5 Reasons It Pays to Implement Sustainable Manufacturing Practices
Imagine this: a new CEO steps into the top role of a major manufacturer and gets to work immediately on a radical sustainability agenda. In a short space of time, she has transformed manufacturing processes, upended the existing supply chain, and rolled out a host of progressive social initiatives; it’s impressive... but extremely expensive. The cost of the transformation has cast doubt on the future survival of the company.
In this example, the CEO has dramatically missed the point. True sustainability isn’t just about environmental or social impacts but rather ensuring the long-term profitability of an organization.
The most commonly adopted definition for sustainable manufacturing comes from the U.S. Department of Commerce, which describes it as “the creation of manufactured products that use processes that minimize negative environmental impacts, conserve energy and natural resources, are safe for employees, communities, and consumers, and are economically sound.”
Sustainable Manufacturing Benefits
Fortunately, making money and doing good are not mutually exclusive. To guarantee long-term success, it is essential for businesses to focus on ethical practices. Companies are increasingly aware of this fact and the substantial environmental, economic, and societal benefits that sustainable manufacturing brings.
Some of these benefits include:
Hiring top talent – A global survey by LinkedIn found that nearly three-quarters of candidates want to join a company where they feel like their work matters. If organizations aren’t focused on ways to incorporate sustainability into daily processes, they won’t attract and retain the best talent.
Savings – Investing in greener processes, which are ultimately more efficient, can result in big savings. This might include cutting energy bills or saving money on production by recycling scrap metal and other materials.
Reputation – A recent study by Harvard and London Business School found that financial analysts rate companies who have visibly committed to sustainability measures more highly. Companies with a good reputation for sustainability initiatives will also attract new customers, increasing their competitive advantage.
Employee satisfaction – Working in a happy, healthy, safe, and more efficient workplace drives employee motivation, satisfaction, and productivity. Studies have found that companies with leading sustainability programs have 55% better morale, 38% better loyalty, and 16% higher productivity rates. A 2019 survey found that three-quarters of workers would be willing to accept a smaller salary to work for an environmentally responsible company.
Operational efficiency – Automating processes to make them safer, greener, and improve accuracy limits parts rejections and reduces waste improving consistency, quality, and cost.
How Can I Implement Sustainable Manufacturing Practices at My Business?
Implementing sustainable manufacturing within your organization won’t be a quick fix, and it is a continual journey with no final destination. But the pay-off is worth it. Here are a few ways to kick-start sustainable manufacturing in your company:
Formalize sustainability: Rather than taking a piecemeal approach to sustainability, address sustainable manufacturing with a formal process across the entire company. Set objectives and priorities, make a plan, hire a team to implement that plan, and use KPIs to assess and evaluate progress throughout the process.
Take a holistic approach: Simply replacing one part for another more sustainable part is a good start, but it’s important to look at the whole picture. Analyze the environmental, economic, and societal impact of the materials used, your production processes, and your energy consumption.
Go above and beyond compliance: Don’t simply fulfill quotas or respond to regulations. Think outside the box, use scenario planning, and find innovative ways to operate sustainably.
Create and maintain a Social License to Operate (SLO): An SLO verifies the community's approval of the company and its business practices.
Do your research: Unfortunately, some sustainable “solutions” can actually make the situation worse. For example, the growth of biofuels is leading to deforestation and food shortages as more farmers grow the crop, while there is an ongoing debate over EVs not actually being better for the environment.