Smart manufacturing is a critical component of driving ESG and sustainability success in manufacturing.
By Rusen Kumar
Introduction
Smart manufacturing is also known as Industry 4.0 or the Fourth Industrial Revolution. Smart manufacturing is a revolutionary concept that combines advanced technologies such as the Internet of Things (IoT), big data analytics, artificial intelligence (AI), and machine learning (ML) to streamline the manufacturing process. Smart manufacturing aims to make the entire production process more efficient, productive, and cost-effective, and at the same time also improving product quality and flexibility.
ESG and Smart manufacturing
Smart manufacturing is a critical component of driving ESG and sustainability success in manufacturing. Participants in a recent global survey of 321 manufacturers communicated the desire to improve their business and community through sustainability and ESG (Environmental, Social, and Governance) policy. 97% of respondents have a formal or informal ESG policy in place.
‘2022 State of Smart Manufacturing report’ prepared by Plex Systems, a Rockwell Automation Company, a leading company in cloud-delivered smart manufacturing solutions, highlighted the acceleration of smart manufacturing adoption and the benefits gained from new technology that has made its way into the mainstream, this report aims to distill the findings gained from hundreds of manufacturers that have made clear that sustainability and ESG are integral to manufacturing success. This study uncovers how manufacturers are addressing sustainability/ ESG initiatives with smart manufacturing to achieve results for environmental stewardship, social purpose, and responsible corporate governance.
The role of manufacturing technology in Sustainability or ESG Efforts
Automation and other smart technologies are proven to provide many benefits. When asked about the role technology plays in the organization’s ESG/Sustainability efforts, 65% of the total respondents stated that it plays a significant or very significant role, ranking highest in consumer-packaged goods, plastics/rubber, and industrial machinery. 64% of organizations agree that technology can reduce hiring challenges and fuel growth in the next five years.
Systems that Support sustainability or ESG Efforts
When asked about systems for investment to support this sustainability or ESG efforts, respondents focused heavily on manufacturing execution systems (MES), quality management systems (QMS), and supply chain planning (SCP). By using these systems, companies can address many of their top sustainability and ESG efforts. Industrial IoT and Asset Performance Management (APM) also ranked highly as they can connect your software and hardware ecosystem to better understand and control your production. This will become even more valuable as global regulators enact stricter governance around sustainability and ESG compliance. More efficient technology, processes, and planning enabled by these systems reduce waste and maximize output. They also enhance agility, whether it is pivoting to a new product line or providing a temporary social good, like producing masks and ventilators for COVID-19. Efficiency, adaptability, and accountability are becoming core to stakeholder value.
Also understand Sustainable Manufacturing
Sustainable manufacturing is the creation of manufactured products through economically-sound processes that minimize negative environmental impacts while conserving energy and natural resources. Sustainable manufacturing also enhances employee, community and product safety. Sustainable Manufacturing, US EPA
Optimizing Processes for Increased Efficiency and Agility
Smart manufacturing is a new way of manufacturing that aims to optimize business, physical, and digital processes within factories and across the entire value chain. It involves the intelligent and real-time orchestration and optimization of resources and processes, with the help of automation, integration, monitoring, and continuous evaluation based on all available information as close to real-time as possible. By leveraging advanced technologies like the Internet of Things (IoT), big data analytics, artificial intelligence (AI), and machine learning (ML), smart manufacturing enables companies to create a more efficient, agile, and responsive manufacturing process that can adapt quickly to changing market demands. Smart manufacturing represents a major transformation in the manufacturing industry, with the potential to improve productivity, reduce costs, and enhance product quality.
The Benefits of Real-Time Data Collection and Analysis
Smart manufacturing is not just about automating processes or using robots. It is also about creating an integrated and interconnected ecosystem that connects all aspects of manufacturing, from supply chain management to product design, production, and maintenance. The adoption and practice of technology and data in smart manufacturing allows for a more responsive, adaptive, and customer-centric production process that is more agile and flexible to changing market demands.
One of the key benefits of smart manufacturing is the ability to gather, analyze and act on real-time data. By implementing sensors and other IoT devices in various parts of the manufacturing process, data can be collected on everything from machine performance to environmental factors. Such data can be used to optimize the production process, decrease waste and downtime, and improve quality control. Furthermore, machine learning algorithms can be used to predict and prevent equipment failures, reducing downtime and maintenance costs.
The Importance of Digital Twins in Smart Manufacturing
Another key aspect of smart manufacturing is the use of digital twins. A digital twin is a virtual replica of a physical product or system that can be used to simulate and test various scenarios. By creating a digital twin of a product, designers can test different designs, materials, and manufacturing processes before committing to physical production. This can result in significant cost savings, reduced time-to-market, and improved product quality.
Enabling Greater Collaboration through Smart Manufacturing
Smart manufacturing also enables greater collaboration between different parts of the manufacturing process. By integrating various systems and processes, from design to production, suppliers, and customers can all work together in real-time, sharing information and making decisions based on data-driven insights. This leads to greater efficiency and productivity, reducing lead times and allowing for more rapid response to changing market demands.
Key findings of ‘The 2022 State of Smart Manufacturing Report’
The 2022 State of Smart Manufacturing Report is the most robust edition yet and first to cover manufacturers’ connection with sustainability and ESG initiatives. While participants span the globe, the results reflect consistency in the rising prominence of sustainability/ESG in manufacturing.
Sustainability and ESG Policy is a Rising Priority for Manufactures
Sustainability and Environmental, Social, and (Corporate) Governance (ESG) policy is gaining global attention. Public concerns around climate change, social justice, corporate responsibility – including increased regulations, emission reductions, and responsible governance – are increasingly driving more businesses to take action.
- 55% of manufacturers have a formal companywide ESG program in place.
- Supreme motivation for pursuing ESG initiatives is to address social inequalities.
Many Manufactures already have Sustainability or ESG Policy in Place
When asked about ESG policy, 97% of global manufacturers in this survey responded that they have a formal or informal policy in place. Manufacturers that are focused on efficiency are consciously or unconsciously focused on sustainability and ESG by creating less waste, using less water, recycling scrap, and doing anything else that contributes to developing a more productive and responsible business.
- 47% of respondents prioritize energy management for sustainability/ESG programs.
- 42% of respondents prioritize recycling for sustainability/ESG programs.
Technology helps to meet Sustainability or ESG and Business Goals
Efficiency, adaptability, and accountability are becoming core to stakeholder value. Smart manufacturing increases efficiency by making better use of resources and fostering a culture of purpose when you tie technology investment to ESG and talent initiatives. More efficient technology, processes, and planning enabled by these systems reduce waste and maximize output. They also enhance agility, whether it is pivoting to a new product line or providing a temporary social good, like producing masks and ventilators for the COVID-19.
- 65% of respondents stated that technology plays a significant or very significant role in the organization’s ESG/Sustainability efforts.
- Manufacturing Execution System (MES) is the top system to address workforce challenges and meet sustainability/ESG goals
Some Important Thoughts and Views on ESG, Sustainability and Smart Manufacturing
“To attract talent and appeal to workforce expectations, most manufacturers are making ESG efforts more visible. —2022 Manufacturing Industry Outlook, Deloitte US
“Most companies now recognize that ESG (Environmental, Social and Governance) metrics are linked to performance, not just compliance.” —Accenture, Measuring Sustainability
“Sustainability and Environmental, Social, and (Corporate) Governance (ESG) policy is growing in importance across all industries. The public concerns around climate change, social justice, corporate responsibility – including increased regulations, emission reductions, and responsible governance – are increasingly driving more businesses to take action.” — Anthony Murphy, VP Product Management Plex Systems, a Rockwell Automation Company
“Learn, improve and continue to make progress by seeking a balanced stakeholder approach to ESG and constantly iterating as you think of the longer-term ahead. Returns on these initiatives will create a more vibrant and dynamic organization, capable of finding and creating new customer value and outperforming the competition. — Gartner — Jasleen Kaur Sindhu, Senior Director Advisory at Gartner and Uri Lerner, Senior Research Specialist at Gartner Gartner Blog Network
“Technology eliminates hundreds of thousands of pounds of paper waste. Using our own advanced automation technology, we reduced paper job packets for our engineered-to-order (ETO) products by 70%”. —2021 Sustainability Report, Rockwell Automation
“A MAPI and Deloitte study found smart factory initiatives led to 10-12% gains in efficiency, utilization, and productivity for manufacturers. These added efficiencies and capabilities can also enhance company sustainability efforts. In addition to supporting business objectives, manufacturers expect sustainability efforts to further outcomes tied to environmental impact and safety.” — Manufacturers Alliance Intersecting Sustainability: ESG and Smart Manufacturing Trends
“The fast-evolving ESG landscape may require close monitoring in 2022 for manufacturers. Many organizations are complying voluntarily within a complex network of reporting regulations, ratings, and disclosure frameworks. But regulators globally are also moving toward requiring disclosure for more nonfinancial metrics. Proactive approaches may help manufacturers stay ahead of the change and create competitive advantage. — 2022 Manufacturing Industry Outlook, Deloitte US
“…this is also more than just an exercise in “doing the right thing.” In a recent article on Business Fitness, former Unilever CEO Niall FitzGerald once said that ESG is a vital part of any company strategy, “not because it is a nice thing to do or because people are forcing us to do it … but because it’s good for business. — Responsibility And Opportunity: How Manufacturers Can Get Ahead of The Game on ESG (Forbes)
Conclusion
Inclusive, smart manufacturing is a transformative concept that has the potential to revolutionize the way products are made. By combining the power of advanced technologies with a customer-centric focus, manufacturers can create a more agile, efficient, and responsive production process that is better able to meet the demands of today’s rapidly changing market. As the manufacturing industry continues to evolve, smart manufacturing will play an increasingly important role in shaping the future of production. Manufacturers that focus on sustainability and ESG initiatives find gains in efficiency, help the planet, and, as a result, are more attractive to the talent they are looking to recruit.
About the Author
Rusen Kumar is a valuable contributor to India CSR, a renowned publication focused on promoting Corporate Social Responsibility (CSR), sustainability, and environmental affairs. With his extensive knowledge and expertise, Rusen Kumar produces high-quality content on various topics such as CSR, sustainability, ESG, and SDGs development. Rusen’s writing is not only informative but also insightful, offering practical insights and recommendations for businesses looking to incorporate CSR and sustainable practices into their operations. His articles are well-researched and engaging, providing readers with a comprehensive understanding of the latest trends and best practices in the industry. Thanks to his contributions, India CSR continues to be a leading source of information and inspiration for companies striving to create positive social and environmental impact. Rusen’s work is a testament to his commitment to promoting responsible and sustainable business practices, and his contributions are highly valued by readers and stakeholders alike.
