Sustainable Manufacturing: The ultimate guide for SMEs

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Sustainable manufacturing is at the forefront of good manufacturers’ plans. This article will take a look at what sustainable manufacturing is, some examples across different industries, and how SMEs can plan for sustainable manufacturing.

What is sustainable manufacturing?

Sustainable manufacturing is the process of manufacturing in a way that minimises environmental harm. It does this by considering the full life cycle of the product, starting from the sustainable gathering of raw materials to the ability for the product’s parts to be recycled or used in other forms at the end of its life. By doing so, it maximises the benefits of the product while at the same time, minimising the impact on the environment.

How is sustainability good for the industry?

Sustainable manufacturing conserves and protects natural resources while creating products that have the potential to be used beyond their initial life cycle. Sustainable manufacturing also ensures minimal wastage, with streamlined production and resources utilised in the most efficient and effective way.

cardboard waste

Minimise harm to the environment — starting with reducing waste.

Sustainable manufacturing – industry examples

There has been an uptick of interest and investment in sustainable manufacturing across the world, and across industries, in recent years. Change can be found particularly in industries that face significant disruption, and which have come under pressure for environmentally unfriendly practices. These industries include car-making, apparel, food, household goods, and electronics.

Some examples of companies that are actively choosing a more sustainable manufacturing process are Adidas and BMW. Adidas has established a Sustainability Strategy through which it went plastic-free in its stores, began producing shoes using recycled plastic waste, and began tracking its supply chain to identify any forced labour. It has also committed to a five-year strategy with sustainability at the core.

BMW has also actively adopted sustainable manufacturing practices and has been a leader in sustainability rankings for some years. The luxury car manufacturer has set itself a target for carbon dioxide reductions, across every step of the manufacturing process. It is aiming to reduce its CO2 emissions by at least a third.

Let’s take a look to see how clothing manufacturing, food manufacturing and toy manufacturing stack up.

Sustainability in the clothing manufacturing industry

The rise of fast fashion and supply chains linked to forced labour has put pressure on the clothing manufacturing industry in recent years. The clothing industry is also a major contributor to environmental harm, making up around 10% of carbon emissions and 20% of wastewater.

Consumers are increasingly seeking assurances that clothing brands are underpinned by ethical manufacturing practices and that they are made from sustainable resources and durable for long-term wear.

This has caused many manufacturers to reconsider their business models and move toward more sustainable practices. Many major outlets and clothing manufacturers have now made a significant commitment to more sustainable operations.

Beyond the positive impact on the environment, sustainability is a very powerful marketing tool. A desire to lessen humans’ impact on the earth is a major theme in social media and among fashion influencers. That trend has pushed the value of ethical fashion up steadily in recent years, although it did see a decline through 2020 due to the impact of the Covid-19 pandemic. The industry, currently valued at over USD$6 billion a year, is expected to recover reasonably fast and push past USD$8 billion by 2023.

Sustainability in the food manufacturing industry

There are a few considerations food manufacturers need to have in mind for sustainable food manufacturing:

  • Raw materials are collected sustainably
  • Minimise pollution and water wastage
  • Food production processes don’t incur excessive waste
  • Use resources efficiently
  • Packaging is environmentally friendly

This can be a complex process as raw materials can be provided by a multitude of different suppliers.

In recent years, there has been a surge in demand for sustainably made food products, with many consumers now happy to spend more on brands that work with environmentally friendly practices. The figures rise among millennials, to nearly three-quarters of consumers. Increased awareness and changing attitudes has seen major companies including NestléCoca-Cola and Starbucks make commitments to sustainable practices.

Sustainability in the toy manufacturing industry

Toy manufacturing has long been a contributor to global waste. Plastic toys use plastic more intensively than other consumer goods and 80& of plastic toys end up in landfills, incinerators or in the ocean according to Joris Vanbriel and Vanessa Yuan, Co-founders of ecoBirdy.

Three of the world’s biggest toymakers, LEGO, Mattel and Hasbro, have made changes to how they manufacture their goods, as they strive to meet these expectations. Mattel is now selling toys in packaging made almost entirely from recycled materials. LEGO is also actively shifting toward a more sustainable business model, aiming to make all of its packaging recyclable by 2025, and increasing its use of plant-based plastic. Hasbro plans to get rid of all plastic packaging for new product by the end of 2022.

lego bricks

There are ways to minimise buying plastic toys: borrowing from friends, buying less, passing toys on, and sharing more.

How sustainable packaging manufacturers are responding to changing consumer attitudes

Sustainable packaging is packaging that doesn’t deplete natural resources and is compostable or recyclable. It has become a key focus for the sustainability industry. Growing consumer awareness around environmentally damaging supply chains and unnecessary waste have led to significant shifts in both the private and public sector. Notably, private companies and governments have banned the use of single-use plastic shopping bags.

47% of consumers won’t buy products in packaging that’s harmful to the environment
Source

The rise of plastics and convenience culture has caused huge harm to the environment. Many single-use products are useful for just a very short time, but last in the environment for years. Millions of animals die every year from consuming or becoming entangled in plastic waste, with nearly 700 species affected by the pollution.

Attempts to reverse the damage are underway. Across the world, governments are moving to ban single-use plastics such as supermarket bags and straws. In New Zealand, the Government has plans to phase out environmentally unfriendly plastics such as PVC, polystyrene and other single-use products such as plastic straws and non-compostable fruit stickers. Consumers are also increasingly aware of the harm caused by this manufacturing and are rejecting it in favour of more environmentally-friendly options.

How to achieve sustainable manufacturing

Use free resources

The Organisation for Economic Co-operation and Development (OECD) plays an important role in supporting sustainable manufacturing. For the last decade, it has provided a Sustainable Manufacturing Toolkit to help manufacturers understand how to create more sustainable businesses. The toolkit details the various indicators of sustainability, and how a business can measure itself against them.

The toolkit offers a ‘Start-up Guide’ and web portal which contains useful information for businesses looking to improve their sustainability. It also details a number of examples of manufacturers who have done it well, which in turn offers a roadmap for others.

The Centre of Excellence for Sustainable Advanced Manufacturing

In a similar vein, check out what government subsidy or funding is available for you. For example, UK sustainable manufacturers can check out the Research and Innovation Centre. The Centre has delivered GBP50 million in funding to support Sustainable Advanced Manufacturing as they research, test and scale innovations for sustainable manufacturing. Initially, the centre will focus on robotics, artificial intelligence, sustainability and additive manufacturing. Eventually, the centre hopes to support economic growth by creating more sustainable and economic ways of manufacturing.

Learn from peers

Conferences and forums are a great way to learn from industry leaders, connect with peers and network with the rest of the industry. The Global Conference on Sustainable Manufacturing is an example of a sustainability forum. The conferences bring industry experts to consider how to improve sustainability across manufacturing and to support the industry as it seeks more environmentally-friendly ways to do business.

Meet sustainability standards

There are several types of sustainability standards that support a manufacturer’s claim to the status. Depending on what industry the manufacturer is in, there are standards around the likes of organics, fair trading, and protection of the rainforests.

The Organic Standard is commonly used in the food industry and is based on a framework of requirements around the usage of chemicals in growing produce. It also forbids the use of genetically modified organisms.

The Fairtrade Standards are also a well-known stamp of authenticity for sustainable products. The Fairtrade Standards support the sustainable development of production and workers’ rights in developing countries.

packaging

Organic standards for manufacturers are generally regulated by NGOs

Be a B-Corp certified business

A ‘B-Corp’ is the shortened version of describing a Certified B Corporation, a certification that identifies a business that has met the highest standards of performance across issues such as environmental performance, transparency and accountability.

The intention of the B-Corp movement is to ensure a more equal world, in which there is lesser poverty and a protected environment. It sees profits as a means to support people and the environment. The certification evaluates the overall impact of a company, its place in the world and how it positively contributes towards community and environmental needs.

The benefits of being a B-Corp business

The benefits of becoming a B-Corp company are severalfold. At a high level, it shows prospective clients, business partners and employees, among other stakeholders, that the business is committed to social good, alongside profit.

Companies that commit to the certification also create a powerful brand positioning that attracts similarly minded staff, and a market offering that feeds consumers’ increasing demands for environmentally-friendly products.

What are the drawbacks to being a B-corp?

While there are clear benefits to being a B-Corp business, there are also some drawbacks. Unlike many sustainable business innovations, there are no tax benefits to being certified, and it holds the company to a certain level of scrutiny and interrogation from stakeholders on all business decisions.
Further, the process of becoming a B-Corp is lengthy and rigorous, which may be a barrier for any companies considering the certification.

How many B-Corp businesses are there?

Becoming a B-Corp company is an increasingly attractive option, despite the hurdles to claiming the certification. The reasons for this include the ability to attract staff who hold the same values, the brand positioning among competitors and, of course, the benefits to the community and the environment, by being a B-Corp company. As a result, there are currently more than 3,500 B-Corp companies in 70 countries around the world, and that number is expected to grow exponentially.

How sustainable manufacturing shapes global value creation

Companies across the globe are now recognising the importance of sustainability, not only for the broader purpose of protecting the environment but also because it makes business sense.

As such the rise in sustainability manufacturing and the proliferation of standards now available to establish quality benchmarks, is driving a global shift in expectations. That in turn, is creating value for organisations around the world, across the bottom line but also for the environment.

3D printing: the future of sustainable manufacturing?

3D printing is proving a powerful tool in the drive toward a more sustainable world. While the process is yet to become entrenched in everyday living, the opportunities it creates are widely recognised.

3D printing is far less wasteful than traditional manufacturing. The process often ‘layers’ materials such as plastics on top of each other to complete the design. Each layer is designed digitally to precisely fit what is required, therefore creating very little waste. This more efficient manufacturing method also reduces emissions, and the ability for production to be ‘on site’ reduces additional environmental harm such as that caused by, for example, the transportation of goods. 3D printing also creates products that can be broken down relatively easily and transformed into a new product, if required.

Advances in sustainable manufacturing

There have been incremental advances in sustainable manufacturing since the concept became more commonplace in the 1970s and 1980s.

Innovations have been driven by both the public and private sectors, with Governments around the world taking steps such as banning single-use plastic bags, earmarking funds for sustainable innovations, and providing incentives for electric vehicles and sustainable energy production.

In the private sector, the rise in consumer demand for sustainable manufacturing has led to changes including greater scrutiny of and changes to supply chains, greater use of recycled and reusable materials, and increasing uptake of more sustainable products such as those which are 3D printed.

While the actions of governments and companies are moving in the right direction, there needs to be a substantial and urgent shift in short-term goals to mitigate the risk of climate change.

More about the author:

Melanie - Unleashed Software
Melanie

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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