The State of Sustainability: Will you Lead or Lag in 2009?
By Kimberly Knickle, Program Director, Emerging Agenda, Manufacturing Insights, IDC
Dec. 30, 2008 -- Manufacturing Insights recently conducted a sustainability survey among 221 U.S. manufacturers. This survey reminds us that many are just getting started in greening their products and processes. Even though many believe they have the data they need, it is how they apply the data that requires the more difficult work. And we believe that having and applying the right data is going to be extremely important in 2009. Our sustainability predictions emphasize that the gap between leaders and followers will widen, and the growing use of numbers to define a company's sustainability progress is going to make that gap visible inside and outside the company. Not only that, companies will need those numbers to decide which green initiatives should be funded first, given that budgets are going to be constricted in our current economic environment. And, IT is going to play a key role in helping companies get the level of visibility they need to green their companies.
Some of our key findings from the survey include:
Let's add some details to a few of those conclusions. New regulations are looming for manufacturers, and the No. 1 concern for most is new or more stringent regulations. At minimum, regulations add costs to the manufacturing process; in a worst-case scenario, companies face the risk of bad publicity, fines or even jail term for executives for noncompliance.
But new regulations are not the only challenges that manufacturers expect to face. Changing the manufacturing process is the second most common concern overall, perhaps because of the length of time and complexity required to change processes. Customer expectations also factor heavily into challenges, with many manufacturers expressing concerns that customers want greener products and processes with only a small impact on price, if any.
Many manufacturers also expressed concern over the lack of standardization when it comes to green metrics and measurement. There are multiple associations that accept or define public reporting of sustainability, green, and/or emissions, but none of these are universal, and most don't provide the level of detailed metrics or performance benchmarks that companies will have to achieve to be successful in sustainability in the long term.
We also should acknowledge that energy efficiency may not remain a company's most important goal in a market where oil and gas prices have dropped off their peak in the fall of 2008. But the fact remains that companies can still drive cost savings from identifying energy efficiencies, and the topic will remain of relatively high importance, especially as companies become more savvy in calculating their carbon footprint and greenhouse gas (GHG) emissions.
Some of our suggestions for manufacturers include:
For more on this story, click here to listen to the Manufacturing Insights Webcast "Attitudes and Trends: Embedding Sustainability Practices."
Dec. 30, 2008 -- Manufacturing Insights recently conducted a sustainability survey among 221 U.S. manufacturers. This survey reminds us that many are just getting started in greening their products and processes. Even though many believe they have the data they need, it is how they apply the data that requires the more difficult work. And we believe that having and applying the right data is going to be extremely important in 2009. Our sustainability predictions emphasize that the gap between leaders and followers will widen, and the growing use of numbers to define a company's sustainability progress is going to make that gap visible inside and outside the company. Not only that, companies will need those numbers to decide which green initiatives should be funded first, given that budgets are going to be constricted in our current economic environment. And, IT is going to play a key role in helping companies get the level of visibility they need to green their companies.
Some of our key findings from the survey include:
- The motivation and evaluation of sustainability initiatives remain centered on regulations and the search for cost and energy efficiencies.
- As a result of the regulatory focus, most sustainability initiatives are still managed by the Environmental Health and Safety department.
- Large manufacturers (10,000 or more employees) are more proactive in sustainability efforts such as focusing more on redesigning products to create revenue opportunities.
- More than 62 percent of large manufacturers expect to influence their existing software application providers to add green-related functionality to their products.
- 53 percent of large manufacturers currently use carbon footprint or emission reporting tools.
Let's add some details to a few of those conclusions. New regulations are looming for manufacturers, and the No. 1 concern for most is new or more stringent regulations. At minimum, regulations add costs to the manufacturing process; in a worst-case scenario, companies face the risk of bad publicity, fines or even jail term for executives for noncompliance.
But new regulations are not the only challenges that manufacturers expect to face. Changing the manufacturing process is the second most common concern overall, perhaps because of the length of time and complexity required to change processes. Customer expectations also factor heavily into challenges, with many manufacturers expressing concerns that customers want greener products and processes with only a small impact on price, if any.
Many manufacturers also expressed concern over the lack of standardization when it comes to green metrics and measurement. There are multiple associations that accept or define public reporting of sustainability, green, and/or emissions, but none of these are universal, and most don't provide the level of detailed metrics or performance benchmarks that companies will have to achieve to be successful in sustainability in the long term.
We also should acknowledge that energy efficiency may not remain a company's most important goal in a market where oil and gas prices have dropped off their peak in the fall of 2008. But the fact remains that companies can still drive cost savings from identifying energy efficiencies, and the topic will remain of relatively high importance, especially as companies become more savvy in calculating their carbon footprint and greenhouse gas (GHG) emissions.
Some of our suggestions for manufacturers include:
- Look for opportunities in both cost savings and revenue generation in sustainability.
- Make sure your organizational structure does not sideline your sustainability initiatives.
- Put a process in place to prioritize initiatives and measure their success with KPIs and payback calculations.
- Take advantage of the data you already have across multiple systems and bring them together using decision-making tools that include a green perspective.
- Look to IT vendors to be partners in your green or sustainability initiatives, considering the years of investment they already have in helping their clients optimize and be more efficient.
For more on this story, click here to listen to the Manufacturing Insights Webcast "Attitudes and Trends: Embedding Sustainability Practices."