The phrase “The Triple Bottom Line” (TBL) was first coined in 1994 by John Elkington. His argument was that companies should be preparing three different (and quite separate) bottom lines: profit, people and planet. TBL believes if a firm looks at profits only, ignoring people and the planet, it cannot account for the full cost of doing business.
Decades later, growing world population, climate change, environmental pollution and the scarcity of natural resources have put sustainability as a top purpose or corporate initiative for many organizations. This begs the question:
Can today’s organizations act sustainably when they simultaneously support all dimensions of the Triple Bottom Line?
The answer is a resounding “yes” as sustainability is one of the core drivers of Industry 4.0—an industrial initiative that transforms traditional factories into smart factories through the use of digital technologies on the assembly line. Let’s take a closer look at the economic, environmental and social impact.
Profit - Economic Impact
Industry 4.0, enabled by IoT, AI, machine learning, data analytics and others, leads to efficiency and effectiveness gains through new ways of producing goods and optimizing the supply chain. It enables the development of products at significantly lower financial and environmental costs through efficient use of energy and resources.
With the right implementation of Industry 4.0 technologies, manufacturers are able to detect non-optimized processes in their value chain and therefore enable manufacturers to right-size their equipment, labor and resources, as they provide insights into process gaps that can be optimized, reducing manufacturing operating costs and increasing productivity.
Companies using sensors on the assembly line further improve economic sustainability through improved inventory management and warehouse management. IoT applications improve the efficiency and effectiveness of supply chain management by reducing inventory inaccuracy and time to market.
The data generated by Industry 4.0 is analyzed to gather information to improve product life cycles and ultimately the economic performance of the industry. In this way, Industry 4.0 strengthens management decision-making and provides improved analytical capabilities of organizational phenomena.
Planet - Environmental Impact
In terms of the environmental perspective, the core aspect is energy efficiency, which comes from the ability to analyze and predict production performance and match energy consumption with the actual needs of the organization. Industry 4.0 enables energy monitoring applications that lead to energy efficiency and the reduction of CO2 emissions. Energy savings also have a positive impact on productivity within the organization.
Industry 4.0 also reduces waste through a streamlined manufacturing process and effective recycling and remanufacturing initiatives. For instance, the integration of various types of sensors significantly increases transparency in any manufacturing operation or process. These sensors also provide valuable information such as behavior, usage, failure models, performance indicators, emissions, etc. of the product throughout its lifecycle.
Such information is used to design better products and processes with the help of various simulation systems to reduce negative impacts on the environment without compromising competitiveness. Integrated systems also help monitor and manage losses that occur during the product lifecycle, both in the manufacturing and use phases. Thus, with complete transparency, manufacturers can develop new products that are both competitive and environmentally friendly, achieving sustainability.
People - Social Impact
Finally, in terms of impact on the social dimension, Industry 4.0 enables the creation of a safer workplace. No matter how far automation goes, manufacturers will always need people. A safer workplace is a consequence of reduced safety incidents and increased employee morale. Industry 4.0 leverages increasing automation thanks to the use of robotics and digitally connected machines that create better working conditions.
Clearly, Industry 4.0 and sustainability go hand in hand. The principle of sustainability is firmly linked to Industry 4.0 and its values. On the one hand, Industry 4.0 can contribute to achieving sustainable development, which, for example, also ensures the preservation of resources for future generations. On the other hand, sustainability represents the main objective for companies that want to compete in today's world.
It is important that technological and industrial developments enable the achievement of environmental, economic and, of course, social sustainability goals. Therefore, companies should be able to effectively use the tools and opportunities of Industry 4.0 in designing their organization, strategies, policies and operations to achieve sustainable development and/or promote sustainability on a more general level.