Within the current economic climate and cost pressures, businesses are looking for ways to reduce cost whilst still meeting their sustainability targets. With both customers and investors demanding more understanding of and impact on carbon emissions, this needs to be considered as part of any improvement initiative. Adopting operational excellence can help to achieve both short- and long-term goals across cost and carbon. Focussing on continuous improvement across all business areas, it can create a competitive advantage and enable more effective investment decisions.
Whilst looking at raw materials and packaging is one of the obvious levers, adopting operational excellence means organisations can directly impact their scope 1 and 2 emissions by looking at internal operations.
Example levers within production process:
Building a complete picture of organisational cost and value drivers, as well as their link to carbon, is complex but vital to understand the current state. Approaching this bottom-up and top-down ensures a holistic understanding of the business and its drivers.
Businesses aiming to optimise their business processes and manufacturing operations can look at identifying waste within their production environment and processes. Improvement opportunities could be identified for example within the following areas:
Utilising the operational cost model, organisations can model any improvement initiatives and different scenarios to understand the impact on cost and carbon. This enables them to gain a holistic picture of potential alternatives and make informed decisions to implement the optimal scenario for their business.
Modelling impact on cost and carbon
Developing short, medium and long-term strategy
Deciding where to invest and how to prioritise is key to achieving the highest impact for an organisation from a cost and carbon perspective. Understanding and mapping impact as well as investment and effort required can help to make informed decisions.
Improving operational excellence also means that organisations can have additional funding available to invest in their future-state optimal roadmap. Using the organisational cost model, they can model any future operational alternatives to understand and compare the impact on profitability and capex requirements. A Digital Twin can support modelling and visualising future state manufacturing footprint or set-up and help to develop a strategic roadmap underpinned by a robust business case with a clear ROI.
If you would like to learn more about how to calculate and impact your carbon footprint and costs, please reach out to us.
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Related Insights
In a difficult economic climate for both consumers and business, food and drink producers face a delicate balancing act to keep costs down while maintaining quality for customers.
Product and pricing decisions are key to survival. But how can a complex business make these decisions amidst so much uncertainty? The answer lies in data understanding.
Through scenario modeling, the true impact on carbon emissions and product cost can be identified. This can be a competitive advantage to make informed decisions and identify levers that reduce carbon and cost.
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