A combination of advanced technologies and new design thinking approaches could help manufacturing companies create a more sustainable business ecosystem for the future. By Anirban Bhattacharyya
Taking a leap forward towards more sustainable supply chain operations, both within and outside the four walls of a manufacturing enterprise, is becoming critical to the future of the business.
To achieve this goal, companies need to create greater awareness across the organization to help drive improved energy usage, reduce water consumption, manage landfill better, be compliant with industry regulations, and reduce the cost of non-compliance. They must also understand the inhibitors and drive organization-wide capability to push forward new business models to help create a closed loop performance management system that operates on the principles of a circular economy by eliminating waste in all forms and continually reusing resources.
Sustainable manufacturing also requires a new kind of ecosystem to help shape global value creation and more cost-effective production in a circular economy. This can be achieved through designing and building more connected products, creating connected operations driving digital threads across the value chain, and adopting new business models that support a future connected data economy that provides a more connected experience for both employees and customers. Advanced 4.0 technologies can play a critical role in this transition by supporting the creation of that connected eco-system and by enabling the development of a more data-driven, cognitive value chain.
Creating Sustainable Cultures
With sustainable leadership, of course, comes a new focus on culture. Adopting a culture of product life cycle analyses, smart reporting, and encouraging employees to participate in sustainable development leadership boards, help foster a culture of more responsible citizenship within the organization.
Leadership teams need to spearhead that new culture of awareness, ethics, and responsible manufacturing by openly championing sustainability strategies, providing new gamification platforms to help make it easier for employees understand the potential impact of their operational activities, and by recognizing and rewarding employees who are motivated to deliver a green manufacturing process.
Once the allocation of funds to corporate social responsibility budgets are approved, re-training employees on sustainable practices will also help set the right culture in the organization. Updating relevant documentation and standard operating procedures, ensuring awareness of best practices, and adherence to regulatory requirements through training and workshop programs also help foster a sustainable cultural mindset.
Meeting the Challenges with 4.0
However, many of today’s manufacturing processes are riddled with challenges to the creation of a connected green supply chain. Poor visibility, a lack of proper operating procedures, frequently changing regulations governing manufacturing processes, and non-optimal scheduling of manufacturing operations that could minimize greenhouse gas emission, energy consumption, waste generation, water use, water pollution, etc., are among the most significant impediments.
New analytical insights derived from Manufacturing 4.0 technologies can provide companies of all sizes with the opportunity to overcome these challenges and optimize the use of resources, achieve major increases in efficiency, reduce the time and materials needed for mass-customization, minimize waste and environmental impact, and add direct value to their business.
Figure 1 maps how various Manufacturing 4.0 technologies can combine to enhance the scope of more sustainable manufacturing approaches, which in turn deliver operational and business model opportunities that have direct and indirect impacts across economic, social, and environmental dimensions.
Underpinning many of the technology elements is the collection of real-time data through sensors and operational systems and harnessing of the power of that data through advanced analytics to generate valuable insights about the business. For example, Big Data platforms provide the tools to collect and analyze huge amounts of data stored in cloud servers to highlight the performance of core business activities, along with associated sustainability metrics. By regularly measuring and reporting sustainability KPIs, manufacturing organizations are then able to take pro-active corrective action to improve their processes.
Additive manufacturing (AM) technologies, meanwhile, which support rapid prototyping, pre-production visualization, industrial tooling design and fabrication, small batch production, and mass-customization, are also being used increasingly to create end-use products in the aircraft, medical and dental implant, and automobile sectors. Small batch sizes and mass-customization results in less wasted energy and a more efficient use of raw materials during the production process. Pre-production prototyping also ensures products are built to specifications with minimal reworking. This not only ensures a quality product that meets customer needs, but also a more sustainable production process that minimizes wasted material, time, and resources.
“Leadership teams need to spearhead that new culture of awareness, ethics, and responsible manufacturing by openly championing sustainability strategies.”
Towards Virtual Manufacturing
Augmented reality (AR) systems, which overlay virtual information over a user’s physical world, and more immersive virtual reality (VR) systems, also provide powerful virtual environments that help to remove a dependency on physical assets in the production process, as well as enhancing worker skills in key activities including product development, quality assurance, maintenance, and training.
When used part of a digital twin approach, these virtual technologies feed into advanced simulation applications that can significantly enhance sustainable supply chain services by providing a platform to unlock best practice engineering knowledge, easily reuse design components, ensure regulatory compliance, and create better efficiencies in both new products and the processes required to produce them. Artificial intelligence techniques, for example, that utilize sustainability metrics during the simulation step can be applied to help produce better products in more sustainable ways .Not only does this virtual methodology save materials and energy in the product development phase, it can also be used to twin entire process operations to ensure the best solutions for sustainable manufacturing are identified before the design reaches the manufacturing floor. Resulting improvements in product quality also mean that customer returns can be reduced with less waste of environmental resources throughout the product lifecycle.
Value Chain Impact
The combination of multiple manufacturing 4.0 technologies alongside more sustainable business model approaches has a direct impact on many core areas of a manufacturing organization. Figure 2 highlights some of the benefits of deploying cognitive manufacturing and associated technologies across the manufacturing ecosystem, from initial compliance, to greater operational efficiency, supply chain optimization, rapid technology-enabled innovation, better resource allocation, and ultimately enhanced market reputation and competitiveness. Along this journey, digitally enabled cognitive enterprises also benefit from the development and mastery of multiple reusable digital assets, improving data security and the organization’s analytical capabilities. These In turn provide the digital platforms to support enterprise-wide continuous improvement services from analytics, to sustainability, to change management.
Agile Localization
In order to respond faster to the changing needs of customers and ever-increasing demands for mass-customized products delivered at speed, manufacturing processes also require higher levels of agility in design, planning, and production. Supported by digital systems capable of sharing real-time data between various departments to enhance flexibility, agile manufacturing approaches allow production processes to be tweaked rapidly while utilizing existing tools, equipment, labor, and raw materials to support a faster-response, mass customization business model.
To ensure rapid delivery when these customized products leave the factory, agile manufacturing approaches are increasingly being combined with a move towards more localized production, which has a number of environmental, social, and economic impacts. When goods are produced closer to consumers, products travel a shorter distance from source to destination, reducing the product’s carbon footprint. Local manufacturing also helps to boost local economies by providing nearby employment so people with relevant skills travel shorter distances to find employment. It also encourages new small businesses to thrive in the area as part of the local manufacturing ecosystem.
Sustainable Value Chains in Action
One powerful example of how a manufacturer is combining agility, sustainable new business models, and building new cross-industry ecosystems, involves a traditionally large heavy equipment supplier serving the agricultural industry. In addition to adopting more sustainable processes for equipment production within its plants, the company has recently expanded its business platform to become a digitally enabled service provider by introducing real-time data collection and analysis capabilities to farmers to encourage more sustainable approaches to crop production and land management. To support these new services the company has installed multiple types of sensors in its farming equipment that collect data regarding soil quality, pH factor, moisture content, etc. The data is combined with meteorological and other agrochemical data to provide powerful predictive analytics solutions regarding crop quality and yield.
To create this new service meant the company had to collaborate closely with farmers, agrochemical providers, credit card companies, cloud-based platform providers, data analytics service providers, external information sources, and internal business units. The result is a holistic, sustainable manufacturing business model, supported by collaborative cross-sector partnerships and deeper community engagement that has not only expanded the scope of the company’s business into new revenue streams, but has also created a successful circular manufacturing ecosystem.
Applying Design Thinking to Drive Sustainability
Transitioning a manufacturing enterprise to a more sustainable model for the future clearly impacts multiple areas of the organization – production processes, technology adoption, supply chain strategies, production footprints, corporate cultures and structures, and new business model developments.
Managing that transition successfully is critical to a company’s ability to develop a truly sustainable manufacturing enterprise. The faster leaders and employees accept change while keeping the core mission and values of the organization intact, the more the organization can begin to create a more sustainable business ecosystem.
Based on design thinking methodologies, Figure 3 suggests an approach that can help companies achieve their goals. The three pillars in this model cover three key areas of enablement for a successful sustainability journey – capabilities, change management, and the application of key technologies.
Enabling Capability: This pillar focuses on manufacturing processes and harnesses operations data to drive manufacturing sustainability. Identifying opportunities involves companies carefully reviewing their manufacturing operation to identify areas that would benefit from applying sustainable practices. This will also help to highlight high risk processes and the creation of a roadmap to remediate those risks and turn them into potential areas of opportunity. Creating, constantly reviewing, and updating standard operating procedures (SOPs) will then help to spread sustainable practices across the manufacturing organization. These procedures are informed and supported by data driven alerts where the machines on a smart shop floor are interconnected and generate data that can be stored in a cloud platform, and then analyzed. Once KPIs are defined that measure sustainable processes, these systems can then generate alerts when there is any deviation from approved limits.
Enabling Change: The second pillar focuses on the people involved in manufacturing operations. In any change management project, it’s important to create the right mindset among the people it affects. Every employee involved in manufacturing processes should go through a sustainable practices training and development program that is developed and approved by experts to ensure a shared understanding of the issue and vision of the future. This awareness can be enhanced by enabling gamification within the corporate culture which promotes sustainable practices by measuring, scoring, and ranking sustainable manufacturing processes, and rewards people who rank high on the sustainability leader board. In order to ensure a green supply chain outside the four walls of the company, manufacturing organizations also need to engage with external trading partners to ensure they adhere to the company’s recommended sustainable practices. The precertification of suppliers and logistic service providers against defined sustainability KPIs may be an important part of this.
Enabling Technology: The final pillar focuses on the systems, tools, and technology used in manufacturing processes. Automating data sources is critical starting point. The combined structured and unstructured data can include information on energy consumption, greenhouse gas emissions, water usage, waste generation, energy sources, renewable versus non-renewable, and other elements that are key indicators of sustainable practices and performance. Sustainability criteria can also be incorporated in Quality Management (QM) systems. Traditional quality targets could be expanded to include sustainability criteria that require sustainable product quality and sustainable production. By enabling digitally based track and trace systems, these can help a company to rapidly identify the origin and various stages of those materials as they pass through production processes and distribution channels. These systems can be invaluable to help track non-compliant raw materials that may have been sourced from non-certified suppliers or are being distributed by non-certified logistics service providers.
A Systematic Approach to Improving Sustainability
By taking a systematic approach to enabling capabilities, process and cultural change, and deploying the appropriate supporting technologies, companies can achieve significant sustainability improvements. These include better control and management of budgets and investments in sustainable assets; enhanced employee and community engagement through connected digital platforms that create a circular ecosystem both internally and externally; and a sharper focus on innovative new revenue models by packaging products and services together and so helping the company to transform to a more solutions led than product led organization. In a world where industry boundaries are blurring as more sustainable business ecosystems emerge, manufacturing companies now have the opportunity to identify and chart their own course to future success in the new era of responsible manufacturing. M