Aligning profitability through sustainable production

Male millennial factory worker building computer parts on an assembly line.

Manufacturing managers face an increasingly complex market. Even as companies work hard to meet financial expectations and regulatory requirements, consumers encourage organizations to pursue sustainability.

Many leaders may see a conflict between profit and environmental protection. However, that is a false dichotomy. Sustainability initiatives in manufacturing can drive both top-line and bottom-line growth in the short term, while positioning the business for long-term success. That’s something everyone can get behind.

Stability in production matters

Manufacturers can uniquely benefit from sustainable transformation. Manufacturing accounts for approximately 54 percent of global energy consumption. Finding ways to use energy more sustainably will lower costs and increase margins. Sustainability and profit go hand in hand.

That said, I understand that many leaders worry that sustainability will come at too high a price. Manufacturers are already facing many challenges. In a time of rising energy costs, it can be tempting to put sustainability aside.

However, that would be a wasted opportunity. Pursuing sustainability goals can reduce costs, drive innovation and increase shareholder value. Today, 66 percent of consumers prioritize sustainable and ethical shopping. Furthermore, 99 percent of C-level executives say environmental programs drive shareholder value. Manufacturers that make strides in sustainability have a competitive advantage.

Industry uses data to drive lean manufacturing

The first step in any enterprise’s sustainability journey is data collection. Thomas Concrete Group, for example, has created a new green concrete offering that provides data on concrete maturation. The solution makes it easy for its customers to reduce their carbon footprints while delivering projects faster and reducing waste. The group now leads vendors on their own sustainability journeys. Together they address the triple bottom line of competitiveness, sustainability and social good.

Another promising story comes from Mercedes-Benz. The German luxury car maker has introduced the MO360 Data Platform to increase transparency and predictability. The result? By 2025, the expected improvement in car manufacturing efficiency will be 20 percent. Manufacturing organizations use such tools to reduce emissions and centralize reporting. This enables the C-suite to embed sustainability into operations and culture.

Green manufacturing can be profitable

Innovation drives industries toward sustainability, and that progress has been accompanied by rising profits for many companies. For example, Ecolab started using recycled water and Nalco Water technology. The solution saves 58.3 million gallons of drinking water annually, and is just one part of the company’s smart manufacturing strategy.

Smart manufacturing uses automated processes to reduce costs and minimize environmental impacts. If applied across industries, smart manufacturing could save companies $349 billion while helping to conserve natural resources for everyone.

Ingredion is another company using smart manufacturing strategies. A component company recently developed a unified data solution during its operations. “At a very basic level, sustainability means doing business today in a way that doesn’t disrupt our ability to do business in the future,” said Brian Nash, Vice President of Corporate Sustainability at Ingredion. “For example, 95 percent of our global supply is corn as a raw material for our products. If we didn’t look at soil health and sustainable agriculture, we could easily destroy the farmland our growers depend on. It directly affects the viability of our business.”

Lessons we’ve learned from our sustainability journey

Manufacturers are uniquely positioned to promote sustainability. By gathering the data they need to guide business decisions, they can reduce costs while conserving resources. That’s why sustainability will be a differentiator for years to come.

We’ve compiled the key lessons into a white paper for manufacturing managers. To learn more about how pursuing sustainability goals can be profitable for manufacturing organizations of any size and specialty, download the white paper here: Profitable Sustainability in Manufacturing.

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