10th Oct '23
The Way Forward for Manufacturing and Sustainability
Can manufacturers prioritise sustainability without comprising their competitive advantage? Do we even have a clear vision of what sustainable manufacturing needs to look like?
Simon Cartwright, CEL Group’s Managing Director joined Tim Lord and Matt Gosling on HSBC’s expert panel at its regional ‘Strategies for Growth’ event in Birmingham on 5 October to explore the challenges and opportunities sustainability presents to UK businesses, especially manufacturing ones. A debate brilliantly hosted by Juliette Forster, Magnus Communications.
In Simon’s words …
Partnerships for ‘Net Zero’
“Achieving Net Zero is imperative – the facts speak for themselves. However, how we reduce our carbon footprint and support global objectives isn’t as clear as we’d all like it to be, especially in the manufacturing industry.
“Many businesses, like CEL Group, are already operating more sustainably than they were a few years ago.
“For example, CEL Group moved to a purpose-built energy efficient facility in 2022, cutting our energy usage by 40%, while doubling our capacity. But we recognise this is just the beginning of what we need to do.
“Collaboration and strong partnerships play a key in achieving successful change. Which was why we were so interested in getting involved with the sustainability part of HSBC’s recent ‘Strategies for growth’ business event.”
UK manufacturing sustainability challenges
“Like many manufacturers in the UK, we’re finding it tough to deal with return-on-investment timeframes on sustainable initiatives, such as solar power. Unfortunately we’re not there yet with solar, because despite relocating to a new facility the local planners hadn’t insisted on solar energy on our sizeable south-facing roof.
“Cost of a solar retrofit, and solar installations in general, is still high in the UK. Whereas in China the cost of solar technology has fallen already by around 80%. This has been achieved by initial government investment encouraging many businesses to enter the market and then scaling back the support to drive competition across the Chinese solar power industry. This strategy is supporting China’s impressive drive to replace fossil fuels with renewable energy.
“Another hurdle here in the UK, particularly for small and medium-sized enterprises (SMEs), is that the profitability isn’t necessarily providing the potential cash for investment in sustainability. This has been eroded by the rise in Corporation tax on company profits from 19% to 25%.
“Insufficient funding grants – another Brexit negative? – is being compound by an apparent lack of political interest in supporting SMEs on their sustainability journey, as well as their growth journey. When I raised this at Thursday’s event it was somewhat damning to see all the delegates agreed that the UK Government have no interest in the needs of UK SMEs.
But why aren’t our policy makers taking the role SMEs play in the UK economy more seriously?
As Tim Lord, HSBC’s Head of Climate Change confirmed – 90% of UK business comes from SMEs and they account for 50% of carbon emissions.”
Quality manufacturing and sustainability
“We need to change. And despite the lack of clear central policy and support, there is still plenty we can do to improve our business and our individual sustainability performance.
“Valuing resource usage, cutting waste and caring about the quality of what you produce are key to any manufacturers’ sustainability journey.
“CEL Group has grown by delivering quality products and a better overall service proposition, at a competitive price point.”
“When we talk to our customers about ‘cost-competitive manufacturing’ we don’t mean low-cost products, which are manufactured at the expense of quality and durability. Our quality-first approach underpins our sustainability.
“We’ve already transformed many leading UK manufacturers’ views about successfully manufacturing quality products in China. We see sustainability as a natural next step on that quality journey.
Sustainable manufacturing in China
“At the HSBC event we were pleased to note a good awareness that China is already reducing its carbon footprint at an impressive rate.
“In September 2022, China confirmed its intention to achieve carbon neutrality by 2060. Commitments are being backed by active policies – resulting in widespread solar and wind technology. Already, China has more electric vehicles on the road than anywhere else in the world.
“Action on climate change in China is vital because so many materials and skills manufacturers need to deliver global products, designed in the UK, come from China.
“There is no getting away from the fact that China is the world’s leading manufacturing powerhouse 28.4% of global manufacturing takes place in China. The USA is in second place with 16.6% and Japan accounts for 7.2%. Together the three countries make up over 50% of the world’s manufacturing output. The UK accounts for only 1.8% of worldwide production”
CEL Group’s sustainability journey
“In our mission to help UK OEMs compete with cost-competitive manufacturing we prioritise efficiency and the reduction of resource wastage. This has helped accelerate our sustainability journey.
“We make life a little easier for our customers because our engineering team have had over 20 years’ experience optimising outsourced manufacturing in China. The have the ‘know how’ to help simplify engineering processes and cut material usage.
“Materials are all sourced from mills which are local to where they will be processed into products, minimising our material carbon footprint.
“Packaging design and transportation strategy also makes a big difference. In the last year alone, we’ve reduced container usage by 30%. Our mixed container approach means we typically use above 90% of container space.
“We recycle 90% of our packaging too and we’re currently on target to achieve ISO 14001 accreditation later this year.”
In summary – manufacturing and sustainability
“In summary, CEL Group has made a strong start on its sustainability journey. We believe delivering on our sustainable objectives is good for our business and our reputation, as well as for the planet.”
“Manufacturers are quite rightly in spotlight when it comes to delivering a sustainable future. Some of us can have more impact than others, but once you make that start (both in your business and in your personal life) you can start to make a difference.
“Strong business relationships and supportive business partners enable us to be more successful. We need to work together on this one and not just move the problem down the supply chain. Take ownership of what you can change. There are helpful resources, like the HSBC sustainability tracker, which can help you benchmark where you are and plan to move forward.
“CEL Group is committed to working across the supply chain to keep reducing our carbon footprint, wherever we can make a positive difference or be a positive influence.”
“Wrapping up the expert panel last Thursday with Juliet Forster, Matthew Gosling and Tim Lord, we concluded that whatever your driver – Make a start today. Don’t expect perfection, look for the ‘low handing fruit’, communicate well and be prepared to educate your people. And as ever, don’t forget the 80:20 rule.”