Society could not exist without industry and manufacturers, who convert raw materials into finished goods worldwide for a wide range of industries. To meet stakeholder expectations, they are under pressure to operate outside the traditional ‘take-make-waste’ linear production model and incorporate more circular processes that extend beyond production to the entire supply chain and how materials are sourced, produced and distributed. To manage resources and adapt to a more sustainable process, they can turn to sustainability and resource management solutions.
What Challenges Are Manufacturers Facing Today?
Manufacturers today are faced with increasing challenges when it comes to managing their resources. As high users of energy and water, which are essential to the process, as well as large generators of waste and carbon, they are challenged with continuously identifying, prioritizing and executing facility optimization projects, all while monitoring the effects of these projects on the bottom line. As one of their largest controllable expenses, energy is a critical resource to manage as well as the resulting carbon emissions. For certain sub-segments of manufacturing, unique waste and materials regulations carry the burden of risk of audits and fines for noncompliance. And to add to the complexity, manufacturers are managing stakeholder expectations to ensure goods are responsibly sourced, produced and distributed. As the industry changes and adapts to the modern age, automation and IoT-connected machines can help deliver precise data and analytics to inform more sustainable operations.
What Manufacturing Trends Support the Sustainability Transformation?
- Pressure to ensure goods are responsibly sourced, produced and distributed is increasing. The notion of a more circular economy is increasing – with expectations that raw materials are renewable and responsibly sourced – and manufacturers are struggling to meet these needs. In addition, sites are mandated to reduce their consumption of energy and water while not letting it affect their cost to produce products. More companies than ever are also considering freight and DC management in their emissions calculations.
- Certain sub-segments of manufacturing are subject to increased regulations on waste and disposal. In many cases manufacturers can face costly fines for violations and the potential for the locality to assign an auditor at cost to the manufacturer to improve their waste process if they aren’t proactive. Packaging is also a common consideration. Manufacturers are looking to reduce packaging altogether and ensure the packaging they do develop is recyclable or ideally fully reclaimable and reusable.
- Manufacturers are subject to various emission standards, specifically related to air and water quality, and in specific locations must pay a carbon tax or participate in a cap and trade system to pay for the emissions they produce. All manufacturers can report to CDP and GRI to report goals and progress. In the UK/EU, manufacturers are required to report on energy, water and waste consumption, perform on-site audits and report emissions. With EU lawmakers pushing for carbon neutrality by 2050, manufacturers must have reduction strategies in place.
What Should Manufacturers Be Thinking About?
Some of the following actions can help manufacturers address current trends and external pressures while maximizing savings and resource efficiency.
- Build a data foundation. Leverage on-site equipment and building sensors and combine with utility bill data to create a complete picture of energy, water and waste consumption and costs. This enables the C-suite to set resource reduction goals that are impactful and attainable.
- Balance cost, reliability and sustainability. A holistic energy management strategy across electricity, natural gas and renewable sources, including DERs, ensures the right mix of reliable power while responding to stakeholder expectations.
- Demonstrate responsible resource management. Consider solutions to mitigate the impact of distribution and packaging by coordinating with EV-based delivery suppliers and ensuring packaging is minimal, recyclable, or reclaimable.
- Maintain compliance with regulations. Whether it’s managing energy, water and waste, reducing packaging, or sourcing responsible materials, reporting to CDP and GRI allows manufacturers to demonstrate transparency and accountability to stakeholders.