The automotive industry is involved in the process of designing, development, manufacturing of motor vehicles along with marketing and selling. It does not include automobile repair shops, motor vehicle’s fuel filling stations, and other maintenance shops. However, the automobile industry is considered to be one of the largest economic sectors in the world. Furthermore, with major concerns about climatic changes and environmental degradation, sustainability has become a priority for the automotive industries. In addition, governments, investors, and consumers are forcing automotive organizations to implement some changes in the process of working, culture, and products. Though there is substantial progress, the industries need to make effective efforts to step up its sustainability.
So, What is Sustainability?
Sustainability is defined as the ability to exist constantly. It focuses on fulfilling the present requirements without compromising the ability to meet the needs of future generations. Formally, sustainability is composed of three pillars i.e. economic, environmental, and social whereas informally, it include profits, planet, and people. Furthermore, though it takes longer time for businesses to achieve sustainability goals, most of the companies are taking a strong decision on it. They are committing to reduce overall emissions and undertake a zero-waste packaging challenge.
From the past few years, sustainability has taken a vital role in the automotive industry. As the automotive supply chain has globalized, companies have become more responsible in managing the automobile’s environmental impact and implementing long term sustainability practices. In addition, most of the successful automotive industries in the world have recognized that environmental responsibility has become an integral part of the businesses. It has become a driving force in the process of vehicle marketing and vehicle purchasing.
As sustainability in the automobile industry is considered to be more difficult, it has got its own importance and if manufacturers ignore it, then they are at their own risk. Furthermore, even beyond supply chain considerations, businesses are facing more difficult questions and dilemmas on the discussions of sustainability i.e. deciding the acceptable tradeoffs between sustainability and profitability, develop new KPIs for managing vendors and suppliers and uncover areas where sustainability increases profitability.
Sustainability as a Competitive Edge: –
Even in today’s automotive world, most of the businesses are considering sustainability requirements as unnecessary and are undertaken by them only to get good press. However, these businesses are treated as half right. Furthermore, if businesses undertake sustainability as a priority, then they can be exposed to the positive press coverage and can increase the reputation amongst conscientious buyers. Thus, your business can have a positive impact with respect to both sales and customer loyalty. That is, customers get attracted to your products based on the sustainability factor rather than specifications and price. Therefore, stepping up into sustainability and going green could actually yield a positive ROI.
Furthermore, the most important link of increased supply chain visibility and control that true sustainable require comes from the sustainable supply chain management and gaining an advantage over the competition. In addition, you will need a high degree of visibility and integration across all touchpoints on the value chain to ensure that your suppliers are meeting the standards or eco-friendly practices. Without this, you cannot know how the parts are being produced, shipped, and from where the parts are coming. Thus, with a high level of visibility, you can effectively control and manage your partner network in terms of sustainability, cost efficiency, and other relevant KPIs.
Over the last few decades, the automobile industry has spread its wings all over the globe and so, it has become harder for the businesses to keep a track of various materials and from where are coming. Therefore, it is necessary to effectively manage the supply chain by integrating certain technologies up and downstream as the vendors of your business will have sub-vendors. So, modern auto manufacturers should work on visible IT environments, driving increased integration across the value stream.
Waste and Risk Management: –
Sustainability is treated as a matter of gaining control over an increasing global value chain. Furthermore, sustainability is also dependent on the ability to take control of the design decisions and production workflows and thus, it is important to minimize unnecessary waste and adhere to modern fuel efficiency standards. This can take the form of sourcing lighter materials as it would help to create more lightweight and fuel-efficient vehicles. So, in order to uncover any potential areas of waste or inefficiency, it is necessary to have a keen look at the production workflows.
In addition, if you can decrease your warehousing needs or streamline the production of a particular product, you can consume fewer resources and reduce your overall carbon footprint. Furthermore, you can decrease the costs and carbon footprint if you can find the areas of supply chain inefficiency. However, the same thing applies to risk management. If you come across any disruption in the supply chain and need expensive and extremely resource-intensive, you can avoid such disruptions that can optimize both cost and sustainability. Thus, sustainability in the automotive industry prioritizes operational improvements and efficiency.
Furthermore, for automotive firms, it is necessary to demonstrate tangible progress and pursue sustainability as an organization-wide mission. Most of the businesses can also invest in robust governance and make business executives accountable for sustainability. In addition, automotive industries should take up the initiative and spread sustainability across the automotive value chain. You can also take up partnership calls and strengthen alliances for greater impact. Automotive industries can make use of advanced technologies and improve operations of sustainability.
The main goal of sustainability in the automotive industry is to build cars, trucks, motor vehicles, and industrial machinery more fuel-efficient. The manufacturers and suppliers in the automotive industry are also working to develop new innovative approaches and meet goals using new materials that can help to reduce dependence on fossil fuels. Thus, it enables to cut down greenhouse gas emissions from various automobile vehicles like cars, trucks, motorcycles, machinery, etc. Therefore, automotive firms can achieve sustainability by lowering their energy usage, ensuring their physical waste is disposed of properly and with small carbon footprint, sourcing products from fair-trade organizations, and by cutting emissions. Know More