EAM's role in managing sustainability in the discrete manufacturing industries

Ralph Rio, ARC Advisory Group

Many companies have initiated wide-ranging sustainability programs. The heightened awareness of sustainability has generated a diverse range of improvement targets. Prioritizing and managing the multitude of ideas requires structure. If you were asked to lead your company's program, what reporting tool would you use to manage it?

In a previous ARC Insight, “Sustainability Program Management with EAM,” we recommended an asset-focused approach for process industry manufacturers, because resources (power, water, steam, air and gas) and emissions flow through assets. Since EAM is already asset-specific, users could extend their EAM applications to include a reporting function for managing plant sustainability and carbon footprint. But what about in the discrete or batch manufacturing industries, where the paradigm is product-specific?

Sustainability for the Discrete Industries – Bill of Materials
In the discrete industries, sustainability is addressed by end product:

  • Business processes and internal accounting are product focused
  • Regulations are often administered by specific end product
  • Customers see sustainability (green) on the product’s label and have less awareness of the company (unless they cause a disaster)

Maddening Mayhem of Manual Data Merges
Managing a sustainability program requires reports for priority setting, status, and progress against goals. A typical discrete manufacturer sources thousands of parts, routes them through a multitude of fabrication and assembly steps, and has hundreds to thousands of end products. This complexity involves accessing data from a variety of systems which typically requires a "maddening mayhem" of manual data merges. This manual and obtuse methodology lacks a credible audit trail.

Assessing sustainability for each end product is impractical using manual reporting methods like a spreadsheet. Considering the executive visibility and potential negative media exposure for sustainability issues, "maddening mayhem" is unacceptably risky – both for the company and the program manager’s career.

Sustainability with IFS’ Eco-footprint Management
To enable manufacturers to manage sustainability on a product-by-product basis, IFS has developed an ecological footprint calculator, called IFS Eco-footprint Management, within its IFS Applications suite. This tool utilizes existing components within IFS Applications to handle the demands of sustainability reporting. The company modeled this approach after cost accounting, where environmental costs are assigned to each component. Using the bill of material (BOM) structure, these costs are rolled up into the next higher assembly. Additional environmental costs are added for processing the assembly. It accumulates up the BOM structure to the final product for its total sustainability cost.

IFS Eco-footprint Management provides a decision- support tool for tracking and mitigating environmental impact. It enables manufacturers to:

  • Track sustainability by product, work center, or other parameters
  • Identify the products or processes driving sustainability issues
  • Analyze the environmental impact of the complete product lifecycle
  • Comply with ecological legislation requirements
  • Meet specific regulatory values - CO2 emissions for example
  • Enhance the brand and mitigate risk

Last Word
Organizations require a structured tool for effective sustainability pro-gram management. The IFS Eco-footprint Management offers an enterprise-wide, standardized methodology for managing compliance with environmental legislation. With a cost accounting paradigm, all parties can easily understand and accept the results. This type of tool fits the operating and report structure commonly found in the discrete and hybrid industries.

All signed-in visitors can view the complete report in pdf format at Managing Sustainability in the Discrete Manufacturing Industries.

If you would like to buy this reportor obtain information about how to become a client, contact info@arcweb.com

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