Manufacturers need to 'go green' if they want to appeal to the Millennial generation
Millennials might not call themselves environmentalists, but they are certainly more concerned with the environment than previous generations. According to a recent report by Walden University, 81 percent of adults worldwide say that when purchasing goods or services, they prioritize firms who demonstrate environmental responsibility. At this point, manufacturers need to start taking the hint.
More than just a cultural connection, manufacturers who restructure their processes and properties with sustainability in mind also stand to achieve significant savings. Many of these eco-minded changes involve operational shifts to reduce an organization's environmental footprint, but others are best realized through changes in manufacturers’ facilities themselves.
Looking for a Greener Pasture
Although underappreciated, the location of a manufacturer’s facilities plays a key role in determining its environmental impact. Facilities located far from consumer markets incur higher transportation costs to move goods through the supply chain, increasing both the toll on the environment and production expenses. The modes of transportation manufacturers rely on are worth considering too. While trucking is often the most viable option for last-mile delivery, it's an expensive choice for long-distance hauls. Trucks consume twelve times the energy to transport an identical shipment as rail, and cost manufacturers more than thirteen times as much in transport fees. Firms looking to save the environment and their pocketbooks are wise to consider relocating closer to population centers and transportation hubs.
But not all manufacturers have the flexibility to locate near their target market; their audiences may be so widespread that such a move would make little financial or environmental sense. For these organizations, locating their facilities and distribution centers in transportation-advantaged areas is vital to streamlining the shipping process. Rather than relying on a single mode of transportation, manufacturers positioned in these locations can construct intermodal strategies. With truck, rail, air and even maritime shipping as accessible alternatives, organizations can optimize their long haul and last-mile operations for financial and environmental savings.
It's important to note that even in situations where a manufacturer is forced to trade off expediency for energy efficiency, most Millennials are willing to wait. 82 percent of 18 to 25 year-old consumers would wait longer for sustainably delivered products – more than any other age demographic – according to a recent study by West Monroe Partners.
The Perks of Sustainable Development
As manufacturers contemplate relocating in order to minimize their environmental footprint, they should strive to ensure that the facilities themselves are designed with sustainability in mind.
Developing LEED-certifiable property is a tangible way to demonstrate an organization's commitment to sustainability. Fortunately, in November 2013, the U.S. Green Building Council updated its LEED program, simplifying the certification process and adding more accommodations for industrial real estate projects. These certifications are well on their way to becoming a standard: the number of LEED certified buildings in the industrial manufacturing space skyrocketed from 198 facilities in 2010 to nearly 1,400 as of October 2014.
Environmentally-conscious development, LEED certified or otherwise, isn’t just about courting Millennials. Many manufacturers have found that the steps toward green development make good business sense too. Efforts to reduce energy use, cut waste and promote efficiency translate clearly into long-term benefits for manufacturers. A study by the U.S. Green Building Council found that LEED certified buildings average a 28 percent savings in energy costs compared to a baseline facility. When scaled for total energy consumption over time, the resources dedicated to developing green buildings represent a significant investment toward reducing an organization's future footprint and costs. Incidentally, reduced energy use can also help mitigate the effect of energy price fluctuations on a manufacturer’s operations.
Going forward, green operations will become an even more critical component of manufacturers' attempts to capture millennial customer loyalty and positively impact their bottom lines. Organizations that locate near their customer base can offer shorter shipping times and a minimal environmental footprint, while those near transportation hubs can take advantage of intermodal networks to deliver goods more sustainably. Despite the renowned fickleness of Gen Y customers, their environmental inclinations seem steadfast. Recognizing this trend and changing accordingly isn't just a matter of customer retention, it's about staying competitive for decades to come.
John Lass is a Vice President, Development, at industrial real estate firm CenterPoint Properties.
Fluent.ai x BSH: Voice Automating the Assembly Line
Fluent.ai has deployed its voice recognition solutions in one of BSH’s German factories. BSH leads the market in producing connected appliances—its brands include Bosch, Siemens, Gaggenau, NEFF, and Thermador, and with this new partnership, the company intends to cut transition time in its assembly lines.
According to BSH, voice automation will yield 75-100% efficiency gains—but it’s the collaboration between the two companies that stands out. ‘After considering 11 companies for this partnership, we chose Fluent.ai because of their key competitive differentiators’, explained Ion Hauer, Venture Partner at BSH Startup Kitchen.
What Sets Fluent.ai Apart?
After seven years of research, the company developed a wide range of artificial intelligence (AI) software products to help original equipment manufacturers (OEM) expand their services. Three key aspects stood out to BSH, which operates across the world and in unique factory environments.
- Robust noise controls. The system can operate even in loud conditions.
- Low latency. The AI understands commands quickly and accurately.
- Multilingual support. BSH can expand the automation to any of its 50+ country operations.
How Voice Automation Works
Instead of pressing buttons, BSH factory workers will now be able to speak into a headset fitted with Fluent.ai’s voice recognition technology. After uttering a WakeWord, workers can use a command to start assembly line movement. As the technology is hands-free, workers benefit from less physical strain, which will both reduce employee fatigue and boost line production.
‘Implementing Fluent’s technology has already improved efficiencies within our factory, with initial implementation of the solution cutting down the transition time from four seconds to one and a half”, said Markus Maier, Project Lead at the BSH factory. ‘In the long run, the production time savings will be invaluable’.
Future Global Adoption
In the coming years, BSH and Fluent.ai will continue to push for artificial intelligence on factory lines, pursuing efficiency, ergonomics, and a healthy work environment. ‘We started with Fluent.ai on one factory assembly line, moved to three, and [are now] considering rolling the technology out worldwide’, said Maier.
Said Probal Lala, Fluent.ai’s CEO: ‘We are thrilled to be working with BSH, a company at the forefront of innovation. Seeing your solution out in the real world is incredibly rewarding, and we look forward to continuing and growing our collaboration’.