Ashish Saxena, Vice President & Sector Head Manufacturing, Wipro Limited.
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Sustainability is now a top boardroom agenda in many organizations.
How can corporate growth leaders play a role in enabling a sustainable and resilient future for all?
Sustainability places equal emphasis on the triple bottom line — people, planet and profit. It is described as development that meets the needs of the present without compromising those of the future.
The most common challenges for organizations today include high carbon emissions, finite fossil-fuel availability, severe weather issues causing service disruptions, water scarcity, inefficacy and waste management.
Corporations of the future are expected to be leaders of change and develop a sustainability strategy. Simultaneously, legislators are reinforcing the sustainability cause by introducing stringent regulations around emissions, waste and labor.
Already, 21% of the world’s 2000 largest public companies representing $14 trillion committed to meet net-zero targets.
Companies that design their business model prioritizing sustainability can help address global environmental issues while positioning themselves to succeed in the long term as the world encounters new challenges. In research conducted in part by Blackrock, 94% of a globally representative selection of sustainable indices outperform their parent benchmarks.
Manufacturing Sector’s Pivotal Role In Global Environment Sustainability
The manufacturing sector is the driver for economic growth, but at the same time, it is one of the largest contributors to GHG emissions worldwide. According to the EPA, 21% of global greenhouse emissions come from burning fossil fuels — coal, oil, natural gas — for industrial purposes.
Direct emissions in manufacturing result from diverse processes, including on-site combustion of fossil fuels; non-energy use of fossil fuels; and chemical processes used in iron, steel and cement production. Furthermore, the industry generates indirect emissions from electricity consumption, waste disposal and logistics.
The Covid-19 crisis compelled manufacturing enterprises to focus on resiliency. Organizations must take a multifaceted approach, designed not just to protect business models but to also assure customers and communities of their business continuity and environmental commitment. With the manufacturing sector’s share of global energy consumption at 54% and one estimate showing a 45% emission reduction from the sector (plus logistics) to meet the 2030 Paris Agreement target, there is a lot of work to do.
Manufacturers must take a leading role in economic recovery with sustainability at the core, driven not just by stricter regulations or environmental issues but also to avail benefits including:
• Better operational efficiency.
• Enhanced brand reputation and public trust.
• Access to new customer segments.
• Long-term business viability.
3Cs Strategy For A Sustainable Manufacturing Enterprise
Before diving into a strategy to incorporate sustainability, it’s important to consider that technology is often a prerequisite for manufacturing sustainability. This leads to the convergence of ESG with Industry 4.0 — more automation — which has great potential.
To capitalize on it, industry leaders should consider practicing life cycle thinking, adopting design and simulation technologies, leveraging renewable energy in operations, products/services and promoting supply chain data transparency. Technologies prevalent in Industry 4.0 — AI, ML, IoT, edge computing, virtualization, simulation, additive manufacturing, automation and data analytics — transform manufacturing units into intelligent factories, thereby optimizing energy utilization and production processes. Technology can help accomplish sustainability goals in a less expensive and smarter way.
Cradle-To-Cradle
Manufacturing follows a “cradle-to-grave” approach wherein an item is produced, used and discarded. “Cradle-to-cradle,” or circular economy, proposes a shift — leveraging technology for product life cycle analysis.
A circular economy promotes sustainability in two ways — one, it curbs emissions caused by production, and two, it extends product lifetime. If reuse/refurbishment isn’t possible, the product should be recycled. At the end of the product’s life, while discarding, waste management must be conducted to extract value. Further, products can also be designed considering a second life. After primary usage as an electric vehicle battery, it can have a second life as a stationary energy storage device.
Modularity in product design promotes separable components, thereby escalating functional lifetime with faster replacement of defective parts. Modular design can result in quicker production, customizability, easy updating and frugality. A Dutch-based smartphone company builds sustainable smartphones using these principles. Material selection also plays a significant role in sustainable product designing. A U.S.-based bioplastics firm provides an alternative to petroleum-based plastic.
Cyber-Physical Systems And IoT
The factories of the future will be smart and digital, using connected devices and collecting data by implementing cloud computing for real-time analysis AND decision making. Humans and robots are likely to coexist as they automate day-to-day operations.
IoT coupled with mixed reality creates pathways to remote control, maintenance and cost reduction. Simulation technologies further increase efficiency by reducing energy consumption and performing process improvement. This can also look like building automation systems using IoT to provide optimal levels of HVAC with minimal energy usage. A Norwegian furniture manufacturer is utilizing Industry 4.0 solutions such as smart industry robots and self-driving trucks, enabling the entire factory to be operated via tablet device. Efficient manufacturing using data for predictive maintenance can lengthen equipment life, thus gaining higher efficiency and increasing utilization per unit carbon emission.
Additive manufacturing, bolstered by 3D printing, is being used to create prototypes and components. A leading aerospace manufacturer has been successfully implementing 3D printing technology for metal and polymer parts for spacecraft. Blockchain can be integrated into the industrial system to enhance transparency, establish networks.
Carbon-Neutral And Renewable
Minimizing carbon emissions is a critical step in achieving global climate sustainability. The first two “C’s” help products become less carbon-intensive. However, we also need to seek alternative solutions for energy-intensive manufacturing processes. Leveraging renewable energy can be crucial in reducing overall GHG emissions. A solar- or wind-powered factory coupled with energy storage unlocks new opportunities and flexibility. A leading sports apparel manufacturer is powering its North American facilities using 100% renewable energy.
By sharing resources between 11 partners, the Denmark-based industrial park provides unbelievable gains for members. Annually, the combined benefits equal 100 GWh of energy, 3.6 million tons of water, 635,000 tons of CO2 and bottom-line savings of $24 million. The network has created a resilient and future-proof supply chain ecosystem for itself.
The Road Ahead
Sustainability is a complex and continuous process. While many organizations have already taken the first step, innovative technologies are yet to be embraced. Sustainable digital manufacturing is a promising lever to profit as much as it is to equitable growth, and early adopters stand to gain a competitive advantage. The 3Cs framework provides a structured strategy toward achieving the common goal of sustainability through digitization.
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