Manufacturing Leaders’ Summit (MLS) – Day 2 Round-up

In January 2020, Microsoft CEO Satya Nadella, President Brad Smith and CFO Amy Hood, announced Microsoft’s bold commitment to be carbon negative by 2030 and to remove the company’s historic emissions by 2050.

Cloud enabled sustainability

This signalled a raising of the bar for Microsoft’s sustainability ambitions, culminating with a set of sustainability commitments. At MLS day two, Michael discussed further Microsoft’s sustainability strategy and how technology can support decarbonisation, the road to net zero within the manufacturing sector and the support offered by cloud technology.

Microsoft’s carbon commitments are based around four key areas, the first being around carbon. Further to its pledge to be carbon negative by 2030, the company has made a follow on commitment after that to have removed from the atmosphere all the carbon that Microsoft have put into it in the lifetime of the company going back to 1975. Michael commented: “It’s a very big, bold goal. And it sets a standard for some of the things we want to do across the industry as a whole.”

The second commitment is to be zero waste by 2030 across the supply chain. In the same timescale Microsoft want to be water positive – to provide back into the ecosystem more water than the company consumes. And finally, the company is targeting the building of the planetary computer. “This is part of our commitment to build platforms to allow all manufacturers to look at the impact they are having on the environment and how they can potentially measure and then manage them – after all, you can’t manage what you can’t measure,” Michael added.

“We’re going about this in the context of carbon, water, waste and ecosystems, and then a connected journey between our core products and services – how we work with customers and partners, policy work that we’re doing with government and policy makers, and then what we’re doing from an internal operations point of view – looking at our back end supply chain infrastructure.”

He did warn that the clock is ticking. The sustainability journey is something that has been talked about for some time however, the pace needs to increase considerably. The good news is that recent research, released alongside COP26, has shown that there is a lot of ambition amongst businesses.

64% of UK leaders want to cut emissions, and is part of their strategy. However, the bad news is that only 41% of organisations are on track to meet their targets. “What the findings of the research shows is that 74% have the ambition, but they don’t have the commitment. Clearly that’s where we need to come together and talk about how we can support businesses on their journey.”

This is where the cloud comes in and Michael added that there are two main areas where cloud-based infrastructure can help on the sustainability journey. The first is the actual building of the cloud, the infrastructure, the data centre sizing, and how it is powered. And the second is the business model behind the cloud and why that supports a route to sustainability.

The key to the first area is around scale. “When you build to scale, you can reduce energy usage. We build our data centres at global scale. We can make them much more efficient from a PUE perspective, and then we can actually decrease the greenhouse gas emissions based on the energy we use to power those data centres.

“We can reduce technology waste – we do some really clever work around recycling and making sure that we’re not disposing of servers and IT infrastructure. Then we tune the hell out of those processes. We run the data centres at scale, we automate them, and we monitor everything to make sure that we’re maximising efficiency. We’re already in a good place, but by 2025 we want to shift all of our data centre energy usage to renewables.”

There is also a business model discussion to be had regarding cloud-based infrastructures. The cloud supports elasticity of demand, scale out, scale down, and innovation, in a way that is difficult to do using old business models. A lot of the efficiency savings that come from using cloud infrastructure s from the fact that you only use what you need – you don’t have technology running, using power and producing emissions, that is idle and not providing business outcomes.

“So, making the most efficient use of that infrastructure across aggregated demands really drives down the overall emissions and makes the most of the technology. And it supports innovation – the cloud allows you to try things that are new without a lot of upfront investment, or buying infrastructure that might then need to be decommissioned.

“These are the core principles behind the benefits of cloud computing that we’ve realised at Microsoft. And we’ve done it ourselves. So don’t just take my word for it. We’ve looked at these capabilities and done it within the Microsoft ecosystem. Over the past five years, we’ve moved 2,000 applications that were previously on premises to the cloud, and we’ve seen the corresponding savings that have resulted. Upwards of 98% reduction in carbon emissions are possible through the use of these technologies and we’ve seen it in our own use cases.”

How can industrial digitalisation help drive us to net zero manufacturing?

It was a similar message from Steve Evans, Director of Research in Industrial Sustainability, (IfM) Institute for Manufacturing, University of Cambridge, who discussed how industrial digitalisation can help drive us to net zero manufacturing.

With a wealth of experience around industrial projects, case studies and the latest government reports, Steve is well-placed to explain how companies are using industrial digitalisation to drive carbon reduction alongside labour and capital productivity.

But how far can we go, and how quickly? Steve also gazed into his crystal ball to offer some thoughts on where the convergence of digitalisation and sustainability – the two great changes sweeping global manufacturing – might take us.

“COVID-19 has been a huge bump in the road, but there are going to be more in the next two decades, so we’re going to need to build systems that are resilient to disruption and that plays into sustainability.

“But this is something manufacturers are already good at – seeing a problem and doing something about it. And it isn’t going to take a massive change to get on the journey. Efficiency is not going to get us to pure net zero by 2050. But what it is going to do is get us on the pathway while at the same time, making us money. We will spend less money on water, materials and energy, so the first part of the journey will increase profit.

“We made a calculation that if every factory in the country was as good as the best that currently operates, on average profit would go up by 24%. So, learn how to be energy efficient, and grab some of that 24% increase in profit. Some of the latest steps on the journey are more expensive, but isn’t it good that you’ve got the money at the beginning? That’s the sort of ROI that I like. If we do that, well, industry, which is about ten percent of GDP, can deliver about 50% of the change that the nation needs.

“You don’t need a plan laid out until 2050. Manufacturers should get out there and practice what they’re good at because, as you become efficient at using energy, water and materials etc, you gain the knowledge needed to take the next big step.

There is no doubting the challenges that are facing manufacturing (sustainability, net-zero, COVID-19, digital transformation etc.). Therefore, companies need to be flexible, agile and adaptable in order to meet these head-on, and thrive in the future.

People-centricity: Fuelling our future manufacturing

A key part of this is the need for industrial businesses to reassess their priorities on both a company and employee level. Therefore, in the afternoon of day two Yati Varshneya, Global Product Line Manager, Johnson Matthey, spoke about ‘Fuelling our future manufacturing’. We are all learning the importance of sustaining a healthy workforce, not just physically but also mentally, and that without creating positive environments for all workers, industrial businesses will not be successful.

In her keynote, Yati took a deep dive into people wellbeing and emotional intelligence; managing knowledge capital and investment as part of the R&D portfolio; and AI and the Human Machine Interface of manufacturing.

Driving digital transformation in an established manufacturing environment

Rounding up the Manufacturing Leaders’ Summit, Alex Brandham, Group Leader – Assembly Maintenance: Control Engineering, Joining Technology and Digitalisation, BMW Group, offered his insight into the challenges and changes in mindset that will be needed to implement a digital transformation in an established manufacturing facility.

He stressed the importance of the concept of lean before digital, and that wasteful processes should not become wasteful digital processes. He also discussed problem-based innovation – starting with a problem and innovating to find a solution.

Finally, he touched on the need to enhance competencies and recognise how traditional problem-solving roles now require augmenting with additional competencies to create a working environment to accelerate collaboration.