Greener by Design: Product Lifecycle Management Strategies in

Automotive Companies
V.Madhusudan1 and Dr.G.Nagalingappa*
1
Research Scholar PESIT and Director, Digital Lifecycle Management, Siemens PLM
*Dean and Professor, Department of Management Studies
PES Institute of Technology, Bangalore-560085, India
Fax: +91-80-22280196, E-mail: Madhusudan.varadaraj@siemens.com
ABSTRACT

Product Lifecycle Management (PLM) is a process of managing information across the entire lifecycle of a product.
Incorporating "Design for Sustainability" in the early stages of the lifecycle provide the opportunity for the
organization to significantly impact the environmental and sustainability aspects of the product.
This research paper investigates the PLM strategies adopted by automotive companies to incorporate “Design for
sustainability “ into the DNA of the R&D organization. Challenges in incorporating it to the organizational business
processes are discussed through a maturity model. This research paper is intended to highlight the possible
impediments across the various levels in the maturity model. This information would be helpful in driving the
requirements of the PLM product and the delivery methodology towards a greener research and development
ecosystem in automotive organizations. Automotive companies considering PLM Implementation, Consulting,
Software and Implementation partners in the area of Product lifecycle management would see a different perspective
for greener design from this paper.

Keywords: Product Lifecycle Management, PLM , Design for Sustainability, Green, Maturity Model , Automotive,
Product Development

1. INTRODUCTION

Human activities are leading to increased accumulations of greenhouse gases in the atmosphere, which are altering
the Earth’s climate patterns at unnatural rates. The Intergovernmental Panel on Climate Change (IPCC) has found
that global average temperatures rose by 0.6° Celsius over the last century, and that most of the warming observed
over the last 50 years is attributable to human activities. The IPCC predicts further increases in the Earth’s average
surface temperature ranging from 1.4° to 5.8° Celsius by 2100[1] .A changing climate could lead to unpredictable and
costly consequences, including rising sea levels, spread of infectious diseases into new areas, and altered incidence
and location of extreme weather events such as hurricanes, monsoons, and droughts.
The automotive sector is a major source of CO2 emissions and thus an obvious target for policy efforts. Emissions of
CO2 result primarily from the burning of fossil fuels, including gasoline and diesel. The transportation sector
accounts for 30 percent of CO2 emissions in the industrialized economies of the OECD (Organization for Economic
Cooperation and Development) and about 20 percent worldwide[2] .Projections indicate that emissions from vehicles
will grow significantly. The global fleet has been growing at a rate of about 16 million vehicles per year since 1970
and by 2025 is expected to reach 1 billion vehicles on the road. Automotive production in India is expected to grow
faster than in developed countries and is poised for a significant growth.
“Greener by design” or Design for sustainability is the process of designing goods & services that takes into account
all the dimensions of sustainable development, and particularly the environment, economics, ethical & social factors.
Automotive industry is today under pressure from government regulatory bodies to address these aspects. The green
motivation today is from outside though not self driven. A Product Lifecycle Management (PLM) strategy to address
the challenges of incorporating sustainability in their design processes is actively considered today.
PLM tools include areas of digital product development (CAD/CAM/CAE), digital lifecycle management and digital
manufacturing. The focus of these tools is to manage the information and data across the entire lifecycle of a product.
They also manage a lot of activities in a virtual environment to prove the design and manufacturing in order to avoid
the time spent on non-value added activities and avoid waste. Product knowledge management and collaboration
with the entire supply chain is also addressed with PLM System.
2. DESIGN FOR SUSTAINABILITY

Design for Sustainability aims to take all global and regional socio-economic concerns into account in products and
services, meeting the needs of society now and in the future, moving from a product to a service oriented system.
Considerations and improvements in the design stage govern the of sustainability aspects of a product. Design for
sustainability provides a unique opportunity to make critical interventions early in the product development process
and eliminate, prevent and reduce downstream sustainability impacts. It is also critical that not only small design
considerations are made, e.g. choosing greener materials, but larger considerations such as reducing the amount of
energy a product requires throughout its lifecycle. The areas that impact sustainability considerations are energy, raw
materials, emissions, chemicals, water, air pollution, waste management, land use, social performance and
compliance. Analyses can be used to determine the areas where design can offer the greatest potential changes and
savings to the environment, economy and society.
Using local materials, off-the shelf parts and local labour are aspects designers need to start looking at to reduce the
carbon footprint thus saving the environment and contributing to the economy and social well-being of communities.
Brundtland commission[3] on sustainable development involves compliance across social performance,
environmental performance and economic performance.

Socio-
Environmental
Social Environmental
Performance Performance

Sustainability

Socio- Eco -
Economic Efficiencies

Economic
Performance

Exhibit 1: Brundtland Commission

3. PRODUCT LIFECYCLE MANAGEMENT

Product Lifecycle Management (PLM) “is an integrated, information driven approach comprised on people,
processes/practices, and technology to all aspects of a product’s life, from its design through manufacture,
deployment and maintenance – culminating in the product’s removal from service and final disposal. By trading
product information for wasted time, energy, and material across the entire organization and into the supply chain,
PLM drives the next generation of lean thinking.” [4]

[5]
Exhibit 2 : A Siemens PLM View
Automotive companies today actively consider PLM technologies to help manage their design processes. The
automotive companies are looking for innovative solutions for working in a virtual environment to validate their
designs and manufacturing. PLM is a new technology in the horizon to address both environmental sustainability and
create competitive advantage for organizations. A PLM environment is expected to help improve the execution
efficiency towards the cost, quality and time to market targets for such companies. Some of the solutions in PLM
would include Requirements Management, Portfolio and Project Management, Repeatable Digital Validation, Digital
Mockups, Bill of Material management, Variant management, Rfx or Enquiry Management, Strategic Sourcing and
Spend Management, CAD Data Management, Document Management, Manufacturing data management, Simulation
data management and Environmental compliance.

The PLM portfolio offering is quite large and wide today and most of the PLM vendors are further expanding their
portfolio. The ERP vendors are also expanding their portfolio to address the needs of PLM for this industry.
The primary value proposition for most of the vendors in this space is data management across the lifecycle of the
product. This is expanded to address virtual design, collaboration, digital manufacturing and sourcing.

4. DESIGN FOR SUSTAINABILITY MATURITY MODEL

The International Organisation for Standards has set about developing a standard for Design for the Environment,
outlining best practices and guides. The standard ISO 14062 (Environmental Management – Integrating
Environmental Aspects into Product Design and Development) is currently the only available standard (informal and
can only be assessed as part of the main ISO 14001 – Environmental Management System Standard) relating to
design for the environment.
Object Management Group (OMG) with Government Technology Research Alliance (GTRA) is defining a Green
business maturity model[6] and this is in development state.
The objective of this paper was not to develop a maturity model. It was primarily to study how organizations
implement PLM to address design for sustainability issues. We found that the green business maturity model was the
closest that we could use to study PLM implementations, though this was still in a draft state.
The Green Business Maturity Model has proposed 5 Levels. The design for sustainability process maturity could be
categorized into
1. Adhoc
2. Defined, documented and architected
3. Governed and repeatable
4. Optimized and extensible
5. Demostratable ROI for Green Initiatives
A definition of the above stages and the functionality of PLM in these 5 stages are described below.

Exhibit 3 : Green Business Maturity Model

Adhoc : In the initial stages of design for sustainability there is no drive inside the organization for such initiatives. In
this stage some companies also resort to “Green Washing” where they consider adhoc ideas that could project their brand
as green without any effort. PLM is primarily considered for document and data management at this stage.
Awakening: In this stage the organization does get to know of the need for such aspects in design for sustainability.
Effort is primarily in defining a common understanding inside the organization. Green Dimensions are evolved inside
inside the organization and awareness is created in the organization. Lean practices are initiated and processes are
identified for better efficiency. IT projects are initiated to manage data and an effort is made towards an electronic
environment with paperless procedures. In this stage procedures are defined, documented and architectures are
evolved to address green issues.
PLM in this stage is considered more for managing electronic workflows and streamlining the business processes.
Intellectual property in the CAD designs and new product development processes are managed. Change management
processes are incorporated and the foundations of knowledge management are established at this stage. Green
dimensions are evolving as a part of such implementations.
Enlightenment: In this stage the organization is forced to comply with certain regulations due to market demands.
The organizations do make an effort to understand the compliance regulations of the markets they are in and comply
with such regulations. In this stage the organizations make every effort to document and track the data for such
compliance issues. They also ensure that these policies and procedures are consistent and repeatable inside the
organization.
Some examples of regulations are RoHS (Restriction of Hazardous substances),WEEE (Waste Electrical and
Electronic Equipment) ,REACH (Registration, Evaluation, and Authorization of Chemicals) and ELV(End-of-Life
Vehicle Directive) is enacted by the European Commission to address pollution resulting from vehicles that have
reached the end of their useful life.
However the biggest challenge for companies today is that every zone or region has their own set of regulations and
this makes the job quite complex based on the market segments where the products are sold. Companies need to
document for their homologation requirements in the region. A lot of companies hence end up costing for
compliance in their products.
PLM Implementation in this stage is more focused in removing the non-value added activities towards compliance.
Organizations in this stage are forced to consider green dimensions and ensure the procedures are consistently
adhered to across the enterprise. Requirements management, systems engineering, repeatable design validations and
validations of design towards meeting specific compliance regulations of a region are considered. PLM applications
today are also enhancing their application to address this area by providing an engine with the regulatory database to
support such processes. The bills of material are also enhanced to track environmentally sensitive components and
assembles. Specific disposal instructions are also documented and formalized. Many automotive companies today
manage their compliance requirements in PLM.
Wisdom: In this stage the company makes a conscious effort towards design for sustainability. Leading Automobile
manufacturers make every use of technology like PLM to address specific design needs towards this initiative. Most
companies use the 4R’s principle in their stage and monitor their design for achieving them. The 4 R’s are Reduce,
Reuse, Recycle and Renew. The focus is on Vehicle technology and its development to various alternate fuels.
Designers in this stage have an excellent knowledge of all the requirements for addressing sustainability aspects.
Design for sustainability is but one piece of the puzzle to product design. Other factors such as safety, reliability,
quality, weight, disposal, cost, time scale, ergonomics, standards, insulation, size, quantity and a myriad of others
need to be balanced along side sustainability considerations. Lifecycle analysis of a particular material and
assessment across the entire life-cycle of a material from mining to recycling is made by designers early in the
product design.
PLM implementations address a much wider spectrum at this stage. Complex requirements in design stage like
platform designer, feature based design, variant and configuration management with advanced bill of material
capability are typically considered. A lot of focus at this stage is on virtual validation and reuse of components and
assemblies across multiple platforms. Large OEM at this stage also consider a reduction in the number of platforms.
The release process of these platforms by global OEM’s for local variations are also managed in PLM. Change
management and localisation processes are also complex for such global OEM’s and PLM is increasingly the
preferred application to manage this process. Project management dashboards are also created to manage the KPI’s
for measuring the 4 R’s. Designers in this stage are experts at analysing the trade-offs, based on the lifecycle
analysis. The design for sustainability processes in this stage are optimised.
Natural: In this stage the companies are very committed towards sustainability of the entire ecosystem. Sustainability
efforts are integrated into every strategy in the organization. Organizations design their products and sustainability
aspects are incorporated in a natural and optimized way. The focus is increasing from just vehicle technology and
alternate fuels to include driver behavior, infrastructure and carbon taxation issues across the value chain. Industry
leaders also educate the customers, suppliers, partners and all others in the value chain and demand a drive towards
sustainability. They ensure all the societal needs are achieved towards this goal.
Lifecycle analyses are made on the product and the carbon footprint is monitored closely. Scorecards are developed to
track ecological footprint. Brands are developed on this clean image and leaders are determined by their holistic approach
to sustainability.
PLM in this stage is used to manage the entire design value and supply chain. The entire process from inside the
organization to the external organization of supplier and regulatory authorities are on a single platform. The entire
product development process extending not just from “cradle to grave” but “cradle to next cradle” is managed. Some of
the companies are also involving customers to define and design their products. Customers are considered as an extended
design community. Knowledge is captured from one project and leveraged across newer projects and there is complete
recycling of not just the designs and material but also ideas and processes. PLM is in this stage managing the entire
ecosystem for the organization.

5. ORGANIZATIONAL DNA WITH DESIGN FOR SUSTAINABILITY – A FIELD STUDY

Two field surveys were conducted by researchers, amongst the automotive companies and consumers in India. This study
was aimed at understanding the perspective of consumers and manufacturers and see if there is any gap in their
understanding of the market for sustainable products. Companies were also asked about implementation of PLM tools
and if they were being used to specifically manage design for sustainability aspects.
The sample for consumers was a group of software engineers in the age group of 25 to 50 who could afford to purchase a
car. The sample size was 50. 10 Automotive companies was selected and their Design department chief or Information
technology chief were asked to answer the survey. This was followed by a select telephonic discussion.
Most automotive companies in India have not established a design for sustainability process in their organization. This is
primarily due to the mindset that such a green product is more expensive and less profitable for the organization.
Automotive companies surveyed in India perceived that technology is not mature yet and cost structures are high to
develop green automobiles. Survey showed companies perceived the customer demand is low. The Consumer survey
revealed that 87% of consumers were willing to pay a higher price. This was a clear gap in the understanding. Indian
customers do seem to be changing, and the young customers in survey indicated the changing product preference to green
and clean products.

Q: Why is Green car development slow? (Automotive Companies) Q: Will you pay more for a green car? (Consumers)

Management Commitment seems to be the high amongst most organization, however they have not translated into
department level initiatives or towards driving the supply chain towards these objectives.

It was also interesting to see that some of the leading companies in India are already fitting the green image of the Indian
consumers. Alternate fuels, fuel efficient cars and small cars are seen as a good attempt to be perceived with a green
image among Indian consumers. Interestingly companies like Honda seem to advertise more on green aspects , but are
still low on the scale compared to some Indian companies like Maruti and Reva.

Q: Which Car Company in India fits your Green Image Today ? (Consumer Survey)

Q: Which Car Company in India fits your Green Image Today ? (Consumer Survey)

The Indian consumers valued new technologies like electric, hybrid and fuel cells high on the perception level for green
cars. Materials and alternate fuels were also valued. Green washing was lowest in the perception chain.
Consumers also expressed in the survey that the government in India was slow and not doing enough to address green and
sustainability issues by legislation.
Leading organizations do understand that a design for sustainability strategy in their products could lead to a clear
competitive advantage. Most organizations would like to incorporate the design for sustainability into the organizational
DNA and had a management commitment to drive this strategy.

6. PRODUCT LIFECYCLE MANAGEMENT STRATEGY FOR SUSTAINABILITY

The survey investigated the areas of PLM, company vision and the benefits derived by PLM implementations.
Specifically this study was made to identify if PLM implementations were considered to address design for
sustainability issues.
The study indicated that most of the PLM implementations were towards management of design data and managing
knowledge inside the organization. Knowledge management was an important backbone and foundation on which
business processes are built. Very few organizations today have implemented PLM to manage regulatory compliance
and managing their design chain. This is also primarily due to the fact that automotive companies in India are still in
the process of moving up in the design for sustainability maturity model. There is however a large potential for such
green products and PLM could be the application used for driving the design and design chain management. The
effort made by automotive organizations in educating consumers and working out a procedure for disposal was also
not seen in India. Though the Regional transport offices have a policy of environmental clearance, a clear regulation
at end of life is still missing.
 Q: The Organization has implemented PLM primarily to ? (Automotive Survey)

All the major Indian automotive companies like Mahindra & Mahindra, Maruti and Tata motors have already
implemented PLM. They have started the journey with PLM applications, and have addressed many of the typical
complexities described in the above sections. PLM is new to addressing the design for sustainability aspects in these
organizations. Indian automotive majors have benefited by implementing a PLM strategy. The costs of a new car
development are significantly low compared to the global counterparts. PLM has been an important contributor
towards managing this new product initiative in these companies.
The Indian automotive industry is relatively new in developing new platforms, however they seem to have climbed
the ladder of new product development very fast. They are challenging the traditional automotive majors on all the
parameters of cost, quality and time to market. It is expected that Indian companies would also lead in terms of
innovation with green technologies.
The next generation of PLM applications in these organizations are expected to address more complex issues as
stated in Level 4 and 5 of the maturity model. PLM as a strategy can address Design, Procurement, Manufacturing
and End of Life aspects of a sustainable product.
A summary of PLM Functionality that is proposed around the maturity model is described below.
Levels Level Name OMG Classification (GBBM) PLM Capability
1. Adhoc Adhoc Data Management
2. Awakening Defined, documented and architected CAD Data Management, Change
management, Electronic Workflows
,Project management.
3. Enlightenment Governed and repeatable Bill of Material Management,
Requirements Management, Portfolio
Management, Digital Mockups,
Regulatory Compliance, Environmental
impact tracking
4. Wisdom Optimized and extensible Feature based design, Variant
Management, Part Families,
Mechatronics Management, Services
catalogue data management, Knowledge
Management, Digital manufacturing
5. Natural Demostratable ROI for Green Design and Supply Chain Collaboration,
Initiatives Supplier Management, Strategic
Sourcing, Carbon Footprint tracking,
Plant waste and energy management,
Maintenance, repair and reuse , Asset
Lifecycle Management, Product lifecycle
costing and dashboards.
Increasingly customers are also looking at these PLM applications in a virtualized environment and IT managers are
looking at lean IT infrastructure with low overheads. Green computing is the order of the day and cloud computing is
seen as the future. PLM Applications will have to gear up to be deployed in such environments.
A maturity model based approach will also help in articulating the right PLM roadmap and the metrics to track for
companies.
7. AREAS OF FUTURE RESEARCH

The implementation of PLM Technology is an opportunity for the organization to transform higher along the design for
sustainability maturity model..
One challenge observed and highlighted by the survey, during these technology implementations towards design for
sustainability was the resistance to change from the workforce and the organizational culture. Most of the technology
implementation methodologies today focus primarily on process reengineering and technology deployment, but provide
very little support in terms of organization change management.

Q: What has been the biggest challenge for PLM implementation in your organization?

Understanding the human behavior at an individual, group and organizational level is complex. Understanding the factors
contributing towards resistance to change could help in better adoption, smoother deployment of technology and
transform the DNA of the organization. This is an area that is intended for future research by this team.
8. CONCLUSION

The Automotive industry is in a rapidly changing environment. They are in the midst of change and have to adapt and
sustain the pressures and risks associated with the new challenges. Deriving competitive advantage by incorporating
“design for sustainability” aspects is essential to organizations in future. Green products are expected to dominate in the
next decade. Increasing attention and focus from government and consumers indicate that the next wave of innovation in
automotive industry would come from environmentally clean and green products.
Implementation of PLM tools, are of immense interest to the automotive community. The industry is looking at
leveraging these tools to enhance their corporate intellectual assets and incorporate the sustainability aspects into their
designs and the entire value chain of the organization. These tools are also very essential for them to stay competitive by
reducing their costs and developing their products at a much faster pace compared to their competitors.
The design for sustainability maturity model can help in understanding the journey of an organization towards
incorporating the sustainability aspects with a product lifecycle management strategy. An understanding of the factors
could help in providing a better ecosystem inside and outside the organization. The risks associated with the same can be
comprehended better and mitigated to ensure a smooth ride to the top of the green mountain.

REFERENCES
[1] JT Houghton, LG Meira Filho, DJ Griggs and M Noguer (Eds), Implications of Proposed CO2 Emissions
Limitations, IPCC Technical Paper IV - October 1997,pp15
[2]Daniel Sperling, James S. Cannon, Reducing Climate Impacts in the Transportation Sector,Springer2009,pp36
[3]Brundtland, Our Common Future: Report of the World Commission on Environment and Development, (1987),
Brundtland commission, Chapter 2, http://www.worldinbalance.net/agreements/1987-brundtland.php.
[4]Michael Grieves, Product Lifecycle Management: Driving the Next Generation of Lean Thinking, New
York:McGraw- Hill, 2006, pp 39.
[5]Siemens PLM, Transforming the process of innovation in automotive and transportation,white paper(2008),pp 6.
[6]OMG,http://www.omg.org/news/meetings/tc/dc/specialevents/GCIO/Green_Business_Maturity_Model_GBMM_
Overview.pdf(2009), Slide 5.

APPENDIX

Field Survey results are available on the website at :

Consumer Survey Results : http://www.kwiksurveys.com/results-overview.php?surveyID=ILJMJ_ecd0bb70&mode=4
Automotive Company : Available on request.