The automotive industry has been experiencing a paradigm shift. Increasing consumer personalization, prolonged pandemic situation, rising inflation rates, global political shifts, semiconductor shortages, and regulatory compliance are adding pressure to increase flexibility and resiliency to meet customer demand. There is an indication of the growing importance of sustainability within the automotive industry and current megatrends such as electrification, connectedness, and autonomous driving demanding zero emissions products with sustainable manufacturing practices is a clear example of the same.
On the one hand, with manufacturing and production sectors contributing to almost one-fifth of the world’s carbon emissions, regulatory compliance has become more stringent for automotive manufacturers to reduce carbon emissions across the supply chain along with the emissions generated by the vehicle itself. Such mandates have motivated companies to start setting up dedicated sustainability focus teams to attain goals towards carbon neutrality. Sustainability has now entered boardroom conversations and has taken its place in the agenda while focusing on how to improve a company’s environmental, social, and governance (ESG) strategy. Furthermore, internal employees, consumers, and investors are becoming more aware of the alarming global environmental concerns and now view a company’s performance through the lens of carbon-neutral production, circularity, and waste-reduction across the value chain, which directly impacts the business’s long-term profitability.
On the other hand, automotive manufacturers are collectively focusing on digital transformation initiatives and disruptive digital technologies not just to aid businesses to reach their economic growth, but also to meet the company’s sustainability goals.
Some of the best practices within the industry to leverage digital technologies for a successful carbon-neutral pathway are as follows:
Manager – Head of Platform Engineering
Digital Manufacturing, ZF
– Creating a long-term corporate sustainability strategy with net-zero targets that factors in the needs of internal employees, investors, customers, suppliers, and government regulations.
– Embedding sustainability and circularity in every stage of the product lifecycle including the design, engineering, production, logistics, and services
– Introducing sustainability based key performance indicators (KPIs) to track product carbon footprint (PCF) across the multi-tiered supply chain
– Including sustainability-oriented benefits as a factor in prioritising digitalization measures
– Efficiently using natural resources (water, green energy, gas) and keeping a check on waste reduction: In order to do so, first the resources must be tracked in real-time to measure and use intelligence to improve their efficiency. For example, Internet of Things (IoT) platform-based digital apps can monitor water consumption, track energy usage across operations to measure product carbon footprint (PCF), improve asset efficiency, reduce consumption, and help optimize maintenance schedules through condition monitoring which can in return help companies to reach their sustainability goals.
– Another effective initiative is successful fleet management where there are several variables at play to sustainably manage it. Here Artificial Intelligence (AI) & Machine Learning assists in optimizing delivery routes, eco-friendly material packaging, and optimal warehouse management through IoT-based real-time tracking that can help manage carbon emissions.
– Additive manufacturing helps to design critical spare parts using 3D printing technology to support the circular economy.
– With autonomous driving and connected vehicles gaining traction, massive amounts of data must be processed on cloud platforms to offer personalized services.
– Lastly, introducing sustainability awareness campaigns for employees to make it an integral part of the company’s work culture.
The role of digital transformation in sustainability is gaining momentum. Hiring the right set of talent with a digital mindset and investing in research & development for developing sustainable products is just the first step for the automotive industry to shape the future of creating the next generation of sustainable mobility.
(This article is authored by Rajkumar Mylvaganan, Manager – Head of Platform Engineering – Digital Manufacturing, ZF)
