Sustainability has quickly shifted from an interesting topic of discussion to an imperative focus area for manufacturing companies. As a key focus area, many manufacturing companies are also seeking to determine if additional value can be gained. According to a 2021 McKinsey study, 40% of respondents said they expect their companies to generate value from sustainability in the next five years. (How companies capture the value of sustainability, 2021).

Driven by the Paris Agreement, which set the goal of limiting global warming increase to 2 degrees Celsius, and even further to 1.5 degrees, manufacturers have an important directive in front of them to eliminate, reduce, avoid and offset emissions from their processes and supply chains. To do this, manufacturers must do these three things:

1. Identify direct and indirect sources of emissions
2. Determine what data is available and what is missing
3. Consolidate data inputs, and use analytics to drive improvements

Identify direct and indirect sources of emissions

The first step to any improvement effort is to determine the current state. Each company must evaluate the sources of emissions from each of their manufacturing plants and, during a later phase of the project, that of their supply chain partners. This collective effort will be managed most effectively by one central team within the company, like a center of excellence, focused on improving sustainability for the enterprise. Each plant will need to evaluate all sources and outputs to determine what technology, raw materials, waste streams and products are contributing to their overall environmental releases.

Determine what data is available and what is missing

After identifying all sources of emissions, the task of determining how to measure each source must be completed. This measure is only possible with data. Data is not only important to determine the magnitude of emissions, or the amount of improvement accomplished, but also to quantify additional value gained by implementing those improvements. Here’s where analytics plays a key role in the process improvement efforts. Utilizing advanced analytics, manufacturers can quantify and evaluate root cause drivers and contributors that can be prioritized and corrected.

After sources of data for the emissions have been evaluated, the team must determine what data is missing that is vital to having a complete picture of the company footprint. Data could be missing due to the simple fact that it’s not being measured or the more complex scenario where it’s unclear how to measure, or it’s deemed unmeasurable. Action must be taken to determine how to quantify and track the sources that don’t have readily available data

Consolidate data inputs, and use analytics to drive improvements

Disparate data sources must be consolidated to one central technology that can be aggregated and disaggregated to clearly understand the improvements or lack thereof. In other words, the technology will help the company target key areas of focus and prioritize efforts of improvements based on the prioritization matrix designed by the sustainability team. This is where analytics can help.

Advanced analytics can not only deliver the insights necessary to drive effective decisions and change management, it can also be used to identify where data needs to be cleaned, which is an important part of the process. Selecting the right technology is critical also due to the need to bring information in from multiple sources, evaluate the data to determine where data needs to be cleaned, and then complete the advanced analytics calculations upon which decisions will be made.

Data and analytics are at the heart of sustainability improvements. To report to company leadership and determine projects for engineers, EHS, operators and analysts, manufacturing companies must have a single-point-of-truth information hub with the inputs of all the sources of emissions from every plant. This information hub can be analyzed to identify key target areas and track improvements. To achieve the ambitious goal set by the Paris Agreement, manufacturing companies must make sustainability improvements a corporate imperative. Many manufacturing companies are already doing this, and they are not only seeking to eliminate, reduce, avoid and offset sources, but also gain substantial value from their efforts. Value can be gained in terms of performance, competitive position, and the ability to meet the expectations of consumers, investors, and other key stakeholders.

In April, SAS will release a Sustainable Manufacturing Study.  Please contact me if you’d like to receive a copy of the report.