Best Practices for Collecting Environmental Compliance Data

Scott McCarleyProduct Marketing DirectorWindchill Product Analytics

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Agenda

About Us

Managing Environmental Performance and Risk

Market Discussion

Best Practice Recommendations

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Product Marketing Director at PTC

Focus on solutions for – Environmental compliance– Sustainability – Supply chain

Managed launch and introduction of PTC’s Windchill Product Analytics software

10+ years of management experience with enterprise software companies

Work with leading manufacturing companies on EC & sustainability

Contact: smccarley@ptc.com

Introduction – Scott McCarley

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5,000+ people focused on helping our customers improve product lifecycle processes with best-in-class technology

$1B+ in revenue, growing ~10%, profitable with global operations (NASDAQ:PMTC)

50,000 customers including market leaders

PTC: The Product Development Company

One of the world’s largest and fastest growing independent software companies

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Product Analytics within the Product Development System

© 2011 PTC

DistributedCollaboration

Visualization

Workflow

Communities of Practice

Heterogeneous CAD Data Mgmt

Complete BOM Management

Document Management

ECAD DataManagement

EnterpriseInteroperability

ERP

SAP, Oracle,Dynamics

Business Reporting

ServiceInformation

Arbortext

Quality & Reliability Mgmt.

Relex

Component Management

WindchillPartsLink

DigitalMockup

CreoElements/View

WindchillSupplier Management

Supplier Management

Manufacturing Process Mgmt.

WindchillMPMLink

Engineering Calculations

Mathcad

Program Portfolio Management

Windchill PPMLink

EmbeddedSoftware

Open Source,Rational

Requirements Management

WindchillRequirementsLink

MCAD / CAM / CAE

Creo Elementsand other MCAD

ECAD

Cadence, Mentor, Zuken

Change & Config. Mgmt

ProductAnalytics

WindchillProduct Analytics

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Environmental Performance

Capabilities & Value

Component characterization and data acquisition

Data quality and supplier risk management

Synchronization of BOMs, parts, and suppliers from multiple business systems (ERP/PLM).

Component, supplier and BOM analysis throughout the Product lifecycle - “early detection”.

Impact analysis of change in products, suppliers regulations across multiple dimensions.

Real-time visibility of analysis results to key stakeholders throughout the enterprise.

Windchill Product Analytics Critical Capabilities & Value

Component and bill of material analysis solutions that enable users to assess product compliance, performance and risk beginning early in the innovation process and

throughout the product lifecycle

Life Cycle Assessment Product

Cost Materials and Substances

Compliance Custom Analytics

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The Green Product Challenge

© 2011 PTC

Comp

lexity

Number of Regulations

Exponential growth in complexity and scope of environmental regulations and customer reporting requirements …

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Comp

lexity

Number of Regulations

REACH – Rate of New SVHCs Additions is Accelerating

© 2011 PTC

SVHC list growing rapidly

Responding to customer requests for SHVC information within the required 45 days is an increasing challenge for many companies

15 3046

73?159?

Oct 08 Mar 10 Today 2011 est 2012 est

5353REACH 44

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“ The cost to implement a product change increases exponentially over its lifecycle ”Source: Lean Manufacturing, MIT

`

=

Managing Risk vs. Preventing Risk

© 2011 PTC

10x

TYPICAL PRACTICE:

Begin analyzing product here.

TYPICAL PRACTICE:

Begin analyzing product here. Reduced …

Launch Delays“Value” Engineering

Scrap & ReworkCumulative

Change Costs

Cumulative Change Costs

Cumulative Change Costs

$$$

=1000x

100x

“ How do I provide product designers the tools and information they need to find problems …BEFORE they’re designed in? ”

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Market Discussion

© 2011 PTC

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For most companies, the challenge is Data Acquisition

“ Appears to be a significant effort –not something we can simply add to what we’re already doing. ”

“ Are there disclosure standardsthat we can leverage? ”

“ What data is commercially available? Who provides this data? ”

“ How do we prioritize our efforts? Which parts should we work on first? ”

“ Can I automate the process for getting data directly from my suppliers? ”

“ Where do we store and manage the data once we have it? ”

“ How do we handle our custom parts? We’ll need help reviewing all the specs. ”

“ Which suppliers need help? How do we track supplier performance? ”

“ How do we get to our suppliers to cooperate? Should these requirements be in our supplier contracts? ”

“ Should we expect to receive full material content? ”

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The Problem: “We can’t re-survey our suppliers every time a regulation changes.”– Requirements are changing.– More customer reporting requirements, more substance-related questions.– More SVHCs added to REACH every ~6 months.– More regulations with specific reporting requirements – e.g. conflict mineral.

The Realization: “We need FMD”– Most companies concluding that Full Material Disclosure is the only viable strategy.– Recognizing the value of Full Material Content extends beyond regulatory compliance.

The Good News: “Momentum is on your side”– Recent improvements in standards, tools, and services have made FMC a realistic target.

What Data Do You Really Need?

2010 2011 2012 est.Customers Collecting Full Material Content 30% 50% 80% +

Source: PTC Customer Advisory Board

Why leading companies are gathering Full Material Disclosure (FMD)

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Product Analytics Customer Profiles

© 2011 PTC

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Data Acquisition Solutions

Utilize multiple data acquisition methods

© 2011 PTC - Forwarding looking information subject to change without notice

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3311

SupplierSupplier--OEMOEMData ExchangeData Exchange

3rd party collects data as authorized customer agent.

Includes GDX, IMDS, BOMCheck |

Requests sent to suppliers via email.Suppliers respond

with 1752A or custom formats.

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1. Direct Supplier Requests (RFX)

Automated processes for supplier data requests.

Supplier-OEMData Exchange

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Requests sent to suppliers via email.Suppliers respond

with 1752A or custom formats.

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2. Integration with External Data Sources

Leverage industry data exchanges

© 2011 PTC - Forwarding looking information subject to change without notice

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* BOMCheck available through PTC Services

SupplierSupplier--OEMOEMData ExchangeData Exchange

GDXGDXIMDSIMDS

BOMCheckBOMCheck**

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3. Content Services

Content Acquisition and Maintenance Services.

© 2011 PTC - Forwarding looking information subject to change without notice

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Q Point , WSP collects data as authorized agent. Other Commercial Options: IHS, TotalPartsPlus,

Validated data delivered to WPA via GDX.

Data ExchangeData Exchange

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Improve Data Collection Over Time

Enable “progressive disclosure”– Start with CoCs (GOOD) – Partial Disclosure (BETTER) – Full Material Disclosure (BEST).

Balance data collection costs with risk of missing data.

Additional Data Acquisition Best Practices

All data has value, but measure and manage compliance risk

© 2011 PTC

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Share compliance results for with stakeholders across the enterprise

– Maintain management focus on critical issues

Build compliance into the earliest phases of product development

– Integrate with PLM and ERP processes– Identify and resolve compliance issues before they

become costly problems

Enable a design-for-compliance process– Explore the compliance status of design alternatives

using what-if and trade-off analyses– Improve product design decisions

Demonstrate product compliance and due diligence for customers and government authorities with an exhaustive audit trail backed by real data

Ensure Compliance Across All Products

Roll-up BOM to View Status for Products Across Multiple Regulations

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Material Data Has Value Beyond Compliance

With information collected for compliance, you can now answer questions like:

© 2011 PTC Forward looking information subject to change without notice

For each of our products, what is the carbon

footprint ?

For each of our products, what is the carbon

footprint ?

If we used Supplier A we’d produce a much greener product !

If we used Supplier A we’d produce a much greener product !

We’re using too much of this material !

We’re using too much of this material !

Windchill Product Analytics™