. Since numerous actors play a role during the product's lifecycle, capitalizing on the collective intelligence of stakeholders to build winning products is imperative for better, faster and smarter innovation. This is achieved through end-to-end collaboration.

Better innovation requires open, directed collaboration across the enterprise and includes consumers and suppliers. Establishing effective collaborative business processes across an innovation-centric organization improves product quality by removing information silos that prevent collaboration and reuse of intellectual property (IP). As a result of this enterprise-wide collaboration, design engineers, for example, are given full and instant access to the latest environmental compliance data so they can make design decisions (i.e., which part or supplier to use) based on product compliance. Involving the entire supply chain through the product development lifecycle enables organizations to reduce the product environmental footprint.

2. Single Access, Centralized Information
Establishing one centralized repository for all product data helps build a collaborative environment. A single source of data (compliance and design data in one platform) simplifies the supply chain data collection process, delivering higher product quality, and eliminates rework and late cycle notices because the data is based on a single source of the truth. This repository enables the enormous volume of product data relative to raw and packaging materials to be managed by the appropriate stakeholders, who can in turn use that data to ensure the lowest environmental impact during the product's lifetime.

3. Data Continuity and Full Product Traceability
By verifying and integrating product compliance specifics at every step of the product development process, companies can provide accurate audit information and traceability. True traceability of compliance data and processes throughout the development cycle lowers development costs and rework by bridging the communication gap between all disciplines -- from product management and design to product launch teams. Plus, as government bodies begin to regulate this area, infrastructure to support these demands will be necessary.

4. Reporting and Tracking
Having all product data within one centralized repository enables organizations to put processes and tools in place for measuring, tracking and optimizing the environmental footprint of their products. This monitoring of all of the thousands of materials and multitude of suppliers involved in the development of each product can ease the inevitable requirements governing bodies will require.

5. Virtual Design Prototyping and Testing
Virtual design helps speed time to market by avoiding late-stage design changes that often cause product delivery delays and raise product development costs. From a sustainability standpoint, virtual design prototyping and testing enables companies to explore ways of improving product designs and developing more environmentally sustainable products while still meeting compliance requirements. With virtual design, companies can decrease the consumption of non-renewable energy and solid waste throughout the design and production lifecycle and reduce or eliminate the use of hazardous materials and substances in their products, thereby avoiding problems such as launch delays, recalls, fines, poor customer satisfaction and a damaged public image. Additionally, the ability to minimize material usage and still meet package design and performance requirements results in significant material cost savings and a lighter environmental footprint.

6. Executive Scorecarding
Using virtual design prototyping and testing, CPG companies can learn how each design iteration measures up against decision criteria, consumer preference scores, financial and operational benchmarks through automated fit-for-use scorecards. This enables organizations to define appropriate sustainability metrics to adhere to and monitor their performance against them.

7. Compliance-Ready
By keeping product data in a central repository, companies can establish a supplier portal that provides an automatic way to aggregate compliance data from their supply chain, eliminating time-consuming tracking and communication breakdowns that result in costly mistakes. By building environmental compliance mandates into the product at the concept level, companies are able to successfully lower costs, remove compliance reporting inefficiencies, streamline compliance declaration analysis and management, and maximize reuse of compliant components and suppliers.

 
8. Secure Data Proliferation
The inefficient use of intellectual property (IP) is crippling CPG company efforts. On average, CPG companies employ over 750 different applications. The proliferation of re-work due to fragmented or incompatible systems is impeding global collaboration and stifling innovation. Industry leaders seeking to maximize the speed and value of the innovation pipeline must address these challenges now in order to achieve better, faster, smarter innovation.

To accomplish this, companies need to effectively and efficiently capture and reuse organizational memory, IP and value chain capabilities throughout the product development process, enable enterprise-wide collaboration, and create viable, environmentally sustainable designs. With the right tools and processes, any company can deliver better, more innovative, environmentally-friendly products at the lowest possible cost, and achieve sustainable, organic growth.

9. Flexible Environment
In order to develop new, successful and environmentally-sustainable products at a competitive price while increasing profitability at the same time, CPG companies need to change the way that they operate as an organization and with their partners and customers.

As in most industries, the process for developing new products in the CPG industry follows a logical step-by-step approach where each functional group completes their task and passes the results to the next. For example, marketing provides product design criteria to research and development to develop the product. Once the design is approved and tested, they send it to manufacturing to be produced.

To compete in today's ever-changing global economy, organizations need flexibility in order to adapt and respond to new demands promptly as well as understand the downstream implications of design changes on manufacturability, environmental impact, shelf-life and supply chain. The elimination of data silos of information , replaced with collaborative behavior and sharing of ideas and information, enables an organizational shift that supports the sustainability strategy.

10. Focus on Sustainability
To achieve the benefits associated with better, faster, smarter innovation, CPG companies must link their innovation engine, fueled by their sustainability strategy, to the organization's business strategy. Once this link is established, technology then becomes a significant enabler of strategic innovation, helping companies reap greater benefits such as enhanced speed, quality and brand equity. The reward is organic growth for maximized profits and leveraged sustainability.

With environmental sustainability continuing to grow as a purchase trigger, CPG companies can enhance brand identity by enabling the successful implementation of an eco-design strategy for end-to-end product design. By aligning the product development pipeline with top and bottom line goals, organizations can use sustainability for opportunistic innovation and enhanced brand equity.

 

 

Rosemary Grabowski has held several executive positions over her 26 year career. In her current role she is defining market development strategies, initiatives and tools to demonstrate the power of strategic enterprise software solutions that provide real business value for customers. Prior to Systèmes, she enjoyed a 24 year career with Cadbury Schweppes. She is passionate about leveraging innovation to drive organic growth. Her multi discipline career provides leadership experience in strategy, innovation process design and implementation, brand licensing, promotion, channel management, brand marketing and supply chain management. For more information, visit: www.3ds.com.