Way to Eco-Friendly Footprint: The Paradox of Green Manufacturing

Is it possible for factories to lower their energy bills and have an environmentally-friendly footprint through Green Manufacturing? Let’s see what advantages and opportunities can mattress manufacturers tap into from what’s happening around

The story of Sisyphus is an old one but its essence applies to many businesses even now. Especially for manufacturers who are trying to lighten the load of energy bills as they climb the uphill road of productivity, scale and profitability.

Every time they reach a certain peak, they are cursed to roll down again. The heavyweight of energy footprint just never goes away. With each new breakthrough or innovation that helps factories to produce more gain more profits or achieve economies of scale, there is some more iron added in the form of new equipment or tools. And downhill they come again.

Does that mean that the whole idea of having a green manufacturing factory is a fantasy?

Energy and factory – A tenuous relationship

As unfortunate as the reality is, the pattern continues from the days of coal to the days of silicon. Factories have always had more negative, than positive, impacts on the environment. This is due to a lot of factors:

1. Air pollutant emissions

2. Toxic waste disposal

3. Air and water contamination

4. Greenhouse gas impact

5. Extensive use of resources like water (cooling, cleaning, dilution, boiling)

6. Production and logistics

Mattress and carbon

In a typical mattress Green manufacturing setup, there are a lot of processes that create waste – often because they are largely fragmented and manual. This happens right from product design to raw-material sourcing to mattress platform to foam-filling to supply chain parts. Many traditional players are still trapped in legacy equipment, conventional equipment and outdated tools. There is a lot of room to make these parts efficient, smart, automated, streamlined, and green.

Myriad ways exist wherein a simple mattress can wreak seemingly small but substantial damage on the planet:

• Emission of fumes and chemicals in the atmosphere.
• Harmful materials that go into the manufacturing of mattresses.
• Health risks arising from petrochemicals, blowing agents and adhesives used in foams, dyes additives etc.
• Use of toxic VOCs (Volatile Organic Compounds) (from flame-retardants, for example, that many memory foam mattresses used for a long time).
• Foam-making materials like polyurethane or petroleum that were predominantly used in old-kind mattresses.
• Energy use and emissions from the mattress-making processes that entail both factory emissions and the carbon impact of transportation of materials and goods.
• The problem of responsible disposal of mattresses since most products use non-biodegradable materials and a lot of mixed materials (spring, wood, foam, and fabric) that makes it difficult to sort, recycle or environmentally conclude a product to uphold Green Manufacturing

In fact, industrial production and logistics have been estimated to be responsible for more than half of global CO2 emissions from fuel combustion – as per a BCG Survey 2019-2020. Production accounts for more than 40 percent of global CO2 emissions from fuel combustion, and commercial logistics contribute about 10 percent. Emissions from production and logistics would need to decrease by approximately 45 percent by 2030 if we want to be on a path to meet the Paris Agreement’s 1.5°C target for limiting the global temperature increase.

The scale and pervasiveness of factories make the situation even more serious. Think of India where the manufacturing sector is growing at a fast clip and can reach $1 trillion by 2025. It is hard for factories to grow and embrace new markets without causing adverse environmental impacts. But are they not realizing that it is both a cost and a climate-change alarm?

The new green lever

Yes, they are. Factories across the world have started waking up to both the gains and imperatives of being environmentally conscious. However difficult it may look at the onset, there is actually a business logic to cutting down manufacturing’s negative impact on the environment.

That explains the rise of the concept of Sustainable Green Manufacturing. This is an amalgam of both the lean and green manufacturing methods that focus on the entire product life cycle. It entails everything – from the first step of raw material sourcing until a product’s ‘end-of-life, and even after that through remanufacturing and recycling for green manufacturing.

Interestingly, Environment, Society, and Economy have now started to appear as the ‘three pillars’ of the ‘Triple Bottom Line’ (TBL). Now a lot of companies have carbon targets in place. A recent study ‘The KPMG Survey of Sustainability Reporting 2020’ shows a notable jump since 2017 in the number of companies disclosing carbon reduction targets. It was seen that two-thirds of N100 companies and three-quarters of G250 companies are doing this now. In fact, companies in the automotive, mining, utilities, technology, media and telecommunications industries are dominating this space with 70 percent or more of N100 companies disclosing carbon targets.

Companies have begun to find a new connection between green consciousness and business sense. It was observed that in 2020, a majority (55 percent) of N100 companies that disclosed carbon targets linked them to external targets. A large portion of businesses that disclose carbon targets are recognizing the need to contribute their fair share to efforts to reduce emissions.

If we consider a BCG study of 1,200 operations executives from numerous producing industries, we again see that industrial companies want to reduce their carbon footprint, with more than three-quarters of them placing decarbonization as a high priority.

There is a money angle to these trends. A lot of businesses are facing, or will soon face, increased costs in materials, energy, and compliance. These will be amplified with higher expectations of customers, investors and local communities. So being careless about one’s environmental impact just would not be okay anymore.

Footprints to follow

Also, Companies are now discovering that it helps to make their development both economically and environmentally sustainable. The early adopters and green manufacturing trailblazers have been great templates here – they have shown that environmental improvements help in profit-making and improved competitiveness. Here are a few examples.

1. Volkswagen Group: It’s ID.3 EVs has been announced as the first model manufactured at its Zwickau plant that uses carbon-neutral production. Goals have been set for carbon-neutral production for its entire fleet by 2050.

2. SSAB: Plans to reach carbon-neutral steel production by 2026. It is controlling CO2 emissions by discontinuing the coal-coking process traditionally used for ore-based steelmaking. It would be shifting to a process powered by fossil-free electricity and hydrogen.

3. Bentley Motors: Uses an innovative energy management system that targets energy fissures and energy consumption by its plant’s boiler and compressed air system. It has cut down energy usage for the production of each car by two-thirds and for the entire plant by 14 percent.

4. Coca-Cola: With a partner in Sweden that reuses pallets, it is working on reducing costs by $700 million and waste by 25 percent in Sweden.

5. Dalmia Cement: Is sourcing 32 percent of its raw materials from industrial waste. It is enjoying a CAGR of 23 percent for revenue over the past five years which affirms that sustainability creates value. It is now building a large-scale carbon capture facility with a capacity of 500,000 tons per year. Aims to become the world’s first carbon-negative cement producer by 2040.

6. Tata Steel: Uses advanced analytics with AI and machine learning to optimize production processes. The algorithm manages the heating process for liquid raw iron. It has reduced materials waste in a significant way and has generated annual cash savings of €50 million.

7. Mercedes-Benz: Its Bangkok plant is on track to achieve carbon-neutral production starting in 2022. It is using large solar-powered systems on its roof to generate electricity. It is storing excess power in a stationary second-life battery storage system. This one uses recycled electric vehicle batteries.

8. Daimler: Has created a goal for all its assembly plants to be carbon neutral by 2022. This would be done by switching from coal-based electricity to energy generated exclusively from renewable resources. It is also urging its suppliers to adopt its standards for decarbonization.

The BCG survey also points out that 75 percent find carbon neutrality as either the most important initiative at their company or one of the top three initiatives. Parallel to these decarbonisation drives, companies are also finding support and innovative muscle from the rise of technology and Industry 4.0. By digitizing operations and using technological enablers of the fourth industrial revolution, the trajectory of sustainable manufacturing is getting even stronger for better Green Manufacturing.

Technology adds a shoulder

Now companies can use economically sound processes that reduce negative environmental impacts and help in the conservation of energy and natural resources. What they give is a cost for now but what they get is a multidimensional spectrum of benefits – both for the present time and in the long-term.
• They improve brand impact consumer affinity, and safety of employees and communities.
• They enhance operational efficiency by reducing costs and waste.
• They can target new customers and create new product offerings.
• They can build a reputation and bolster both regulatory and public trust.
• Inject long-term business viability and faster responsiveness to changes.

The regulatory landscape is also making this change desirable and urgent. The Environment impact assessment that was earmarked as a process under the Environment (Protection) Act, of 1986, is one example of compliance-driven responsibility because it prevents industrial and infrastructural projects from being approved without proper oversight. Obtaining prior environmental clearance helps a company to be cognizant and proactive in controlling the environmental burden of its processes.

At the same time, the market is on a fresh path that encourages the use of environmentally friendly tools. Look at the smart manufacturing market which is all set to rise from $214.7 billion in 2020 to $384.8 billion by 2025. Factories are embracing industrial automation in manufacturing processes and using software systems that reduce time and cost. Technologies like IIoT (Industrial Internet of Things), AI (Artificial Intelligence), ML (Machine Learning), RFID, industrial robotics, distributed control systems, condition monitoring, smart meters, smart beacons, interface boards, yield monitors, guidance and steering, GPS/GNSS, flow and application control devices are making it easy for factories to monitor and correct their environmental impact. Even advancements in industrial communication technology with better/real-time man-to-machine and machine-to-machine communication are assisting in finding gaps and delays before it is too late.

From sensors that catch water wastage to energy audit tools that evaluate high-stake equipment; factories are now better equipped with technologies to find where they cause environmental damage and then take remedial action. Asia is not behind other regions here. The smart manufacturing market in APAC is expected to grow at the highest CAGR from 2020 to 2025.

According to Salesforce’s Trends in Manufacturing Report, based on a survey of 750 responses from manufacturing leaders globally, the highest priority for C-suite executives over the next 24 months was made of these areas – increasing process efficiencies, demand planning, and new service offerings. The main difference between manufacturers who are future-ready and those who are not is simple – business agility.

Mattress and green innovation

In the mattress industry, a key area that can create a big shift is injecting this efficiency and green consciousness across the entire cycle. From the OEMs to suppliers, vendors, and partners so that all stakeholders can work more efficiently and optimize the complete journey of a mattress. As some mattress players have shared earlier, investments have started pouring in for areas like IoT, lean manufacturing, advanced R&D, Supply Chain digitization, and smart manufacturing in many factories. Tools like AI and IIoT are being deployed to cut costs, bring efficiencies and garner visibility across the lifecycle of the mattress. Solutions like Edge Computing, Digital Twins and Predictive Maintenance are also helping to expand the longevity of machines and shrink their negative environmental burden. Some players are working hard to improve logistics and distribution parts that affect the last mile of a mattress cycle.

Mattress Green Manufacturing

As per a Prescient & Strategic (P&S) Intelligence Private Limited report in September 2018, there is an unmistakable surge in demand for eco-friendly mattresses with an increase in public awareness of environmental issues such as toxic pollution, VOCs emitted from polyurethane-foam mattresses. There is an appetite for natural and organic products which is tilting the market towards ecofriendly mattresses. Consumers are not only becoming aware of but are also demanding the use of eco-friendly materials like organic cotton, natural latex organic wool, hemp, animal hair, organic cotton and wool, natural latex foam and coconut fibre. The way the use of renewable and biodegradable materials is rising and the way responsible Green manufacturing is becoming part of the product’s proposition – it’s a clear sign that mattresses have been flipped towards a greener tomorrow.

Not to forget, players are also seriously innovating in various aspects. Consider Anti-Microbial Technology that prevents the growth of bacteria and is resistant to dust mites and Neem Fresh Technology that deters bacteria and dust mite-breeding.

Let’s have a quick look at the various ways – both inside and outside a mattress – that Green Manufacturing sustainability is entering this space:
1. Advent of carefully designed organic and natural mattress brands that use healthy and non-toxic materials.
2. Attention and interest to alternative mattress materials like natural latex, organic cotton, organic wool and organic bamboo that are devoid of harsh flame retardants or chemicals.
3. Decrease the use of polyurethane, chemical adhesives, dangerous pesticides, and other off-gassing chemicals.
4. Use of eco-friendly production practices for Green Manufacturing.
5. Inclination towards local production and direct-to-consumer models of logistics that reduce the transport side carbon impact of the mattress industry.
6. Innovation and efforts in recycling and down-cycling so that old materials/mattresses can be used as new ones.
7. Radical formats like inflatable or filling-less mattresses or astronaut-inspired foam work.
8. A broader and discernible move towards plant-based materials like cotton, vegetable oils and tree-tapped latex; as companies forgo foam and try options like wool or bamboo.

Tricks and hacks- dead-weight lifts

Here’s a snapshot of what is being done by green factories and what can be done if, as a manufacturer, you want to have a positive impact on the environment:
1. Use the right visibility and audit measures so that you first know where you are causing wastage or damage.
2. Use an approach that is coordinated, integrated, and not random or chaotic:
• Try to aim for a win-win scenario between costs and profits. That’s possible.
• Adopt innovation strategic analysis and look to work beyond ticking compliance boxes.
• Integrate sustainability across business functions and have a long-term mindset to it.
• Do not ignore the suppliers and external stakeholders that join your Green manufacturing chain in some –small or big- way. Encourage them and collaborate with them for environmental responsibility.
• Replace ageing equipment. Go for the new machine if repairs or part replacements are causing time and energy consumption. Even a small change or time-saving can have a considerable impact on product turnaround time.
• Try to use wasted heat in cogeneration or other facilities. Do not toss away scrap metal and waste material. Use it all in some way.
• Control scrap rates and machine idling time. Try to optimize layouts to reduce the complexity of logistics processes. Reduce waste in process emissions and energy consumption.
• Aim to generate, use, and recover heat more efficiently with high-efficiency burners, heat exchangers and heat pumps that raise the temperature of waste heat to a usable level.
• Use intermodal transportation to optimize logistics network and materials handling. Use automation for initiating a shutoff when the equipment is not in active use.
• Convert the factory into an intelligent factory. Do it comprehensively – here all the production areas distributors and customers, are integrated. Also, the transparency of the production processes and supply chain activities is enhanced by connectedness and automation.
• Collaborate with other ecosystem players, like local universities and businesses to reduce waste.
• Recycle when you can: Example – When you recycle aluminium, it needs 95 per cent less energy than producing the primary metal from bauxite. It also reduces the corresponding emissions.
• If you cannot reduce carbon in some areas, you can compensate for its CO2 emissions through offsetting measures.

Also, these measures can be unrelated to your own production or logistics. Many governments offer taxes and subsidies related to carbon – and they are, often, global in nature
• Go for the word renewable in every way possible. Wind, solar and geothermal – anything.
• According to the OECD Sustainable Green Manufacturing Toolkit, measuring performance is a vital first step to improvement. Start small and go step by step.

Will the rock roll back?

It is encouraging to see that intent, awareness and tools are rising to help factories as they embrace a new environmentally-friendly avatar. But there could be fresh challenges worth reckoning as we move into the future.

One of them was, of course, the pandemic. As per the estimation by United Nations Conference on Trade and Development (UNCTAD), the COVID-19 outbreak could cause global FDI to shrink by five percent to 15 percent.

This was attributed to the downfall in the manufacturing sector coupled with the factory shutdown. Manufacturers of automobiles, chemicals, electronics, and aircraft are already facing concerns regarding the availability of raw materials. If factories struggle with basic existence and survival issues, they may forget or postpone their carbon-neutrality plans.

Also, as the BCG survey pointed out, most companies have struggled to achieve their carbon goals. Just 13 percent of respondents said that their company have fully implemented decarbonization measures in their production and logistics. Here, the chief impediment has been the concern that the initiatives will raise conversion costs.

It is nice to see that over 60 percent of BCG study participants reflected plans to implement decarbonization measures. And more than 90 percent are dedicating a portion of the manufacturing investment budget to decarbonization measures in the next three years. What’s lacking though is the presence of set science-based targets for measuring their success. Globally, only about 330 companies have established science-based targets when it comes to decarbonization, according to a collaborative initiative that monitors such efforts. Also, 63 percent of companies believed that decarbonization would increase their conversion costs (total manufacturing costs minus material costs) by 2030. The ones who thought that they could lower their conversion costs through decarbonization by 2030 are less – just 21 percent. The perception of implementation costs for carbon reduction applications is similar: 63 percent of participants believe that these costs will increase during the next five years. Only 18 percent felt that they would decrease.

Companies need to get out of this short-sighted approach. The payback time frame may exceed the two-year period. Companies have to realize that these investments have a far-reaching impact – whether they look to avoiding carbon taxes or helping the world reach its climate change goals. Note that by 2019, 46 countries (responsible for approximately 20 percent of global GHG emissions) had implemented CO2 taxes or certificates for promoting decarbonization. We also need to have more examples of actual action than simply setting goals or glimpses of high ambitions. Remember that merely 13 percent reported that their company have fully implemented decarbonization measures in their production and logistics.

The scenario is grim for small and medium-sized businesses (SMEs) that are struggling with their short-term survival, or cost. They lack the knowledge and resources to invest in environmental improvement to support green manufacturing. Some of them do not even know where to start.

Also critical is the area of skills. Factories cannot just switch to a green colour or a digital mode. They need to have resources and talent that align with the new milieu. Especially when we see that digital skills are important for non-technology sectors like Green manufacturing. According to an AWS report “Unlocking APAC’s Digital Potential’, it was seen recently that in the manufacturing sector, cloud architecture design and the ability to create original digital content such as software and web applications will be among the most in-demand digital skills by 2025. Over 50 percent of digital workers in the Green manufacturing sector believe that they will require these skills to perform their jobs. Incidentally, digitally skilled workers currently represent only 12 percent of India’s workforce. The number of workers in India requiring digital skills will need to rise nine times by 2025.

As we can see challenges will remain and change, but the path towards environmental- responsibility should continue. Because it is not just an environmental but an economic factor too.

Tani Colbert-Sangree, Program Officer, GHG Management Institute explains that the drivers for turning environmentally responsible are a lot. “Companies have many different reasons. From branding to compliance to cost-efficiency. I think it boils down to branding generally, whether a company wants to be seen as part of the solution vs. part of the problem. Whether they are actually part of the problem or the solution requires digging a bit deeper into the goals, through their actions to reach those goals.”

What is definitely hard to deny is that now carrying a heavy rock is foolish and callous. It will not only cause more environmental damage but will also stop a business from achieving the win-win of positive impact and profitability. The awareness of customers and the availability of new tools may finally break the curse of factories. All they need to carry up on the hill’s top is a carefully chosen plant or sapling. They need to stay on top and water it well. It’s now possible and prudent to change the rock into a tree. Because it will grow every day. But it will not roll back. Thankfully!

ISPF is an industry body which promotes importance of sleep and role of mattress for a Indian consumers. ISPF plays very important role in connecting Indian bedding industry ecosystem. ISPF also acts as bridge between India and international players.