Analytics’ impact on sustainability and profitability in manufacturing
Sustainable manufacturing and zero waste are major priorities for manufacturers and analytics can help companies identify goals to achieve.
Perhaps no event has had such a profound impact as the COVID-19 pandemic. It fueled countless unintended consequences and challenged our perceptions of social responsibility and purpose. It ushered in unprecedented changes in the workplace and corporate culture. As Americans grappled with questions of work-life balance and mental health, their attitudes about sustainability evolved.
According to the IBM Institute for Business Value, the pandemic upended 94% of the global consumer base’s viewpoints about sustainability. Surprisingly, data from Pew Research suggests Americans view environmental responsibility nearly on par with bolstering the economy. These sentiments mean manufacturers must prioritize sustainability to stay relevant in a changing world.
Defining sustainable manufacturing
Zero waste is the ultimate goal. The pathway to achieving it is sustainable manufacturing. The US Department of Commerce defines this term as “The creation of manufactured products that use processes that minimize negative environmental impacts, conserve energy and natural resources, are safe for employees, communities, and consumers and are economically sound.”
The process scrutinizes all aspects of manufacturing to put sustainability in the driver’s seat through the entire life-cycle of goods. It becomes the innovator for lessening the industry’s contribution toward climate change.
Fortunately, leveraging the power of analytics and digital technology can provide ways to reduce the greenhouse gas emissions generated by manufacturing processes. Organizations can then meet their goals for environmental safety and a sustainable future.
Making manufacturing better for the environment
Sustainable manufacturing involves an overhaul of business as usual to identify the inefficiencies and vulnerabilities that exist with current systems. The task is critical on several scores. It provides a pathway for reducing emissions and pollution, the essence of this eco-friendly approach. The investment can support stakeholders’ values and foster public trust.
Restructuring manufacturing can involve several innovative elements that will minimize environmental impacts. The US Environmental Agency’s (EPA) Environmental Management System (EMS) can provide a suitable framework for reviewing an organization’s impact goals and developing plans for implementing them. Monitoring its progress is an essential piece for pivoting when reviews cite red flags.
Three manufacturing sustainability trends
Focusing on sustainability makes sense for businesses, particularly during these uncertain economic times. It allows organizations to reduce costs to help ensure their long-term viability and safeguard their bottom lines. This move is evident in the trends gaining in popularity in manufacturing, starting with some of the simplest yet most effective ways to make positive impacts.
It’s also a much-needed response to climate change, given that global manufacturing contributes up to 75% of global emissions.
1. Using recycled and recyclable materials
Using recycled materials can decrease manufacturing costs while repurposing supplies ready for use. They use less energy to reuse than the amount needed for raw materials. Recyclable materials serve a dual purpose. Recycling can reduce emissions and positively influence climate change. For example, reusing 1 ton of aluminum spares the equivalent of consuming 21 barrels of oil.
Companies sourcing these materials build brand trust by demonstrating a commitment to sustainable manufacturing that can resonate with consumers.
2. Embracing the Internet of Things
The Internet of Things (IoT) can provide many opportunities for manufacturers to improve their efficiency while reducing waste and energy expenditure. Deloitte’s Sustainable Manufacturing: From Vision to Action report predicts this paradigm will gain momentum as the technology has with consumers.
The adoption of this technology has skyrocketed in recent years. Manufacturing and natural resources alone increased the number of units in these industries worldwide by over 48% between 2018 and 2020. IoT offers an excellent way to reduce the costs of human error while supplying a reliable to gather big data for valuable analytics to fine-tune sustainable manufacturing.
3. Monetizing waste
Waste generation remains a significant challenge in manufacturing sectors. It’s also a lost opportunity to monetize these materials. Paradoxically, the petroleum industry offers an excellent example of turning trash into dollars. Only about 60% of a 45-gallon barrel is used for fuel. The remaining percentage provides the raw materials for many products, including clothing and household goods.
However, other industries have also capitalized on this concept, including agriculture. It’s even evident in winemaking which repurposes the spent yeast and grape pomace or dregs from production for animal feed, pharmaceuticals, and cosmetics. It’s worth noting that this industry has also put sustainability on the front burner to reduce its negative environmental impacts.
Using advanced analytics to define, achieve goals
Digital technology offers an excellent way to gather the necessary data. It’ll allow manufacturers to get precise figures for determining baselines to develop achievable goals. It benefits organizations by homing in on the gaps in the processes to make the most impact. It requires a cross-functional team that can focus on all steps in the life cycle.
Success for a design for sustainability depends on input regarding societal impact, functionality, manufacturability, resource utilization, economy, and environmental consequences. Bringing these items to the table can ensure a reasonable path toward sustainable manufacturing that covers all its requirements.
Increasing profitability through sustainability
Sustainable manufacturing may improve a company’s bottom line simply by allowing it to run more efficiently. However, its benefits reach well beyond the ledger. A commitment to sustainability sends a powerful message to consumers. The public expects organizations to make environmental responsibility a priority. They’re willing to back up their values with their pocketbooks.
According to the IBM study, 55% consider sustainability very or extremely important when choosing a brand. Consumers are also willing to pay more to support businesses that align with their values. That makes sustainable manufacturing not only a wise business model but an effective marketing tool to nurture brand loyalty and repeat sales.
An indirect benefit exists with a company’s workforce. Employees want to work for organizations that have a purpose, with 40% citing it as a path toward engagement and job satisfaction. That’s a vital point for employers to keep on their radar, given the aftermath of the Great Resignation and labor shortages.
Perhaps sustainable manufacturing is only the tip of the iceberg of a greater paradigm shift in consumer thinking. After all, the pandemic was a wake-up call. It prompted many people to rethink their lives and the fulfillment they find in their jobs and their actions. It behooves organizations to heed this call. It can build stronger brands and ensure their long-term viability in the face of changing times.
– Downtown Ecommerce Partners (DEP) is a CFE Media and Technology content partner.