This article is sponsored by Tetra Pak.
As businesses invest in improvements to the sustainability profile of their products, they’re looking at all aspects of the value chain — from material sourcing to packaging and end-of-life. While each of these areas is important, brands can sometimes overlook a key opportunity within their manufacturing operations to reduce climate impact. And the conclusions from the recent COP26 meetings have made it even more clear that brands have a key role to play in innovations that usher in climate solutions.
Boosting the sustainability of your manufacturing operation reduces climate impact and makes good business sense. Tetra Pak’s data suggests that almost half — 48 percent — of a product’s carbon footprint comes from the manufacturing process alone. Because manufacturing is an inherently resource-intense process — from energy to water to material — reductions in resource consumption minimize costs.
Reducing the carbon impact of your operation is an important piece of the puzzle. And although manufacturing is a relatively invisible process to consumers, they are pushing for more transparency. Brands such as Tetra Pak customer Oatly are showcasing commitments to both sustainability and transparency by printing the carbon footprint of its products directly on the packages in Europe. This carbon labeling trend is only heating up as consumers look to packaging to understand how a brand is taking action to address our changing climate.
To ensure sustainability is at the forefront of operations, companies need to place sustainability goals on par with their business goals. I’ve seen several of my customers update their strategies to align with this approach — and it has helped them achieve their net sales and profitability goals, as well as reduce their impact on the environment.
Consider these best practices to strengthen the sustainability of your manufacturing operation.
Improve operational sustainability
While the need for sustainable manufacturing is clear, the tougher question is how do we get there? As companies set science-based targets, they need outcome-based solutions. The good news is that services are available to help manufacturers reduce their carbon footprints and become more efficient, enabling them to be more competitive.
For over 10 years, I’ve helped customers reduce their operational costs using Total Productive Maintenance (TPM), an approach that is actually very similar to how we look at increasing sustainability in manufacturing. By increasing the overall efficiency of your operation, you reduce your CO2 output, increase overall equipment effectiveness, waste less material and save money.
There are many benefits to working with someone who has experience improving the sustainability of manufacturing operations. My team and I start by doing activity-based costing, or ABC. This is where we take a critical look at everything that happens in a manufacturing facility during each phase of production, including how much water and energy are being used and where there are opportunities for improvement. These inputs are then used to create a carbon and energy mass balance of the manufacturing plant.
Following TPM, we then set up focused improvement teams and pillar teams that look at areas such as autonomous maintenance, early equipment maintenance, education and training. Unlike traditional TPM though, we’re also looking at these operational indicators through a sustainability lens by identifying the environmental impact and carbon footprint of their facility.
And the results speak for themselves: We were able to reduce one customer’s output by more than 1,000 tons of CO2 per year, which is equal to a 19.4 percent increase in efficiency plant-wide. To put that into further context, you would need about 1,500 acres of forest to sequester that amount of CO2.
In this particular example, about 40 percent of the benefit came from standardizing and bringing equipment to basic conditions across the plant, thereby ensuring proper servicing and maintenance so that everything continues to run smoothly.
Another key area for improved operational efficiency is quality losses. Food manufacturers manage risk by doing a lot of quality sampling. I’ve seen some food manufacturers do up to 2 percent quality sampling — statistically speaking, that’s a very significant amount of product that goes to waste to mitigate quality risks. If we can improve quality, we can reduce those losses, leading to a reduced carbon footprint.
Balance your business and sustainability goals
To be sure, there is a balance to strike. Not every improvement can be made, and not every investment is realistic.
For instance, let’s say you have a manufacturing facility that’s on board with becoming a more sustainable operation. The tricky part we tend to see with customers comes down to budgets. In this case, I’ve seen companies work with contract manufacturers (also known as co-packers) to support their production needs. And these facilities typically house a combination of old and new equipment. Because it’s unrealistic to assume that these facilities will replace all their older equipment, I would advise companies to look at fine-tuning their existing equipment and use TPM to understand where there are opportunities to drive costs out and improve the sustainability of their operation.
For food manufacturers, the typical total capacity use for their equipment is somewhere between 30 to 40 percent, which means their equipment is only producing products 30 to 40 percent of the time. This is a huge opportunity for businesses to optimize their existing operations and strengthen their sustainability profiles — not only will they see increased efficiencies in production, they’ll also see reductions in their overhead, waste and carbon impacts.
In a resource-strapped and sustainability-focused world, businesses need to look everywhere they can to reduce carbon and increase the sustainability of their products. Since a large amount of carbon emissions comes from the manufacturing process, it’s critical that we look for ways to lessen our impact. When we change our sustainability mindset and think of it as a license to survive, we’re better positioned to identify opportunities to reduce operational costs and make manufacturing more sustainable.