Industrial activities are, today, responsible for the lion’s share of global carbon emissions. In 2014, roughly 28 percent of global GHG emissions came from industry. Companies generate greenhouse gasses directly in their factories and indirectly by transporting products and materials.
The operations advantage
When companies optimise their operations—whether to increase productivity, improve quality, or reduce cost—better environmental performance can be a byproduct.[/tweetthis] Efficient manufacturing processes and supply chains cost less to run, consume less energy, use fewer resources, and produce less waste.
Today, many of the world’s largest businesses are designing and executing improvement initiatives to address both cost and sustainability goals simultaneously. A few examples show the potential.
- Manufacturing: Optimising process control and product formulation: Some companies have found that they can make important improvements to the environmental profile of their products with only modest capital investments. For example, in primary steel production, optimising the control of blast furnaces with better sensors and improved analytics can reduce coal consumption by 10 to 15 percent.
- Consumer goods: Optimising packaging through the supply chain: At one major quick-service food player, the manufacture, distribution, and retail sale of sandwiches alone created over 900 metric tons of non-food waste every year. To address this issue, the company redesigned its packaging and developed a single, sustainable solution that could protect the product through the end-to-end supply chain. The change cut overall packaging costs and eliminated 160 tons of waste every year.
- Logistics: Reducing shipping costs and greenhouse-gas emissions: One company used telematics technology to monitor the movement of its large road-vehicle fleet and then applied advanced analytics to that data, to optimise routes and vehicle utilisation. This led to an annual reduction in road miles of around 20 percent, cutting carbon emissions by 1,300 metric tons.
- Procurement: Buying into a smaller carbon footprint: In road building asphalt prices can vary significantly, according to local market dynamics. One road builder had traditionally purchased asphalt based on price per ton alone, which often meant product was transported long distances. When the company adopted a total-cost-of-ownership approach to sourcing, it found that local producers were usually a better value, cutting shipping and related carbon emissions by 40 percent.
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