Bringing sustainability to the centre of manufacturing

An image of a factory at night.
(Image credit: Pixabay)

Over the past three decades, there’s been a paradigm shift in attitude towards sustainability. Previously condemned to an afterthought, corporate sustainability has now become part of the mainstream discourse, with more than eight in 10 CEOs believing that businesses now must lead efforts to deliver on environmental goals.

I strongly believe that organizations now have an enormous responsibility and opportunity to move towards more sustainable business models with economies now returning to pre-pandemic productivity levels.

As environmental, social, and governance (ESG) goals move to the center of decision-making criteria for both investors and tender processes, the organizations that succeed in the years to come will be those that make sustainability a core tenet of their operations.

While the manufacturing industry has made significant strides in boosting its ESG credentials over recent years, there is undoubtedly more that can be done, especially for organizations with the stated goal of becoming net zero. From sourcing to engineering, production to transportation, a concerted effort is required across sectors if meaningful and long-lasting change is to be achieved. This will not only help avert the climate crisis but also help increase profitability; almost half of manufacturing executives report that their environmental sustainability initiatives measurably boosted their corporate financial performance.

This demonstrates that robust ESG policies are becoming integral to the bottom line. Here’s how adopting emerging technologies can help the manufacturing sector achieve their environmental ambitions.

Unlocking the potential of sustainable manufacturing industry

There are several emerging technologies that the manufacturing industry could adopt to drive sustainability. The development of new technologies has enabled manufacturers of all sizes to reduce waste, increase efficiency, and be able to view the entire value chain more easily. For example, EY study shows that 81% manufacturing companies across Europe agree that AI has become more important for their business over the past 12 months.

AI can offer a range of industries near-limitless possibilities. For the manufacturing sector, this could include predictive maintenance, enhanced production planning, logistics optimization, and improved product design. In turn, the sector can drive a more efficient use of resources, minimize waste, and reduce energy consumption.

To illustrate how this could work in the real world, picture a factory floor. Data on utilized materials can be collected to determine whether they were responsibly sourced. Manufacturers can do this by integrating sensors to track the flow of a certain piece of material on its journey across the supply chain. AI’s data-analyzing capabilities can then determine how much material was used.

In turn, organizations can analyze just how much material is needed and, therefore, reduce the generation of waste. Accessing this data in real-time offers an organization the ability to ensure its supply chain processes are aligned with ESG standards.

CP Gurnani
CP Gurnani

CP Gurnani is Managing Director and Chief Executive Officer at Tech Mahindra.

Further environmental benefits can be achieved if the manufacturing sector adopts complementary technologies to AI and big data. To illustrate, the adoption of Internet of Things (IoT) technology could reduce global carbon emissions. IoT can help address quality management challenges and improve productivity among operators, maintenance engineers, and workers. It can also help conserve energy.

We recently worked with an automotive factory to monitor and control the plant's various energy sources. By deploying IoT solutions, we helped the client gain real-time energy consumption and cost data, as well as install a real-time alarm system, and improve data analytics. This enabled the client to reduce its energy consumption by 10% and better analyze energy usage.

AI also underpins further use cases in manufacturing, such as augmented reality (AR), which allows the creation of virtual designs for pre-prototypes. This can further support an organization's ESG ambitions by cutting down on manual maintenance through real-time daily monitoring, enhancing product development, and streamlining cargo picking for loaders.

Another important area that is gaining momentum in sustainable manufacturing is smart packaging. Responsible packaging reducing the environmental impact of packaging, minimizing container dimensions to limit the burden of cold chain logistics and product storage are becoming priority for the industry.

While there are lot of technologies and components which can help reap the benefits of smart packaging, digital leaflets, or ePI (electronic product information) directly accessible from the medicine package by scanning a QR code or barcode on the package can serve an excellent means for patient connect which the conventional model lacks. Basis our experience of working with pharma companies in the UK, using e-leaflets in each medicine box, could save 100 Tons of paper and lead to less deforestation.

Rethinking sustainability through a data management model

AI, IoT, and AR depend on near-ubiquitous flows of data to operate, which demand large amounts of computing power and energy consumption. For IT leaders working towards improving sustainability credentials, migrating from on-premises operations to the cloud is a strong step in supporting this directive.

What’s more, cloud-based technology makes it easier for manufacturing businesses to automate the collection and transformation of raw data from multiple databases, such as ERPs. In turn, organizations can benefit from a centralized system of records and report more accurately on their ESG credentials than before.

Data management can also add a lot of value. We worked with an inverter manufacturer that sought to increase the return on investment (ROI) of its customers' PV assets. We aided them in creating a multi-site overview with in-depth diagnostics of vital equipment by implementing remote data management with a locally regulated, diversified collection of data points.

Decarbonized, sustainable operations have moved far beyond compliance exercises; they are now a new source of competitive advantage for manufacturers as well as a further driver of digital transformation. Now more than ever, every company, government, and non-profit around the world has a critical role to play in reaching our net-zero future. In order to get closer to a more sustainable future, manufacturing industries of all stripes must keep pushing the envelope of innovation.

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CP Gurnani

CP Gurnani is Managing Director and Chief Executive Officer at Tech Mahindra.