Why sustainability is a necessity in the manufacturing world

Sustainability and environmental considerations can help boost a manufacturing business and gain trust with consumers and employees.

By Limuel Sagadraca and Thomas Risley July 25, 2023
Courtesy: Brett Salyes, CFE Media and Technology


Learning Objectives

  • Understand how sustainability goals can help improve profits and assets in the long run.
  • Identify industry changes that have led to increased focus on environmental and sustainability goals.

Sustainability insights

  • The right sustainability choices can reduce operational expenses, increase productivity and increase production
  • Creating a roadmap to success will help ensure employees, processes and assets can work together

How are baseball games won? It starts with getting on base. Companies can apply this same principle to environmental, social and governance (ESG) goals. In a world where 58% of consumers choose to buy from companies that share their beliefs and half of the generation entering the workforce refuse to work for an employer who isn’t proactive on sustainability, companies cannot afford not to focus on their environmental, social, and governance (ESG) plans or sustainability performance. Many companies are listening as Bloomberg reported a record $120 billion invested sustainably in 2021.

No matter where a company sits on the sustainability scale, there is good news. ESG is now viewed as an improvement opportunity rather than an expensive obligation. With the right choices, companies can reduce operational expenses, increase productivity and increase production –boosting their bottom line. Sweeping, plant-wide overhauls aren’t the only option, either. If the resources are there, by all means try to hit a home run. Starting small and getting on base can also be helpful.

Pressures to reduce emissions

What matters most to employees, customers and investors? What are the risks involved in making changes to the organization, or more importantly, what are the risks of not changing? ESG in the manufacturing industry has become increasingly tied to customer expectations, regulatory activities and stakeholder demands. Manufacturers are facing aggressive emissions reduction goals to meet changing customer demands and it seems like every supplier wants to sell the perfect technology or solution to solve sustainability problems.

Knowing where to start and what to do next can be overwhelming. The obvious answer may seem to be using what limited capital a company has to invest in the latest clean tech or spending substantial amounts on projects that drive efficiency. While those may be options, they are not always the right first steps. Bringing in an outside consultant or expert can help companies understand what changes will create the biggest opportunity to maximize the investment.

Define sustainability goals with a good strategy

Are companies and firms focusing on sustainability because it’s the right thing to do for the employees and customers? Are they trying to attract investors? Reduce energy costs? Tackle regulatory issues? Once these questions are answered, many of the solutions to better sustainability and ESG are the same ones that will lead to improved efficiency and productivity.

What’s good for business can also drive sustainability goals. Improved asset reliability and performance, reduced waste and education of workers alone can have a significant impact on productivity and carbon footprint. Developing a roadmap to success will help ensure all the people, process, assets and technology are working together. It’s about working smarter and staying that way. When managing operations and creating a more efficient and effective plant, companies and individuals are better positioned to meet goals while also driving productivity.

Sustainability challenges and opportunities that are presented to manufacturers in the market today. Courtesy: Life Cycle Engineering

Sustainability challenges and opportunities that are presented to manufacturers in the market today. Courtesy: Life Cycle Engineering

Setting goals and investing in education is important as workers are about to receive a lot of new information. They are being asked to take on new knowledge, skills and abilities while becoming more proactive and future-focused when it comes to sustainability and ESG. Be sure to make room for applying the learning to the workplace. It’s also important to have a method to capture or report on results delivered from actions taken after training. This isn’t only to celebrate the success of the learner, but also to realize the return on the training investment. These steps are a crucial part of the change management process, which is necessary for success.

Sustainability benefits business

The corporate landscape is changing quickly. Big players like Amazon and IKEA are requiring suppliers to report on emissions and sustainability goals. Financial exchanges like NYSE are encouraging and reporting on corporate ESG disclosures. Manufacturers must respond to these changing pressure points or risk losing work to the competition.

These challenges aren’t always easy to solve, however. Manufacturers need ways to understand their emissions footprint and value chain reporting. A life cycle analysis can provide a framework for measuring the environmental impact of a manufacturing process, products, vendors and suppliers. This can help improve long-term decision making and also establish the right sustainability program and goals for any organization.

Incorporating reliability principles into the capital project design can also help ensure that manufacturers are running at optimum efficiency. This involves looking at the entire life cycle of their assets and maintaining production levels that lead to a minimized carbon footprint.

Incorporate sustainability principles into the organization

Manufacturing demands may fluctuate, but a plant always needs efficient production to meet any goal. A highly reliable plant provides the opportunity to produce a product right the first time, eliminating unnecessary waste.  Running the plant efficiently further reduces costs. If a plant is not running well, assets could be doing unnecessary overtime, thus increasing maintenance, reducing life expectancy and operating inefficiently. Optimizing energy consumption and process inputs allows manufacturers to build the right environment to support current assets. In the future, when plants upgrade their assets to more efficient ones, they are sizing them to the correct carbon footprint for the operation.

Manufacturers also have an opportunity to reduce waste through better reliability practices. Whatever the plant is making, procedural changes can both improve productivity and reduce environmental impact. Changes to process, physical assets, technology, the shop floor and materials, all have impacts on the value of the finished product. It’s very likely that there are opportunities to reduce waste, cost to produce, and inefficiencies through monitoring, preventive maintenance planning, resource management and other strategies.

Balancing profits and productivity with sustainability goals

Manufacturers who are still deliberating on sustainability or ESG strategies should consider that investors who place a premium on ESG standards are increasing in both size and impact. They are also laser-focused on how other organizations are delivering on their goals.

The market has thrown its fair share of curveballs in the last few years. A decade ago, the manufacturing industry would have never imagined their efforts to reduce emissions would be so tied to profits. However, there are no more curveballs when it comes to the importance of sustainability.

Consumers, investors, and employees have spoken, so now it needs to be a core part of doing business. The question is, can the manufacturing industry win the game? The answer is yes, as long as there is a strategy and plan for execution to go along with the vision.

Author Bio: Sagradaca leads and serves the LCE team working with commercial businesses with asset-intensive operations. He brings more than 25 years of industry experience to his role, most recently from Rockwell Automation, where he held the position of Global Manager – Business Value Consulting for their Information Solutions organization. Risley has over 40 years naval, marine, and commercial engineering experience including 30 years of technical and program management of naval and commercial power projects. Currently he works on projects related to alternative energy, alternative fuel, and reducing engine exhaust emissions and decarbonization through carbon capture. He is also a professional engineer registered in Pennsylvania.