Syngroup News #01-2022 Building the Bridge - Sustainability & Circularity in the industrial sector

Syngroup news
#01 | 2022
Building the Bridge
Syngroup - The Efficiency Consultants
Sustainability & Circularity
strategic ◆ tactical ◆ operational
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Syngroup NEWS #01/2022
Key Topic Sustainability & Circularity 1/4
Building The Bridge
Syngroup, the Efficiency Consultants - Sustainability & Circularity
The manufacturing industry is ranked as the
third largest contributor to CO2 emissions
worldwide, with a share of just under 20%. In
addition, there is a direct link to the two sectors
in the first two places - electricity and
heat generation and, above all, transportation
in the globalized organization of industry.
Together, the three largest sectors are responsible
for 86% of CO2 emissions worldwide.
Within industry itself, attention is primarily
focused on energy-intensive sectors such as the
basic chemical industry, iron and steel production,
paper production and processing of stones
and earths (construction supply industry). The
focus of efforts to reduce energy consumption
within the sector today is mainly on technology
improvements or innovations.
» Sustainable production needs
optimized processes and must include
the downstream sectors.. «
Walter Woitsch
A broader consideration in the direction of
optimizing processes and workflows, as well
as an expansion to the downstream sectors
in which the products of the basic materials
industry are further processed, takes place
only to a limited extent or not at all under the
aspect of sustainability.
This is exactly where we at Syngroup apply
our logic: Higher efficiency in the processes
contributes significantly to the reduction of
the Footprint of the companies.
The following "10R" illustration uses ten possible
strategies to show the path of measures from
conventional production ("linear economy") to
starting points in the area of the circular economy.
This way of looking at things succeeds
in shifting the previous focus of the discussion
from - the reduction of energy consumption
for production - to be clearly differentiated and
thus expanded.
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Syngroup NEWS #01/2022
2/4
The 9R Framework of Circular Approaches
Circular Economy Strategies in the Production Chain by Priority
Circular Economy
Smarter
Product-
Use and
-Manufacture
R0 Refuse
R1 Rethink
R2 Reduce
+
Make product redundant by abandoning
its function or offering the same function
with a radically different product
Make product use more intensive, e.g.
through sharing products or by putting
multi-functional products on the market
Increase efficiency in product
manufacture or use by consuming fewer
natural resources and materials
Extend
lifespan of
product and
its parts
R3 Re-use
R4 Repair
R5 Refurbish
R6 Remanufacture
increasing cirularity
Re-use by another consumer of discarded
product which is still in good condition
and fulfils the original function
Repair and maintenance of defective
product so it can be used
with its original function
Restore an old product and
bring it up to date
Use parts of discarded product in a
new product with the same function
R7 repurpose
Use discarded product or its parts in a
new product with a different function
Useful
application
of materials
R8 recycle
R9 recover
Process materials to obtain the same (high
grade) or lower (low grade)quality
Incineration of materials
with energy recovery
Linear Economy
Source: Potting et al. (2017)
The lower the consumption of natural resources
and the lower the environmental impact,
the higher the degree of circular economy.
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Syngroup NEWS #01/2022
Key Topic Sustainability & Circularity 3/4
1
Strategic Approach
Optimized production footprints for industrial companies
An optimized design of the production footprint
of industrial companies leads to an
optimization of the relevant cost items of up
to 15% - a high proportion of this reduction
also has a direct impact on emissions (e.g.
through the reduction of logistics costs).
In almost all cases, the production footprint
of corporate organizations has grown historically.
Production usually follows (short-term)
operational requirements such as specific
competencies at a site, customer or supplier requirements.
Due to the progress in the use of
new analysis tools, today one is able to create
a digital twin of the production footprint quite
quickly. This model can be used to run through
any scenarios for optimizing the current
production landscape. As one customer put it,
"It's incredible what a purely technical algorithm
without emotion can deliver in terms of
results."
2
Tactical Approach
Adapt production to requirements and optimize processes
Design: an often neglected aspect is "overengineering"
with regard to the functional
requirements of the products. An example
from the packaging industry: the specification
(barrier effect) is based on a theoretical maximum
requirement - in addition, for reasons of
safety, production is carried out at the upper
tolerance limit, although technologically "precise"
production would be possible.
Processes: the optimized design of the processes
/ supply chain before and after the actual
production. The internal sales department
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Syngroup NEWS #01/2022
4/4
of industrial companies offers a very good
projection surface here - many processes are
directly or indirectly connected with this area
of the company.
An example: Problems in maintenance lead to
unplanned downtimes in production, changed
production- and delivery schedules cause work
in the internal sales department. New delivery
dates have to be negotiated with the customer.
But back to the inside sales department. Our
experience shows that up to one third of the
time is spent on problem solving, sometimes
with a direct impact on the footprint. The most
common problem is misproduction, be it due
to wrong specifications or wrong deadlines.
The right use of new technologies can create
improvements. Active integration of customers
and suppliers in the supply chain and appropriate
data management increase process reliability
and thus reduce potential sources of error.
3
Operational Approach
Optimizing overall equipment effectiveness and increasing efficiency
From our point of view, it is worth taking a
look at the established key figure OEE - Overall
Equipment Effectivenes for overall equipment
effectiveness. In a "typical" European
operation in series and process manufacturing,
the situation with losses is as follows:
In the classic OEE view (proportion of production
time to operating time), the proportion of
defacto production time is just under 50% up
to 85%.
Cause Min. Max. Reasons Impact Emissions
Planned downtimes 5% 15% Cleaning, setup, ... low
Unplanned dowstimes 3% 12% Incidents
high
Ausschuss, Reparatur
Speed 5% 15%
Non-compliance
with target speed
medium
Scrap 2% 10% Quality, process, ... very high
OEE 48% 85%
This leads directly to two conclusions: Overall
plant effectiveness shows that there is still
sufficient optimization potential even for European
industrial companies. New tools such
as data-driven information systems can provide
the basis for optimization initiatives. Examples
include the use of sensor technology
and artificial intelligence to optimize plant
availability.
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But not to be forgotten - the human being as
an executing resource remains at the center.
And finally, increasing efficiency leads directly
to a reduction in the footprint of the organizations.
In other words, in addition to other
measures such as further technological development,
increasing efficiency makes a significant
contribution to reducing emissions.
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Syngroup NEWS #01/2022
Key Topic Sustainability & Circularity
Production Footprint Optimization
A Syngroup Technology-Offering
Production Footprint Optimization combines
data processing and mathematical modelling
methods to: optimally allocate production
sites, evaluate related risk and ensure strategic
investment initiatives.
◆◆◆
Usually, sizable investments are validated
using ROI models, best and worst case
scenario calculations and other well-known
methods. These calculations are highly focused
on the investment subject and often fail to
address the impact on the footprint as a whole
due to the huge amount of data and overwhelming
complexity involved. Production Footprint
Optimization applies state-of-the-art
operations research methods to conquer the
complexity and enables deci-sion makers to
quickly evaluate different allocation and cost
scenarios in a holistic manner.
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Historic Footprint
optimal Footprint
How It Works
1
Re-creation of actual production footprint
based on past logistic flows to customers
and between production sites (Intercompany),
geographic locations and production
capabilities and capa-cities, as well as fixed
and proportional costs of: material, labour,
machines and logistics.
2
Definition of scenarios are based upon
the actual footprint, including but not
limited to, changes in cost-structure,
opening or closing of production sites
and the entering into new markets
(geography, product).
3
Analytical and visual investigation of
optimised scenarios and comparisons
to referenced foot-prints, by looking at:
capacity utilisation, redirection of logistic
flows and high yield footprint modifications
(based upon cost reductions).
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Syngroup NEWS #01/2022
Case Study
Production Footprint Optimization
1
Service
Digital Transformation
Industry
Plastics
2BackgrounD
Our client is a global plastics processor
undergoing a consolidation process
and is evaluating its organically grown
and fragmented presence.
3 4
Approach
Primarily, the Footprint is to be designed
in such a way that cost advantages
arise in the medium term and low risks
in the long term in the event of cost and
market uncertainties. An "unemotional"
evaluation based on facts, figures
and mathematics should serve as a basis
for decision-making.
Typical Project TAsks
Analyse von Footprint, Prozessen,
Produkten und Kunden.
Datensammlung & Konfiguration
des Optimierungsmodells.
Neuberechnung des Footprints
zur Validierung
The collected data was fed into the optimization
model, the actual footprint
was replicated and reasonable scenarios
were derived (e.g. new plants, market
growth, shifts in the cost structure).
Visualization of the optimized scenarios
and enrichment with interactive
features allows to navigate through the
results and draw conclusions.
In a next step, the model was further developed
with more industry- and
customer-specific scenarios. Now it frequently
supports global and local projects
that have an impact on production
distribution, investments or logistics.
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Definition von Szenarien als
Entscheidungsgrundlage.
Konsolidierung der Szenarien
und Ableitung umsetzbarer
Erkenntnisse.
Result
10% Cost reduction
of footprint
on global scale
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Syngroup News
#01/2022
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