Sustainable manufacturing: Fixing the factory floor

Sustainable manufacturing—the production of goods through economically-sound processes that minimise environmental impact—will most likely require the transformation of the entire manufacturing and industrial system. Manufacturers will need to look at how they design, source, manufacture, deliver, and service all their products. It’s a daunting proposition. But it’s one manufacturers need to address as the sustainability imperative continues to grow.

Whether it’s in response to stakeholder demands, regulatory mandates, a concern for the environment, or plain financial gain, manufacturers can no longer confine sustainability to aspirational targets printed in their annual reports. To make the necessary progress, they will instead need to commit to clear action. And that action will have to start on the factory floor.

Leveraging digital technology and renewable energy

Currently, manufacturing processes use roughly one-third of the world’s energy.[1] Even in lower-intensity sectors—those outside of such top users as chemicals, refining and paper—energy often represents a significant cost. And that only stands to rise as global energy prices increase. By building sustainable practices into processes, manufacturers can tackle their single largest sustainability obstacle while at the same time working to minimise environmental impact and conserve resources.

Through the use of digital technology, manufacturers may already have a head start in their sustainability journey. In recent years, the implementation of lean processes using digital capabilities have boosted productivity, created safer workplaces, and reduced costs. What this automation through digital technology can also provide manufacturers is greater visibility into their production processes, equipment wear-and-tear, and, more importantly, energy usage. Armed with this data, organisations can then optimise production and improve predictive maintenance to diminish energy loads as well as reduce material and water waste—all key factors in building sustainability.

But that may not be enough. Building a more sustainable factory floor should also mean greater use of renewable energy—now increasingly competitive in terms of cost. There are a few ways to do this. Many manufacturers are taking advantage of power purchasing agreements, which can lock in fixed prices for a supply of renewable energy, sometimes for as long as 15 or 20 years.[2]  In other instances, manufacturers with large campuses are even investing in on-site generation, using solar panels, wind turbines and geothermal pumps to power their facilities.

By reducing waste and water usage, adjusting energy loads, and tapping into renewable resources, the factories of the future have the potential to drive measurable sustainability outcomes as well as reduced costs. This is particularly important as energy efficiency improvements are now being increasingly mandated by licensing authorities at the launch of a manufacturing operation or upon review once operational.

Making the sustainability shift more accessible

It’s true that low-carbon manufacturing and industrial systems will likely mean changes in every sector and along nearly every step of the value chain. While it may be intimidating to conceive of broadly, there are steps manufacturers can take within their organisations and on their factory floors to make the shift toward sustainability more accessible, operating within the traditional framework of change management. These include:

• Plan: As a first step, it’s important to measure your facilities’ current carbon profile to build a baseline of your environmental footprint. This can inform your strategy and enable you to set clear targets and priorities. With decarbonising an inherently uncertain endeavour with no guarantees reduction targets will remain steady or be achieved, any strategy should also be underpinned with strong scenario planning. Additionally, companies should also be prepared for their data to be audited, providing proof to clients as to their levels of sustainability.
• Execute: To carry out sustainability initiatives, new roles—such as a chief sustainability officer—may need to be developed. In turn, these leaders can help determine which sustainability metrics the company is under pressure to deliver on and prioritise investments, as well as build any new capabilities needed. Just as important, to execute on priorities, manufacturers will most likely need to bring ecosystem partners together—including industry associations, third-party providers and regulators—in  a coordinated effort where all participants up their sustainability game.
• Reflect: Manufacturers can do more than simply measure the progress of their sustainability initiatives. They can also use that progress to create a clear market narrative around the positive impacts they are driving and paint a powerful picture for investors and consumers alike—all the while improving transparency. While those manufacturers that lag in sustainable activity risk public opinion turning against them, those who do take sustainability seriously need to get the word out.

Ultimately, sustainable manufacturing can only be achieved by setting the right tone from the top, gaining buy-in and considering all the change management implications.

Reaping the rewards

When it comes to sustainable manufacturing, significant change is afoot and it necessitates bigger thinking—especially on the factory floor. Manufacturers prepared to embrace the change will discover opportunities for innovation—with sustainability targets inspiring inventive green design and novel applications of technology.  Those who are unprepared may find themselves left behind.

But by focusing on long-term outcomes, working collaboratively with industry stakeholders, and adopting a deliberate and coordinated approach, manufacturers have the capacity to realise significant benefits on the road to sustainability. These range from improved competitiveness and efficiency to reduced costs and risks. Yet the true measures of success will extend well beyond the shop floor. By driving measurable sustainability outcomes, manufacturers also have the power to create lasting social value.

To learn more read the Deloitte report, Sustainable manufacturing: From vision to action.

The blog was originally published on Forbes on 1 October 2021.

[1] Geospatial World, July 17, 2018. “Factory automation and environmental benefits,” by Teresa Tomas.

[2] Deloitte. Sustainable manufacturing a profitable business case.