Many manufacturing companies have reported their best-ever year in terms of growth and profitability.
Yet their annual reports reveal growing concerns about the impact of operations on the environment, and commit to achieving quantifiable and measurable targets for more environmentally sustainable practices.
A few — such as Sweden’s SKF — have implemented policies which render their operations net savers or generators rather than users of energy.
Some time in the last five years environmental sustainability has gone from being an avant-garde concept to mainstream business practice that leading manufacturers have integrated into highly profitable business models.
Contrary to suggestions that the role played by IT in sustainability strategies only revolves around the more efficient use of energy in datacentres, a closer look shows that IT has a profound impact on manufacturers’ ability to reduce their impact on the environment.
In the past the principal uses of IT in manufacturing were to control automated machinery and equipment on the factory floor, and to assist with financial control and support product design with CAD and PLM systems.
Today IT plays an increasingly prominent role in supporting pull-driven supply chain models, lean transformation initiatives, six sigma quality projects and now sustainability initiatives — all of which are interdependent and highly information-intensive.
A common measure of efficiency in manufacturing is the continuous stream of new products from factories. The flow of such innovation depends largely on the efficiency with which an organisation’s product development teams can collaborate with the globally distributed net of engineers, researchers, patent attorneys and numerous other specialists that are required to bring products to market.
Collaboration, of course, is but a means to an end, driven by the sheer complexity of the design process. Adding sustainability goals adds further to this complexity.
The EU’s Restriction on the Use of Hazardous Substances (RoHS), for example, forced the electronics industry to find a replacement for lead-based solder that would allow continued compliance with the Joint Electronic Device Engineering Council’s (JEDEC) Moisture Resistance Levels and reliability standards.
A seemingly simple change in material ultimately precipitated changes in design engineering, materials sourcing and purchasing, production operations and numerous other functions — none of which would have been possible without an IT infrastructure. The extent to which these infrastructures can be optimised has a significant impact on the efficiency with which teams can collaborate and ultimately bring new products to market on time and within budget.
Conventional business practices have assumed a nearly inexhaustible supply of raw materials, but recent sharp increases in commodity prices are causing the sector to look afresh at recycling.
The ability to do this on an industrial basis demands visibility over downstream materials flows. In the highly globalised manufacturing sector — where products are likely to have been designed in one country, built in another, consumed somewhere else and discarded in yet another — IT provides the only means of establishing visibility over materials flows that lie beyond line-of-sight.
RFID and other network-based technologies are likely to play an increasingly important role in the sector’s ability to track and recycle valuable or hazardous wastes.
Consumer demands for greater customisation are causing manufacturers to make even basic products available in a variety of models and configurations. Unchecked, this results in smaller production lots that are likely to be much less efficient than large job-lots in terms of hydrocarbon footprint, materials use, packaging and logistics. IT tools play an important role in allowing organisations to agree production plans that meet balanced scorecards for product supply, profitability and sustainability.
An increasingly common strategy calls for the use of network-based collaboration tools — such as messaging — to integrate information flows across different organisational entities without the need to incur expensive and complex systems integration projects.
Responding to these challenges will require unprecedented collaboration across the manufacturing value chain. Sustainability goals merely add one more set of considerations to be addressed and makes more prominent the importance of IT as an enabler of manufacturing excellence.
Campbell Macfarlane is manufacturing practice director of BT Global Services
To read BT’s white paper on sustainability, click here.