Optimising production to battle inflation and energy security

Overview

  • Manufacturers are under increased pressure to balance energy security, access to affordable energy and reducing their environmental impact amidst volatile market conditions. 

  • Inflation, supply chain disruption and labour shortages are among a host of factors driving the cost of production to unprecedented levels.  

  • Lean manufacturing, cutting-edge technology, and data analytics are key to minimising waste, increasing efficiency and elevating product quality. 


The rising costs of production

Manufacturers know all about the impacts of today’s rapidly rising costs. There are inflationary pressures from every angle – wholesale energy prices, war and conflict, supply chain disruption, raw material availability, labour shortages and a lack of energy security. All these factors have driven up the costs of production to unprecedented levels.  

Over 64% of manufacturers see this as their biggest threat* and 60% are evolving business practices to reduce energy consumption.** This is against a backdrop of sustainability – the energy ‘trilemma’ of balancing energy security, access to affordable energy and reducing environmental impact. Manufacturers are struggling to find the right balance in an uncertain world where volatile market conditions are set to continue beyond 2023. 

Now is the time to find solutions to soaring bills and mitigate their effects on your manufacturing output, productivity and profit. Before that, let’s focus on the major challenges that inflation creates. 



The only certainty is change

As energy, materials and labour costs rise, they have an inflationary domino effect. The inevitable result is passing costs onto consumers through product prices. Ultimately, inflation makes it harder to compete globally, and it impacts the certainty and stability that many businesses need to thrive. 

Regulations and reporting requirements are also creating more scrutiny on sustainable business practices, performance and compliance. Consumers, investors and shareholders have a keen eye on Environmental, Social and Governance (ESG) ratings. But just when businesses are trying to achieve more stringent environmental regulations and reach net-zero targets, they’re battling against a tide of inflation-driven cost pressures.  

War and conflict are also significantly disrupting global trade and manufacturing supply chains, from procurement to raw materials and finished goods. Delays and lost revenue weigh heavily on balance sheets, limiting growth and investment. 

Inflation’s impact on energy, materials and labour is bad news for business. But change also brings opportunities and makes optimising production a necessity, now and in the future.

Smart buildings and efficient production are your superpowers

At Vodafone Business we help customers build solutions that help streamline their processes and collate data to mitigate risks. We’ve committed to supporting our business customers in saving 350 million tonnes of CO2e*** over the next decade. Our approach is comprehensive along the entire production lifecycle and supply chain. 


  1. Smart Buildings 
    Manufacturers can address the specific needs of their sites using end-to-end IoT solutions that deliver smarter data to act on, helping them to transform operations and optimise management, safety and security.  
     
    These solutions can enhance estate visibility across various building types by providing real-time monitoring of site conditions, utilisation, and energy efficiency. This makes it much easier to identify new opportunities for streamlining operations, managing energy consumption and reducing costs. 
     
    Manufacturers can also take advantage of smarter security equipment such as wearables to better protect employees and valuable assets. For example, body temperature sensors can let you know if somebody is unwell, helping you comply with safety regulations and duties of care. 


     

  2. Think lean manufacturing  
    Lean manufacturers think about waste as a potential resource and a cost-effective route to energy-efficient operations. The focus is on waste and energy efficiency processes, products and services – anything that requires time, money or skills has the potential to generate value. That includes not using a resource in the first place and cutting waste at source. 
     
    Streamlined processes also deliver energy savings beyond your plant or factory. Lean manufacturing requires more connected supply chains, and more connected means more efficient operations. When resources are used only as required, there's a direct reduction in the energy and materials used in production. 


     

  3. Embrace new technologies 
    The manufacturing sector has always been a forerunner for technological advances. To stay competitive and resilient to changing markets, manufacturers are embracing automation and gaining greater insight through robotics, IoT, AI and smart networks like 5G and MPN. These technologies can help energy efficiency and cost reduction, offsetting the impact of increased energy prices and reducing carbon emissions. 
     
    As production processes evolve and demand for precision grows, robots and AI will be key. Not only to optimise operations and minimise human error but also to adapt to diverse tasks, from intricate assemblies to heavy-duty operations. With their ability to enhance efficiency and reduce waste, it’s little wonder that there are well over 2.7 million industrial robots in the world**** and AI in manufacturing is valued at an estimated $2.6 billion.***** Machines are ready to take an even bigger role in working alongside humans in manufacturing. 


     

  4. Be more data-driven 
    Data analytics is diving into machine and sensor data – not just spotting areas for improvement, but also finding ways to mitigate rising energy costs. For example, predictive maintenance means instead of machines breaking down and wasting energy, you get alerts before issues become problems. Plus, with analytics fine-tuning schedules based on demand and inventory, you can maximise every kilowatt. 
     
    21% of UK manufacturers have made data insight a core part of decision-making processes, compared to 16% of the overall business population. However, 30% of manufacturers are still failing to collect or collate data systematically, and 38% currently make no use of analytics.****** There’s still a considerable opportunity to get ahead in this area, or at least make significant energy savings. 

60% of manufacturers

are evolving business practices to reduce their energy consumption.

21% of UK manufacturers

have made data insight a core part of decision-making processes. 

30% of manufacturers

are still failing to collect or collate data systematically.

Keep manufacturing moving

In an ever-evolving market landscape, the imperative for manufacturers is clear: adapt to stay competitive. The latest strategies, solutions and technologies are key to maintaining momentum. Embracing lean manufacturing, integrating cutting-edge technology, and harnessing data analytics helps minimise waste, amplifies efficiency and elevates product quality.  

Imagine smart buildings and connected factories tuned to intelligently adjust energy consumption, ensuring costs don't leak away. Or making decisive, data-driven choices that bolster energy efficiency. And with the power of 5G, optimising energy in warehousing and distribution with precise asset tracking.  

This is the future of manufacturing. Ready to keep moving? Ask us how

*Make UK, January 2023, 2023 set to be turbulent year for manufacturers, Make UK/PwC survey finds 

**Make UK, September 2022, Out of control energy bills are now business threatening for 60% of manufacturers 

***As officially defined by Eurostat, CO2e (also written as carbon dioxide equivalent, CO2 equivalent or CO2eq) is a metric measure that is used to compare emissions from various greenhouse gases based on their GWP (global warming potential) by converting amounts of other gases to the equivalent amount of CO2. 

****European Commission, January 2021, World Robotics Report 2020 by International Federation of Robots 

*****Emergen Research, February 2023, Artificial Intelligence in Manufacturing Market 

******Automation.com, March 2021, Manufacturing Tops the UK’s Most Data-driven Industries List, Research Reveals 

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