Manufacturing in 2030: Why Advancing Beyond Disruption Requires a More Innovative ApproachApr 11, 2022 02:52PM ● By Jessica Donan
South Carolina is a phenomenal place to do business and home to companies that are driving innovation in the aerospace, agribusiness, automotive, and technology industries.
One of the state’s most valuable features for businesses is the Port of Charleston, which has the deepest water in the Southeast and regularly handles ships too big to travel through the Panama Canal.
A project is close to completion to make it even deeper as record cargo volumes and bigger ships continue to flow through the busy seaport.
South Carolina is also an incredibly desirable place to live, with a population that is expected to double over the next 50 years, according to Sustain SC.
All this growth signals a bright future for the Palmetto State. But there are significant challenges ahead that could change everything. South Carolina ranks 37th out of 50 states in the 2021 United States Sustainable Development Report.
To be fair, no state is on track to achieve the United Nations’ 17 Sustainable Development Goals (SDGs) by 2030. Every state has at least one goal and at least 20 percent of indicators that it is moving away from, rather than toward. However, there are 36 states that are doing more to address sustainability than South Carolina, at least according to this report.
Within the manufacturing sector lies an opportunity to rewrite our narrative and align those foundational elements of South Carolina’s economy with the parts that must adapt to the needs of the 21st century.
It’s a chance to realize transformation at an enterprise level, with business objectives at the lead, and it comes down to three simple guiding principles: humans at the center, technology at speed, and innovation at scale.
Change, or be changed
If the last two years have taught us anything, it’s that transformation is no longer an option for manufacturers. It’s change, or be changed. Manufacturing leaders recognize that their industry must respond to evolving market expectations.
This includes the integration of digital technology, artificial intelligence (AI), and more robust data, as well as meaningful steps to reduce the company’s carbon footprint. The problem is many leaders don’t know where to begin. They also worry about the cost of responding to continuous market disruption.
Many companies will need to make a significant investment simply to understand the areas in which they are failing. So getting from that place to the point of success feels like a daunting, if not impossible, journey.
True transformation requires an upfront investment. But the cost of inaction is much greater. Businesses across all industries will soon face regulatory requirements to validate their disclosures about environmental, social and governance (ESG) metrics, which will impact the entire supply chain.
Right now, a sustainability report is a good marketing tool. In the near future, certain companies will risk fines if they can’t back up their reports with auditable evidence.
The good news is there are examples of companies that have pursued sustainability and seen those initiatives lead to positive financial results. When companies become more sustainable, not just in response to evolving regulation and societal pressure but to create a competitive advantage, they can realize an economic benefit.
The key is defining a strategic path that will allow the shift from a linear value chain to a circular economy. This begins with identifying technologies, materials, processes, and collaborations that will not only meet regulatory requirements but also help realize the path toward a sustainable, long-term edge for the business.
Sustainability must be woven into the fabric of an organization. It won’t work as a quick fix in one area, as this will create many other issues. Sustainability is transformative if it is about process, culture, product, and customer behavior.
It’s about diversity, equity, and inclusion (DE&I). These initiatives can’t be executed in a siloed approach by the finance team, by the human resources team, or with product innovation. It has to be integrated and discussed in every department. There is clear evidence that when comprehensive steps are taken, the result is often an organization that is more efficient and more valuable.
Sustainable business, sustainable community
Most transformations fail because the interdependencies between technology and humans or between functions and departments are not considered. Teams try to work around legacy systems, deploy poorly suited off-the-shelf technologies, and fail to properly plan for the change management necessary to succeed.
The leaders of the business need to be at the center of the transformation, encouraging dialogue from all levels, even if it’s difficult to hear. People need to be able to share their insight and perspective so that technology can be used at speed, and scaling opportunities can be uncovered.
The goal is not just to create a better and more sustainable business, but a better and more sustainable community. We have excellent examples where global manufacturers have come to South Carolina and, as part of bringing their operations here, have bought land that they have pledged to keep green.
In addition to helping to offset carbon emissions, these companies are preserving existing forest area and creating new parks for employees and communities to enjoy. All of which makes South Carolina a more desirable place to live and work.
If these transformative sustainability steps aren’t taken, South Carolina risks losing out on not only new but also existing economic development, as well as the war for talent as individuals want desirable places to live, work and play.
A loss in the area of economic development could lead to a degradation in our need for a growing tax base, which means less money for the needs of the community — a trickle-down effect that could have a detrimental impact on what should be an exciting future for our state. So now is the time to innovate and transform.Jessica Donan is US Central Mobility Assurance Leader for Ernst & Young LLP