Intelligent industry and sustainability: The business template of the future

The future of industry is “intelligent.”  The growing convergence of products, software, and services holds the key to the next big transformation opportunity for organizations across industry. But importantly, any transformation isn’t about optimizing a process for efficiency gains; it means doing so at scale, and doing it sustainably to create more value for stakeholders – society, customers, and employees. 

As the process of Intelligent Industry picks up, and as the business case for sustainability grows by the day, how much are the two concepts intertwined and mutually compatible? What is the role of Intelligent Industry in transforming and contributing to the sustainability agenda of organisations? How is technology helping manufacturers to achieve the goals set by their sustainability agendas?

“Intelligence” is driving the sustainability paradigm

An industry report claims the phenomenon of Intelligent Industry is fostering synergies between the digital and engineering worlds to help companies manufacture intelligent products, operations, and services at scale. And while we talk of Intelligent Industry, its complement of new-age technologies will extend sustainability across the entire value chain. Technologies like AI, ML, data analytics, and digital twins are enabling companies to better utilize resources, simulate emissions, and optimize supply chain and transportation networks. 

Through simulations and scenario analysis, predictive modelling and operational efficiency, digital tech is allowing organizations to optimize their resource utilizations. Unilever’s example is quite fascinating. The company used a digital twin to set manufacturing parameters; for example, resetting the temperature at which soap is pushed out before it is cut into bars. It resulted in savings of $2.8 million by reducing energy usage and improving productivity by 1–3 percent.

Singapore has taken logistics technology to another level. Through a digital twin model called Virtual Singapore, city authorities plan emergency evacuation routes, or guide traffic via real-time inputs. They can even identify likely dengue outbreaks by measuring the density of people bitten by disease-carrying mosquitoes. 

Intelligent Industry is synonymous with all things “smart” – smart products, smart systems, smart technologies, even smart cities – all of which are core to the manufacturing industry. It is the next generation of digital transformation, and its wide range of contributions shows it is creating huge opportunities and unleashing innovation for a profitable and sustainable future. 

The business case for a sustainable strategy 

Even after setting ambitious targets in operations, not many organizations are on track to become sustainable manufacturers. The majority of manufacturers are still focused on traditional lean manufacturing, rather than on Green or Sustainable manufacturing which follows the comprehensive ‘6R’ approach of Reduce, Recycle, Reuse, Recover, Redesign and Remanufacture. In contrast, Lean manufacturing is only focused on Reduce (waste elimination) and Green manufacturing emphasizes on '3R’ approach of Reduce, Reuse, and Recycle.

Most attention is given to Scope 1 emissions (direct emissions owned or controlled by the organization), but less attention is given to Scope 2 (indirect emissions; for example, those caused by generating electricity used by an organization) and Scope 3 (all other emissions generated within an organization’s value chain, including upstream and downstream emissions). Also, the lack of synergy between business and sustainability executives significantly hinders progress in this regard. 

But there appears to be a silver lining. Of late, concerns regarding climate change and regulatory pressures are forcing organizations to change – for the better. We are seeing a growing market segment that is very carbon-conscious and willing to pay a premium for products that offer sustainable solutions. This is creating a vast array of opportunities for businesses to be economically profitable – and environmentally responsible. 

Today, there is recognition that Intelligent Industry and new-age technology is key to driving progress and extend sustainability across the value chain. With technologies like AI, ML, data analytics, and digital twins enabling companies to better utilize resources, simulate emissions, and optimize supply chain and transportation networks, organisations are beginning to take notice – and action. 

Industry research suggests that a majority of organisations believe that technology will be key to their sustainability strategy. And we see significant adoption of technologies to drive sustainability in manufacturing: a high number of companies are adopting automation, AI and machine learning, while an equally high number are employing data analytics for sustainable operations. 

For an Intelligent and Sustainable future 

To convert sustainability ambition into reality, manufacturers should enable an alignment between business teams and sustainability executives, break down large but vague targets into smaller and measurable metrics, work with customers and suppliers to reduce indirect emissions, build transparency through credible reporting, and position technology at the core of their efforts.

Clearly, sustainability is the future. If the industries of today are not building products that are intelligent enough to create a sustainable future, those products may not have a future at all – which is reason enough to drive the future of business on this path.

The article has been written by Clifton Menezes - India Head of Group Portfolio, Capgemini