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January 24, 2023

For manufacturers, sustainability offers a win-win scenario

We show how digital tools, including many already in use, can make the industry lean and green.

The environmental footprint of industrial businesses is enormous. More than half of all worldwide carbon dioxide equivalent (CO2e) emissions are attributable to fossil fuels used during manufacturing and logistics activities. Given current emission trends, manufacturing- and logistics-generated CO2e would have to drop by around 50% by 2030 to achieve the 1.5°C target set by the Paris Agreement for limiting the rise in global temperatures.

Finding the best decarbonization strategies and assessing the economic impact of implementing them can lead to win-win use cases for sustainable manufacturing and operations.

It will be soon impossible to distinguish between environmental and economic sustainability, as pressure to proactively decarbonize our planet grows along the entire industrial supply chain. While industry’s environmental footprint is enormous and net zero is widely perceived as a top priority, the complexity of the environmental problem is magnified by the lack of transparency of manufactured product lifecycle emissions.

Since net zero implementation has not kept pace with ambitions, businesses must instill a sense of urgency with a strategy and business plan that closely relates sustainability efforts to positive business outcomes. Senior leaders who need to sponsor sustainable manufacturing lighthouse projects on a large scale have a mandate to uncover those opportunities using digital technology, data and key performance indicators. Actionable insights must be the goal.

Here we’ll explore how digital tools can help bring about the sustainable manufacturing metrics needed to understand where the sweet spot lies in the people/profit/planet equation.

Study existing data and processes to boost sustainability

In recent years, the use of digital capabilities to execute lean processes has increased productivity, decreased operational waste, and lowered expenses. Digital technology may also give firms more visibility into their operations, equipment wear and tear, and energy use. Equipped with this data, companies should optimize production or establish predictive maintenance to minimize energy loads as well as material and water waste—all important elements in building sustainability.

Beyond standard cost-cutting levers, sustainable operations are and have always been anchored in maximizing operational and resource efficiency. As a result, there is a natural and common association between the two. A closer examination of a standard supply chain model exposes several potentials for an organization to not only increase profitability, but also to further incorporate sustainability into its identity.

The factories of the future have the potential to achieve demonstrable sustainability outcomes as well as economic savings by lowering waste and water consumption, changing energy loads, and using renewable resources. From this perspective, all operations related to the upstream movement of products and materials (aka reverse logistics) also provide tangible sustainability and operational benefits by enabling efficient product returns, inspection, and refurbished products which in turn allow for a low-cost re-introduction into the market of returned components and products. A well-managed reverse logistics operation, from a sustainability standpoint, not only eliminates the need to source new raw materials for manufacturing, but it may also contribute to recycling activities as part of a circular economy material flows.

Make across-the-board improvements

To build a strong foundation for the digital factory of the future, businesses must encourage improvements in processes and structure; people and culture; and scaling technology. It is critical to recognize that digital transformation has an impact on every area of a company. Indeed, in our research, 90% of decision-makers agree that sustainability, along with diversity and inclusion, are “important aspects of being a modern business.”

Cost challenges necessitate that organizations simplify operations and integrate more digitization to achieve improved efficiency in industrial processes, according to our clients. During engagements, we still observe missing interfaces for horizontal and vertical integration, overcomplicated procedures and systems, and numerous uncoordinated or even conflicting projects that overwork personnel, resulting in a chaotic working environment.

Companies have traditionally sought process enhancements that reduce cost and time to market. As a result, efficient, waste-free procedures are (still) the best method to maximize the value of current technologies. Digital technology may be used to improve all processes in manufacturing, logistics, and administration, as well as the organizational structure. Processes in the factory of the future are designed to be simple, based on direct communication and fewer interfaces. When developing and modifying processes with a lean and digital approach, it is important to eliminate confusion and unclear roles.

Digitization will enable growth and stimulate innovation by providing transparency into present processes and situations and allowing data-driven decisions based on these insights. This will propel production to new heights, allowing businesses to meet sustainability and flexibility objectives.

Apply IT and OT data to sustainability

Technological breakthroughs have been the primary engine of previous industrial revolutions and will continue to be critical for the development of Industry 4.0. Cloud computing, machine learning, and the industrial Internet of Things offer a linked organizational environment that enables continuous data interchange and analysis across systems and physical assets.

Companies want scalable and established solutions built on interfaces that assure consistency of execution. This is made easier by employing reference architectures and selecting existing best practices from a solution library. To attain net zero, this library should also include solutions that fulfill the primary aim of carbon footprint neutralization.

The sustainable, efficient factory of the future will be built by connecting the worlds of information technology (IT) and operations technology (OT). While these sectors did not previously cross, the complete integration of IT and OT will yield new insights from plant and operations data. Businesses will gain transparency and easy access to existing and planned digital solutions by utilizing data-enabled technology platforms.

Selecting the correct green and digital solutions, linking them based on current designs, and making them scalable will be the success elements for the future of manufacturing. The technology to address climate change is becoming increasingly available; businesses must learn how to use and scale it properly. To do so, organizations must ensure their approach allows them to gather accurate and continuous data, which is only possible when they construct infrastructure on blueprints and design principles and leverage scalable solutions.

To learn more, visit the Sustainability Services section of our website or contact us.

This article was written by Alessandro Silvestro, Principal Industry 4.0 & Sustainability Advisor in Cognizant’s Sustainability Services practice.

Cognizant Insights Team

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