The Sustainable Challenge
Manufacturers are already in a rebuild and regrowth stage and this is an opportunity for companies to come back stronger and in some cases ‘greener’. Manufacturers can refocus on their sustainability goals and deliver a green recovery. Accounting for more than 60% of direct industrial emissions in the UK, manufacturing is an energy-intensive industry that has been striving for decades to improve energy productivity while reducing greenhouse gas emissions.
From 1990 to 2018 emissions from manufacturing decreased by 56.7 million metric tons of carbon dioxide, and the next decade is shaping up to be a critical period for transformation, to reach that ever crucial goal of carbon neutral by 2050. Manufacturers have proven themselves to be adaptable in a crisis, and this trait will be key when tackling the net-zero objective. Recent research shows that manufacturers are still heavily invested in driving sustainability and sticking to their goals, not allowing Covid-19 to divert their tracks.
“Make UK research conducted just before the Covid-19 struck showed that the manufacturing industry is ready to take on the net-zero challenge with 90% of manufacturers being aware of the net-zero target. At that time nearly half were already committed to following through with concrete actions and already 30% were investing in energy efficiency measures. This trend continued through the year, with research conducted in November showing 45% of manufacturers say that infrastructure projects focusing on green energy should be prioritised to support manufacturing. And when deciding what infrastructure the country should invest in to support manufacturing, 27% of companies said ensuring infrastructure is green and sustainable.
But there is no denying that manufacturers are facing competing challenges. Much of their bandwidth of preparing for the end of the transition for example has been overtaken by tackling the challenges of Covid-19. But we need to ensure they are also focusing on preparing to move to net zero. There remains little support, particularly for SMEs to prepare. That said, there is no question that the green agenda is firmly on manufacturers agenda and they are of the firm view that it must remain on Government’s too.”
– Bhavina Bharkhada & Brigitte Amoruso, Make UK
In the UK, we have a combination of pioneers who are leading the way in terms of sustainability and laggers that are behind the innovation curve. The most energy efficient automotive manufacturing site in world is based in the UK; Toyota, Derby. Toyota has always been ahead of the game when it came to producing electric or hybrid vehicles, and their location in Derby has been getting progressively more energy efficient each year. According to research, they have already been able to reduce energy consumption by 77%.
Their Burnaston factory has been harnessing solar power for years, utilising their own solar farm, that has a total of 16,800 solar panels, which produces enough power to produce 7,000 vehicles each year (or enough to brew 150 million cups of tea). By deploying its solar arrays, Toyota UK can save up to 3,800 tonnes of carbon dioxide.
Another company that is at the forefront of sustainability is Crystal Doors, a Rochdale based manufacturer who makes bespoke vinyl wrapped doors and accessories for kitchen, bedroom & bathroom retailers. In the last year alone, they’ve won 6 awards for their environmental goals and actions.
“At the core of Crystal Doors purpose is to manufacture a zero environmental impact product not in isolation, but by bringing all our stakeholders on our journey. Being carbon footprint reporting to scope 1,2 and 3 is still not enough as we reach such goal later this year. Embedded carbon, cradle to cradle must also be reported to be absolute where circular economy forms a significant part of our journey. Today I drive up and down the world searching for answers, and fortunately from the comfort of my home with virtual meetings. Universities, eco warriors, standards and many organisations are all very happy to support what is a global crisis, where everyone can do something.”
– Richard Hagan, Crystal Doors
It’s not only the looming legalisation pressures that should be driving sustainable change. Manufacturers are able to gain monetary and competitive advantages by becoming more sustainable in their operations. Reports suggest that when sustainability initiatives are put at the core of the business, manufacturers have seen a 40% increase in profit margins and 30% increased competitiveness as a result.
Tom, CEO of Jetsoft explains how commercial benefits are often the hidden driver behind sustainable practices.
“I think the commercial benefits are still the main driver compared to sustainability, but with efficiency, you use less resources which delivers the sustainable benefits. It always reminds me of when you are a kid and your dad used to tell you to turn off the lights when you leave a room and he would always use the excuse of saving the planet, but actually it was to save of his energy bills. I think that is happening in the industry at the minute, they are using sustainability as a marketing tactic, but it is really being driven by underlying profitability.”
The Millennials – Pushing Sustainability
It is a common assumption that younger generations (Gen Z and Millenials) are more greatly concerned with global challenges. Whilst they may not necessarily live the most eco-friendly lifestyle compared to their counterparts, according to research the younger generation does have a stronger attitude towards being sustainable. They are driving sustainable consumer behaviour, but they are also promoting sustainability within businesses. In 2019, around 70% of millennials said they would prefer to work in a company with a strong sustainable agenda.
“There is definitely more scrutiny of the sustainability credentials from the younger workforce. But not just what is being done but the plans for the future. This will be the key for attracting new young talent.”
– Bhavina Bharkhada & Brigitte Amoruso, Make UK
Furthering on from that point, Jude Holmes from Made Smarter said “Demonstrating that your business is committed to the environmental agenda can also attract customers and increase employee motivation and satisfaction by knowing they are working for a responsible employer.”
When you combine this enthusiasm with the fact that younger generations tend to have a stronger digital skillset, it is vital that manufacturers attract them with their sustainable ambitions. There is a huge digital skill gap in the industry, with only a minimal number of workers in the manufacturing sector proficient with technology. Studies have stated that the UK is losing out on £63bn a year because of the digital skills gap.
When manufacturers are considering attracting young talent, especially those of an SME size that may not have a major brand driving their attractiveness, ensuring operations are completed sustainably could become critical to attracting tech-natives into the company.
Technology Driving Sustainability
Speaking of tech, digitalisation is a core component of the sustainable journey. If businesses are to be resilient, then they must be efficient.
As mentioned earlier on, manufacturers are in this very delicate rebound phase and rather than just going back to old ways, they could undergo a so-called ‘green recovery’ which would put sustainability at the crux of the operations. To achieve this more efficient and optimised version of manufacturing, technology is going to play a major role.
Innovation & Industrialisation
The majority of manufacturers already understand the benefits of digitalisation and have begun investigating various technologies that will help to optimise their operations, which in turn drives down energy consumption and emissions. The aim of sustainability is to design and develop manufacturing processes and products that have zero-impact on the environment. Automation, IoT, machine learning and data analytics are the enablers that will drive efficiency in manufacturing. For instance, the integration of sensors across a facility can provide real-time insight into asset usage and behaviour patterns, carbon emission level, energy consumption patterns and detect anomalies in assets. This combined with simulation systems would enable manufacturers to mitigate their environmental impact, without losing their competitive standing. These digitalised factories are able to deliver the same product quantity and quality, for less energy, water and materials.
Mike Jeffs, the Chief Commerical Officer of Hark, who deliver an innovative energy monitoring and management solution explains how the manufacturing sector is entering a new era.
“Manufacturing is on the cusp of a huge digital transformation. It’s been difficult to avoid the buzz phrases cropping up over the last 2-3 years; Industry 4.0, digital twins, smart manufacturing. Sustainable manufacturing interest has doubled29 over the last decade. In a world where margins are being squeezed, next day supply is requested, and lower prices being demanded, technology can be a real competitive advantage, and so too can sustainability.
According to Bill Gates, emissions are over 51 billion tonnes per year and because Co2 stays in the atmosphere for thousands of years, we’re still seeing the effects of manufacturing from years gone by on the environment around us – more volatile weather, which leads to so called ‘natural ‘disasters. Emissions come from a variety of industries and sources, transport (16%), energy (27%), industry, buildings (7%), agriculture (19%), waste and forestry. Manufacturing is the biggest segment and the most challenging to solve due to the sheer scale of what we make and produce in our economy – steel, concrete, plastics etc.
Greentech is vital in reversing the effects of Greenhouse gases from manufacturing but has other benefits too: increased operational efficiency, reduced operating costs, brand reputation, adhering to regulation and importantly long-term business viability. The first step in that challenge is gaining visibility and a benchmark for companies, and green tech can be the catalyst to contextualise emissions for all stakeholders in a manufacturer to enable a coordinated, integrated approach to being carbon natural.”
There are so many ways that manufacturers can integrate technology to bolster their sustainable credentials. The creation of a smart factory enables complete visibility into operations, spotting inefficiencies and waste. Harnessing smart manufacturing helps to conserve resources, whether its material, energy or water.
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With such possibilities, the manufacturing sector is beginning to invest heavily in cutting-edge technologies, in the hope of seeing greater efficiency and subsequently more sustainable operations.
Jude Holmes provides direct insight on how the adoption of technology can drive efficiencies and tackle carbon reduction. She says:
“There are a number of ways manufacturers can use technology to create better efficiencies and reduce environmental impact to help reach the UK’s ambition to have net-zero greenhouse gases by 2050.
Examples include: reducing waste through Digital Twin technology (which creates a digital replica of physical assets) and additive manufacturing (3D printing). Predictive analysis, gained through artificial intelligence, allows you to have a better understanding of demand. Additionally, it can pinpoint any inconsistencies and optimise production.
Creative Apparel, based in Stockport, is a great example of a manufacturer with sustainability at the heart of their vision, with plans to build new state of the art smart factory. It is investing in full factory digitalisation where a central IT system drives and measures smart machinery, linking production through to its customers and supply chain. Renewable energy sources including rainwater harvesting, solar power, air-source heating and eco fans will support the introduction of modern, high tech machinery to enable a more sustainable approach to production.
Its ambition is to quadruple production capacity, increase productivity by 30%, and reduce waste by 20%. Managing Director Phil Millar believes putting technology at the heart of growth plans will increase CAL’s turnover fourfold within five years, and create 50 new high value jobs. Another manufacturer is reducing mileage and emissions through the adoption of a software package which will enable sales staff and customers to have a meeting using an online virtual showroom. Parity Medical designs and makes mobile wireless computer carts and specialist clinical computing devices for the NHS and private healthcare sector. They believe their technology solution could reduce travel by 30,000 miles and cut carbon emissions by 11 tonnes per year.”
Steve Wood , Managing Director of Parity Medical said:
“It’s fantastic that technology can make such a difference to our business while reducing our impact on the environment and play a part in the UK’s ambitions to reduce all greenhouse gas emissions to net zero by 2050.” Other SMEs have adopted technology, with the motivation of improving efficiencies or growing their business but have seen the added benefits of reducing their energy consumption, improving their energy efficiency and reducing waste. Simple actions such as installing LED lighting within your factory can reduce electricity consumption and cut the costs of your energy bills.”
Not only does the integration of this technology bolster a company’s green credentials, it drives cost-efficiencies which at this moment in time is integral to long-term survival. Aside from this, digitalisation makes manufacturers resilient to any challenges that may arise in the market. It could enable them to pivot if there is a drop in demand for a core product or scale up quickly if there was a spike.
For some businesses, changes will only be made when policies enforce it, but for many in the sector this doesn’t seem to be the case. Activities would show that some companies are enforcing stricter deadlines on themselves and pursuing their sustainable goals. Some of the drivers include; reduced costs, attracting employees who are sustainably conscious and building a stronger brand reputation.
“There are many drivers behind manufacturers desire to be leading the green revolution. The PM’s10-point plan and all the recent government strategies that roughly follow the Committee on Climate Change’s recommendations for the UK’s path to the Net Zero by 2050. However, the drive for the country’s manufacturers is not only because the Net Zero by 2050 is enshrined in international law in the Climate Act, but also because the Green Industrial Revolution is seen as the path to recovery from the pandemic. Manufacturing is going to be the solution to the problem, and will be boosted by the soaring demand for the new products, and services required to decarbonise the economy.
For manufacturers who put sustainability at the heart of their businesses, they have seen real benefits from doing so: 40% reported increased profit margins and 30% increased competitiveness as a result. But a big driver for manufacturers is that it is the right thing to do. One-third (33%) of manufacturers reported that they are investing in green technologies in an effort to reduce emissions, acknowledging that it is the right thing to do, and one in five are doing so because their customers are demanding better environmental performance.
Ultimately the main driver for our manufacturers still remains the bottom line, particularly in the aftermaths of Brexit and in the midst of the pandemic. The pandemic has accelerated the thinking and we have seen that companies who have adopted more sustainable models (closer supply chains for example or less packaging or waste or taken steps to reduce their energy consumption) have been a lot more resilient during the pandemic. They have also taken the opportunity to look hard at the future and are preparing to invest in the new technologies and talent that they need for the transition.”
– Brigitte Amoruso, Make UK
Investment in Green Tech
Clean technology is used to refer to any technologies that aim to improve environmental sustainability. In some circumstances is can be used synonymously with terms like ‘GreenTech’ which refers to renewable energy sources or new methods of recycling.
Those using CleanTech are ones that are seeking to increase performance, productivity and efficiency by maximising the positive effects on the environment. The CleanTech market is anticipated to reach $3trillion by 2025. CleanTech is being invested in across the board and the manufacturing sector is no exception.
“Make UK research found that one-third (33%) of manufacturers reported that they are investing in green technologies in an effort to reduce emissions, acknowledging that it is the right thing to do, and one in five are doing so because their customers are demanding better environmental performance. Moreover, almost three in ten (28%) manufacturers said they would invest in new digital technology, such as Artificial Intelligence (AI), to be used in predictive maintenance, to save money on repairs and trips for engineers to carry out checks on site. But, importantly, manufacturers plan to invest in green technologies because of the direct benefits to their business and the impact on their bottom line. Indeed more than half (52%) of companies said they are making such investments to reduce costs, and more than one-quarter (27%) to improve production processes.”
– Brigitte Amoruso, Make UK
There is such a strong interlink between innovation and sustainability; innovation should always be a focus for any business to remain competitive in an ever-saturating market of competitors and to continuously improve processes to become more efficient and cost-effective. But this same innovation can reduce energy consumption, drive down emissions and significantly reduce a company’s carbon footprint. Below are some amazing examples of manufacturers who are coupling innovation with sustainability.
Innocent Drinks have made a commitment to be carbon neutral by 2030, with an ambition to reduce 10,000 tonnes of CO2e from the business by 2023. One of the ways they are going to achieve this is the launch of their new carbon-neutral factory ‘the blender’ based in Rotterdam. Atos will be providing an end-to-end technology solution, that will deliver in-depth data gathering and analytics on power usage, helping them to achieve their decarbonisation objectives.
Rolls Royce’s Civil Aerospace and Defence divisions in Derby have joined the UN’s Race to Zero campaign and is aiming to reach its emissions target by 2030. As part of this plan, the manufacturer will focus on advancing key technologies, including:
- Driving step changes in the efficiency of engines and ramp up the availability of lower carbon alternative fuels.
- Build small modular nuclear power stations that can provide competitive, clean, low carbon power at scale.
- Pioneering the electrification of flight
- Continuing to deploy hybrid electric systems in the rail and marine markets.
- Delivering microgrid solutions to provide stability and back-up power, and expanding the uptake of renewables.
In one of their latest press releases, Unilever explains how they have built sustainability into their manufacturing DNA. They have transformed their factories so that they are powered and operated with minimal environmental impact. Since 2010, they have already reduced their water consumption by 47% and they aim to continue increase circular models; reuse, recycle and recover to avoid excess waste. One example is how 73% of the waste produced at their Ceytea site is now being used to generate green energy.
UK-based start-up Arrival have reinvented automotive operations to unlock true sustainability. Their revolutionary new method of design and production, means they can create electric vehicles, in a sustainable and scalable manner. They have created Micro-factories that use a portfolio of vertically integrated in-house technologies to maximise efficiency and produce EV’s at a lower cost than traditional methods. The decentralised structure means Micro-factories can be constructed close to the demand, eliminating long supply chains and reducing their carbon footprint. The regional production also provides a 30% reduction is costs.
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