Best Practices for Collecting Environmental Compliance Data. Scott McCarley Product Marketing Director Windchill Product Analytics

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1 Best Practices for Collecting Environmental Compliance Data Scott McCarley Product Marketing Director Windchill Product Analytics

2 Agenda About Us Managing Environmental Performance and Risk Market Discussion Best Practice Recommendations 2

3 Introduction Scott McCarley 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: 3

4 PTC: The Product Development Company One of the world s largest and fastest growing independent software companies 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 4

5 Product Analytics within the Product Development System Windchill PPMLink Windchill RequirementsLink Mathcad Creo Elements and other MCAD Cadence, Mentor, Zuken Open Source, Rational Program Portfolio Management Requirements Management Engineering Calculations MCAD / CAM / CAE ECAD Embedded Software ERP Document Management Distributed Collaboration Workflow Heterogeneous CAD Data Mgmt ECAD Data Management Enterprise Interoperability SAP, Oracle, Dynamics Business Reporting Communities of Practice Change & Config. Mgmt Complete BOM Management Visualization Service Information Manufacturing Process Mgmt. Quality & Reliability Mgmt. Product Analytics Supplier Management Component Management Digital Mockup Arbortext Windchill MPMLink Relex Windchill Product Analytics Windchill Supplier Management Windchill PartsLink Creo Elements/View 2011 PTC 5

6 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 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. Environmental Performance Materials and Substances Compliance Life Cycle Assessment Product Cost Custom Analytics 6

7 The Green Product Challenge Exponential growth in complexity and scope of environmental regulations and customer reporting requirements Complexity 4 Number of Regulations 2011 PTC 7

8 REACH Rate of New SVHCs Additions is Accelerating Responding to customer requests for SHVC information within the required 45 days is an increasing challenge for many companies SVHC list growing rapidly Complexity REACH Number of Regulations Oct 08 Mar 10 Today 2011 est 2012 est ? 73? 2011 PTC 8

9 Managing Risk vs. Preventing Risk How do I provide product designers the tools and information they need to find problems BEFORE they re designed in? TYPICAL PRACTICE: Begin analyzing product here. Reduced The cost to implement a product Launch Delays change increases exponentially over its lifecycle ` Value Engineering Source: Lean Manufacturing, MIT Scrap & Rework Cumulative Change Costs $$$ Cumulative Change Costs 1000x = 10x 100x 2011 PTC 9

10 Market Discussion 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. How do we prioritize our efforts? Which parts should we work on first? 2 What data is commercially available? Who provides this data? Should we expect to receive full material content? Can I automate the process for getting data directly from my suppliers? Are there disclosure standards that we can leverage? 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? Where do we store and manage the data once we have it? How do we get to our suppliers to cooperate? Should these requirements be in our supplier contracts? 2011 PTC 10

11 What Data Do You Really Need? Why leading companies are gathering Full Material Disclosure (FMD) 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 est. Customers Collecting Full Material Content 30% 50% 80% + Source: PTC Customer Advisory Board 11

12 Product Analytics Customer Profiles 2011 PTC 12

13 Data Acquisition Solutions Utilize multiple data acquisition methods 1 3 Requests sent to suppliers via . Suppliers respond with 1752A or custom formats. 2 Supplier-OEM Data Exchange 2011 PTC - Forwarding looking information subject to change without notice 3 rd party collects data as authorized customer agent. Includes GDX, IMDS, BOMCheck 13

14 1. Direct Supplier Requests (RFX) Automated processes for supplier data requests. 1 Requests sent to suppliers via . Suppliers respond with 1752A or custom formats. Supplier-OEM Data Exchange 14

15 2. Integration with External Data Sources Leverage industry data exchanges 2 GDX Supplier-OEM IMDS Data Exchange BOMCheck* 2011 PTC - Forwarding looking information subject to change without notice * BOMCheck available through PTC Services 15

16 3. Content Services Content Acquisition and Maintenance Services. 3 Data Exchange Validated data delivered to WPA via GDX. Q Point, WSP collects data as authorized agent. Other Commercial Options: IHS, TotalPartsPlus, 2011 PTC - Forwarding looking information subject to change without notice 16

17 Additional Data Acquisition Best Practices All data has value, but measure and manage compliance risk 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 PTC 17

18 Ensure Compliance Across All Products Roll-up BOM to View Status for Products Across Multiple Regulations 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 18

19 Material Data Has Value Beyond Compliance With information collected for compliance, you can now answer questions like: We re using too much of this material! Windchill Product Analytics For each of our products, what is the carbon footprint? If we used Supplier A we d produce a much greener product! 2011 PTC Forward looking information subject to change without notice 19

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