Redefining sustainability for manufacturing firms

Sustainability is a term heard often nowadays, and if you pose a question about its definition, you are likely to receive a variety of responses. But what does sustainability mean for manufacturers? And more importantly, why does this matter?

Simply put, sustainability promotes the efficient use of resources, which translates to improved productivity. While sustainability has its origins in the environmental space, it is a catalyst for improved financial performance, revenue growth and risk mitigation, especially for manufacturers. In fact, sustainable practices are likely to replace lean as the primary driver of innovation and operational improvements over the next three to five years.

A 2008 Next Generation Manufacturing research study, commissioned by the Wisconsin Manufacturing Extension Partnership, identified that 33% of Wisconsin’s manufacturing companies recognized the value of sustainability and deemed it as critical to their strategic direction. However, the 2008 study also found that fewer than 20% of responding manufacturers had made any progress on implementing sustainability processes in their companies. So, while manufacturers recognize the importance of sustainability, why aren’t they actually practicing it in their workplaces, especially if it is profitable? The study cited the following challenges faced by manufacturers:

· No visible link between sustainable practices and profits

· Lack of time and resources required to identify and institute sustainable practices

· Very little or no knowledge about sustainable practices and processes

Too narrow a focus

A narrow focus could also be another factor. Typically, when manufacturers look at sustainability, they are looking at reducing energy use or better methods of recycling. As per the study, more than one-third of manufacturers reduced their annual energy usage and almost half reduced their use of non-recycled materials.  But sustainability is much more than just reducing energy consumption or recycling. Continuous process improvements along the supply chain, and even logistics must be viewed alongside issues such as workforce development and energy.

This is not to say that there hasn’t been improvement in recent years. A 2011 version of the same study reports that 67% of the companies surveyed indicate that sustainability is important or highly important to the organization’s success. Obviously, awareness and importance of sustainability has increased dramatically among Wisconsin manufacturers in the last few years, which is great news. Wisconsin manufacturers are realizing the importance of sustainable and green practices to their bottom line and are making progress in implementing green practices. But this is only a fraction of Wisconsin manufacturers. We can do much better. We need to do much better.

For our state to remain competitive, clearly more companies must commit to process improvements that also increase sustainability. The link between sustainable practices and improved profitability is too strong to ignore. Sustainability should be viewed as a strategy to improve the competitive position of Wisconsin manufacturers.

Articles in this series will introduce and explore process improvements, methodologies, and best practices that manufacturers can execute in their workplace. If you like (or don’t like) what you read here, or have topic ideas for potential articles, feel free to send me a note at bertram@wmep.org.

Next Generation Manufacturing Study is released by the Wisconsin Manufacturing Extension Partnership (WMEP). To download the 2011 study results, visit www.wmep.org.

Randy Bertram is a senior manufacturing specialist with WMEP.

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