Today’s manufacturing executives are faced with one of the most challenging business landscapes in generations, with pressures including geopolitical turmoil, supply chain constraints and resource scarcity all contributing to an uncertain outlook. Amid these challenges, sustainability is rapidly evolving into one of, if not the top priority, for manufacturing leaders seeking to strengthen their business’ long-term position.
The growing interest in sustainability is motivated by the risks and rewards that exist at multiple levels. From a regulatory perspective, legislators are taking stronger steps to enforce reduced emissions and sanction those that don’t address the negative externalities of their operations. At an investment level, financial markets are preferring organizations that align with high ESG expectations. Perhaps most importantly, consumers are demanding greater sustainability in the goods and services they purchase, across the entire supply chain rather than simply at the point of sale.
All of this means that decision makers now have a golden opportunity to differentiate their organization and become global market leaders through sustainability.
Adopting a Sustainable Mindset
Meeting the expectations of various stakeholders goes beyond adopting sustainability as a company value. It’s about operationalizing sustainability, which changes the way you approach different business objectives and challenges. This includes enhancing the way products are designed and expanding lifecycle management to embed sustainability across the value chain.
In addition, a sustainability-led approach creates new revenue streams and business models for companies to pursue or explore, especially in the realms of the circular economy and recycling industries. Recycling isn’t just for plastics and packaging. Already we’re seeing some manufacturers implement carbon recycling as a means of reducing CO2 emissions and improving energy security.
Seizing these opportunities will bring benefits across three key areas: being better for profit, better for the planet, and better for your people.
Creating a Business Advantage
Leading companies are not just setting sustainability goals because it looks good, but rather because achieving these goals generates business value. This typically includes cost savings through energy and improved operational efficiency, increased profitability by being able to do more with less, and reduced waste products meaning greater conservation of resources. These benefits combine not only to create a more sustainable business model, but also one that’s more resilient to future changes in the market. For example, sustainability can help to tackle the challenge of carbon pricing, as focusing more on renewable energy helps reduce price volatility and aids long-term planning.
Being more sustainable in the manufacturing sector is about identifying opportunities to become more sustainable and productive at the same time. Businesses do not need to compromise one for the other. It shouldn’t be looked at as a cost, rather an avenue to generate new revenue.
Ultimately, the goal is to establish a sustainable brand in the marketplace. By gaining a reputation for sustainability, you’re able to access more markets, gain larger customer bases and open new revenue streams. There are also non-financial benefits to consider around increased brand equity, customer loyalty and talent retention.
Accelerating Data Driven Environmental Outcomes
By its very nature, becoming a more sustainable company means having a direct, positive impact on the environment, as well as being profitable. According to a recent McKinsey report, reaching net zero by 2050 could entail a 60 percent increase in capital spending on physical assets. The effective use of net-zero technology and digital transformation can help organizations achieve both profitability and sustainability – through strategies such as digital twins, advanced analytics, and closed-loop optimization, for example.
This is all made possible through data availability, data integrity and data consistency. By extracting meaningful data from existing systems in a consistent way, in real-time, organizations can create systems and mechanisms to analyze the data before acting on sustainability goals.
One such sustainable outcome is energy. The automated extraction of energy data, awareness and availability can lead to energy improvements and smarter operations; by enabling the organization to monitor, assess, predict, and improve energy efficiency across all levels. This in turn helps to derive meaningful insights and encourage active decisions to achieve goals regarding reducing waste and lowering the marginal cost of production.
The use of data also has an important impact on environmental risks and smart water management. Consider, for example, a water management company. By implementing computer vision and AI to detect hazardous liquid spills and leaks at pumping stations, they can prevent serious environmental damage from happening in the first place. This comes from data visibility allowing the company to be proactive to any potential emerging situations. By operationalizing sustainability data, they can spot risks before they happen, helping prevent both environmental damage and waste at the source, rather than after the fact.
The benefits of this approach are twofold, namely eliminating any potential regulatory fines that would come from a leak, as well as the direct negative environmental impact it would have.
Establishing a Culture of Sustainability
Adopting a more sustainable approach isn’t only about technology. For manufacturers to achieve their sustainability goals, all employees need to be involved. It isn't just an initiative for a single department or a single job title to focus on; there should a company-wide effort. A cultural shift is needed to bring meaningful change.
This is because sustainability affects everyone. It requires everyone to buy into it, from the plant floor workers to the C-suite executives. In turn, this widespread culture will help attract talent and retain it. This is becoming more relevant as the next generation of industry leaders enters the workplace for whom sustainability is non-negotiable. As such, they actively make decisions on who to work for with sustainability in mind.
Achieving this improved talent acquisition and retention will then help drive more sustainable initiatives and innovations, in turn driving greater business success. Put simply, as we look ahead, a more sustainable company will be a more successful company. Businesses have an opportunity to drive innovation with sustainability, and, with a bright future in this area, there’s no better time to get started.
Contact SMC for more information on how to keep up with sustainability demands.
Article Source: Rockwell Automation