Environmental Sustainability for Manufacturers in 2012: Part I

Editor’s Note: This is the first of a two-part forecast written by Kimberly Knickle, practice director, IDC Manufacturing Insights.

First, the good news: Companies are making progress in environmental sustainability. In IDC’s fourth annual Green IT and Sustainability Study (October 2011), 40 percent of U.S. respondents indicated that their company has a sustainability report, meaning sustainability is increasingly a corporate-level priority and companies are documenting their sustainability performance. Companies need and want data to back up those reports, not just for reporting their performance and setting corporate goals but also for making sustainability improvements in manufacturing operations, in the supply chain, and across the product portfolio. But here’s the challenge – in a world where manufacturers often don’t know the profitability of individual products, how likely is it that they can calculate the sustainability pros and cons of that same product? Not likely is the current answer, and that’s too bad for a number of reasons, but if manufacturers aren’t getting to a product-level measurement of sustainability, then what are they working on?

Energy Consumption – An Area of Focus for Sustainability Investment Now
Much of the sustainability investment appears to be focused on energy management. For several years, manufacturers have been reviewing their energy consumption in the factory and making improvements or even capital investments that show clear payback from energy cost savings. The end result has been more productive energy management — in other words, producing goods at lower energy cost per product. It’s easy to understand why cost-saving initiatives appeal in our economic environment.

Lean and Green – Combining Sustainability and Continuous Improvement in the Plant
Bringing sustainability into the plant, lean and green is an increasingly popular mantra, with sustainability embedded into continuous improvement programs and once again, usually with an energy component. More importantly, this connection between lean and environmental sustainability has provided a path for moving forward with green improvements without new projects. Lean and green means that manufacturers are getting the most they can from their own operations and increasing their return on assets. The most advanced manufacturers are able to share green best practices across the factory network to lower their overall corporate footprint even more.

Technology and Sustainability - A Great Combination
Some more good news: Technology (IT) has certainly been an enabler in manufacturers’ progress in sustainability in many ways, including energy management or sustainability software and more automated data collection within the factory. We’re seeing increasing investment in Smart Buildings combining IT with more traditional HVAC and lighting systems, although adoption of this concept is primarily focused on general facilities such as office buildings, not necessarily production plants. (Learn more from our IDC Energy Insights research.) IT-based compliance with EHS (Environment, Health, & Safety) regulations and product safety and stewardship regulations such as RoHS and WEEE is also improving. But there’s more that IT can do for manufacturers in the area of sustainability.