Written by Deborah Blumberg
Today’s most competitive companies are launching digital transformation initiatives that power efficiency while reducing environmental harm. When Forbes Research surveyed manufacturing leaders in 2023, for instance, almost 70% said they’d be increasing their technology investments to become more sustainable.
This presents an opportunity for industry leaders to make a significant impact, but many are stumped by where to begin. How can they transform in a way that positively impacts their business and the climate crisis? And where do they start?
Schneider Electric Smart Factory
Schneider ElectricFor insights, Forbes interviewed Greg Tink, director of Industrial Digital Transformation at Schneider Electric. The industrial tech company was recently recognized as one of the world’s most sustainable companies for the 13th consecutive year for designing innovative, climate-conscious solutions to fuel organizations in their modernization journeys.
Below, Tink shares a series of tangible steps to help companies envision and actualize their digital transformation ambitions.
1) Be Crystal-Clear
Before researching new technologies or fine-tuning a budget, start by establishing what sustainability issues matter most to your operations and customers. From there, define what “digital transformation” means for your company—in terms that are clear, specific and tailored to your goals. “It’s about setting the tone and having a common purpose,” Tink says. “If you start a journey without knowing the destination, you’ll never end up anywhere.”
This includes mapping specific sustainability targets—reducing water use by a certain amount each year or transitioning to renewables by a set date, for example—and aligning the company’s mission, values and culture accordingly.
Defining your transformation approach in concrete language (like Schneider Electric’s description of its own Sustainability Impact programming, for instance) will ultimately help fellow executives and employees understand and buy into your game plan.
2) Own It First, Centralize Second
C-suite leaders need to be the driving force behind transformation initiatives before delegating and distributing efforts across the organization. “It’s leadership’s job to set the tone and enable the rewiring—that new corporal neural connection required to make the organization transform,” says Tink.
When CEOs own the digital transformation, they unlock the cross-team inertia required to set their big ideas into motion. This ultimately builds trust through shared data and experiences, boosting retention and job satisfaction and powering smarter business decisions. Tink says it’s an approach Schneider Electric embraces within its own ecosystem to continuously hold itself accountable to its vision and stakeholders.
With senior leadership at the helm, you can then equip teams across levels and business functions to collaborate and contribute to your initiatives. “You need a core group with a strong mandate,” says Tink. “Just designating someone as a transformation leader doesn’t necessarily make an organization transform. You have to have structure and momentum behind it.”
3) Prioritize People
The most essential investment as you modernize: your employees. Empowering them with the necessary skills to navigate and build upon new processes means they get to participate in the effort, too. “As you automate, give your people the ability to learn and access the right training so they can move with the organization,” Tink says. “They need to see themselves in this transformed way of working—it’s cultural incentivization.”
When Schneider Electric set out in 2017 to build a transformation program for a 65-year-old factory in Lexington, Kentucky, it retained employees by prioritizing education and upskilling. In early 2024, the company was recognized by Forbes in its list of America’s Best Large Employers for its continued emphasis on empowering its workforce.
To successfully shift away from legacy machinery and siloed systems, Tink says, companies need a “lean continuous improvement mentality” woven throughout workforce culture—and that can’t happen unless teams are equipped to understand and contribute to the changes happening around them.
4) Get A Pulse On Progress
Set performance measures first and then implement systems to hold your business accountable to its sustainability goals, Tink says.
This could include flow studies to pinpoint process bottlenecks, for instance. “Ask, where are we the least efficient? Where can we drive efficiencies, reduce energy intake and do more with less impact everywhere? Where can we reduce waste? There are no shortcuts: You have to analyze the entire process to understand what needs to change,” says Tink.
Accurately benchmarking performance in areas like energy conservation, carbon emissions and water use requires continuous monitoring and bird’s-eye visibility—achieved only with a robust digital backbone. Schneider Electric uses industrial software with artificial intelligence (AI), including the AVEVA System Platform, which delivers real-time analysis of trends and standardizes data management to help organizations optimize. AI and machine learning are now used throughout the industry to elevate sustainable performance with trusted, actionable insights to drive efficiency and reduce waste.
When the company was modernizing the Lexington factory, Schneider Electric’s earliest objectives included setting climate-conscious targets and then achieving a holistic snapshot of factory operations to gauge improvements. By easily tracking metrics that matter, like energy use and power quality, factory employees could detect operational inefficiencies and collaborate on opportunities to refine production and advance agility.
5) Demonstrate Wins With Data
Once your company has data to validate its digital transformation and sustainability investments, share those numbers widely. “Roll the data out so everybody in the company can see it and it becomes a part of the culture,” says Tink.
The AVEVA tool made it possible to capture the Kentucky Smart Factory’s achievements, including a 30% net reduction in CO2 emissions and a 3.4% year-over-year energy savings since 2012—results that were highlighted as proof that transformation and sustainability go hand in hand. Schneider Electric uses its own automation technology in all of its Smart Factories and reports a 10-30% reduction in energy costs and a 30-50% reduction in maintenance costs overall.
By establishing a similar data fabric that integrates technology, automation and AI capabilities, organizations are empowered to manage, access and leverage data with greater agility and efficiency.
With insight into what’s working at one facility, replicate solutions across your factory footprint, advises Tink. “That’s really powerful: making it stick in the organization and spreading out the success so everybody can accomplish this together.”
At the same time, expect that some changes may not pan out. “A key part of innovation is being able to try and fail,” he says. Measure and validate your improvements, learn from your experimentation and then move on to the next phase of your journey. Teaming up with a partner with industry expertise can jump-start your transformation, removing the guesswork as you roll out digital initiatives.
“Becoming more digital drives sustainability as well as business goals,” says Tink. “You use less energy and drive efficiencies in your workforce, and that leads to profitable sustainability over time. The world is transforming, and industry can lead this transformation.”
