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How technology can create a sustainability footprint for manufacturing

by Harshad Khatri, May 2011

If building a sustainable enterprise was a fashionable trend five years ago, today it is a strategic differentiator. According to the nonprofit organizations the Climate Group and the Global e-Sustainability Initiative (GeSI), transforming the way people and businesses use technology could reduce annual man-made global emissions by 15 percent by 2020, and deliver energy efficiency savings of more than US$800 billion to global businesses.

Indeed, recent breakthroughs in the technology industry—primarily in computation and communications—have provided unprecedented capabilities in capturing the promise of sustainability. In the manufacturing industry, the benefits span the entire lifecycle and value chain of any product, including inception, design, manufacture, sales, and service, as well as supporting services for each of these business functions. In today’s global economy, where the mantra is “design anywhere, make anywhere, and sell anywhere,” manufacturers continue to leverage efficiently coordinated global capabilities. The impact of technology-driven sustainability spans the entire value chain by allowing for global design team collaboration; global manufacturing coordination; and low-cost, energy-efficient supply chain and logistics execution.

But how do organizations go about leveraging technology to complete this transformation? The Climate Group and GeSI recommend managers use a framework to standardize, monitor, account, rethink, and transform (SMART) their businesses to “optimize for energy efficiency and how we live, work, and play in a low-carbon world.” This approach will be successful when low-carbon business models become the norm and proliferate across all industries and economies.

For manufacturing companies, applying technology within the SMART framework allows for a closed-loop view of the value chain, enabling the ongoing review, optimization, and transformation of the organization to capture sustainability benefits. Here’s how:

Standardize. Technology ensures the standardization of measurement methods to help managers understand and capture the sustainability impact of products across the entire lifecycle, from design and manufacturing to transportation. With standardized measures, the drivers of sustainability can be modeled, analyzed, and optimized globally.

Monitor. Organizations can use technology to link and make sustainability goals and outcomes visible, as well as to monitor statistics such as energy use across the value chain. This step involves ensuring that the monitoring is consistent throughout the company and processes, implementing monitoring devices and tools for power management, and applying remote monitoring and control of systems wherever appropriate.

Account. Technology-driven monitoring of statistics such as materials and energy usage creates accountability across the organization, driving and aiding managers who must make decisions and create sustainability goals.

Rethink. In time, business environments will change, and sustainability goals will need to be refined. Technology drives this process by offering tools that can develop alternative, updated scenarios and processes. The information will enable industry leaders to rethink their own operations and product development for materials, cost, and energy reductions.

Transform. Technology allows for the scaling of optimized sustainability-enabling tools and practices across the value chain on a global scale. As with any other initiative, a “think big, start small, and scale rapidly” cadence will allow for global sustainability transformation.

Manufacturing companies that focus on technology-enabled sustainability are expected to gain a dual edge on the competition: a “green edge” that comes with being an environmental leader, and a financial edge gained by capturing and leveraging that reputation in the market. Using the SMART framework allows companies to monitor and transform value chain activities—which, in addition to reducing emissions, optimizes results and reduces costs across the board. Over time, these benefits are truly strategic advantages, driving both the top and bottom lines.

Harshad Khatri is a senior director for industry strategy and insight at Oracle.