How Sustainability in Manufacturing drives Growth, not Cost

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By connecting data and processes across the digital thread, companies can find improved efficiency, visibility, and innovation across the product value chain and full lifecycle.

Many forwarding-looking manufacturers no longer view sustainability programs as additional costs of doing business but rather as offering opportunities to differentiate and increase the value of their products in an increasingly competitive global market. Manufacturers also understand that sustainable production is not merely a set of additional costs that must be offset somewhere else in the manufacturing value chain.

Increasingly today, success is achieved by building sustainable production practices into the DNA of the manufacturing operation. Sustainability investments in products and processes can deliver increased market share. They do this by opening the doors to new ways of discovering, creating, making, and selling more sustainable products to meet the demands of today’s generation of customers.

In practice, do manufacturers drive sustainability within their organization? The answer is through digital transformation. Sustainability has proven time and time again to be a natural byproduct of digital transformation. Beyond that, when businesses undertake a focused strategy that encompasses digital technologies and capabilities across the entire value chain, they are better positioned to surpass market expectations and achieve important sustainability goals.

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Sustainability in Action

Consider the 17 sustainable development goals (SDGs) set by the U.N. for 2030. They are the blueprint to achieving a better and more sustainable future for all. These goals act as a framework for industries globally and give companies a way to measure their progress in different areas of a sustainable corporation. Carbon neutrality, water management, and increased usage of renewable energy are among the SDGs set by the U.N. Along with the digital thread—which is defined as a seamless flow of data that connects business processes, systems, products, and equipment across the value chain to deliver business growth, operating efficiency, cost reduction, resiliency, and risk mitigation—these goals help companies act on their sustainable commitments.

Within the 17 goals, there are specific use cases for manufacturing and product design. Across the supply chain, manufacturing companies have opportunities in energy optimization, emission reduction, and effective resource management. These goals can be met across the product lifecycle, everywhere from product design and creation to obsolescence and disposal. Consider these ten practical use cases for sustainability in manufacturing:

1.     Sustainable Product Design & Creation: Businesses can discover, design, develop and manufacture better, more sustainable products that protect public health and the environment throughout their lifecycle while improving competitive advantage.

2.     Connected Energy & Smart Facilities Management: Industrial IoT (IIoT) platforms and advanced analytics can be used to enable real-time monitoring, analysis, and control of water, air, gas, electricity, and steam (WAGES) usage to unlock double-digit improvements.

3.     Energy Efficiency Demand Side Management: Businesses can take advantage of utility-funded customer electric and gas efficiency program rebates and incentives to upgrade to LED lighting and install more efficient HVAC and/or more efficient drives/motors.

4.     Demand Response Load Management: They can also take advantage of utility compensation programs focused on peak shaving and emergency reduction in load.

5.     Energy Sourcing & Supply Optimization: Innovative, competitively priced supply contracts can be identified to customize renewable mix, contract volume, and length to meet operational profile and sustainability needs.

6.     Distributed Energy Renewables Integration: The distributed generation and battery storage revolution can be enabled with data, predictive analytics, and renewable dispatch management, asset strategies, and configuration to reduce peak demand charges and enable carbon neutrality.

7.     Carbon Neutrality Emissions Reduction: Improving operational efficiency, switching to cleaner fuel sources, and purchasing renewable energy and carbon credits to offset emissions can help businesses achieve carbon-neutral manufacturing and reduce costs.

8.     Electric Vehicle Fleet Management: Businesses can fully embrace the electric vehicle (EV) revolution and leverage energy-optimization services to forecast and manage the charging of the vehicles during off-peak hours while meeting the daily transportation requirements to drive the lowest cost of operation and additional monetization through grid services or market participation.

9.     Obsolescence & Disposal: They can also ensure prototypes, samples, materials for process tests, and manufactured products waste as little material as possible across each stage of product and process development, manufacturing, and distribution.

10. Plant Cogeneration Integration: Lastly, companies can leverage on-campus cogeneration systems to cut down on pollutants and greenhouse gas emissions, drive energy savings, and increase reliability.

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Once a company commits to sustainability, various technologies can be employed along the digital thread—such as digital product creation, process emulation, predictive analytics, extended reality, and intelligent manufacturing operations—to identify improvement opportunities and measure progress against benchmarks. And this can all be done while still achieving corporate goals for innovation, quality, and growth.

See also: Actioning Sustainability: How Tech is Making ESG a Reality

Benefits of Sustainability

Companies today will benefit greatly by leveraging the digital thread and supporting technologies to reduce the global impact (instead of adding to it). Again, these changes ought not be seen as a cost or burden to bear for a business. Instead, they offer immense opportunities for businesses to thrive through innovation. By connecting data and processes across the digital thread, companies will find improved efficiency, visibility, and innovation across the product value chain and full lifecycle. This means everything from materials to the energy used to manufacture them are all elevated to sustainable standards.

Here are several examples of sustainability benefits delivered with the digital thread:

1.     Digital Product Creation: Virtual design and development capabilities eliminate or reduce physical samples and material waste.

2.     Product Lifecycle Management: Digital thread manages the product definition, including material, product, and supply chain information creating a platform for sustainability tracking and reporting.

3.     AR/VR/XR: The design process can be enhanced with augmented reality applications.

4.     Process Emulation: Manufacturing and packaging processes can be virtually tested in real-time to eliminate development and trial lot or batch waste.

5.     Supply Chain Optimization: Technology detects material and supplier constraints based on global trends and points users to a logical alternative.

6.     Distributed Energy or Renewables Integration: Digital thread enables renewable dispatch management, asset strategy, and configuration to reduce peak demand chargers and reduce carbon footprint.

7.     Intelligent Operations: Automation, learning, and advanced analytics can enhance manufacturing operations, leading to better Overall Equipment Effectiveness (OEE), resource optimization, product quality, and asset performance.

Companies that embrace sustainability practices as part of their DNA and business models for flexibility and resiliency are poised to weather increasingly volatile supply chains, rapidly changing competitive conditions, fluctuating resource and material costs, and consumer demands. They can do this while minimizing environmental impact and optimizing the use of natural resources, which has never been a more urgent endeavor for our global community.

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Jeff Miller

About Jeff Miller

Jeff Miller leads Kalypso’s Digital Performance Management (DPM) practice in North America. In this role, he helps organizations maximize the value of their investments in IoT, Extended Reality, Machine Learning, and other enterprise digital technologies. Prior to joining Kalypso, Jeff served clients through senior leadership roles at PTC, Accenture, DXC, and KPMG. Earlier in his career, he managed product design teams and manufacturing and supply chain operations for the Westinghouse Nuclear Fuel and Power Generation businesses.

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