Adopt Sustainable Manufacturing Practices To Drive Profits

It’s a common misconception to think that profitability will be higher when environmental concerns are minimized.  In fact, in 2010, The World Economic Forum and Boston Consulting Group joined forces to identify and compare companies with the most effective sustainability practices, ranging from $25M to over $5B valuation.  What they found from their study of more than 1,000 companies was surprising to say the least.

After identifying dozens of companies who held the highest standard of sustainable operating practices, they interviewed more than 200 executives to learn about their adoption, execution, and results from said practices.  Three broad approaches were identified:

The Up-Front Investment

The largest number of sustainable businesses made a sizable up-front investment in research, technology, and processing for long-term gains.  The investment ranged from time in researching alternative chemicals, waste control/recycling, and workflows, to installing new green-energy production equipment and facilities, such as solar, wind, and hydro-electric.  Energy efficiency was particularly attractive given governmental rebates and tax incentives for such investments.

Incremental Change

Some businesses who were either unable to generate the working capital or feared the risk of a significant sustainability investment chose to take an incremental approach to sustainable practices, which might include replacing manufacturing equipment with more efficient models, changing lighting to a lower draw alternative, and weather-sealing the facility where climate dictates significant HVAC usage.

Distributed Sustainability

The final group in the study shared the responsibility of sustainable practices with their vendors and distributors, spreading both the cost and credit across multiple brands.  From sustainable raw materials-harvesting to production to freight—businesses who took this approach generally had stronger influence with their partners, which may not be achievable for most independent milling shops.

Throughout the study, these companies demonstrated that trade-offs between innovation, profitability, and ecological responsibility are not necessary, but have the ability, collectively, to propel a business to excellence in a reimagined manufacturing space.