New EU regulation offers opportunities

With a new regulation, the EU wants to oblige manufacturers to develop more sustainable products – for example by offering frequent software updates. As a result, many manufacturers will now have to completely rethink their processes and products. However, what might initially look like a burden could actually be a blessing in disguise.

A clear majority in the EU Parliament is supporting the introduction of the new Ecodesign for Sustainable Products Regulation (ESPR). The regulation is going to introduce obligations on manufacturers to increase the lifespan of products, by making things like spare parts and software updates more easily available to consumers. “If we want truly sustainable products on the European market, we have to get to the root of the problem: namely their design,” explains Ebba Busch, Swedish Minister for Energy, Enterprise and Industry and Deputy Prime Minister.

The new ESPR is intended to replace the existing Ecodesign Directive (2009/125/EC). “The new regulation is not just an update of the outdated directive, but a fundamental reorganization of environmental requirements for products,” emphasizes product law expert Marthe-Louise Fehse.

While consumers will welcome the introduction of product passports and more software updates, the regulation is putting pressure on manufacturers to improve the durability, repairability and recyclability of their products.

Only few companies are prepared for frequent software updates

With European elections looming, it is expected that the ongoing negotiations about the finalisation of the new regulation will be concluded sooner rather than later. For the vast majority of companies that develop and manufacture software-based devices and products, the new directive means that they have to pay much more attention to software updates than before. However, the majority of these companies are not well prepared for this change.

The fact that it will soon be mandatory across Europe to offer software updates over several years is leading to a wide range of challenges for manufacturers. This is particularly true for companies that offer entire product lines rather than single products, as a security update or the introduction of a new software-based feature cannot be easily applied to all models. Especially companies such as manufacturers of white goods or household and kitchen appliances, that have only started to develop smart devices recently and that have little experience with the continuous maintenance of software across entire product lines, must now look for new ways to meet the new regulation - and act quickly.

Product line engineering can help companies to meet targets

The good news is that it is still possible for most companies to introduce new processes and solutions before it is too late. “With the help of product line engineering and a holistic solution for variant management, companies can manage and maintain even complex product lines with software-based products,” explains Danilo Beuche [pictured below right] , honorary professor at the University of Leipzig and co-founder of the German software specialist pure-systems. “By systematically reusing all hardware and software components across entire product lines, companies can ultimately develop and produce their products more efficiently - and also manage software updates for all models more easily,” the expert says.

That’s why Beuche sees the obligation to offer more software updates for longer as a unique opportunity for companies rather than a burden. “Most consumers want products that work perfectly even after years of usage, and which receive new features via software updates even after the initial purchase,” says Beuche. “It therefore makes sense to introduce more sustainable products and processes, regardless of the new regulation.”

The success of companies like the German router manufacturer AVM shows that frequent software updates can be a key ingredient for the success of a business. In Germany, and nowadays also in many other European countries, AVM is famous for providing software updates for their routers and smart home devices for many years. With this business approach, the Berlin-based company, which was founded by four students, has become one of the two market leaders for broadband devices in Europe. Even though their routers are designed to last for many years, AVM has been increasing its sales figures year after year, which proves that happy customers are better for sustainable business than customers who have to replace their products frequently.

A good opportunity to introduce new business models

The clever use of software can even help companies to introduce completely new business models. Companies like the e-bike manufacturer Cowboy are offering a basic version of a product to all their customers, who then have the option to pay for additional features as a part of a monthly subscription. In the case of Cowboy, the additional feature is a GPS-based anti-theft protection for their e-bikes. This example shows that well-maintained software, which the EU wants to enforce with the new directive, is not necessarily a burden, but can also lead to completely new sources of income.

Top image credit: MG_vectors/

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