Historical thinking has often portrayed addressing environmental issues as a lose-lose situation for manufacturing managers. The notion was that prioritizing sustainability would harm your business, while concentrating on productivity would neglect environmental concerns. However, today, embracing eco-friendliness doesn’t have to be detrimental to businesses. Sustainability can serve as a driver for reducing waste and cutting costs. It can also enhance a company’s brand, foster innovation, and open up new market opportunities.

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Industry 4.0 and smart solutions are pivotal in attaining sustainable productivity. Nevertheless, investing in new technology can appear risky, especially without a guaranteed return on investment. This uncertainty is compounded by supply chain fluctuations, global market instability, and escalating costs.

The answer, as Adem Kulauzovic, Director of Automation, Domino Printing Sciences, outlines, may lie in servitisation – a risk reduction, support-as-a-service model that allows organisations to adopt a layered OPEX approach to Industry 4.0 that enables them to achieve both productivity and sustainability outcomes.

Adem Kulauzovic

The myth: sustainability is the enemy of productivity

In the past, conventional wisdom held that gains in productivity often came at the cost of sustainability, as higher output and greater resource consumption had adverse effects on the environment. Similarly, when demand was high or the primary focus was on productivity, sustainability initiatives might have been deprioritized by manufacturers due to the perceived effort and investment required. However, a new perspective challenges this belief. It argues that sustainability and productivity can coexist harmoniously, without being mutually exclusive.

UN Sustainable Development Goal (UNSDG) 12 states “Sustainable consumption and production is about doing more and better with less”. It is a goal that many regions worldwide have embraced, with commitments from many countries to achieve net zero carbon emissions by 2050. Even without regulation, businesses seek to improve their sustainability credentials, driven by investors, end-customers, and employee activism.

From a manufacturing standpoint, businesses are at their most sustainable when machinery operates at peak efficiency, and the primary focus is on producing high-quality products rather than generating waste. This is particularly evident in food manufacturing, where the global food system is responsible for over one-quarter of the world’s greenhouse gas emissions, with 18% directly linked to the food supply chain. When a food product is wasted, all the emissions associated with growing, rearing, and processing the raw ingredients essentially go to waste.

To mitigate the overall environmental impact of food production, manufacturers should focus on optimizing their production processes to eliminate waste and maximize the quantity of fresh, marketable products that make their way through the supply chain to consumers. This principle holds true for any manufacturing setting – directing effort and energy into inefficient processes is ultimately less sustainable from both a business and environmental perspective.

Improving OEE with Industry 4.0

The connection between sustainability and productivity can be best exemplified by examining the three core elements that constitute one of the most commonly used productivity metrics globally, which is overall equipment effectiveness (OEE): uptime, throughput, and quality.

Uptime refers to the duration during which a production line is operational and not halted for any reason during a planned production run. One of the primary reasons for stoppage, known as downtime, is product changeovers, which occur whenever a machine is left running but idle while being prepared for the next production run. Optimizing and automating changeovers through Industry 4.0 and smart systems can have a beneficial impact on both sustainability and productivity. This approach maximizes the time a machine is actively engaged in producing marketable goods while minimizing unnecessary energy consumption during idle periods.

Throughput is the relationship between a production line’s potential maximum capacity and its actual performance. Inefficient operation, such as when a fault slows down one machine in the production line, will result in longer production times for the same quantity of marketable goods and increased energy consumption. Employing real-time performance monitoring solutions, including cloud-based services, allows manufacturers to monitor production and take corrective action at the earliest indication of reduced throughput, thus maintaining the efficient operation of machines.

Quality pertains to ensuring that each product meets a high standard for sale, often involving quality checks. This is particularly relevant for food products, encompassing the product’s quality and the integrity of its packaging to optimize shelf-life and minimize transportation waste. Any product that completes the production process but is not suitable for sale must be either reworked (resulting in energy waste) or discarded (resulting in both energy and resource wastage). Both of these outcomes are suboptimal from both business and sustainability perspectives. Automated vision inspection systems reduce the risk of quality issues being overlooked due to human error, allowing for a more rigorous examination of product lines and facilitating early intervention to reduce excess waste.

Beyond the reduction of waste and the optimization of resources for creating marketable products, making gradual improvements in Overall Equipment Effectiveness (OEE) empowers manufacturers to unlock both time and cost savings. These savings can be subsequently reinvested into further enhancements, innovation, and additional sustainability initiatives. For instance, businesses can invest staff time in training programs like Lean Six Sigma or evaluate the impact of adopting new sustainable packaging on the production line.

Reducing risk through servitisation

While most manufacturers would certainly embrace the opportunity to optimize Overall Equipment Effectiveness (OEE) and minimize waste, for some, the initial investment in new Industry 4.0 equipment may appear too risky without a guaranteed return on investment. This concern might be particularly pronounced for small and medium-sized enterprises (SMEs) with restricted capital budgets and outdated legacy equipment, especially in the context of the current socio-economic conditions.

Servitisation, which involves clients paying for an outcome or service rather than directly buying equipment, could present a compelling solution to this issue. Servitisation is gaining recognition on a global scale, with organizations such as the World Economic Forum acknowledging it as a viable means of enhancing economic productivity and contributing positively to global decarbonisation efforts. Suppliers who provide manufacturing solutions through a servitisation model have a vested interest in ensuring that their products continue to operate efficiently and consistently over time. This approach maximizes performance while minimizing waste.

In the context of Industry 4.0, servitisation entails manufacturers collaborating with a partner who can provide support-as-a-service tailored to their particular objectives, whether it’s enhancing uptime, throughput, or quality. This model not only shifts the risk associated with achieving specific outcomes onto the supplier but also assists with cost management by enabling the investment to be spread out over time, adopting an Operational Expenditure (OPEX) approach rather than a traditional Capital Expenditure (CAPEX) model.

Furthermore, through service-based contracts, clients can adopt a Land, Adopt, Expand, and Renew (LAER) approach to their investments. This approach allows for adaptability and flexibility when objectives or goals evolve, while also keeping them at the cutting edge of innovation by providing access to new technology as it becomes available.

The significance of servitisation in promoting sustainable productivity is unquestionable. However, as a support-as-a-service model, this approach is still in its early stages of development. Our partner, Domino, takes pride in its involvement in a three-year, £1.8 million research project currently conducted by Aston Business School’s Advanced Services Group on behalf of the UK’s Economic and Social Research Council. The research’s primary objectives are to gather evidence on how servitisation affects both economic productivity and environmental performance, particularly in relation to achieving net zero emissions and fostering the green economy. The insights gained from this research will be used to influence industrial policy and practice in the UK.

Conclusion

Sustainability and productivity can indeed be mutually reinforcing. However, for businesses to achieve substantial and lasting improvements in sustainability, they need to have the right individuals concentrating on processes that are vital for their current manufacturing operations and those dedicated to future innovations. Collaborating with an Industry 4.0 support-as-a-service partner who can assist in optimizing Overall Equipment Effectiveness (OEE) will translate to heightened productivity, reduced waste, and more time for your employees to focus on the next phases of your sustainability initiatives.

[i] Noah Walley and Bradley Whitehead, “It’s Not Easy Being Green”, 1994

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