Arena Blog

Read Our Blog for the
Latest Trends and Insights

PLM and Circular Economy: A Framework for Sustainable Product Development

Circular Economy IllustrationThis is an interesting time for product lifecycle management (PLM). Over the last 20 years, PLM has become increasingly important to manufacturers when it comes to new product development and introduction (NPDI). PLM has been essential in getting products to consumers faster, especially in markets with complex products like medical devices, defense, and high-tech electronics where quality management and compliance regulations are stringent.

PLM is also starting to play a critical role in manufacturing companies’ environmental, social, and governance (ESG) strategies. More companies are taking action when it comes to sustainability efforts. A recent survey that polled 2,000 C-suite executives across 21 countries, found 67% are using more sustainable materials, 66% are increasing the efficiency of energy use, and 57% are using energy-efficient or climate-friendly machinery, technologies, and equipment.1

No longer is going green a nice thing to have as a marketing incentive—it’s become a necessity. Also, putting a green label on your product, another marketing trend known as greenwashing, doesn’t cut it anymore either. Companies need to back up their claims.

The need for sustainability

In 2015, the United Nations (U.N.) issued 17 Sustainable Development Goals (SDGs)—a universal call to action to end poverty, protect the planet, and improve the lives and prospects of everyone, everywhere as part of a 15-year plan to meet the goals by 2030.

With the U.N.’s aggressive 2030 SDGs timeline, companies in all industries are finding ways to move the needle on sustainability either by improving the sustainability of their products and operations or achieving sustainability gains by exploring new markets with a more diverse set of products. PLM is playing a significant part in accelerating that switch—by helping companies become more sustainable and more circular in the long-term health of our planet.

Circular economy helps manufacturers reduce their environmental impact

As manufacturers focus on the sustainability of their products, suppliers, and operations, they’re seeing the value and urgency of moving from a linear to a circular economy to help them become more sustainable.  A linear economy focuses on profitability, irrespective of the product lifecycle. The model is built on a take, make, consume, and throw away concept—without concern for the environment.

By comparison, a circular economy is a continuous cycle where materials are either regenerated or reused to minimize a company’s impact on the environment.

The circular economy is based on three principles, driven by design:

  • Eliminate waste and pollution
  • Circulate products and materials (at their highest value)
  • Regenerate nature 2

Legislators and business leaders view the circular economy as the best way to ensure long-term profitability and the development of environmentally conscious products, especially as many natural resources used in the linear economy are reaching levels of depletion.

Changing from linear to circular with PLM

Transitioning to a holistic circular economy from a linear model is critical to reducing environmental degradation and prioritizing biodiversity while ensuring future competitiveness.  As more manufacturers move toward implementing sustainable business models, PLM systems are enabling circular product lifecycle practices in the early stages of the design process. This makes it easier for companies to design products using a continuous cycle that includes: design, manufacture, deliver, service, return, end-of-life or repair, reuse, recycle or refurbish.

The fact is, 80% of an ecological footprint is determined in the design phase.3 Products will need to be designed with sustainability in mind from the start, along with the ability to adapt to changing requirements. Sustainability begins with the first conceptual product design considerations by choosing environmentally conscious or sustainable materials and components.

PLM better aligns to represent the needs of a globalized economy where resources are circulated and nature is regenerated as manufacturers focus on circular economy and sustainability. A PLM system can capture and manage information about how a component or a part can be recycled and make this visible to design engineers early on.

With a secure platform for supply chain collaboration and communication from early design through volume production, PLM also makes the supply chain transparent when it comes to sustainability concerns.

A synergistic relationship—PLM and sustainability

The objectives and challenges of PLM and sustainability are somewhat similar. They should be seen as synergistic. In contrast to PLM, which in theory is a strategy to manage a product over its full lifecycle, sustainability is concerned with the sustainability of users, industries, economies, the environment, and the entire world in which the products function.

Where PLM and sustainability diverge most noticeably is in the traditional lifecycle of products. Manufacturers often fail to take into consideration the whole lifecycle costs and environmental footprint of their products, which in turn has led the U.N. to a call to action to change our world.

PLM software enables businesses to continuously enhance and optimize their products for sustainability by assisting them in tracking and measuring the sustainability of their products over time. This might be especially crucial for businesses striving to comply with compliance or consumer demand for more sustainable products. The advantages of combining a circular economy with PLM benefit society, not just businesses.

Arena helps to increase the visibility of the product’s carbon footprint

Arena helps manufacturers create products in a more environmentally conscious way. For more effective product design and development, Arena’s Cloud PLM software unifies product information, people, and processes onto a single platform. As a result, companies can increase productivity and sustainability efforts while reducing their product’s carbon footprint.

Arena offers a structured way to maintain the full product record to address changing product requirements. Teams can access the most recent and accurate product information by centralizing components, drawings, and BOMs into a single cloud-based system.

With revision controls and automated engineering change processes applied to parts, BOMs, and documentation, Arena PLM enables cross-functional teams to quickly create, exchange, and approve product designs and get more visibility into any changes that influence production.

Arena helps manufacturers become more sustainable and more circular by:

  • Streamlining environmental compliance processes to get more environmentally conscious products to market
  • Integrating into component databases like SiliconExpert and Octopart to source sustainable parts
  • Enabling real-time collaboration between internal teams and supply chain to ensure design for manufacturability
  • Eliminating design and latest-build confusion to reduce costly scrap and rework or production delays

As we begin 2023, businesses face a host of challenges—from energy depletion to inflation to geopolitical unrest. With less than 10 years to achieve the U.N.’s SDGs, the decade to deliver is underway and the movement for change is now.

What are your goals for product sustainability?

Learn how Arena can help your company achieve efficient and sustainable product development practices for a circular economy. Read our PLM FAQs.

Resources Cited:

  1. Deloitte 2022 CxO Sustainability Report
  2. What is a circular economy?
  3. Recycling and the circular economy: what’s the difference?