Driving Sustainability and Profitability Through Digital Transformation
Corporate efforts to fight climate change and create more sustainable processes were once thought of as a “nice to have” checkbox, but a growing number of companies are now finding value and profitability through such efforts, which also happen to provide a greater good for the planet. While companies taking a more altruistic approach to the problem is one of the contributing factors, so are digital transformation efforts that provide a balance between becoming more sustainable and finding optimizations that improve the bottom line.
Related Webinar: Getting to the Greater Good – Digital Transformation Drives Profitability and Sustainability
“If your business objective is sustainability, it can take you down a path – if your business objective is profitability, it’s going to take you down another path,” says Ricky Watts, Senior Director of the Industrial Solution Division Intel Internet of Things Group at Intel. “The way we approach it on a project basis is to find a balance between the two, because it’s very hard in a very competitive world to do everything for just a sustainability outcome. As much as we would like to say, ‘It’s the right thing to do, let’s go do it,’ you still have to return value back to the business.”
Watts was a panelist in a recent A3 webinar, “Getting to the Greater Good – Digital Transformation Drives Profitability and Sustainability,” which discussed how companies could use new technologies to become more sustainable while also focusing on process optimization and digital transformation. The webinar was the final part of the Intel-sponsored Intelligent Edge for Industrial Applications series. Watts was joined on the webinar by Steven Meyer, Sr. Principal Engineer, Facilities Automation at Intel, and Bill Wright, Head of AI/ML, Intelligent Edge, TME and Industries at Red Hat.
Wright says that companies are expecting employees to go out and generate revenue for the company, but in the case of sustainability there is now more urgency for companies to look at the bigger picture. “About 10 years ago, it was a marketing and PR move to say that they were involved in sustainability, and everyone would nod,” says Wright. “Now it’s a little more serious, and the needle has shifted a bit, people are saying we better do something about that too. "There’s now more urgency behind it, and a realization that it is an issue for all of us. But if one can’t show a good business value in addition to the benefit to the climate, it can still be a tougher road in some cases."
Beyond carbon footprint reduction
The panelist agreed that companies look beyond just reducing their carbon footprint in sustainability efforts, engaging in actions such as reducing water consumption (or even becoming water-positive), engaging with partners to ensure they are sourcing sustainable power and materials, and reusing or recycling materials better.
Reducing waste in manufacturing processes is a big way that companies can move the needle on sustainability efforts. By implementing automation and digital transformation strategies within a manufacturing operation, the panel said companies could not only improve product quality, but also reduce waste, driving profit.
“In our manufacturing environment we used advanced process control, which is automatically tuning and tweaking the process for optimal state,” says Meyer. “When you do that, you’re removing waste in the process, and you’re also removing re-work from having to correct issues. You’re optimizing to make sure the process is going to produce the right product. When you do that you get a more efficient manufacturing line, but you’re also getting sustainability benefits.”
However, Meyer also warned that companies need to factor in the costs of energy consumption needed when implementing a new or innovative production. He gave an example where a manufacturing line looked to deploy advanced robotics to help move materials that had gotten too heavy for humans to move, but this added more electrical consumption for the company, which “moved the needle in the wrong direction.” Meyer says factoring in those costs and recouping that in the future needs to be placed into any automation or transformation plans.
The webinar panel also addressed other sustainability and transformation challenges, including:
- Making sure that workers on the floor are included within any sustainability and process improvement efforts, as they are the best arbiters of finding ways to reduce waste or energy consumption;
- How companies need to come up with a baseline standard for measuring climate change data, and how they can responsibly share that data with other companies;
- How the role of digital twin and simulation can improve efforts around climate modeling, but also improve digital transformation efforts and manufacturing line changes;
- The role of machine learning and artificial intelligence in helping to determine where companies can have a big impact on climate change or sustainability efforts.
Watts concluded the webinar with advice for companies looking to better achieve sustainability strategies: “Challenge your customers and the people working for you to make sure you understand what they are bringing on sustainability. Don’t compromise. Ask the tough questions and get the right answers. Make sure you build that into what you are doing, driving your outcome so when you present your business case to management, you are taking your partner’s information and building that in with your own. Don’t do it on your own, use your partners.”
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