Materials Compliance for Green

Product Development
Balancing Social Responsibility with Profitability

November 2009
William Jan

~ Underwritten, in Part, by ~
Materials Compliance for Green Product Development:
Balancing Social Responsibility with Profitability
Page 2

Executive Summary
One of the core questions that a manufacturing company asks itself before Research Benchmark
investing in a materials compliance management solution is: will this really Aberdeen’s Research
pay off in the end? Companies that believe the answer is "no" are among Benchmarks provide an in-
those who believe that the cost of compliance solutions will translate to depth and comprehensive look
higher product prices, causing them to lose ground to competitors. On the into process, procedure,
other hand, companies that believe the answer is "yes" are looking at methodologies, and
compliance as a means to sell into new / global markets. There are technologies with best practice
numerous standards, directives, and regulations established around materials identification and actionable
compliance with the purpose of reducing certain hazardous substances in recommendations
products and to promote material recyclability. In light of such
requirements, top-performing companies are able to successfully leverage
compliance measures to enable Corporate Social Responsibility (CSR) and
to achieve profitability.

Best-in-Class Performance
Aberdeen Group used four key performance criteria to distinguish Best-in- "[Being materials compliant]
Class companies. Results that characterize Best-in-Class performance enabled EU and other country
include: sales to proceed smoothly, gain
a competitive advantage
 19% increase in annual product revenue servicing customers, enhance
 13% decrease in product time-to-market corporate status, and improve
morale and corporate
 88% achievement rate on product launch dates responsibility."
 90% achievement rate on development budgets ~ Executive, Consumer
Electronics Manufacturer
Competitive Maturity Assessment
Survey results show that the firms enjoying Best-in-Class performance
shared several common characteristics:
 13% more likely than their competitors to improve documentation /
evidence of compliance
 19% more likely than their competitors to build compliance into
their new product development processes
 36% more likely than their competitors to align their organization
with compliance requirements

Required Actions
In addition to the specific recommendations in Chapter Three of this
report, to achieve Best-in-Class performance, companies must:
 Promote an open exchange of compliance information with their
suppliers and partners
 Ensure that their compliance information and capabilities are
accessible by stakeholders in the development value chain
© 2009 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
Materials Compliance for Green Product Development:
Balancing Social Responsibility with Profitability
Page 3

Table of Contents
Executive Summary ....................................................................................................... 2 
Best-in-Class Performance ..................................................................................... 2 
Competitive Maturity Assessment ....................................................................... 2 
Required Actions...................................................................................................... 2 
Chapter One: Benchmarking the Best-in-Class .................................................... 4 
Business Context ..................................................................................................... 4 
The Goals behind Materials Compliance ............................................................ 5 
The Maturity Class Framework ............................................................................ 8 
The Best-in-Class PACE Model ............................................................................ 9 
Best-in-Class Strategies......................................................................................... 10 
Chapter Two: Benchmarking Requirements for Success ................................. 12 
Competitive Assessment ...................................................................................... 12 
Capabilities and Enablers ...................................................................................... 13 
Chapter Three: Required Actions ......................................................................... 18 
Laggard Steps to Success ...................................................................................... 18 
Industry Average Steps to Success .................................................................... 18 
Best-in-Class Steps to Success ............................................................................ 18 
Appendix A: Research Methodology..................................................................... 20 
Appendix B: Related Aberdeen Research ............................................................ 22 
Featured Underwriters .............................................................................................. 23 
Figures
Figure 1: Top Pressures Driving Materials Compliance ....................................... 4 
Figure 2: Top Objectives for Implementing Materials Compliance ................... 5 
Figure 3: The Number of Regulations Manufacturers Must Satisfy ................... 7 
Figure 4: Strategic Actions of the Best-in-Class................................................... 10 
Figure 5: Substance Disclosure Information Sought from Suppliers ............... 15 
Figure 6: Reasons for Providing FMD ..................................................................... 15 
Figure 7: How Substance Disclosure are Typically Documented.................... 17 
Tables
Table 1: Environmental Standards, Regulations, and Directives ........................ 6 
Table 2: Top Performers Earn Best-in-Class Status.............................................. 8 
Table 3: How the Best-in-Class Fare with Product Recalls and Block
Shipments ........................................................................................................................ 9 
Table 4: The Best-in-Class PACE Framework ....................................................... 9 
Table 5: The Competitive Framework................................................................... 13 
Table 6: Level of Compliance Automation............................................................ 16 
Table 7: The PACE Framework Key ...................................................................... 21 
Table 8: The Competitive Framework Key .......................................................... 21 
Table 9: The Relationship Between PACE and the Competitive Framework
......................................................................................................................................... 21 

© 2009 Aberdeen Group. Telephone: 617 854 5200

www.aberdeen.com Fax: 617 723 7897
Materials Compliance for Green Product Development:
Balancing Social Responsibility with Profitability
Page 25

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the Figures and Tables, please click here (registration required).

© 2009 Aberdeen Group. Telephone: 617 854 5200

www.aberdeen.com Fax: 617 723 7897