Sustainability in manufacturing

To get back on track, the manufacturing industry should focus on R&D and innovation, including renewable resources and building materials, and build a market in these areas. These comments were part of a discussion on how sustainability can drive opportunities for manufacturing during the ‘Sustainability in manufacturing’ forum at National Manufacturing Week.

The two-part ‘Sustainability in manufacturing’ forum at National Manufacturing Week 2012 included discussion on energy efficiency in manufacturing and the state of manufacturing in NSW. According to Graham Larcombe, Director of Strategic Economics Group, the global sustainability debate should be driving opportunities for manufacturing and green manufacturing could create more jobs and entice new approaches.

Opening the forum, Associate Professor Sami Kara, Director of Research at the School of Mechanical & Manufacturing Engineering at UNSW, stressed not only the importance of monitoring and measuring energy output in manufacturing, but making sure that this is being done correctly.

Kara said that, in the past, there was no transparency in how energy was used as a resource. Having both a direct and indirect impact on a product’s life cycle, it is crucial that manufacturers understand how electricity is used in their processes, and that this use is efficient and sustainable. This knowledge will help manufacturers to verify charges from suppliers, benchmark performance indicators, identify abnormalities and assess performance of resource efficiency initiatives.

Monitoring your manufacturing plant is not as simple as buying a meter, says Kara. For starters, there are literally hundreds of meters on the market - and not all of them might do the job you want, or be compatible with your present infrastructure. Once you’ve found the right meter, it should be installed in the best location possible, and the relevant parameters need to be regularly monitored. Several of these meters are likely to be needed throughout the plant, as consumption needs to be measured both overall and at machine level.

With regards to the carbon price, Kara says that this makes it imperative that meters are accurate - because if they are not, you’ll (literally) pay for it. But overall he said the tax shouldn’t make a difference to the decision, because “regardless of the carbon tax, it’s in a manufacturer’s interest to cut down on their cost. It’s win-win. The cost will go up either way.”

Wayne Fallon, a lecturer in Management at the UWS School of Business, was recruited by the Office of Environment and Heritage (OEH) to develop a course to train accountants and business managers in matters of energy efficiency. The course, which is intended to lead into a Master’s degree, will have modules in energy efficiency, cost saving, decision-making, management systems and assessment, as well as considering the implications in all other areas of a business.

Fallon spoke about how the development of an energy efficiency approach may occur - it won’t always be top down. It may even involve working with competing organisations. Most importantly, he said industry development is driven by the impacts of government policy, industry innovation and society’s demands. He said there is a scale which showcases the businesses who comply with these demands and those who don’t: Denial, Compliant, Reactive, Proactive, and Innovator. Those who are proactive and innovators, claimed Fallon, are those who are able to achieve a sustainable competitive advantage.

Nathan Rogers, an Associate at energy auditing company NetBalance, spoke about how, with rising energy costs, legislation and schemes to reward energy-saving measures, there has never been a better time to get your manufacturing plant professionally audited.

Audits can be provided in three levels - the simplest being Level 1 and the most comprehensive being Level 3. A professional auditor will provide suggestions for all aspects of energy efficiency, including a management review, accountability, understanding, benchmarks and targets, maintenance, and skills and training.

Rogers admitted that getting an audit and implementing its recommendations doesn’t always pay off straight away, which is why companies thinking about their immediate costs should consider taking advantage of current funding schemes. The NSW Department of Environment and Heritage Energy Saver Program subsidises part of the cost of an audit for sites which use 160 MWH-10 GW pa. The Clean Energy Future Program also subsidises approved projects.

Special guest at the forum Ray Williams MP, Parliamentary Secretary for Western Sydney, noted the enormity of the manufacturing industry. It is the third largest employer in NSW and Western Sydney is the country’s largest manufacturing region. With the looming carbon tax resulting in a 20% rise in electricity prices, this is going to have a huge impact on industry, so it’s important to be prepared.

Mark Goodsell, Director of Ai Group, followed and agreed with Williams about the importance of manufacturing - he said it was important to NSW, and NSW is important to Australia, making up 40% of the country’s economy. The industry lost 40,000 jobs over the year to March 2012 and, despite Australian manufacturing having the highest wage rate in the world, productivity is in decline, which is a worrying combination.

Paul Brennan, Managing Director of ASP Plastics, wrapped up the forum by talking about the importance of constantly adapting, saying that your business has to change faster than the world around you. Brennan said that, as his company had lost business prior to the GFC, they were already prepared to make these changes. This includes strategies such as looking for new markets and constant R&D, with Brennan saying that he doesn’t want to be manufacturing the same products in three years that he’s making today. This tough approach requires dumping emotional attachments to existing products and services, and only focusing on the outcomes.

The forum was highly informative, with a range of viewpoints, strategies and solutions provided on the importance of making your approach to manufacturing as adaptable, innovative and sustainable as possible.