GC Business Growth Hub’s Claire Scott explains why energy efficiency is just one part of the puzzle to boosting productivity and reducing environmental impact in manufacturing.
The environmental impact of business is under the spotlight like never before. Customer pressure to demonstrate green credentials is spreading quickly through supply chains, and regulations are tightening as the UK and other countries look to become carbon neutral in the coming decades.
Perhaps understandably, the first step for SMEs is usually to look at energy – improving energy efficiency and using renewable energy being two of the most cost-effective, and often least disruptive, ways to cut your carbon footprint.
It is estimated that UK SMEs are sitting on around £2 billion of potential energy savings that could be achieved at low or no capital cost. Since 2016, we’ve helped SMEs in Greater Manchester to identify around £5 million in annual energy savings and provided ongoing guidance and capital grants to help implement energy saving projects.
Saving energy isn’t everything
But energy efficiency isn’t everything. Recent research shows that changing our consumption of energy can only deliver just over half the emissions reductions we need to achieve our climate change targets. The rest has to come from a fundamental change in the way goods are made, by improving our use of materials, water and waste. In other words, manufacturers need to be smarter in production, using fewer resources and producing less waste in the process.
In the long-term, the economy will have to move to a circular business model, where materials are reused and kept ‘in the loop’ for as long as possible. But many SMEs are not ready to make this jump just yet. Instead, smaller manufacturers can start by understanding the true cost of waste in their business and what can be done to design it out at the earliest possible stage.
Moving up the pipe
When thinking about waste, most businesses tend to focus on ‘end of pipe’ solutions and how to improve the recycling of the waste that they create. While this is important, the real opportunities are to be found further up the pipe. The closer to the start of your process you think about waste, the more productive and cost-efficient you can become.
To help more manufacturers make resource efficiency improvements earlier in the process, we’ve developed a ‘true cost of waste’ calculator. The calculator helps clients to identify their most wasteful process stages and attach a cumulative cost to that waste – incorporating the raw materials, energy and labour costs spent processing and ‘manufacturing’ it.
Posted under General Interest and Energy Efficiency on 4 December 2019