Today, 93% of manufacturing CEOs report that sustainability is impacting the future of their business.
According to some estimates, we need 3 Earths in order to support our consumption by 2050. There will simply not be enough raw materials to go around.
With the right attitude, motivation, and investment, sustainable practices like circular economy principles can deliver sustainable profitability while simultaneously sparing resources for better use. Many of these tactics can, in fact, be integrated into the same lean initiatives that manufacturers have been using for decades.
Leaders around the world are implementing circular manufacturing methods in order to achieve sustainable profitability on the long term.
Circular manufacturing opens up new avenues of value creation for your company by reconciling profitability with sustainability.
To put it simply - circular manufacturing saves you money while also saving the planet.
This is the process of reincorporating waste material - whether it’s from consumers or your own operations - back into new products.
Reduce the novel materials you use and re-make the existing materials.
Otherwise known as remanufacturing or refurbishment, this is recreating a product with a combination or re-used, repaired, and new parts and distributing it back into the market.
This saves manufacturers from discarding (read: wasting) perfectly good parts when only a portion needs to be replaced.
The best of both worlds - this practice describes using a product again (often in a different market) without needing refurbishment or repair.
In fast moving consumer goods models, exploring reusable packaging models can make a huge impact.
What if we could prevent a product from turning into waste in the first place?
This practice involves creating products that can easily be repaired to increase their longevity in the market.
"But how doe we adopt these strategies and still make a profit?"
In order to grow, manufacturers need to sell a certain quantity of products. What are the incentives to invest in higher quality, longer lasting products? In other words, how do circular economy principles counter the traditional revenue model that relies on more, rather than less?
Saving the planet requires change.
We’re noticing a fundamental shift in the business models of those companies that want to make an impact and invest in sustainability. Rather than investing in the product themselves, they invest in the lifetime of the product.
At every level, circular economy principles are integrated according to the following fundamental building blocks:
Lean and green initiatives support each other if they’re well-executed - sustainability transformations and lean ways of working can work well when applied in synergy.
Getting started is often a matter of integrating sustainability initiatives with existing lean or continuous improvement programs within an organization. Note: it’s a huge bonus if manufacturers are already using tools that help standardize work and facilitate continuous improvement, as changes to standards and ways of working can be communicated more effectively.
What does this integration look like?
Check out the four examples below.
Integrating sustainability goals into a factory’s existing performance goals allows manufacturers to work towards a greener way of working at scale.
Often these KPIs are already beneficial for a manufacturer’s bottom line. Reducing waste (eg. water, plastic, etc) helps our manufacturing processes stay efficient and cost effective while also having a positive effect on the environment.
Try to identify the points in your processes where the biggest ecological footprint (energy or resource usage) exists, and start there.
Make a sustainable action plan and integrate it into your existing Lean optimization materials.
Not only does this provide a ready-made and transferable format for making incremental improvements to your green footprint, but it also delivers results through a methodology already familiar to everyone involved.
Examples:
Plant managers, supervisors, and leaders within an organization should take every opportunity to lead by example.
Some companies already excel at integrating this culture of leadership and leveraging it for better lean results - the same principles apply with sustainability initiatives.
From an operator or shift perspective, many companies engage the workforce by assigning sustainability-focused roles to a number of individuals working on the shop floor.
In addition to their regular daily tasks, they’re also made responsible for certain key tasks relating to sustainability.
Not only does this actively work towards established goals, but it involves the frontline workers and provides more opportunities for accountability and engagement.
This may seem obvious, but the success of sustainable profitability - and morale in general - can hinge on effectively sharing the wins from these programs.
Clearly communicate the real impact in terms of cost, lead time, and savings. Having these figures clearly defined not only gives hope to those involved, but can be an important resource for stakeholders.
"What should I look out for?"
A lot of the world’s top manufacturers set significant sustainability goals and achieve them. But at the same time, a great many more companies don’t manage to achieve, or even create, these sustainability goals.
In fact, only 2% of programs effectively deliver on the ambitions and goals originally defined.
What are the main reasons?
Be mindful about these common pitfalls when implementing your own circular manufacturing strategies.
Want to learn more about lean manufacturing and sustainable profitability?
👉 Webinar: Sustainable Profitability. How to Leverage Circular Economy Principles in Your Operations.
👉 Introduction to Impactful 5S Standard Operating Procedures.
👉 How to continuously improve your processes in manufacturing.
This article was created in collaboration with sustainability and lean manufacturing expert Mathias Fahy from Mobius Business Redesign.