Building sustainable manufacturing supply chains
For the modern manufacturing sector, ‘sustainability’ has to become more than a buzzword and the supply chain less remote. Stakeholders and customers alike are united in their desire for transparent information on a business’s sustainability credentials. What ESG initiatives are in place? Is there an emission-offsetting programme? A net-zero deadline? Clearer details on supply chain structure and practices should then also follow – how far do items travel? What do Scope 3 emissions look like? What has the business done to keep forced labour out of its supply chain?
Here, two manufacturing partners tell us about sustainable manufacturing methods and supply chains.
Building a sustainable supply chain
Federico Crespo is the CEO of Valiot, a company that builds innovative manufacturing automation solutions for businesses such as Heineken, John Dere, Metalsa, and Coca Cola. Here he discusses with us the ways a sustainable supply chain can be generated.
“Valiot provides integrated AI solutions that help improve factory efficiency and optimise the value chain,” explains Crespo. “Its products, FactoryOS and ValueChainOS, enable manufacturers to anticipate and identify production bottlenecks and mitigate pain points in the production process before they become a major concern, actually making the operation smarter.”
One way in which AI is used at Valiot, is to strengthen the supply chain.
“Our ValueChainOS product oversees the operation of one or multiple factories to optimise the entire value chain. Everything is connected to the same data lake, allowing key processes – like the ever-changing demand forecast and inventory management – to be in the same space,” explains Crespo.
AI algorithms then run thousands of scenarios to provide the most optimal production sequencing. Continuous information analysis predicts factory behaviours and guarantees the production sequence remains optimal. If it’s not, it autonomously reschedules and provides the ideal plan.
“This optimises service and inventory levels, significantly reducing production cycle times and maximising productivity and throughput,” says Crespo, who is also excited about the future of factory automation and its potential to revolutionise the manufacturing industry.
“For years, factories have been relying on outdated and inefficient manual labour to produce goods, which has led to higher costs, slower production, and a decrease in quality and output.
“Factory automation has the potential to drastically reduce these inefficiencies, resulting in improved production, lower costs, and better quality goods. Automation also allows factories to focus on core processes, such as design and product development, while the automation system handles the tedious and time-consuming tasks associated with production.”
Ultimately, Crespo believes that factory automation is the future of manufacturing and he’s excited to be a part of it. “With the right tools, training, and support, I am confident that our clients will be able to see the benefits of automation for their businesses,” he says.
In 2023, Crespo expects the global supply chain to become increasingly digitised and automated, with advanced technologies such as blockchain and predictive analytics being more widely utilised.
“I’m expecting to see an increase in the use of 3D printing and other new technologies. These could allow companies to quickly and easily produce customised products with minimal materials and waste,” he says. “I also expect to see a greater emphasis on sustainability, with more companies understanding the importance of creating a more sustainable supply chain, with a greater emphasis on digital logistics and more sophisticated tracking systems that allow companies to better monitor their supply chains.”
Crespo hopes to see the global supply chain become more interconnected, with more companies collaborating and sharing data on a global scale: “This could lead to greater efficiency and cost savings for businesses, as well as a more transparent and secure supply chain.”
The ‘Titanium Economy’ and sustainable manufacturing methods
Jason Hehman is Client Partner at TXI, a product innovation consultancy that builds engaging digital products to transform businesses.
“I help our clients tackle their most interesting and difficult business challenges by establishing trust among product teams and customers, breaking down internal silos, and developing resilient, innovative cultures,” explains Hehman. “We provide pragmatic advice that helps guide leaders through the product innovation process — from new product discovery to delivery and beyond.
“We’re unique in our space because of our commitment to engineering excellence, continuous discovery, and research-driven design thinking. We work with clients in healthcare, life sciences, digital health, biopharma, retail, education, and manufacturing.”
TXI works to understand digital product user behaviours and needs, then build platforms and applications that help meet them. For manufacturers, this can involve engaging with their customers in new ways, understanding shifts in their ordering and purchasing processes, and developing new, innovative tools and product offerings that serve an evolving industrial market. The result is great process flexibility, increased productivity and revenue, and higher-quality production.
Hehman himself is fascinated by what’s dubbed ‘the Titanium Economy’ and its evolving role in manufacturing. Coined by McKinsey consultants in a book with the same name, the titanium economy refers to a group of over 4,000 small-to-midsize industrial firms that have transformed their business with technology over the last decade.
“The average consumer doesn’t know their name, but they develop the parts and materials (think: truck parts, plastic lumber, and colour enamels) for things we use every day. Further, their business performance has rivalled that of flashier tech companies over the last decade,” explains Hehman. “These under-appreciated firms are developing a digital-first culture of innovation and using it to transform their operations with technology. As they shifted from traditional manufacturers to industrial technology companies, they didn’t just revamp old processes with automated equipment — they’re adopting new ways of thinking that lead to new product applications, custom offerings, and sustainable manufacturing methods.”
Naturally forward-thinking, titanium economy companies are leaders in decarbonising operations and accelerating green initiatives.
“Consumer and investor pressures for sustainability create opportunities for manufacturing companies to differentiate themselves by providing green alternatives to traditional materials and energy sources,” explains Hehman. “Companies that are vocal about their sustainability progress also find it easier to align talent and supplier relationships with their values.”
The manufacturing sector – from entering the Titanium Economy to giving rise to newly-founded companies – is clearly moving in a sustainable direction not because it’s a popular choice, but because it gets results.