Sustainability a lower priority in 2024
Some supply chain issues that gained ground in 2023 have dropped on ASCM’s annual priority list. A combined trend encompassing sustainability and the circular supply chain, which aims to minimize the use of raw materials and reduce waste by repurposing discarded waste, was listed seventh in 2022, but ninth this year.
Awareness of sustainability is high, but real movement on the issue hasn’t kept pace, according to Eshkenazi.
“All organizations tell you that it’s among their top initiatives,” he said. “However, the investment, unfortunately, does not match the rhetoric. Investment is much lower now than it is for other technologies.”
There are several reasons why sustainability is receiving less investment, but it’s due primarily to the lack of metrics standards on which organizations should report. Although there is an increasing number of regulatory regimes for reporting requirements, they are not yet having a widespread effect, Eshkenazi said.
“We’re seeing significantly more attention paid in the EU toward where materials are coming from and the impact of those raw materials,” he said. “Unfortunately, we’re seeing now that the awareness is high, but the impact is low.”
Sustainability is on the minds of manufacturers, but real progress is still likely years away, said Paul Miller, an analyst at Forrester Research.
For example, BMW Group’s I Vision Circular is a prototype electric car unveiled in 2021 that will be made from 100% recycled materials and will be fully recyclable, but it won’t enter production until 2040, Miller said.
“It’s a worthwhile vision,” he said. “But it’s a long way off, because they need to modify their own processes and engage their suppliers and supply chain so material can be cost-effectively recycled at the point of need.”
However, if the reliability and cost of energy become a concern, it could lead to sustainability improvements as companies look to reduce energy consumption, according to Miller. For example, energy prices rose by up to 10 times in Germany at the start of the Russian invasion of Ukraine in 2022, making it an operational issue to reduce energy bills.
“We’re seeing the shift in IoT investment on the plant floor away from things like predictive maintenance toward energy tracking,” Miller said. “Specifically, trying to find the energy-intensive machines and make sure that when they’re consuming power, they’re doing something useful.”
A growing number of software companies are stepping in to offer energy monitoring tools, he said. For example, C3 AI has a sustainability tool that tracks energy usage in machines and processes.
“It can pinpoint — with a fair degree of accuracy — which machines, parts and processes are consuming the most energy,” Miller said. “For example, it can tell you that machine is sucking down lots of power, but it’s not making anything right now, so you should send someone to switch it off.”
