Achieving net zero in manufacturing supply chains
In today’s rapidly evolving industrial landscape, achieving net-zero targets has become a critical objective for many manufacturing firms committed to sustainability. However, reaching beyond these goals to encompass broader Scope 3 emissions — those linked to the entire life cycle of products and their supply chains — presents a formidable challenge.
The IfM’s Centre for International Manufacturing has been leading efforts to address these complexities. Here, Jagjit Singh Srai, Head of the Centre, and Director of Research in the Department of Engineering, shares innovative strategies and examples of interventions that are transforming the manufacturing value chain for a more sustainable future.
Can we redesign products, production and supply chains for sustainability?
Manufacturing companies are increasingly setting ambitious goals to achieve net-zero targets, marking significant advances in their sustainability initiatives. This enthusiasm for sustainability is buoyed by a surge in consumer demand for products produced using sustainable and ethical practices. Furthermore, regulatory bodies are enacting stricter guidelines, compelling companies to embrace sustainable solutions. This change may also be fuelled (but not always!) by the advocacy of shareholders, leadership teams and employees to produce more sustainable goods and prioritise sustainability.
However, it can be challenging for companies to include broader Scope 3 goals and consider the impact of their products’ usage in their supply chain operations. Achieving this requires a thorough assessment of various product designs, production methods and supply chain set-ups. Key areas to focus on include alternative materials and energy sources, production processes, delivery methods and the product’s sustainability during its use. The effort is even greater for companies transitioning to new operating and business models adopting circular economy principles.
At the Centre for International Manufacturing, we work closely with industrial and institutional partners to address these challenges by considering alternative (renewable) materials, exploring smaller-scale manufacturing operations closer to the market, and evaluating the opportunities these interventions provide for redesigning supply chains. Our expertise in the analysis, design and operation of manufacturing supply chains is applied across sectors from food and healthcare to automotive and aerospace.
Exploring the different options throughout the manufacturing value chain is important when it comes to creating more sustainable operations. Figure 1 (below) provides examples of interventions that can shape future supply chain configurations, such as exploring alternative renewable feedstocks, evaluating new production processes or developing supply chain scenarios that promote circular business models.
Below we explore four areas of our work in this space.
- Using renewable resources for sustainable production
By leveraging expertise in supply chain design, our team has looked at how renewable feedstocks can be more extensively used in manufacturing supply chains. While using resources efficiently, we aim to minimise waste and reduce environmental impact. For example, we have created new methods to consider alternative feedstocks as a supply-driven matter rather than determined by customer demand. In the context of renewable feedstock, our process involves evaluating the feedstock’s characteristics and technology options for converting it into primary and secondary raw materials for specific markets.
An example of this concept is the use of terpenes as sustainable chemical feedstocks currently sourced from the petrochemical industry. Terpenes are natural compounds found in citrus, turpentine and pine oils, but they are also available as by-products of industrial production. They can be converted into chemical feedstocks and offer an alternative to current fossil fuel sources, transitioning to renewable resources. This transition potentially offers several benefits, including new sustainable manufacturing processes, reduced feedstock costs, increased supply security and minimised environmental impact.
Another example of using by-products of industrial processes has been our work conducted in a major research project, project TIGR2ESS, a collaboration between Cambridge and India, and more recently Pakistan. The project, funded by the Global Research Challenges and Cambridge Newton Funds, involved exploring the feasibility of alternative supply networks and public–private partnerships to produce, at scale, primary agri-production, but also the reprocessing of by-products into value-added products.
For instance, we have worked on transforming localised circular supply networks that use post-harvest rice straw stubble — currently burned on-site to clear the fields, leading to significant air pollution in the region — into revenue-generating industrial products from what was previously considered waste. Discovering alternative uses for such waste not only solves the waste-management challenge burdening farmers and the local community but can also assist in reducing emissions, lowering air pollution and improving livelihoods. Exploring possible production pathways and creating markets for processing agricultural waste straw helps to tackle sustainability challenges in agriculture. The initiative has also led to a policy intervention that promotes involving intermediaries, bridging public and private interests such as social ventures or the farmer–producer organisation model. This work has been captured in the academic literature, articulating the opportunities of involving social ventures or FPOs to design by-product supply networks drawing on the case of rice straw.
2. Organisational capabilities for delivering sustainable supply chains
To assess management capabilities in advancing sustainable supply chain practices, we have developed an evaluation framework based on several cross-case studies.
The Sustainability Maturity Assessment tool compares sustainable supply chain practices in multinational companies. It offers a comprehensive evaluation of the maturity of sustainable supply chain practices, encompassing sustainable supply network design, network integration and connectivity, network efficiency, process development and reporting, and product–service enhancement. These five dimensions are assessed against environmental, social and economic objectives. Additionally, the framework assesses both “existing” and “desired” capabilities, encompassing the company’s end-to-end supply system, including inbound supply, internal manufacturing, downstream distribution and alignment with direct/indirect customer needs. The outcomes of the assessment reveal performance gaps and provide actionable steps for the organisation to strengthen its sustainability and digital transformation strategy.
For example, on one particular dimension, a low score indicates minimal attention to waste management, prevention and disposal, with waste being sent to landfill. A medium score suggests the presence of a formalised zero-waste strategy, albeit partially implemented in a limited part of the supply chain. Ambitions may be present, but the formal policy is only partially implemented in a factory setting. A high score indicates a focus beyond the factory — for example adopting circularity principles and considering the entire product life cycle, including using renewable energy in production. On the product side, actively pursuing repair, recycling and refurbishment may also be indicated.
3. Developing circularity approaches through strategic partnerships and innovative metrics
Our research team has been collaborating with the World Economic Forum on the Circular Transformation of Industries (CTI) initiative, which helps industries transition towards a circular economy, focusing on sustainability, economic growth and supply chain resilience.
We have worked on analysing case studies from leading multinational enterprises to understand how to transform operating and business models from linear to circular. As a result, our efforts have led to the creation of White Papers discussing the crucial role of partnerships in enabling a circular economy and identifying six important enablers to drive transformation pathways towards circular supply networks. This work led to the Circular Transformation of Industries: The Role of Partnerships White Paper, which explores the enabling role of partnerships in creating circular solutions.
This work has been presented at recent Davos meetings, leading to new initiatives to promote circularity in selected sectors.
The centre is actively supporting the CTI initiatives, with two additional content pieces in the pipeline for 2024/25 that focus on demonstrating the positive impact of circular models and the need for standardised metrics to assess circularity.
4. Leveraging digital technologies in circular supply chain ecosystems — promoting repair, remanufacture and resell
In collaboration with industry partners, we have developed an approach to inform circular supply network transformation strategies to support implementations beyond incremental sustainability improvements. This approach focuses on the entire life cycle of products, emphasising activities such as repair, remanufacturing and reselling to maximise resource use and minimise the generation of waste. The heart of this initiative explores the role that digital technologies can play in circular ecosystems. The approach enables organisations to visualise and manage the intricate web of resource exchanges — material, financial and informational — between supply network and ecosystem actors.
Unlike traditional linear supply chains, circular supply chains are characterised by multiple usage cycles and reverse logistics for reprocessing. Consequently, recovering products at the end of their life cycle is paramount to fostering circular and sustainable business models. This newly developed method identifies key intermediaries that facilitate material exchanges and manage the essential information flows required for circular operations. Crucially, it maps out stock and resource flows, ensuring the efficient operation of the entire system. By highlighting these interactions, the method uncovers opportunities for implementing digital technologies, advanced production techniques and organisational changes that promote circularity. For instance, the concept of “circularity brokers” emerges — individuals, entities, or digital platforms that connect materials and products after their use cycle with the demand side to maintain the flow of materials within the circular economy.
This approach illustrates how digital technologies can support the design of sustainable supply chain ecosystems, offering practical solutions for businesses committed to reducing their environmental impact and enhancing their operational resilience.
Do the numbers add up? Ensuring robustness in redesign strategies
Our centre bridges the gap between data modelling experts and those focused on strategic, operational and system-level perspectives. To ensure the robustness of our approaches, we have developed a range of tools to quantitatively evaluate various aspects of sustainability interventions. These modelling tools analyse scenarios for raw material sourcing, alternative production processes, location footprint implications and inventory management, complementing our strategy-level frameworks.
Want to know more?
At the Centre for International Manufacturing, we work closely with industry to develop research into practical solutions. We are always looking to expand our network of industrial partners to advance research and develop manufacturing solutions for the future.
For further information about research and collaboration opportunities with the Centre for International Manufacturing, please contact:
Jagjit Singh Srai (jss46@cam.ac.uk).
You can also read:
Srai, J. S., Alinaghian, L. S. and Kirkwood, D. A. (2013). Understanding sustainable supply network capabilities of multinationals: A capability maturity model approach. Proceedings of the Institution of Mechanical Engineers, Part B. Journal of Engineering Manufacture, 227(4): 595–615.
Srai, J. S., Tsolakis, N., Kumar and Bam (2018). Circular supply chains and renewable chemical feedstocks: a network configuration analysis framework. Production Planning & Control, 29(6): 464–482. DOI: 10.1080/09537287.2018.1449263
Srai, J. S., Joglekar, N., Tsolakis, N. and Kapur, S. (2022). Interplay between competing and coexisting policy regimens within supply chain configurations. Production and Operations Management, 31(2): 457–477.
Rossi, L.A., Srai, J.S., 2024. The role of digital technologies in configuring circular ecosystems. Int. J. Oper. Prod. Manag. https://doi.org/10.1108/IJOPM-12-2023-0973
