Harnessing Data-Driven Energy Management for Manufacturing ESG

Manufacturers face mounting pressure to enhance their sustainability efforts while maintaining efficiency and profitability. It’s a tall order and may appear contradictory at first glance. Certain environmental, social, and governance (ESG) objectives introduce additional burdens and raise operational costs — a major exception is energy management.

In the case of energy management, business objectives and sustainability go hand in hand. Efficient energy use helps reduce operational costs while minimizing carbon emissions and promoting sustainability. That aligns with broader ESG goals. The core success factor lies in data-driven solutions:

Data collection

Real-time monitoring

AI-driven optimization

Automated machinery adjustments

Yet these are precisely the data-driven capabilities that many manufacturers lack. SoftServe has partnered with KPMG to help them develop and deploy these capabilities for powerful results.

As businesses navigate the complex ESG landscape, data-driven solutions will be crucial. Harnessing data-driven energy management will provide fast returns in cost reductions and efficiency boosts. It also endows companies with the technology and strategies they need to reach their current and future ESG targets.

The importance of energy management to reach ESG targets

The manufacturing industry is undergoing a transformative phase, driven by sudden shifts in consumer demand, regulatory requirements, increased climate risks, and high price variations of crucial inputs. According to a KPMG report, 80% of companies cite customer expectations and needs as the primary drivers for their ESG activities, underscoring the increasing relevance of sustainable practices in maintaining a competitive advantage.

Energy management is crucial in this context, as it directly influences a company's environmental footprint and cost structure. Correctly implemented, energy management encompasses:

Consumption monitoring and analysis

Identification of potential consumption reductions

Realization of reductions for direct financial savings

Challenges facing manufacturers

Despite recognizing the importance of energy management for ESG efforts, many manufacturers struggle to implement effective strategies. Two specific domains are critical:

1. Data collection and analysis:

According to a KPMG survey, while 90% of companies want to use data to pursue ESG goals, only 32% of companies have a centralized approach to managing ESG data, policies, and documentation. This indicates a gap between the ambition to use data for specific operational improvements, and the knowledge of decision-makers of optimization potential.

2. Integration with production processes:

Modern manufacturing processes are often highly complex and integrated with numerous other systems. As Max Morwind, SoftServe’s VP of Manufacturing Consulting, notes, "Smart energy management tools can use data to reduce the energy consumption of production processes." However, implementing them is difficult due to the unique requirements and environmental variables of each process.

Understanding energy consumption with IoT and smart metering

The first step in achieving ESG goals and moving towards carbon-neutral production is understanding energy consumption. To gather insights, companies must deploy smart meters and IoT devices to provide real-time data on energy usage. By systematically capturing and analyzing energy data, companies can uncover patterns and trends that indicate inefficient processes or equipment.

Reducing consumption with digital twins and AI

Manufacturers can use AI algorithms to analyze the energy data generated by IoT to optimize processes through suggestions for optimized equipment settings or processing schedules to reduce energy use. Direct integration with machinery can further boost savings. The ESG implications are obvious: energy-efficient processes pave the way for more sustainable production.

By integrating digital twins, manufacturers can simulate various scenarios and predict the impact of capital investment-intensive energy-saving measures. This approach not only enhances flexibility; it also ensures that changes do not disrupt production processes. Most importantly, it helps companies prove business cases before making significant investments.

Collaborative solutions for powerful energy management

SoftServe and KPMG have collaborated on several innovative solutions to enable manufacturing clients to achieve their ESG goals while also reducing operational costs through data-driven energy management:

Energy Consumption Monitoring:
Capture real-time energy consumption data from smart meters and use AI to analyze and predict consumption at the asset level. This provides granular insights into energy usage patterns and enables forecasting for efficient resource allocation.

Enhanced Energy Efficiency:
Leverage machine learning algorithms to identify inefficiencies, optimize processes, and implement automated system interventions for increased efficiency.

Optimized Energy Sourcing:
Utilizing predictive demand and supply matching to improve short- and medium-term allocation of local renewable energy, reduce costs, and ensure compliance with regulatory standards.

Data-driven solutions to deploy energy management and support ESG compliance

By adopting data-driven energy management practices, manufacturers make a substantial contribution to their overarching ESG initiatives. Data-driven strategies support:

Regulatory reporting requirements with high-quality raw data

Product-level sustainability metrics for customers

Positioning as a leader in digitalization, AI, and sustainability

As you navigate the complex landscape of ESG and energy management, remember that the journey towards sustainability is both a technological and strategic endeavor. Collaborating with SoftServe and KPMG can accelerate your progress, ensuring that your energy management solutions are not only effective but also scalable and future-proof.

The time to act is now — embrace the power of data-driven energy management and lead the way in the next era of sustainable manufacturing and energy excellence. Explore our energy management solutions today and take the first step towards a more efficient and sustainable future for your business.