The Next Manufacturing Revolution
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Next Manufacturing Revolution founding members: Lavery Pennell is a strategy advisor assisting clients to unlock value while improving sustainability performance. Using a combination of corporate strategy, commercial, technical and sustainability experience, their rigorous and comprehensive approach creates step- change cost savings, revenue opportunities and competitive advantage. www.laverypennell.com 2degrees is the world’s leading business community for driving growth, efficiency and profit through sustainability. It has over 31,000 professional members in more than 90 countries. 2degrees Enterprise Services helps organisations to collaborate using new media to solve their sustainable business challenges; their mission is to make it efficient for retailers and major brands to engage key stakeholders, reduce environmental impacts and grow their businesses. www.2degreesnetwork.com The Institute for Manufacturing (IfM) is the public face of the University of Cambridge Department of Engineering Manufacturing and Management Division. The IfM takes a distinctive, cross- disciplinary approach, bringing together expertise in management, technology and policy to address the full spectrum of industrial issues. The IfM’s activities take place within an unusual structure that integrates research and education with practical application in industry. www.ifm.eng.cam.ac.uk 2 Forewords Achieving the continuous improvements in competitiveness necessary for a company to succeed in the modern world can only be achieved by relentless year over year improvements in innovation and all forms of productivity. So I welcome this report which presents the untapped potential of resource efficiency for UK manufacturing. This is a subject that has not received the wide attention that it deserves, given its low risk potential to boost profits while improving the sustainability of manufacturing. Continuous improvement in resource efficiency has been something that I have long championed in the companies with which I have been involved – and which has rewarded those organisations with strong performance improvements. Yield improvements are a natural place for manufacturing organization to focus. For example, at 3M, millions of tonnes of material have been saved or reprocessed over the years as the company focused steadily on driving yield improvements. While not the focus of this report, the consequent reductions in capital expenditure, energy saving and emissions reduction were huge. The Next Manufacturing Revolution founders are driving better awareness around non-labour resource productivity, showing us the potential that is being missed, using real case studies. They have also developed an engagement programme for manufacturers, the individuals who strive for improvements within the sector and associated organisations. I encourage the manufacturing community to support this and other resource efficiency initiatives, not only because they leave a cleaner environment – but also because they are profitable and great for business. Sir George Buckley Chairman elect, Smiths Group Director: Stanley Black & Decker Inc, Pepsico Inc, Archer Daniels Midlands Company, Hitachi Limited Former Chairman and CEO: 3M Co and Brunswick Corporation 3 I welcome this report for the important issues it raises around sustainable manufacturing and the range of opportunities it identifies for UK industry to improve its productivity through more efficient use of resources. It fits neatly with my objective of strengthening the manufacturing sector in a forward looking and sustainable manner. In recent years we have seen increasing volatility in global commodity prices and concerns about security of supply. So a greater focus on efficiency in manufacturing processes looking at use of materials, energy and water, as well as a greater focus on recycling in production and at end of product life will both help firms reduce costs and increase resilience. The Government is supporting sustainable manufacturing in several ways. The Green Investment Bank, for example, is now operational with £3 billion of finance. It has committed over £700 million already to good projects, alongside private capital with an environmental objective. There are many companies cited in the report as best practice leaders, and I am very supportive of its efforts to encourage the rest of UK manufacturing to follow their lead. Working with business, the Government is supporting UK manufacturing by encouraging innovation and technology commercialisation and exports, while improving skills and building UK supply chains. To further facilitate this we have launched the Advanced Manufacturing Supply Chain Initiative (AMSCI) and the Manufacturing Advisory Service (MAS) which are directly helping firms achieve resource efficiency. Additionally, the High Value Manufacturing Catapult Centres and the Technology Strategy Board programmes are helping companies develop innovative production processes and make use of new materials. These programmes, alongside the Government’s industrial strategy, are giving new impetus to manufacturing and providing more clarity about the long term direction in which the Government wants the economy to travel. I wish every success to the ‘next manufacturing revolution’. The Rt Hon Vince Cable MP Secretary of State for Business, Innovation and Skills 4 Acknowledgements The Next Manufacturing Revolution thanks the reviewers named below for their contributions on topics in their areas of expertise. This study does not represent the views of these individuals or their organisations. AB Sugar Anthony Alexander, Research Fellow for Sustainable Supply Chain Management, Cardiff Business School Ramon Arratia, European Sustainability Director, Interface Peter Askew, Head of Packaging and Packaging Waste Policy, BIS Susanne Baker, Senior climate and environment policy adviser, EEF Jocelyn Blériot, Head of Editorial - European Affairs, Ellen MacArthur Foundation Dr Nancy Bocken, Lead researcher sustainable business development, University of Cambridge Michael Bogen, Collaboration Concept for Co-Modality (CO3) Dr Claire Barlow, Director of Undergraduate Education, University of Cambridge Engineering Department Andy Barnetson, Director of Packaging Affairs, Confederation of Paper Industries Dr Peter Ball, Reader in Manufacturing Operations, Cranfield University Keith Beattie, Energy & Environmental Sustainability Leader, Eli Lilly Jane Bickerstaffe, Director, Industry Council for Packaging & the Environment (INCPEN) Nick Blyth, Policy & Practice Lead, Institute of Environmental Management and Assessment (IEMA) Geraldine Brennan, EPSRC Centre for Innovative Manufacturing in Industrial Sustainability, Imperial College London Stella Constantatos, Global Sustainability Manager Logistics, Unilever Lucy Cowton, Product Sustainability Manager, Innovia Films Cliff Crosfield, Atlas Packaging Dr Colin Cunningham, Director, Scottish Environmental Technology Network (SETN), University of Strathclyde Albert Dessi, Technical Team Leader Energy Efficiency Opportunities, Australian Department of Resources, Energy and Tourism Dr Teresa Domenech, Institute for Sustainable Resources, University College Tony Dunnage, Group Environmental Engineering Manager, Unilever Professor Paul Ekins, Institute for Sustainable Resources, University College London Dr Steven Fawkes FEI, Chairman, Day One Energy Solutions Dr Michael Gell, Head of Product & Packaging Design, WRAP Anna Graham, Business Support Manager, Zero Waste Scotland 5 Steve Hope, General Manager, Environmental Affairs and Corporate Citizenship, Toyota John Huddleston MBE, Director, JJA Radley Limited Keith James, Special Adviser Environmental Research, WRAP Douwe Jan Joustra, Director Research & Education, Circle Economy Platform Netherlands Martijn Kruisweg, Head of Eco-Efficiency and Sustainable Growth, AkzoNobel Euston Ling, Technical Solutions Manager Waste Services & Fuel Use Procurements, North London Waste Authority Ignacio Duque Oliart, Institutional Affairs Manager Iberia, European Recycling Platform (ERP) Kit Oung, Energy Expert, Projective and Committee Member, British Standards Institute Richard Pamenter, Head of Environmental Sustainability, GSK Dr Alan Pears, Adjunct Professor and Associate Director, RMIT Centre for Design Tracey Rawling Church, Director of Brand and Reputation, Kyocera Document Solutions Simon Roberts, Cranfield University Johan Sandberg, Cefur Dick Searle, Chief Executive, Packaging Federation Jarno Stet, Waste Services Manager, City of Westminster Dr Richard Swannell, Director of Design and Waste Prevention, WRAP Dr Peter White, Director of Global Sustainability, Procter & Gamble 6 Contents Forewords ........................................................................................................................................... 3 Acknowledgements ............................................................................................................................. 5 Executive summary ........................................................................................................................... 10 Chapter 1: Introduction to the Next Manufacturing Revolution ...................................................... 13 Chapter 2: The Importance of Manufacturing to the UK Economy .................................................. 17 Chapter 3: Energy Efficiency ............................................................................................................. 19 Chapter Summary ........................................................................................................................