Episode 032 | November 7, 2022 | 38:44
Guest: —
Published: November 7, 2022
Duration: 38:44
Description
How to create a strategy and execution model making a factory go circular in production. In this special episode, Joachim and Frederik take a deep dive on a recent project they’ve worked on with a healthcare company helping them make their production more circular — turning analysis into strategy, and strategy into an executable model.
Full transcript
About this transcript
This transcript was automatically generated and may contain inaccuracies, typos, or mistranslations. Episodes recorded before 2024 were transcribed by an on-site model and may have a higher error rate. The content reflects the original conversation to the best of our ability. For the authoritative version, please listen to the audio episode.
Energy is a funny area — only one thing is really important: are you buying renewable energy, yes or no? Then it gets more complicated because some things you purchase energy for are very complex to deliver with renewable sources. A factory in a very water-scarce area had initiated rainwater collection — normally this indicates very high water-efficiency maturity. But this came out of necessity — they were short on water. So it was also responsible business strategy because it made them more resilient.
Hello and welcome to the Sustainable Healthcare Podcast. Today Frederik comes in to talk about a project we did with a client on how to make part of their factory mass circular. How do you bridge the gap between high-level sustainability goals and a model that says where we are, what we need to do, and what the priorities are.
Why circularity in pharma and medtech production? Global warming is real. Circular economy is one of many tools. Clients ask how they reduce Scope 1, 2 and 3 emissions. Circular economy looks at the economic system and finds how to do things in a less environmentally harmful way — looking at economic growth while recognising limited planetary resources. The current linear-economy growth paradigm assumes we can grow without limit. Circular economy is even more important beyond CO2 — for fresh water and rare minerals.
The project setup: the corporate entity had a sustainability strategy and fragmented plans for integrating sustainability here and there, but no coherent plan. There was an execution gap between strategy at corporate level and the manufacturing plant on the ground. We built a coherent model that collected all sustainability efforts in one place — track progress, see what matters first as a manufacturing plant leader, segment into three main areas, allocate subject matter experts.
Methodology: we started by interviewing directors at each site — production sites on different continents. What is the reality for each factory manager? How do they rate their own maturity? Their staff, competencies, ongoing projects, systems? We learned the language they used. The water-scarce factory example illustrates why local context matters — they saw themselves as less mature because they lived in scarcity, while a factory elsewhere with nearly the same efficiency saw itself as more efficient because it wasn’t the same problem.
Co-creation is the principle. We are the helpers; ownership has to live in the client organization. They were pulled in as experts but the model and plan was co-created with the people who would actually execute it. The recorded episode on why transformations fail covered exactly this. Even the metrics matter — measuring waste in tonnes vs volume. If your systems are set up for tonnes and the plan demands volume reduction, it feels dragged over your head.
Three material areas: energy, water, waste. For each, levels of maturity, self-assessment to figure out which level you are on, and what initiatives to start to get to the next. Uniform tool and language across sites for comparison and learning.
Energy: only one thing is really important — are you buying renewable energy? Then complications: steam needs hard and fast — solar thermal less reliable; many pharma/medtech factories run 24/7 across three shifts, breakdowns are unacceptable. Lower-level questions include “are you still using coal?” Beyond purchasing, are you actively reducing energy consumption? Renewable energy is finite too. Sophistication levels: bundle certificates vs owning the solar plant; capturing heat on-site; recirculating cooling. Sometimes simple solutions like better airflow with a large ceiling fan reduce cooling needs without lowering air temperature dramatically.
Waste: a trickier beast — significantly less mature than energy. Where does waste go when generated? Landfill is the least desirable — limited space, polluting locally, we stop using the resource, dependent on more extraction. Incineration is next — with or without energy recovery. Energy recovery is a Danish tradition (district heating). Slightly better than landfill but we’re still extracting raw materials. Above incineration is recycling — different from reusing. Recycling means taking something with shape and removing the shape (wooden chair → cardboard, downcycling from high-value to low-value material). Upcycling is the reverse — Banksy art from an office chair. Reuse maintains the shape — chair stays a chair, used in another office. The Ellen MacArthur butterfly: the closer to the core, the better — reuse without spending energy to give it new form.
Water: manufacturing plants take water in, use it, release it (treated or untreated). Lowest level is just untreated release. Then sophistication: how many times can you reuse water on-site — use it for the highest-level process first, then reuse for less demanding ones. Reduces cost of buying water, reliance on water access, and cost of release. In many areas (California, South Africa, India) fresh-water access is already a problem and regulation is getting stricter. Pharma production uses a lot of water. A lot of environmental pollution doesn’t show up in CO2 accounting — chemical pollution from drug production or consumption has a heavy local toll. Antibiotics is a real mess (different episode).
What changed for the client: before: fragmented, disconnected, plans on different topics in different language at different sites. After: collected and synchronized, comparable across countries and sites, knowledge exchange enabled, good business cases identified faster. Strategic tool, concrete roadmap, and educational tool. Feedback: “we love that this is so concrete that we know what we can go out and do.” Sites with high maturity ended up asking “should I pick the GE or the Siemens ventilation unit?” — a good problem, prioritization not direction.
Before: fragmented. After: collected, synchronized, comparable. They kept asking us “will we be best in class? Is this what really circular looks like?” — being super harsh on the levels in their own assessments. We built into the model that net zero isn’t good enough — we need to be regenerative. The day we need to give back more than we take. We cannot just stop the bleeding, we need to heal.
Side effect: directors got language for how environmental work is strategic and a core part of the business, not the Robin to the Batman of production. “What I do is good business” — eureka moment. Driving more reliability, top line, bottom line, better care. Thank you. If you’re in a similar situation, reach out at GreenInnovationGroup.com.