There is growing evidence that investors are increasingly prepared to commit more capital to support businesses become more sustainable.
Traditionally those looking to invest in becoming more sustainable are challenged by the pressure to get a short term return and recently by the economic uncertainty of covid and inflation.
Many investors are now seeing sustainability as a strategic investment, as a way of ensuring businesses are future ready in a world where climate change, resource scarcity and social inequalities are becoming more prominent.
Six years ago, I doubt if any pitches to investors had sustainability in their proposals, now it is a prerequisite.
An illustration
We at Westaways need to make more sausages. We could take on additional buildings and more staff or is productivity the answer?
We have chosen productivity or making more sausages with less resources in a shorter time with the same labour.
This is not just upgrading a machine or a production line to produce an extra 10 packs per minute. It is more complex. To explain:
A machines efficiency might be measured in output per unit of energy used. A machine will never be 100% efficient, but machines can be graded on how efficient they are according to recognised standards.
Recent advances in servo technology have provided a significant improvement in efficiency. Servo technology uses a closed-loop control system to compare the desired position, speed, or torque of a machine with its actual position, speed, or torque. This feedback loop allows servo systems to make real-time adjustments to minimize error and achieve high levels of accuracy.
In this instance the machine uses around 33% less electricity for same output.
The core competence of the machine can be augmented by using control technology that uses machine learning (ML) to refine settings and show historical trend data.
The ML can constantly reduce the “giveaway” to enable the process to be nearly 3% more efficient in materials and energy.
In manufacturing, giveaway refers to the amount of product that is lost or not sold, and it can be a significant cost. Giveaway can be a problem for manufacturers who produce items by weight, as small amounts can add up to a large loss over time
This investment uses less energy to make more product with the same resources. The fact the line runs quicker, and that the machinery memorises settings and shares to other machines reduces set up time between batches. This means the new line produces around 42,500 more sausages a week than the line it replaces.
Productivity
Productivity could be measured in the time taken to make a standard 27mm white plate or have a haircut.
For Westaways it is the weight of pork sausages per hour of factory time, or man hour.
“Productivity in the short term is nothing, but in the long term it is everything”.