Manufacturing is responsible for almost a quarter of direct global carbon emissions. According to the Environmental Protection Agency, U.S. manufacturing companies contribute 23% to the world's carbon emissions. In Europe, the industry emits an annual total of 880 million tonnes.
Smart manufacturing. Credit: August Phunitiphat / Shutterstock
Credit: August Phunitiphat / Shutterstock
The supply chain is a major cost factor for most manufacturing units, and keeping it down was the main driver of efficiency for a long time. However, organisations have only recently become aware of the impact of non-sustainable practices - with the rising concerns over global warming, climate change, and more sustainable metrics driving both consumption and investment.
The answer to this costly conundrum lies in the 4th industrial revolution or Industry 4.0 the term some use for digitalization. The widespread adoption of smart technology makes manufacturing a more productive, cost-effective, and sustainable process.
Tools to achieve manufacturing/industrial sustainability
A.I., Data mining and Automations: Factories have always produced a lot of data but used it minimally until now. With data learning and greater interconnectivity through Artificial Intelligence, Robotics, Data mining, and analysis in the value chain, there is a tight relationship between product performance and manufacturing.
Greater adoption of green tech: This means a streamlined value chain, including adopting smarter processes and deliverables in production, procurement, and packaging.
Loop Cycling: Recycling and reuse of materials and by-products of manufacturing. Many companies are breaking down products and reusing them in their raw material form. Filtering and recycling wastewater and packaging material are quite common now - this reduces waste and drives efficiency, helping companies reduce their adverse environmental impact.
Need and impact of Smart Tech
Increases efficiency: There is a need for SWOT analysis, including assessing the carbon footprints, developing realistic targets, and specific measures.
All this is easier said than done. There is a certain hesitancy among companies due to the compliance problems in their supply chain, especially relating to sourcing and forced labour.
Direct emissions (Scope 1) can be monitored easier than Scope 2 (energy expenditure, including heating and cooling) or Scope 3 (independent suppliers and vendors).
The way to tackle this is to create a system that gathers information related to ESG centrally and does the required compliance analysis to avoid risks.
Change processes: Adopt machine learning tools that detect any change in sourcing. Monitor the supply chain, conduct surprise auditing and correct course the moment any red flags appear, such as procurement changes or materials that raise waste or emission rates.
Offset and Compensate: Adopting simple changes in the supply value chain can go a long way in bringing down costs - as well as promoting growth and profitability in terms of brand and company image among consumers and activist investors. A 2021 World Economic Forum report, Net Zero; A Supply Chain Opportunity, says that a 2–4% increase in the cost of production can deliver up to 40% reduction in harmful emissions.
Ground Realities: Some Examples
The stark reality of climate change has forced most manufacturers and companies to adopt sustainable practices with active ESG policies. Recurrent natural disasters and ecological and environmental disasters mean a paucity of raw material, an upset transport chain, and bottlenecks down the line.
Most manufacturing companies have adopted CO2 reduction targets and sustainable corporate policies.
BMW and Ford have committed to net-zero emission targets by 2050.
Nike has made a sustained effort to improve the working conditions in factories worldwide with its Lean Management Framework. These include developing systems and processes to capture accurate data and analyse qualitative and quantitative metrics, assessing supplier management strengths and weaknesses, and identifying development opportunities.
Microsoft has developed its due diligence process and is looking for carbon removal project proposals to fund.
Nestle and Unilever both have a responsible sourcing policy where they work with suppliers to opt for more sustainable resources. Nestle funds environmental projects done by growers and suppliers of its various raw materials (like coffee growers) in its supply chain.
Industries and manufacturers collaborate on developing sustainability standards, providing assessment tools, and offering training to their direct and indirect suppliers. For example, the Responsible Business Alliance (RBA) comprises Intel, H.P., IBM, Dell, Philips, and Apple.
The Carbon Disclosure Project Supply Chain Program is a global data-collection platform where suppliers disclose information about their carbon emissions. Members include Microsoft, Johnson & Johnson, and Walmart, who use it to help their suppliers measure their environmental impact.
Ikea develops sustainable energy resources such as wood and recycled materials and now owns and directly manages about 243,000 hectares of forests in the U.S. and Europe.
Post pandemic, the need of the hour is to implement all changes that promote a safe environment.
Parting Thoughts
Sustainable manufacturing has to become an integral part of manufacturing companies' strategies to remain competitive. All stakeholders (governments, the public, and investors) want environmental resilience, which comes with a more sustainable tech adoption.emissi
- The author, Bryan Christiansen, is the founder and CEO of Limble CMMS. Limble is a modern, easy-to-use mobile CMMS software that takes the stress and chaos out of maintenance by helping managers organize, automate, and streamline their maintenance operations.
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