Agoria advises and guides companies in their transformation into the factory of the future. This series of articles will help you to gain a better understanding of each of the 7 transformation domains that play a crucial role. One of the increasingly more important transformations is the ‘Eco-factory’. In this article we delve deeper into the themes of sustainability vision and ecosystem approach.
An ‘ecosystem’-approach helps to develop an Eco-Factory in the long term. In addition to insight into how some companies implement this in practice, you will also get testimonials of how companies like BSH Home Appliances, ABEE and AMS deal with this.
Sustainability has in just a few years become a fixed theme when charting corporate visions and strategies geared to guaranteeing the availability of raw materials, competitiveness, corporate social responsibility, resilience in times of crisis, or staying attractive as an employer. It has been one of the transformations in the ‘Factory of the Future’ trajectory from the very outset, albeit often one in which companies are still trying to find their way somewhat. Much has to do with the systemic nature of sustainability and the limitations of the extent to which you can make a difference individually as a company. Accordingly, more and more companies are looking into how they can cooperate better with partners in the current value chains at the level of e.g. one product or service, or into the entire ecosystem from which they can derive added value, for example in cooperation with knowledge partners, start-ups, governments, etc.
Many companies have consequently taken steps to fine-tune their energy and materials management in recent years. From energy conservation and the provision of renewable energy, to the maximum prevention of production surpluses, to adapting designs to conserve materials and ultimately energy. This trend runs through nearly all industries and usually starts with efficiency gains. We have recently seen companies that not only want to do something better on the sustainability front, but are also looking at the and-and option. For example, Audi stated a while ago that it was a bit crazy to produce a top-notch electric car in a polluting factory. Responsibility, leadership and vision came together to make the site in Forest a climate-neutral production unit. It is not only a matter of renewable energy or production residues, but also of water buffering, adapted design, sustainability KPIs, and AI to optimize the process further on a number of fronts. That and-and option makes companies work together more across teams in their organization, but also with external partners in order to accelerate co-creation.
Bruno Vermoesen of BSH is of the same opinion. As Senior Expert for EU Governmental Affairs for the Circular Economy, he has been the driving force behind pilot projects for a number of years now to explore how the circular economy can be given concrete shape, but also how it can make a difference in highly competitive markets. “Giving and taking is a story that always takes longer than just taking,” he says. “A lot of arguments about the importance of sustainability are frequently spelled out in visions and sustainability reports, but really large investments or daring projects often do not follow. Sustainability is not only about ecological value, however, but also about remaining relevant as a company in the long run. Furthermore, there is increasing pressure from legislation and society, and the importance of ultimately becoming as independent as possible from the use of primary raw materials. In order to reconcile this attitude with day-to-day activities, you really need to start organizing and taking action at the value chain level, but also to find out where you can continue to make a difference in terms of expertise and cost efficiency. This is precisely where cooperation with complementary partners is crucial. At BSH, for example, we look into how we can increase the value of products based on the premise that we can start using more valuable components if we can recover them at the end of a product’s life. This leads quickly to partners such as repair workshops and management bodies such as Recupel that manage such collection and logistics much better than you can ever do yourself. More than just cooperation, this also encourages shared innovation where two areas of expertise meet. A sustainability vision is important here, but perhaps even more important is to try out new ideas and strategies on a limited scale. These provide insights and lend credibility when a new vision is devised and implemented in the organization.”
Through award-winning projects such as Papillon, BSH has explored how less traditional partners such as Society Building could provide shared added value by making quality household appliances available to lower income families. It enables them to keep the monthly cost of such products affordable, but above all to reduce energy costs and thus prevent energy poverty. Such a rental model, enables BSH to guarantee the return of the products, gain insight into their use in order to optimize the design and facilitate repair and reuse, but also to help make a social contribution.
It is this combination of strategies as well as the switch of revenue model that at times makes pioneering companies adapt more quickly to a sometimes rapidly changing society and market, or enables them to create whole new markets at other times. Umicore reinvented itself as a mining company, but has since become a leader in high-quality recycling and materials technology and is also helping to roll out electric mobility worldwide. With Light-as-a-Service, Signify and ETAP rolled out a concept on the market in a short period of time that almost makes the new one normal. Atlas Copco and Barco would then use remanufacturing to attract new customers and create additional markets. Atlas Copco relies on sensors to go one step further by using remanufacturing as an opportunity to bring products into a network environment that also allows in particular for predictive maintenance and follow-up of optimal use.
More than just a vision, an ecosystem approach is a story of continuous interaction and co-creation. Sometimes it is organized top down, but more through pilot projects from the bottom up — or through cooperation by and between smaller players from different sectors and industries that create new value chains. A good example is the increasing electrification of vehicles. More and more Belgian companies are also looking for their place in this process. Member companies ABEE Avesta and AMS found each other to explore new opportunities individually and jointly in the field of lightweight mobility. In concrete terms, together with a few other companies, they are looking into the feasibility of developing an electric vehicle that consists of only a limited number of components, one that could be used for last mile transport, or inner city traffic for instance. Noshin Omar, CEO of ABEE Avesta, is resolute on the matter: “In the future, sustainability and an ecosystem approach will form an essential part of every business case. A vision from development to recycling, and the further development of local partnerships are crucial in this respect. It’s not only about the lowest cost, but also about creating social added value that pays off in the longer term, for example in terms of local jobs, expertise, and resilience.” Johan Potargent CEO of AMS concurs: “We are already seeing more and more that different forms of technology, and certainly digital technologies, will find their way in in our daily lives, but everything related to sustainability will be inextricably linked to this process in the future. It is precisely this link that will keep the European economy going. In order to make that shift, we need to make positive connections between the various players in a value chain. That is precisely the locus of the facilitating role of a business federation but also of companies with an outspoken vision and network approach that want to move forward. In this way they attract other companies as well”.
Ecovision and ecosystem thinking are all about looking at how markets can change rapidly, how the needs of customers change also, as well as about responding in a targeted manner or to changing markets and society. Companies with an ecovision ask themselves where they can make a difference within approximately 5-10 years and what preconditions they need to meet in order to do so. But it is also an internal exercise to examine how such added value can be materialized, developed and implemented from different positions and expertise within the company, but also with the management level. Finally, it is also about an open form of cooperation and innovation with external partners, in which the discussion is more about developing speed and scale by learning from each other and possibly developing pilot projects together, as well as increasing the sales market rather than competing with each other within a limited (for the time being) but steadily growing sustainable market.
Also read :
- Digital Factory Transformation : “Industry and Machine Learning, a match made in heaven”
- Digital Factory Transformation: digital assistant supports operator in manufacturing industry
- Networked Factory Transformation: co-creation with external partners pays off
- Digital Factory Transformation: Agoria supports your digital strategy with DigiCoach