How to Increase Sustainability Through Smart Manufacturing

Summary

As the effects of climate change become increasingly apparent, sustainability has become a key focus area for manufacturers worldwide who are under pressure to reduce their environmental impact. But how can we achieve sustainable green manufacturing while also maintaining a sustainable business model? The answer lies in smart manufacturing.

Understanding green manufacturing

Green manufacturing is a philosophy that focuses on minimizing waste, improving energy efficiency, and reducing the environmental impact of manufacturing processes. It involves making conscious choices about the materials used, the manufacturing processes employed, and the waste management strategies implemented.

Industries globally are adopting goals of becoming carbon neutral. They’re also recognizing the positive financial impact of green manufacturing and the potential efficiencies related to energy use and sourcing.
For example, manufacturing energy transformation initiatives center on solutions that capture, contextualize and analyze energy consumption, carbon emissions and waste within the walls of the factory as well as across the supply chain. This data supports an organization’s decarbonization efforts, while also helping create a more sustainable business model overall.

But green manufacturing is not just about being environmentally responsible. It offers significant benefits to manufacturers, including cost savings, improved operational efficiency, and enhanced brand reputation. By adopting green manufacturing practices, manufacturers can not only contribute to environmental conservation, but also improve their bottom line.
 

Government action

Last year, the Securities and Exchange Commission (SEC) issued a proposal for companies to report their greenhouse gas (GHG) emissions to investors in an effort to improve ESG transparency and reduce their carbon footprint. This rule will apply to any public company that has already developed transition plans or publicly set climate-related goals to disclose their Scope 1, 2 and 3 emissions to investors.

The proposal, which will likely take effect this fall, sounded alarm bells for manufacturers and their supply chain leaders. A March 2023 survey conducted by PwC and Workiva found that "70% of business leaders report they are not waiting for the...SEC to finalize the climate disclosure rules and will proceed with compliance regardless of when they become U.S. law."

These regulations are tricky for businesses because manufacturers don't have easy access to GHG emissions data—especially Scope 3 emissions, which come from upstream and downstream emissions of a product and across the supply chain. Scope 3 includes third-party emissions such as transportation, distribution, waste, energy and fuel, leased assets and travel. In many cases, the data may not exist, and manually collecting it will prove to be labor-intensive, challenging to update and difficult to audit.

Scope 3 emissions are the most challenging to capture, but they account for about 75% of companies' total emissions across all industries. Nevertheless, manufacturers would be wise to begin adopting green manufacturing technologies to track their climate-related risks and emissions data before this SEC rule is set in stone.

In addition to the SEC’s proposed mandates, the Department of Energy recently published their “Industrial Decarbonization Roadmap.” This roadmap, which is designed to spur decarbonization efforts, identifies four key pathways to reduce industrial emissions through manufacturing innovation. It says, in part:
“Energy efficiency: This pillar offers the greatest opportunities for near-term decarbonization solutions. In many cases, it does not require major changes to industrial processes and can bring immediate reductions in emissions. Key energy efficiency goals include improvements in system efficiencies, process yield, and recovery of thermal energy; expansion of energy management practices; and increased implementation of smart manufacturing strategies designed to reduce energy consumption.”
 

Smart manufacturing supports green manufacturing

Smart manufacturing technologies play a crucial role in driving sustainability in manufacturing. Technologies that can capture, contextualize, and analyze data related to energy consumption, carbon emissions, and waste provide manufacturers with the insights they need to identify opportunities for reducing their environmental impact.

By analyzing energy consumption data, manufacturers can identify energy-intensive processes and take steps to make them more energy-efficient. Similarly, by analyzing waste data, manufacturers can identify sources of waste and implement strategies to reduce them. Moreover, smart manufacturing technologies can help manufacturers comply with decarbonization, energy, and waste reporting requirements. By providing a granular and highly contextualized view of data over time, these technologies enable manufacturers to track their progress towards their sustainability goals and demonstrate compliance with environmental regulations.
 

Practical steps toward a more sustainable business

So, how can manufacturers leverage smart manufacturing to make their business more sustainable? Here are some practical steps:

Begin to implement aspects of the DOE's Industrial Decarbonization Roadmap: The roadmap identifies four key pillars of industrial decarbonization: energy efficiency; industrial electrification; low-carbon fuels, feedstocks, and energy sources (LCFFES); and carbon capture, utilization, and storage (CCUS). Manufacturers should pursue all four pillars in parallel to achieve a cohesive decarbonization strategy.

Implement energy-efficient technologies: Energy-efficient technologies, such as energy-efficient motors and lighting, can significantly reduce energy consumption in manufacturing facilities. As the U.S. Department of Energy’s (DOE) Industrial Decarbonization Roadmap states, "Energy efficiency offers the greatest opportunities for near-term decarbonization solutions. In many cases, it does not require major changes to industrial processes and can bring immediate reductions in emissions.” In addition, data on energy usage over time and correlated to production processes can be analyzed via AI and ML to deliver further savings.

Optimize production processes: By optimizing production processes, manufacturers can reduce waste and improve resource efficiency. This can be achieved through a variety of techniques, including implementation of smart manufacturing pillars.

Use data analytics: Data analytics can provide valuable insights into energy consumption, waste generation, carbon output across your supply chain, and other environmental aspects of manufacturing. By analyzing this data, manufacturers can identify opportunities for improvement and make informed decisions about their sustainability strategies.

Implement smart manufacturing strategies: As the DOE's roadmap highlights, "increased implementation of smart manufacturing strategies designed to reduce energy consumption" is a key energy efficiency goal. Smart manufacturing technologies can provide the data insights needed to implement these strategies.

By following these steps, manufacturers can not only reduce their environmental impact and comply with reporting requirements, but also create a more sustainable business overall.

It’s clear that sustainability is not just a nice-to-have, but a must-have. By leveraging smart manufacturing technologies, manufacturers can drive sustainability in their business, reduce their environmental impact, and achieve their sustainability goals.