Sustainable Manufacturing

From vision to action

Since the dawn of the industrial age, manufacturers have been evolving and adapting in response to new technological innovations and changing market demands. Today, the industry is moving through another evolution, one that has sustainability at its center.

Sustainable Manufacturing: From vision to action explores the opportunities that sustainable manufacturing presents for manufacturers, and shares real-world stories from manufacturers that are leading the shift towards sustainable practices—as well as strategies organizations can adopt to get started on this journey.

Focusing on five key impact areas where sustainable practices can drive measurable improvements across the manufacturing value chain

  • Engineering: During product design, both small modifications and wholesale reinvention are reducing costs and waste.
  • Sourcing: Through the ethical selection and sourcing of sustainable and/or alternative materials.
  • Production: Improved operational efficiency, smart technologies, and green energy are being combined to create the factory of the future.
  • Transportation: During shipping and delivery, where supply chain reconfiguration and decarbonization efforts are rationalizing trade routes and reducing emissions.
  • Aftermarket: The transition towards a circular economy model promises to change the way products are designed, produced, sold, used, and disposed.


A push and pull towards sustainable manufacturing

The slow but steady move towards sustainable manufacturing has been driven by several forces such as a desire to reap the rewards it offers, a need to offset risks and costs, and growing pressure to address stakeholder, shareholder, and customer demands.


Manufacturers across the spectrum are leveraging sustainable manufacturing practices to reduce costs and waste, improve operational efficiency, gain competitive advantage, and enhance regulatory compliance.

Rising risks

The shift towards sustainable manufacturing is also an effort by companies to mitigate a range of risks such as ever stringent regulatory mandates, just as compliance is becoming more complex. To add to that, there is increasing external pressures from investors wherein companies are now expected to deliver year over year progress on their sustainability objectives.

This could ultimately require the transformation of the entire manufacturing and industrial system, forcing manufacturers to relook at how they design, source, manufacture, deliver, and service all their products.


Figure: The building blocks of the low-carbon economy

Source: Deloitte analysis

Product design with sustainability in mind

In transitioning to sustainable manufacturing, it’s important to recognize that, in many ways, sustainability begins at the product design stage.

With rapid prototyping and additive manufacturing (AM) vastly enhancing research and development (R&D), companies can often realize sustainability benefits by modifying existing products. Beyond generating less material waste, AM can help manufacturers reduce reliance on environmentally-detrimental materials such as caustic cutting fluids. The lighter weight of many AM-produced parts can also help save fuel and energy.

By thinking through the entire lifecycle use of products, many manufacturers are also reducing disposal and waste by making their products available for lease or rent rather than selling them outright so that they can ensure proper product maintenance and extend the product life-span. In addition to incenting manufacturers to improve production quality in an effort to extend product life, this approach can open the doors to new streams of revenue through service and support contracts.

One key to realizing these benefits is to approach product design with sustainability in mind. This could involve redesigning individual elements of specific  products to improve environmental performance, looking for opportunities to reduce disposal costs and improve raw material utilization, finding ways to extend product lifecycles, or designing with the ultimate intent to reuse, refurbish, or remanufacture (see: The case for a circular economy).


Material selection and ethical sourcing

An important element in driving sustainable manufacturing revolves around material selection and sourcing. At its most fundamental level, this begins by reducing raw material inputs, replacing potentially toxic materials with those less harmful to the environment, and using processes such as AM to shorten supply chains and cut down on the amount of material required to produce components.

To meet ESG mandates and avoid backlash from consumers, investors, and regulators, manufacturers may increasingly need to demonstrate provenance of their raw inputs.

Immutable proof

One way to deliver transparency is through the adoption of immutable ledger technologies, such as blockchain. Advancements like these are already influencing the ways in which manufacturers select and source their materials. By tracking and tracing individual materials, component parts, and even finished products, immutable ledgers can help manufacturers enhance product quality, accelerate product recalls, and reduce tampering.


Forging the factory of the future

In considering ways to reap the rewards of sustainability within the manufacturing sector, another critical focal area is on the factory floor. This often begins with automation and integration. In recent years, manufacturers have implemented lean processes as well as digital capabilities to boost productivity, create safer workplaces, and reduce costs. Integrated and complimentary capabilities allow manufacturers gain greater visibility into their production processes, equipment wear-and-tear, and energy usage, improve predictive maintenance, and minimize material waste.

Alternative energy options

Energy often represents a significant cost—which only rises as global energy prices increase. By reducing waste and water usage, adjusting energy loads, lowering heating requirements, and even embracing carbon-neutral manufacturing, the factories of the future can drive measurable sustainability outcomes as well as reduced costs.

One approach for making this happen may be by increasing reliance on the increasingly competitive renewable energy sources.


Streamlining shipping and distribution

Beyond product development and production, manufacturers serious about realizing sustainable development goals must look at the impact of their distribution practices. This is particularly critical given the industry’s heavy reliance on both shipping and road freight.

Taking enlightened action

A way to move the needle around shipping and distribution is by implementing initiatives to support “green transport” through long-term contracts, committing to volume on selected routes, and incorporating emissions targets in tender criteria. Sectors under regulatory pressure, like automotive, or those with high consumer visibility, such as fast-moving consumer goods or apparel, could be prime candidates for these types of programs.

To be effective, however, both ship and fleet operators would need to play a role by sharing emissions data more openly or improving monitoring technologies to help manufacturers make informed decisions and verify performance.


The case for a circular economy

When walking the path towards sustainable manufacturing, an additional consideration revolves around what happens to products once they are in a consumer’s hands. There is no question that the imperative to reduce waste is increasing. There is also a growing movement to hold companies accountable for all their product lifecycle emissions.

Thinking in loops

Loosely defined, a circular economy is a closed-loop system designed to replace end-of-life waste disposal with material reduction, reuse, recycling, and recovery. It aims to keep resources within the product lifecycle for as long as possible by:

  • Closing the loop: Reintegrating waste or production by-products back into the manufacture of new products.
  • Slowing the loop: Extending product life and slowing the resource transition to waste or resource recapture.
  • Narrowing the loop: Reducing resource and material intensity requirements during production, use, or disposal.

Source: Deloitte analysis

The journey towards sustainable manufacturing

Whether prompted by stakeholder demands, regulatory mandates, a concern for the environment, or pure financial motives, the sustainability imperative is growing. To make the progress necessary to shift the dial, manufacturers will need to commit to clear action.

Getting started
  • Assess your current state
  • Refresh your strategy
  • Set targets and define priorities
  • Consider funding and tax implications
  • Address cultural imperatives
  • Define necessary roles and responsibilities
  • Evolve your approach to investment decision-making
  • Form structured ecosystems to overcome potential barriers
  • Measure progress and create a clear market narrative
  • Play an active role to provoke the future you desire

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