How technology is powering manufacturers towards net zero

In the race to put the global economy on a sustainable path, manufacturing has long been seen as more of a liability than an asset. According to the World Economic Forum, global production sectors are responsible for one-fifth of carbon emissions, and they consume 54 per cent of the world’s energy sources – figures that leave no doubt about manufacturing’s central role in the sustainability challenge (Financial Times).

Manufacturing, of course, is central to the world’s economies and existence. But what if the manufacturing sector could decarbonise and contribute a vital piece to the sustainability jigsaw, helping reduce climate change and laying the foundation of a greener and cleaner future?

Across the UK and beyond, companies are scaling their use of digital technology – cloud computing, machine learning and artificial intelligence – to solve some of the manufacturing sector’s biggest sustainability challenges.

“It’s gone from a ‘let’s talk about sustainability to make everyone feel better’ to something that companies want to do because they see it as an opportunity,” explains Matt Walsh, Managing Director EMEA Manufacturing & Mobility lead at Microsoft. “It’s now a dual mission of sustainability and profitability.”

Creating agile factories

What has changed the equation for many companies is technology and, in particular, the ability of cloud computing, artificial intelligence and machine learning to use data that can then be used to develop greener technology.

Global smart manufacturing was valued at $297.2bn this year, and is expected to expand 14.9 per cent in terms of compound annual growth rate by 2030². At the same time, Industrial Internet of Things (IIoT), the backbone of digitising the factory floor, is expected to account for more than 70 per cent of all IoT connections by as soon as next year³.

Lina Huertas, Industry Executive for Manufacturing at Microsoft UK, says that cloud computing’s ability to harness and process huge amounts of data is helping companies go back to the drawing board, rethinking the creation, development and design of products in a digital environment. “Developing a product, especially a complex one, traditionally requires huge amounts of physical prototyping and testing, which could add up to a lot of wasted material,” she explains.

By using high-performance computing (HPC) and AI technologies companies can run simulations rather than building and testing physical prototypes, significantly reducing the volume of materials consumed – but also speeding up the process of product design. Accelerating design potentially means getting sustainable products to market more quickly.

For example, digital technologies could speed up the availability of sustainable aviation fuel and hydrogen-powered aircraft. Meanwhile, cloud-powered 3D printing can save materials while opening the possibility of creating infinitely more complex designs.

She also says that cloud computing offers greater scope for responsibly dealing with products at the end of their life, whether that involves recycling its components or reusing them as part of a circular economy. “There are huge amounts of things you can do in manufacturing but a lot is defined at the design stage,” she says. “Digital technologies make design easier, quicker and cheaper, but they also allow the consideration of complex sustainability factors such as the emissions of a new supply chain or minimising waste at end-of-life.”

Reducing energy needs through digitisation

According to Make UK, the manufacturers’ organisation, about 90 per cent of emissions from the manufacturing and construction industry come from manufacturing activity itself, with over 85 per cent of those emissions produced by fuel combustion⁴. That places growing pressure on manufacturers to reduce their consumption of energy, the cost of which has spiked since Russia’s invasion of Ukraine last year.

To reduce costs and lower its carbon footprint, Electrolux, the Swedish home-appliances manufacturer, is using Microsoft’s Azure cloud platform to run a so-called digital twin – a digital model of a real-world system, product or process – to optimise its use of furnaces for baking metals and composites in the manufacturing process. “Cloud technology enables them to plan precisely how and when they ramp up and cool down the furnace based on the different products being treated,” says Walsh of Microsoft. “Using data to find that sweet spot, they can then scale across all of their other furnaces.”

In Brazil and Ecuador, Unilever, the British consumer-goods multinational, has used artificial intelligence running in the cloud to control moisture levels in giant towers used to dry soap powder. The result has reduced energy costs and freed up staff, who no longer have to monitor moisture levels in the towers manually. Moreover, about 90 per cent of the project was done remotely, cutting down on carbon-intense business trips and site visits⁵.

Spreading sustainability along the supply chain

One sustainability-related advantage of using the cloud is that off-premises data centres are far more energy efficient than in-house servers, with one study finding that using the Azure cloud platform could be up to 93 per cent more energy efficient than on-premise solutions. Microsoft data centres also use energy from renewable sources, automatically removing a large chunk of potential carbon emissions from clients’ books.

Neil Rawlinson, Chief Strategy Officer, High Value Manufacturing Catapult, a group of research and innovation centres established and supported by Innovate UK, the UK’s innovation agency, argues that measuring emissions across the supply chain is a vital step towards sustainability – but how to do it remains little understood.

“We have a system-wide challenge of having no common carbon equivalent accounting across the manufacturing sector,” he says. “Digital technologies can be a fast track for businesses to understand and reduce sources of waste, manage their power consumption and deliver better for increasingly demanding customers.”

Microsoft works closely with suppliers to reduce emissions – both directly and along the supply chain. By 2025, for example, it intends to reuse 90 per cent of the components from its data centres⁷. But it is also helping suppliers to reduce their emissions by 55 per cent by 2030.

“Our strategy is clear,” says Anand Narasimhan, General Manager, Cloud Supply Chain Sustainability at Microsoft. “We are figuring out how to design cloud hardware to be more sustainable, and ensuring that all our suppliers and partners are aligned to the same reduction roadmap, to become more sustainable and circular.”

To achieve that, Microsoft shares with suppliers and clients alike both its methodologies for measuring carbon emissions as well as strategies to reduce those emissions and incorporate reductions and sustainable design thinking across the value chain.

Part of sharing what it does internally is captured in Microsoft Cloud for Sustainability⁸, which includes many of the methodologies and tools it uses to capture, compare and use scope 1, 2 and 3 emissions data across the supply chain.

“There are very few standard methodologies for sustainability so we’re trying to move the needle by saying, ‘Here are the ones that worked for us, we’re sharing them with the world, to learn and improve together’,” Narasimhan says. “There’s a lot of complexity in what we do but you have to embrace complexity across the ecosystem, because sustainability is not something you can solve on your own.”