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QAD 2021 Predictions: Continuing Momentum for Sustainability in 2021

vmblog 2021 prediction series 

Industry executives and experts share their predictions for 2021.  Read them in this 13th annual VMblog.com series exclusive.

Continuing Momentum for Sustainability in 2021

By Brent Dawkins, director of product marketing, QAD

The ongoing sustainability movement will be one of the biggest trends for manufacturers in 2021. We will see the continued adoption of a wide range of social, economic and environmental efforts across the vertical landscape, from automotive to food and beverage to life sciences. As an example, Nestle, the food and beverage company, has more than a few initiatives to protect the environment. Nestle's eco-friendly actions include the systematic reduction of packaging weight since 1991 and the utilization of a team of agronomists to provide environmental impact training to farmers. Other recent examples include Mercedes-Benz's pilot project for using blockchain to track CO2 emissions and Perrier's program winners for developing sustainable and circular packaging solutions. While consumer product manufacturers previously led the way for sustainable manufacturing practices, a growing number of manufacturers in other sectors have started treating sustainability as an important operational objective to increase global competitiveness.

The sustainability trend goes beyond niche businesses that may have positioned themselves as "green" and now includes enterprises of various sizes across multiple industries. Many manufacturers now publish separate sustainability reports or incorporate the information in their annual report. The benefits of striving for sustainability go beyond brand protection and reputation, including:

  • Improved operational efficiency with reduced waste and costs
  • Increased competitive advantages and access to new customers
  • Enhanced long-term business viability
  • Improved responsiveness to existing and new regulatory requirements

Today, manufacturers view sustainability as a required corporate strategy for long-term business viability and success. In addition, this trend will continue to grow as even more companies recognize the benefits to be achieved, including increased production efficiency, better traceability, reduced waste and greater innovation. Let's consider just a few areas where sustainable efforts help connect the plant floor, back-end systems, supply chain operations and other areas to drive greater sustainability:

  • Asset Management provides optimal asset maintenance to maximize asset utilization and reduce material consumption. Similar to a well-maintained car saving on fuel consumption, well-maintained plants and equipment enhances sustainability by cutting energy requirements. Additionally, asset management boosts efficiency with real-time asset monitoring that sends alerts when tolerances are exceeded to indicate a machine on the plant floor requires maintenance.
  • Lean Manufacturing is a business model and approach that emphasizes the elimination of non-value-added activities while producing quality products on time and with greater efficiency. Lean strategies have played a key role for manufacturers over the years as a business strategy to drive competitive advantages. While the focus is on delivering continuous improvements in cost, quality, production and delivery, significant environmental benefits often result in the areas of production efficiency and waste minimization.
  • Demand Planning allows manufacturers to more accurately identify where, when, and how future customer demands will affect the business. Improved forecasting accuracy ensures optimal supply chain performance, enhanced material consumption and reduced freight expediting costs that cause unnecessary greenhouse gas emissions and costs to the company.
  • The supply chain is another area with plenty of room for improvement from a sustainability standpoint. The complexity of global supply chains, lack of trading partner communication, excess inventory and unnecessary shipments result in waste. Practitioners know that inefficient logistics activities increase the supply chain carbon footprint for no reason. By improving collaboration with supply chain partners, the number of lifetime miles material or product travels can be reduced and CO2 emission savings can occur.
  • Traceability continues to play an important role with customers and consumers focused on product origins to avoid fraud, environmental damage and other factors. From food and beverage to electronics and other products, there is an increasing demand for transparency across the entire value chain to improve operational efficiencies and reduce waste.

Sustainability is not going away and will continue to grow in importance throughout 2021 for customers, investors, governments and manufacturers across the globe. Ultimately, enhancing manufacturing and supply chain sustainability boosts a company's reputation with the ethical sourcing of materials, addressing fair labor practices and showing genuine concern for the environment. Compared with a few years ago, company executives are more likely to see the benefits of going green, like reputational advantage, new product and service opportunities, and meeting regulatory incentives. If your organization has not already created a sustainability approach and framework, 2021 is the time to do it.

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About the Author

Brent Dawkins 

Brent is QAD's Director of Product Marketing with over 20 years of manufacturing and supply chain experience. In his spare time, you can find him hiking the Rocky Mountains of Colorado, coaching youth hockey or enjoying time with family.

Published Tuesday, November 03, 2020 7:36 AM by David Marshall
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