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Assessment and improvement of production line infrastructure to reduce material use

Resources:
Energy, Materials, Water, Waste, Carbon
Sector:
All manufacturing industries
Cost:
High cost
Annual saving:
5 - 50 %
Payback time:
1 - 1.5 Year(s)
Read more
Resource savings: Raw material:
Savings vary greatly depending on organisation and sector. Material cost of manufacturing companies in the EU is typically between 40 and 50%, being by far the biggest cost factor.
Resource savings: Energy:
It could be savings on electricity and heat and ventilation. Only a small share of the heat might be put to real use.
Associated cost savings: Raw material:
1 - 40%
Associated cost savings: Energy:
10 - 20%
Total cost savings:
Financial savings achieved through better management of resources and reduced costs; companies could cut their product cost in half by reusing materials and components
Premises and operation areas:
Product and design, Production processes, Supply operations, Waste and recycling
Size of company:
Micro (less than 10), Small (less than 50), Medium (less than 250), Large (more than 250)
Advancement in applying resource efficiency measures:
Advanced
What is in it for you:
Financial savings achieved through better management of resources and reduced costs. Reduced demand for scarcer raw materials and decreased dependence on price volatility. Reduced variable component of production.
Descriptive information:

Changes and improvements to production infrastructure can significantly reduce raw materials used, and related costs of storage, as well as boost manufacturing efficiency.

According to McKinsey reports, companies should prioritise activities that offer the greatest potential benefit. Additionally, producers can save resources by reducing the amount of material or energy (electricity and heat) they use in production by mapping energy consumption at every production step. Manufacturers should also prioritise waste recovery, which can enable them to secure access to materials through activities such as recycling and reuse. Manufacturers that make components or final products can also optimise product design in order to use materials more efficiently.

Barriers to embarking on production line improvements include lack of awareness or the perception that operations are already efficient. New thinking is needed, beyond business-as-usual, to develop the ideal or optimal case. Changes in management approach and organisational culture may be needed to introduce the full 360-degree thinking that is conducive to improving resource efficiency. Lean manufacturing, which applies material-and-information-flow analysis techniques (McKinsey), supports this. 

Another possibility for improving resource efficiency is value recovery through reusing materials, waste-to-energy conversion, and component recovery. Environmental profit and loss statements (EP&L, McKinsey) can also be used to place a monetary value on environmental impact.

Sources

McKinsey (2015), Resource Productive Operations Five core beliefs to increase profits through leaner and greener manufacturing operations, http://www.mckinsey.com/~/media/McKinsey/dotcom/client_service/Operation...

McKinsey (2015), Manufacturing growth through resource productivity, http://www.mckinsey.com/insights/operations/manufacturing_growth_through...

McKinsey (2012), Manufacturing resource productivity, http://www.mckinsey.com/insights/sustainability/manufacturing_resource_p...

Effizienz Agentur NRW, Protect resources, http://www.ressourceneffizienz.de/fileadmin/user_upload/Englische_Flyer_...

Further Information

European Commission, EMAS Website, http://ec.europa.eu/environment/emas/about/index_en.htm

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