Tacton's Bo Gyldenvang
The grievous effects of climate change are now on our doorstep—there is no denying the role of every individual, industry and government in the deterioration of our planet’s environmental stability. But manufacturers play a specific role in climate change. Alone, they contribute more than 12% of the annual total CO2 emissions across the world.
The good news is that manufacturers are increasingly driving sustainability initiatives. Research from CapGemini found that reducing waste is the biggest environmental priority for manufacturers, and the second biggest is reducing their emissions footprints.
However, they have a long way to go, and despite their contribution to the problem, manufacturers have a significant opportunity to become part of the solution. By taking a holistic approach to weaving in sustainability practices—and starting with the right Configure-Price-Quote (CPQ) solution—manufacturers can lead the way toward combating climate change.
Here’s how…
Achieving sustainability through the right solutions
Manufacturers can achieve sustainability by starting with modern CPQ solutions. CPQ systems produce quotes and process orders for configurable products, helping to put together valid configurations with approved pricing. The right CPQ solution allows manufacturers to optimize the configuration of products to support sustainable production and to offer products that align with emissions regulations and other sustainability requirements in their region. A few examples of how CPQ solutions help include:
Reducing oversizing. Manufacturers that configure-to-order instead of buying off the shelf are able to buy the correct-sized equipment based on their needs. They no longer have to try to fit with a standard-sized offering—reducing oversizing and improving a product’s efficiency.
Optimizing the use of sustainable materials. A modern CPQ solution enables manufacturers to rate materials based on sustainability and pick items based on how they are made or recycled. They can provide the most sustainable options during the configuration process that coincide with the eco-friendly desires of their customers.
Helping to create fewer unsold products left on shelves. In the effort to reduce waste, manufacturers need to direct their efforts toward more customizable products instead of mass-produced, standardized ones. CPQ solutions aid in this endeavor by enabling manufacturers to configure-to-order based on a modularized product instead of pre-manufacturing off-the-shelf products. (Consider this example: IKEA produces the same cabinet base that can be used in multiple constructions for the kitchen, bathroom and bedroom.)
Accelerating their transformation to a sustainable portfolio. With the ability to configure modularly, manufacturers can create product parts that can be used for multiple products. They can reuse standardized modules in multiple products to reduce the need for a large stock and cut down on waste.
What’s in it for manufacturers?
It’s vital for manufacturers to realize that their efforts supporting sustainability don’t just help to combat climate change, they help to contribute to their business success. Today’s profitable manufacturers understand that they have a responsibility to the environment and society as a whole; driving sustainable practices delivers business opportunities and benefits.
Manufacturers need a three-pronged approach to future growth. One that includes:
● Effective usage of land and resources
● Social responsibility such as fair trade practices, ensuring employee welfare and charitable contributions
● Responsible resource consumption and waste management
Manufacturers will see return on investment from these efforts. CapGemini found that more than 80% of organizations saw enhanced brand reputation; better environmental, social and governance (ESG) ratings; and improved efficiency and productivity from sustainability initiatives.
Customers are clamoring for products and brands that contribute to combating climate change, and manufacturers have a massive opportunity to address that ask. The same CapGemini research also found that only 10% of manufacturers are focusing on the holistic “6R” approach demanded by truly sustainable manufacturing (reduce, recycle, reuse, recover, redesign and remanufacture). So the door is wide open for manufacturers to give customers what they want.
Technology and data can help
Aside from advanced CPQ solutions, manufacturers should look to automation to support sustainability in their operations. CapGemini found that 73% of organizations are adopting automation to drive sustainability in manufacturing, and 68% are adopting artificial intelligence and machine learning. Manufacturers need to invest in innovative technologies to achieve the 6R approach and begin reconfiguring products for the new age of climate care—an age that is upon us whether we like it or not.
Bo Gyldenvang is CEO of Tacton
