The world has been rapidly developing in the past decade, and the manufacturing sector has been one of its biggest driving forces. The only pause it encountered was during the pandemic outbreak, and India is no exception. Now that the world is slowly opening up, India’s manufacturing sector, too, is returning to normalcy. Until October 2021, only 11 out of 23 manufacturing sectors registered positive growth year-on-year.
While the world is addressing the problems and providing solutions in the new normal, the major questions that have not been addressed are those related to the impact on the environment due to rapid development. The UN and the governments may be framing policies around sustainable development, but these would only succeed if organisations try to adapt those policies. The UN reports that there have been vast gaps in the sectors’ spending on financing and implementation of nature-based solutions. The NITI Ayog set up by the Indian government has been focusing on sustainable development in the country and has been taking up many suggestions like the ‘Smart City Mission’, sustainable cities and urbanisation, and producing clean energy from the UN with an aim to implement the same in the country, aiming to complete them in the next 2-3 decades. The manufacturing industry, which directly and indirectly is a part of such initiatives, needs to embrace sustainable practices to meet the world’s growing demands. For example, the demand for electric vehicles in India has increased after the Central government announced an increased subsidy. Insight suggests that the sale of EV (Electric Vehicles) two-wheelers in April 2022 saw an increase of 12% compared to 1.2% to 2% in April 2021. The sales of ICE (Internal Combustion Engine) two-wheelers, however, saw a dip of 11% in April 2022. Naturally, if any company producing ICE two-wheelers enters EV production, their loss will be mitigated and they will stay relevant in the industry. This example can be applied to all the manufacturers – governments and consumers for reasons ranging from economy to adaptability and ecological impact, rapidly shifting towards sustainable products and solutions. If those within the manufacturing vertical don’t catch up to their prepared counterparts in terms of adoption of sustainability, then they are bound to see a downside in their growth momentum. Naturally, a negative trajectory only impacts the revenue as a whole.
Manufacturing accounts for approximately 19% of worldwide greenhouse gas emissions. The supporting report says that by 2050, population expansion and accompanying demand for consumer products would necessitate at least twice the energy and materials currently used. This means GHG emissions would only increase tremendously, adversely affecting material supply and hence affecting operation costs. On average, green projects result in a 17% reduction in operating costs. It is only logical that 73% of manufacturing companies consider sustainability part of their formal strategic vision. These companies believe that incorporating sustainability in their businesses provides an edge over the competition, helping businesses to grow quicker and also ensuring they contribute in not harming the environment. Industry experts believe that manufacturing firms that commit to sustainability not only show their environment-friendly approach; they also stand to garner revenue of USD 338 billion through their sustainable products and solutions. This is why sustainable solutions and technology are considered long-term investments by a company.
The one factor that the majority of the manufacturing vertical has not considered is how technology is helping implement sustainable practices leading to a positive impact on growth and the environment. Digital transformation, primarily driven by AI and automation, has ensured that sustainability is achieved as it compliments the concepts of circular economy, adaptive reuse and material efficiency concepts.
Automation technology such as generative design enables manufacturers to increase material efficiency, create lighter products and reduce waste. For example, Indian start-up Social Hardware applied generative design to their Avocado Wrist Connector, focusing on minimising weight while ensuring strength and durability – a problem often faced with a single prosthetic hand and socket device. The technology enabled a weight reduction from 300g to 96g, which would have taken months through traditional design methods but took less than a week. The result is a lightweight, breathable socket that offers users greater control and mobility as it allows them to quickly switch between tools essential to agricultural work and address issues such as sweat and heat when doing intense work in humid environments.
Deloitte’s report says consumer demand for more environmentally friendly products and environmental regulations are compelling manufacturers to commit to long-term results in their work. With such consumer demand, around 52% of manufacturers are committed to implementing sustainable practices. Smart manufacturing solutions can help reduce energy use by up to 25%. A study by Bitkom has showcased that if the manufacturing vertical is digitised at an accelerated pace, then by 2030, 61 megatons of CO2 equivalent emission can be reduced. Porsche, the renowned car manufacturing company, is an outstanding example of digitised manufacturing. The company has not undermined the ecological impact when setting up its new factories. To design carbon-neutral factories, Porsche first created the plans digitally and based on the finalised integrated plan, they began the actual construction. From calculating the weight-bearing loads on the floor to enabling its suppliers to model their equipment to the available space, Porsche Production 4.0 are now smart and zero ecological impact. Even the electricity produced is from the green roof equipped with photovoltaic systems, renewable resources and the biogas-powered combined heat and power plants present on-site. Steps like these taken by manufacturers worldwide would help the environment and reduce carbon footprint. This is also what the consumers are looking forward to when opting for sustainable products.
According to a study, data gathered in a public forum says that 6 out of 10 polled consumers are willing to change their shopping patterns to reduce environmental impact for as small as packaged products. Companies recognise the benefits of sustainability initiatives, with 77% of those surveyed agreeing that they drive an increase in consumer loyalty. Hence companies and their consumers feel that it’s imperative to analyse the environmental impact of a product and its manufacturer. But this is one among many instances that showcase the importance being placed increasingly on sustainability by consumers. The sector can have a significant long-term impact and bring the sector closer to becoming eco-friendly, profitable and consumer-approved. Sustainability acts as a catalyst for the manufacturing industry, many of whom are still contemplating crossing the threshold. All the data, trends and current economic situation indicate that the sector can strengthen its growth, establish consumer trust and even generate leads by incorporating sustainability and helping the world reap its benefits.