Analyst Insight: Manufacturing execution systems (MES) are crucial to achieving ESG goals in the industrial sector. 

According to the World Economic Forum, one-fifth of the world's carbon emissions comes from the manufacturing and production sectors. At the same time, new regulations are causing companies to make ambitious climate pledges that address the concerns of all stakeholders, from investors to customers and regulators.

How, then, can these climate goals be achieved more quickly? The simple answer is data transparency, but getting there is far from simple. It requires collection and consolidation across multiple departments — from operations to finance and business — as well as collaboration among internal and external parties. In addition, to stay relevant and transform their operations and business models, manufacturers need to draw on the power of data.

On the technology side, advances in clean and renewable energy will play a key role in tackling carbon dioxide emissions from end to end. Additionally, there needs to be a shift toward a circular economy that considers the entire product lifecycle, including consumer behavior. This is where Industry 5.0 enters the conversation, as it brings humans and technology together to solve for automation and creativity. 

Manufacturing execution systems are critical to realizing the C-suite’s goals for ESG compliance. Following are five ways that MES is key to the ESG journey.

Energy management. MES provides real-time data on energy consumption and identifies opportunities for energy savings. It also tracks progress toward energy reduction targets. By integrating MES with energy-management systems, companies can create a closed-loop system that identifies inefficiencies, and adjust production processes to reduce energy consumption.

Waste reduction. MES helps track and analyze production data to identify areas where waste is generated. By implementing Lean manufacturing principles and process improvements, manufacturers can reduce waste and increase efficiency. MES also provides real-time data on waste generation, in order to track progress toward waste reduction targets.

Supply chain transparency. MES provides visibility into the supply chain, allowing companies to track materials and products from source to end customer. This visibility helps ensure that suppliers adhere to ESG standards such as sustainable sourcing practices. It also helps identify areas where businesses can improve their own supply chain practices.

Compliance reporting. MES helps track and report on ESG-related data such as energy consumption, waste generation and supply chain practices. Automating compliance reporting reduces the risk of errors and ensures that ESG obligations are met.

Continuous improvement. MES provides real-time data on production processes and supply chain practices. By using this data to identify areas for improvement, companies can implement changes that will reduce environmental impact, improve social outcomes and enhance governance practices. MES also provides a platform for collaboration across teams and departments, all working together to achieve ESG goals.

By drawing on the power of real-time data, MES helps optimize energy usage, reduce waste, improve supply chain transparency, automate compliance reporting and achieve continuous improvement. As ESG becomes an increasingly important aspect of business strategy, MES plays a vital role in helping to meet those goals, and demonstrates a commitment to sustainability.