The concept of sustainable manufacturing has evolved dramatically over the last 20 years. What was once viewed as an unaffordable luxury or unwanted obligation is now an essential investment. Companies are seeking to minimize their carbon footprint and operate more efficiently and profitably through lower energy costs, reduced waste, and smarter use of raw materials.
With the proper tools and technology, improvements can be realized in every area of the manufacturing value-chain, both on and off the plant floor. These areas include:
Original product design and engineering
New products are designed with carbon footprint reduction in mind. An example of this could be new products that use less material than their predecessors.
Sourcing
Manufacturers are looking beyond their own operations and putting pressure on suppliers to adopt sustainable practices.
Production
Smart manufacturing has the potential to improve production in many ways, such as energy efficiency and raw material consumption.
Transportation
Digital tools help reduce fuel costs and carbon emissions by optimizing the movement of goods before, during, and after the manufacturing process. These digital tools can also facilitate collaboration among employees across locations to reduce the need for travel.
Aftermarket considerations
After point-of-sale, companies can promote sustainable practices by increasing the reusability of materials from manufacturing. When reuse is not an option, waste reduction strategies (such as take-back plans) will reduce land-fill waste and improper disposal of potentially toxic material.
While each area is equally as important, we will focus primarily on production throughout this article. Can manufacturers—especially those making industrial products—bolster overall performance and competitiveness by using smart technologies and greener energy? Let’s look at the steps they could take.
The case for responsible manufacturing
Manufacturers around the world are being asked to do their part to reduce emissions of greenhouse gasses (GHGs) and achieve the overall goal of carbon neutrality. Governments that commit to reducing the overall carbon footprint of their country will require manufacturing leaders to make changes within their organizations. Existing government regulations may also change to achieve carbon reduction targets, forcing those manufacturers who do not yet meet baseline requirements to adapt.
At the consumer level, watchdog organizations have access to more data than ever. A product’s carbon footprint can now be measured or accessed by consumers online or at the point of sale. Environmental scores will become an increasingly important factor in what and why people decide to buy.
Meanwhile, financial lenders and investors—especially on the institutional side—are increasingly considering environmental, sustainability, and governance (ESG) factors when deciding where to extend credit or invest. Companies failing to show a commitment to ESG may have to work harder to raise capital and might find themselves excluded from certain opportunities.
The business case
Many of the changes that reduce waste and carbon emissions for manufacturers could also lead to long-term cost savings and higher profitability. These technology-driven improvements could include smarter energy use, minimizing packaging, maximizing the use of raw material, higher-quality finished products, more efficient transit, smarter scheduling of materials and labour, and better facility management.
Smart manufacturing technology can help factories work more efficiently, use less energy and material, and reduce costs. This all means sustainability is more achievable than ever.
Factories of the Future
A strong link exists between the use of digital technology in manufacturing and improved sustainability. For example, factories that connect to a smart grid optimize their energy use by analyzing usage data to identify wasted energy, eliminate this inefficiency, and store excess power. Depending on the factory, they could also integrate internal energy generation to support this cycle. This same idea can be extended to smart lighting, where sensors learn the in-person work patterns of a facility, turning lights on or off as needed.
These examples are just a start. Digital tools can help manufacturers view their operations holistically and better understand where to implement changes that make their business more resourceful and sustainable. These include:
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Digital opportunity
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Definition
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Example
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| Factory asset intelligence/performance management |
Applying data science tools that provide insights to optimize factory floor operations. |
Data related to temperature, pressure, or vibration can help predict when an asset is vulnerable to failure and in need of maintenance. The problem is fixed before it escalates. |
| Factory synchronization and dynamic scheduling |
Coordinating scarce factory resources for optimized manufacturing and operational activities. |
Ensuring a facility has all necessary parts and personnel in place before starting the assembly process. This will avoid delays and suboptimal use of resources. |
| Augmented workforce efficiency |
Improving workforce efficiency through enhanced technologies and equipment. |
Smart, wearable technology (glasses, watches, etc.) that gives workers access to information instantly. |
| Plant consumption and energy management |
Using contextual data to optimize energy usage and reduce overhead costs. |
Switching power sources over the course of a day helps minimize costs and fossil fuel consumption. |
| Smart conveyance solutions |
Enhancing warehouse material transfers using digital orders and autonomous vehicles. |
Tools that optimize warehousing ensure that the most in-demand items are in the most optimal locations. |
| Core operational technology |
Automating the production line through systems components using controllers, production machinery, and networking. |
Using robotics for precision tooling reduces material waste. |
| Engineering collaboration/change management |
Utilizing product performance data to improve design, engineering, and production. |
Digital twinning helps to simulate design and production as well as understand the potential impacts to operations. |
| Quality sensing and detection |
Preventing quality issues in real time while reducing the need for human quality inspections. |
Using smart cameras to detect defects can reduce product return rates and improving quality. |
These tools are most effective when they are networked and integrated.
Deloitte’s Smart Factory at Wichita
Deloitte is currently constructing a net-zero building called The Smart Factory at Wichita, which brings to life best practices and real-world proof points to show manufacturers just how much is possible.
At a compact 60,000 square feet—with the manufacturing site comprising roughly one-third of that space—the smart factory can generate sufficient energy to power operations through an on-site solar and wind farm coupled with battery storage. Microgrid control units monitor energy flows and rely on advanced analytics to improve demand management. Excess power can be stored for later use.
The facility brings together a range of leading vendors to collaborate on technological interoperability. The aim is a sustainable ecosystem that integrates multiple technology platforms in new or existing facilities.
Manufacturers that visit the site can explore various use cases and see the tremendous benefits of a smart factory in action.
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The CAE story
In September 2020, CAE became the first Canadian aerospace company to achieve its goal of carbon neutrality. The initiative formed part of their broader, more proactive approach toward climate change.
CAE defined its environmental vision through three pillars: consume less, consume better, and offset carbon emissions.
To reach its goal, CAE bought renewable energy certificates to offset the use of electricity and invested in GHG reduction projects, including wind energy and forest conservation.
CAE considers carbon offsetting and renewable energy certificates as interim measures as the company continues to make changes to reduce overall emissions. CAE is continuing to invest in energy efficiency projects, like making full-flight simulators more energy efficient, installing energy-saving lighting solutions, reducing its energy and real estate footprint through their innovative CAE Agora workspaces, and exploring biofuel solutions for its fleet of small aircraft used in CAE’s flight academies.
In conjunction with these initiatives, CAE created a climate change committee to oversee the integration of climate-related issues into CAE’s business strategy. The committee’s additional remote was to identify and manage climate-related risks and opportunities around dedicated projects.
The company not only leads by example, but also spreads a message around climate action through speaking engagements at industry events, participating on expert panels, moderating, and sitting on industry associations devoted to reducing GHG emissions.
By taking a proactive approach toward climate change mitigation and carbon emissions neutrality, CAE hopes it will inspire other companies to take action and have a positive impact on climate change.
Help the planet, help yourself
Becoming sustainable is a process that requires a commitment to integrating climate action into the core of your corporate mission.
In the past, manufacturers hesitated to implement sustainable practices. Costs were high, the disruption was great, and the risk to a company’s competitiveness was real. The greater risk today is inaction.
Digital tools are helping manufacturers ensure that every dollar put towards sustainability results in a positive return. Modelling—including initiatives like Deloitte’s Smart Factory—helps to keep disruption at a minimum. The business world is starting to realize that growth and profitability have become intrinsically linked to slowing the pace of global warming. Investing in sustainability is the best choice for manufacturers to achieve both.
