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Why sustainability will drive manufacturers to greater efficiencies and bigger profits

Main visual : Why sustainability will drive manufacturers to greater efficiencies and bigger profits

We all know what’s happening: our world is under threat from the irreversible effects of climate change.

The planet's average surface temperature has risen 0.9 degrees Celsius since the late 19th century, with the five warmest years on record taking place after 2010.

These rising temperatures are a result of the excessive consumption of natural resources and the burning of fossil fuels – a process in which the manufacturing industry plays a big role.

To my mind, manufacturing is the key to building a more sustainable society.

This industry produces all the other things that we use. If we can ensure we are making things in an environmentally friendly way, we’ll be half-way there.

After all, it’s the process of production that is material and energy intensive, and releases greenhouse gases through the combustion of petrol, coal and natural gas.

So, manufacturers have a big responsibility to examine the way they are impacting the world. But this responsibility doesn’t have to be an onerous weight – in most cases, becoming more sustainable will power an organization to greater business success.

In this blog post, I’m going to discuss the ways in which manufacturers can make positive changes – and show that sustainability is as good for the P&L as it is for the earth.

The ethical consumer driving sustainability

As the conversation around sustainability evolves, more and more manufacturers are waking up to the issue and their role in addressing it.

Predominantly, they are being driven by two considerations.

First is customer demand: consumers are aware of the environmental crisis facing us, and it’s making them think differently about the companies they support.

Over eight in ten global consumers (across all generations) feel strongly that companies should help improve the environment. This has particular implications for manufacturing as its influence extends throughout the supply chain.

Buyers want to know their product has been produced in an ethical way, with sustainable resources and fair working conditions for employees at all stages of the process. If manufacturers can’t prove that this has been the case, consumers will take their purchasing power elsewhere.

The second consideration for manufacturers is, of course, the ethical imperative to protect the environment.

As it stands, climate change will affect everyone in the world, regardless of where or how they live. We all have a duty to protect the earth – our shared home.

De-bunking the sustainability myth

But operational concerns drive most of the decisions manufacturers make, and it’s no different when it comes to sustainability.

Unfortunately, many manufacturing organizations are under the misconception that sustainability is arduous and difficult to achieve, and more importantly that it’s expensive and damaging to profits.

But this is absolutely not the case. Manufacturing in a more sustainable way is cheaper.

And I’m not just speaking in terms of each individual organization. In failing to become more sustainable, the manufacturing industry is costing itself more money in the long term.

China, for example, is a huge manufacturing nation. But as the world heats up, Chinese manufacturers are struggling to maintain high levels of productivity. There was a 12% reduction in output across 2017 caused by rising temperatures – and that’s just the start.

Unless we can find a way to slow the rate of global warming, manufacturers across the world will be placing their own industry under threat.

Sustainability drives efficiency

Ultimately, if you dig deeper into sustainability it starts to look more and more like efficiency.

It’s all about using raw materials in the best way possible, optimizing energy use in factories and preventing waste. All these things reduce costs!

Of course, making changes to the type of materials you use, or the way that you supply energy to a plant, is a long-term project. A lot of investment goes into this infrastructure so it takes time and effort to change.

But there are also much simpler forms of efficiency revolving around the digitalization of the workplace, which manufacturers can implement pretty rapidly.

How should manufacturers go about making these changes?

The first thing is to start with data. You need to assess your organization’s use of energy and resources, including the supply chain. Once you’ve identified the points where you generate the most waste, you can start there.

And you don’t have to launch into sustainability with big changes. Small adjustments – like choosing to do video-conferencing instead of flying – can massively reduce your organization’s carbon footprint.

Sometimes manufacturers get caught up in thinking about supply chain management and forget about this. But it’s a crucial part of making your operations more sustainable end-to-end.

The future: in production

The manufacturing industry as a whole is just waking up to sustainability.

And it’s very important that it does. While regulation is all very well and good, it’s not enough to prompt change on its own.

The impetus has to come from manufacturing firms themselves – which will only happen when we start recognizing the business benefit that can be derived from sustainability.

As I said at the beginning of this blog post: manufacturing is the key to making our world more sustainable.

If manufacturers step up to this challenge, they’ll find it easier to drive new efficiencies, reduce costs and meet consumer demands.

And, most importantly, future generations will thank them.