Fostering Sustainable Industrial Transformation: Insights from EFESO’s Executive Leadership Panel Discussion 2024

In this roundtable, we engaged with a battery recycler to focus on the transition to a circular supply chain model. Below summary encapsulates the insights and strategies discussed, highlighting the path towards a sustainable and circular supply chain future. First we delved into the challenges and opportunities this shift presents, including:

• The complexities of evolving the supply chain into a circular model
• Strategies for fostering collaboration across various value chain stakeholders
• The competitive edge that a closed-loop business model and circular supply chains can offer in the future
• Ways to create synergies within the value chain to accelerate the development of circular supply chains

Next we identified several key challenges:

• The agile market’s undefined roles, particularly who will spearhead the circular ecosystem for critical battery materials, amidst diverse stakeholder visions
• The intricacies of establishing collaborations within a dynamic partner ecosystem, likely to undergo vertical integration and consolidation
• The necessity to construct mutually beneficial models in a high-stakes market, balancing significant volume increases with European OEMs’ cautious production scaling
• Navigating regional disparities and emerging regulations, including battery and storage regulations, waste shipment directives, and trade regulations that impact critical materials and EV vehicles

Finally, the roundtable participants explored potential solutions:

• Fostering a stable investment climate to ensure a more predictable business case, such as advocating for a protected European EV market, setting minimum recycled material usage thresholds and regulating critical material export volumes
• Maintaining technological leadership within the value chain
• Establishing a professional battery recycling system and a collaborative ecosystem, drawing inspiration from the automotive catalysts sector
• Piloting the ecosystem through small-scale tests and consortium-driven initiatives, or pursuing profitable vertical supply chain integration
• Effective stakeholder management throughout the ecosystem’s phases, uniting committed parties around shared vision and purpose

The Global Head of Engineering from a bakery group, presented the group-wide energy efficiency program. After having announced ambitious energy saving and CO2 reduction targets to the markets in 2023, the group was confronted with the need to support those targets by a roadmap of tangible initiatives in its 26 Production Sites.

They decided to build in-house capability on Energy Efficiency in every plant to ensure a speedy delivery of the Energy Efficiency roadmaps. It also aims at creating local ownership in the sites and a group-wide Energy community. With EFESO, a program was created to train the plant Energy correspondents and providing a plant energy scan toolkit. The program is in rollout and has already created results, ownership and enthusiasm.

The roundtable focused on sharing ideas about implementation challenges with energy efficiency in industrial environments and approaches to overcome them.

In the group discussion, the following challenges and good practices were discussed:

• Create local engagement in the production sites: Co-create the approach with the sites, involve the local management for Management support at all level, do the local energy efficiency diagnostics by and with the plant (no top-down invasion)
• Energy must be made “visible” in the daily operations: Visual management is needed so that operators see a direct link between decisions and energy consumption. Energy performance must also be regularly reviewed in the adequate management meetings
• No time to waste: Some Energy Efficiency projects can be implemented rapidly, especially if they impact the mindset and the behavior of the operators. Yet many of the larger savings are the result of CAPEX projects. They must be first detected, then budgeted and only then can start the EPC. We easily lose two years between the first diagnostic and the implementation. To reduce this crucial time, the group developed the approach of building in-house capability and doing the diagnostics in parallel in the 26 production sites
• Making convincing business cases: Some green energy investments are not linked to financial gain, no growth (e.g. fleet electrification decisions). How to convince the sites to present these cases and how to convince the board? The debate zoomed in on possible approaches: Setting a fixed price for CO2 to be included in the business cases, reserving a separate CAPEX budget line for greening investments, imposing a balanced set of investment criteria beyond financial returns (such as CO2 savings)
• Need for data and transparency: Everyone recognized the need for common definitions of master data for energy. How are data sets defined, which data must be captured, how can that lead to internal benchmarking and continuous improvement? A critical element is the implementation of energy management systems in the production sites. Also, making performance data available towards top management, ensures awareness at all levels
• CAPEX versus Green Electricity: When CAPEX decisions take too long to implement, an easier short-term solution can also be to switch to green electricity

In many organizations, there’s a need to further develop all production employees competences in this ever-changing environment. But how do you tackle this successfully to involve all stakeholders and motivate as many employees as possible, across different target groups, to participate?

The key challenges include:

Digital disconnect – The blue collars don’t have access to digital ways of learning.

• Leaders leading actions – If leadership does not drive this, people will not feel that this is necessary
• How to streamline academies / learning across large organizations so we create the same culture
• How to measure success of the program

The key solutions gathered by the participants on this table included:

• Be authentic and transparent in the ‘why’, the good, the bad and the ugly
• Management supports training by giving an introduction and explaining what is in it for them
• Try to find at least one person in each site to be the ambassador – create a representative committee to discuss the topic and create engagement
• No one size fits all: Adjust training/communication to the target population – create stakeholder groups (e.g. learning profiles)
• Share quick wins and successes in a physical way
• Define metrics or KPIs to measure progress and create healthy competition – instill pride
• It is important to link training to clear business objectives and define metrics to measure the success of the training and show progress to people
• To transform a company you do not need to change everybody, you need a critical mass and the rest might follow
• Feeling of participation replaces the burning platform – sense of meaning and purpose (be authentic about the ‘why’)
• Boring training that they need to follow – make it interesting e.g. gamification

Future factories aim to effectively adapt to external challenges in markets, technology, business models, and global developments. Antifragility is the key characteristic of the Future Factory to be ready for uncertainty, balancing resilience and efficiency in various scenarios.

Sustainable factories include buildings efficiency, environment impact but also the creation of a safe and healthy workplace to attract & retain workforce.

It is a must to support willingness to ‘Reindustrialize’ Europe’.

When building a new factory or fundamentally reshaping an existing factory, challenges include ‘what are the topics to consider’, ‘what is the best approach’, ‘where to start first’, ‘who to involve’ … Knowing that decisions will have impacts for many years, and cost of retrofitting might be huge.

The key challenges of building your future factory for the age of uncertainty

• Shape the company’s ‘dream’ about how the factory will look like
• Focus on questions to answer ‘now’ and ‘later’
• Secure speed in decisions and execution
• Involve several stakeholders
• Get insights from data and people experience

The participants gathered some key solutions:

• The factory ‘fingerprint’, a north star for investments: Creating a concrete view on how the factory should look like acts as framework to design new factories, align factory investment plans and steer portfolio management decisions
• Dare to act & test, a way to move from ‘thinking’ to ‘doing’: Promoting a culture and providing means where people can test ideas that are aligned with the ‘fingerprint’ will help to mobilize and deliver concrete results. Also, selecting the ‘questions to answer now’ and the ‘questions to answer later’ will avoid long analysis and allow more flexibility in building / revamping factories
• Re-industrializing Europe, macro and micro initiatives: Initiative must be supported at EU and country level but should not prevent companies to make own decisions to re-locate operations and build lighthouse factories
• Co-create, from design to hand-over to operations: Aligning requirements, experience & constraints of engineering, operations, IT, procurement should be done as from the begin (design decisions) and kept till hand over to operations
• Insights from data & people: Lot of data available within a company. Yet not structured to support the path to future factory. Once we have our ‘fingerprint’, we could use this framework to collect meaningful data and transform those into knowledge used to steer informed decisions on investments for future factories. Organizing best practice & knowledge exchange across all business units and countries where the company operates will boost co-creation process