Sustainable Manufacturing: Green Factory : A case study of a tool manufacturing company

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Linköping University | Department of Management and Engineering Master’s Thesis, 30 credits | Sustainability Engineering and Management

Spring 2020 | ISRN LIU-IEI-TEK-A--20/03881—SE

Sustainable Manufacturing: Green

Factory – A case study of a tool

manufacturing company

Rohan Surendra Jagtap (Linköping University)

Smruti Smarak Mohanty (Uppsala University)

Supervisor LiU: Simon Johnsson

Supervisor Sandvik Coromant: Peter J. Jonsson

Examiner: Bahram Moshfegh

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Popular Scientific Summary

Sustainable development is a hot topic trending across the world in the 21st century. It is important to grasp the definition of ‘Sustainable Development’. One popular definition of sustainable development is from the United National World Commission on environment and Development is “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. In the 4th_{industrial revolution the whole} world is moving in a sustainable direction in the three domains - environmental, economic and social. The term Sustainable Manufacturing refers to the integration of processes and systems capable to produce high quality products and services using less and more sustainable resources (energy and materials), being safer for employees, customers and communities surrounding, being able to mitigate environmental and social impacts throughout its whole life cycle. The thesis report presents a method to track energy use in the production line for a product family i.e. turning tools. This is done by carrying out a bottom-up energy audit and creating a map of the energy use in the entire production process by implementing the Value Stream Mapping (VSM) method. This analysis of the energy use will help developing an energy cost tool which quantifies the carbon footprints from the manufacturing of tools as well as from the facility. Another outlook of the study is to develop new Energy Performance Indicators (EnPIs) for the production and support processes. The EnPIs presents an opportunity to monitor the energy use closely by integrating them into the energy software. Finally, another purpose of the thesis study is to study the social sustainability dimension wherein the working environment is analysed and discussed.

The case study result presents a huge potential in achieving higher sustainability in tool manufacturing industries. By implementing sustainable manufacturing, the organizations could achieve efficient productivity, such as higher quality of manufacturing, waste elimination from the production line, re-use of the essential resources and product durability improvement resulting in less carbon footprint. This thesis work could serve as a base for future sustainability projects for the tool manufacturing industries.

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Foreword

This Master Thesis has been written in collaboration with Linköping University. The work has been jointly developed by Rohan Surendra Jagtap (Linköping University) and Smruti Smarak Mohanty (Uppsala University) with the help of AB Sandvik Coromant. We both authors have worked in most of the areas prioritized to our field of studies. In this study, I have focused on the energy audit, energy cost tool and energy performance indicators aspect whereas Smruti has focused on the Sustainable Value Stream Mapping and social sustainability. Both the report shares about 80% to 90% similarity and might differ in terms of formatting and overall structuring.

I’d like to thank Simon Johnsson my supervisor for the thesis at Linköping University who is working as a Research Engineer in the Department of Management and Engineering (IEI) within the Division of Energy Systems. He has helped me whenever I have faced difficulties throughout the thesis as he has a thorough experience working with energy auditing and related research work. While also read proofing my entire thesis report, thus making it much better in terms of the language as well as structuring. I’d also like to thank Ines Julia Khadri, Ph.D. student at the Department of Engineering Sciences, Industrial Engineering & Management in Uppsala University who supervised Smruti and has indirectly also helped me with the thesis. I would like to thank Sandvik Coromant, Gimo for their assistance in the collection of data including all the respondents and managers that took part in our study and gave us the opportunity to interview them with thorough input and full support. I would further like to thank my manager at the company Peter J. Jonsson and my supervisors at company Martin Kolseth, Lovisa Svarvare and Peter P. Andersen for their unwavering support and guidance. I would like to appreciate all my course instructors within the Sustainability Engineering and Management program at IEI Department at Linköping University. I am truly grateful for the knowledge gained throughout the last two years which has complemented me in doing this thesis work. The thesis completes my master’s studies and I have enjoyed my time at Linköping University.

In truth, I could not have achieved my current level of success without a strong support group. I am thankful to my parents and friends who have constantly provided me with the emotional support and motivation especially during the Covid-19 pandemic.

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Abstract

Efficient use of resources and utility is the key to reduce the price of the commodities produced in any industry. This in turn would lead to reduced price of the commodity which is the key to success. Sustainability involves integration of all the three dimensions: environmental, economic and social. Sustainable manufacturing involves the use of sustainable processes and systems to produce better sustainable products. These products will be more attractive, and the industry will know more about the climate impact from their production.

Manufacturing companies use a considerable amount of energy in their production processes. One important area to understand the sustainability level at these types of industries is to study this energy use. The present work studies energy use in a large-scale tool manufacturing company in Sweden. Value Stream Mapping method is implemented for the purpose of mapping the energy use in the different operations. To complement this, an energy audit has been conducted, which is a method that include a study and analysis of a facility, indicating possible areas of improvements by reducing energy use and saving energy costs. This presents an opportunity for the company to implement energy efficiency measures, thus generating positive impacts through budget savings. Less energy use is also good for the environment resulting in less greenhouse gas emissions level. This also helps in long-term strategic planning and initiatives to assess the required needs and stabilize energy use for the long run. Social sustainability completes the triad along with environmental and economic sustainability. In this study, the social sustainability is reflected with the company’s relationship with its working professionals by conducting a survey. The sustainable manufacturing potential found in the case study indicates that significant progress can be made in the three sustainability dimensions. Although, the scope of the thesis is limited to a tool manufacturing company, several of the findings could be implemented in other tool companies as well as industries belonging to other sectors.

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List of Figures

Figure 1 The three dimensions of sustainability (Sonnemann, et al., 2015) ... 1

Figure 2 Different divisions of Sandvik group ... 6

Figure 3 Classification of sustainable manufacturing, Bonvoisin et al. (2017) ... 8

Figure 4 Energy Audit process developed by (Rosenqvist, et al., 2012) ... 10

Figure 5 Concept of energy performance indicators (EnPI) in baseline period and implemented period (ISO, 2020) ... 12

Figure 6 Funneling structure for literature review ... 14

Figure 7 Mixed research methods adopted for thesis study ... 21

Figure 8 Data Collection ... 22

Figure 9 Iterative process for industrial audit, (Rosenqvist, et al., 2012) ... 23

Figure 10 System Boundaries for study ... 29

Figure 11 Production flow for the products ... 31

Figure 12 Active power sum L1-L3 (10m) for 2018 ... 31

Figure 13 Active power sum L1-L3 (10m) for 2019 ... 32

Figure 14 Unit Processes of GVP3, Heat Treatment and Packaging ... 33

Figure 15 Sankey diagram: Product A ... 34

Figure 16 Sankey diagram: Product B ... 34

Figure 17 Sankey diagram: Product C ... 35

Figure 18 Sankey diagram: Product D ... 35

Figure 19 Percent energy recycled from compressors ... 36

Figure 20 Percentage of energy going to the ventilation and preheating the incoming air ... 37

Figure 21 Percentage of total instantaneous electricity of compressors ... 37

Figure 22 Working week total energy use in STAMA cells ... 38

Figure 23 Non-working week total energy use in STAMA cells ... 38

Figure 24 Organizational structure of Energy Management ... 39

Figure 25 Energy Pyramid at Volvo CE (Thollander, et al., 2020) ... 40

Figure 26 Procedure for implementation of energy efficiency measures (Hessian Ministry of Economics, Transport, Urban and Regional Development, 2011) ... 41

Figure 27 Pump energy use during production week in STAMA cells ... 42

Figure 28 Pump energy use during non-production week in STAMA cells... 43

Figure 29 VSM diagram for Product A ... 46

Figure 30 VSM diagram for Product B... 46

Figure 31 VSM diagram for Product C... 47

Figure 32 VSM diagram for Product D ... 47

Figure 33 Energy Cost Tool: Tool Sheet ... 50

Figure 34 Energy Cost Tool: Data Sheet ... 51

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List of Tables

Table 1 Structure of unit processes categorization (SÖDERSTRÖM, 1996) ... 9

Table 2 Comparison of Traditional VSM and Sus-VSM (Bown, et al., 2014) ... 11

Table 3 Set of templates to measure energy efficiency (Schmidt, et al., 2016) ... 19

Table 4 Example of losses in a compressed-air system, (Falkner & Slade, 2009) ... 44

Table 5 Reference Chart for the Tool sheet ... 49

Table 6 List of current EnPIs used in STAMA cells ... 53

Table 7 List of suggested new EnPIs which can be developed through available data in STAMA cells ... 53

Table 8 List of suggested new EnPIs in STAMA cells ... 54

Table 9 List of suggested new EnPIs for support processes for the industry ... 55

Table 10 Results of social sustainability survey ... 56

Table 11 Social Sustainability score matrix... 57

Table 12 Improvement suggestions in social sustainability survey ... 58

Table 13 Material removal ... 75

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Abbreviations

SM Sustainable Manufacturing VSM Value Stream Mapping

SUS-VSM Sustainable Value Stream Mapping IEA International Energy Agency PA Packaging

EnPI Energy Performance Indicator

FSSD Framework for Strategic Sustainable Development SSD Strategic Sustainable Development

IPCC Intergovernmental Panel on Climate Change GHG Green House Gas

KPI Key performance Indicator EEM Energy Efficiency Measures EE Energy Efficiency

EB Energy Baseline

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1. Introduction

The report by UN Intergovernmental Panel on Climate Change (IPCC) has highlighted about the fact that the increase in global greenhouse gas emissions is rapidly altering the climate. It states that the average global temperature will reach the threshold of 1.5 ℃ above pre-industrial levels by 2030. Thus, causing various problems like desertification, increasing sea levels, reducing food production etc. Energy demand reductions, decarbonization of electricity and other fuels, electrification of energy end use etc. are some of the mitigation pathways. The demand of low energy and land- and GHG-intensive use goods contribute towards limiting the warming to as close to 1.5 ℃ (IPCC, 2018). The tool manufacturing industry, mining and quarrying industries use about 49,081 GWh, while the total electricity use is 171,862 GWh (SCB, 2018). This is about 28% of the total use, thus turning out to be a significant contribution and a considerable share of the energy supplied worldwide.

Sweden is on track to meet its energy target to reduce the energy intensity of the economy by at least 20% from 2008 to 2020 (International Energy Agency, 2019). The target of a reduction of 50% by 2030 also seems to be feasible albeit further improvements are required to achieve it (Ibid.). The energy intensity depends on the structure of the economy and the structural changes in energy-intensive industries can potentially have a large impact on a country’s performance (Ibid.).

Sustainable development is a hot topic trending across the world in the 21st_{century. One} popular definition of sustainable development is from the United National World Commission on environment and Development is “Development that meets the needs of the present without

compromising the ability of future generations to meet their own needs” (Brundtland

Commission , 1987). This definition is based on two key concepts: “needs” which refers to the essential needs of the world’s poor, to which overriding priority should be given; and “limitations” which refers to the restrictions imposed by technologies and socio-economic factors on the ability of the environment to meet the needs of present and future generations.

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To achieve long-lasting sustainable development in an organization, there is a need to balance environmental, economic and social sustainability factors in equal. The three dimensions of sustainability are defined as follows.

• Environmental Sustainability:

Environmental sustainability means that we are bounded within the means of our natural resource. To achieve true environmental sustainability, there is a need to ensure that the use of natural resources like materials, energy fuels, land, water etc. are at a sustainable rate or by circularity. There is a need to consider material scarcity, the damage to environment from extraction of these materials and if the resource can be kept within circular economy principles (Circular Ecology, 2020).

• Economic Sustainability:

Economic sustainability refers to the need for a business or country to use its resources efficiently and responsibly in order to operate in a sustainable manner to consistently produce an operational profit. Without the operational profits, businesses cannot sustain its activities. Without responsible acting and efficient use of resources, a company will not be able to sustain its operations in the long run (Ibid.). Being economically sustainable would help to build long lasting economic models.

• Social Sustainability:

Social sustainability refers to the ability of society or any social system to persistently achieve a good well-being. Achieving social sustainability would ensure the social well-being of a country, an organization or a community can be maintained in the long run (Ibid.). From a business perspective, it is about understanding the impacts of corporations on people and society (ADEC Innovations, 2020).

The thesis primarily focuses on the environmental sustainability and economic sustainability dimensions which is in relation to energy use tracking and how it can be made more efficient. The tracking helps the case company to evaluate its greenhouse gas emissions and potentially reduce it in the future through energy efficiency or other sustainability improvements. This will in turn present an opportunity to generate operational profits in the long term while also incorporate sustainable values, thus maintaining the interests of stakeholders and customers. While the social sustainability dimension is briefly touched upon which reflects the well-being of employees working in the organization. The bottom-line of the thesis is to present a case study of a tool manufacturing company linking the three topics. The following chapters present the problematization of thesis, objectives and research questions, delimitation set by authors and case company background.

1.1. Problematization

Minimization of environmental impact is getting progressively significant inside manufacturing sector as customer, suppliers and customers demand that manufacturers minimize any negative environmental effects of their products and their respective operations (Klassen, 2000). Managers play an imperative part in deciding the environmental effect of assembling manufacturing operations through decisions of crude materials utilized, energy used, toxins radiated, and wastes generated (Ibid.). In the course of recent decades, theoretical thinking on environmental issues have gradually extended from a restricted spotlight on

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contamination control to incorporate a huge arrangement of the board choices, projects and technologies. In this 4th industrial revolution most of the organizations want to increase the productivity, while the environmental burdens are the major challenges for them. Increasing rate of carbon footprint in the production facility and other supply process involved in the complete manufacturing process is a major problem. Structural industrial changes hold quite a lot of potential for industrial manufacturing companies in their pursuits of becoming more sustainable. Decreased energy use and increased energy efficiency are two possible ways to achieve increased sustainability. Sustainable manufacturing in the tool manufacturing industry could offer a potential solution to achieve this goal.

1.2. Need of sustainable manufacturing in tool manufacturing industries

Manufacturing is experiencing a significant progress period. The presentation of applied autonomy and robotics, 3D printing, and a changing worldwide economy have created tremendous changes in the business, and these progressions give no indication of easing back down (Pivot International, 2020). There is another area where manufacturing is encountering changes, i.e. sustainability. While sustainability in manufacturing industry has been a subject of enthusiasm for the area for a considerable length of time, as of late makers have started looking unquestionably more truly at how to manufacture in an increasingly productive, environmentally-friendly manner (Pivot International, 2020). Many industries consider “sustainability” as an important aspect in their operations for increasing growth, global competitiveness and brand awareness (Gray, 2020). Apart from that some key benefits to sustainable manufacturing are:

• Improve operational efficiency

• Cost and waste reduction from the production process

• Long haul business feasibility and achievement

• Lower administrative consistence costs

• Improved deals and brand acknowledgment leading to more prominent access to financing and capital

Sustainability implies working with an eye toward what's to come. Manufacturing in a sustainable manner is a way to indicate that less environmental harm results from the manufacturing procedure, and that is consistently something worth being thankful for (Pivot International, 2020). Sustainability is actually very basic: If you utilize less assets today, the industry will have more for tomorrow - regardless of whether "tomorrow" signifies quite a while from now. It's simple for most of the manufacturing industry to think about "the environment" as a theoretical formulation, however manufacturers know better, managing as they do in crude materials. As assets become rare, costs go up (Ibid). Sometimes, manufacturers need to begin utilizing substitution materials (Ibid). These issues can make logistical issues, also an expansion in costs - and these issues can rapidly swell into significant issues for your organization (Ibid). As the Harvard Business Review reports, organizations that focus on sustainability early will end up in front of the pack (Nidumolu, et al., 2009). Sticking to the strictest environmental consistence guidelines instead of the most indulgent, for instance, can permit an organization to discharge feasible items a few item cycles in front of their rivals. This makes an undeniable upper hand, setting the up the manufacturer to remain in front of those competitors for quite a long time to come (Ibid).

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1.3. Objective and Research questions

The purpose of this thesis is to understand what affects the energy use most in the manufacturing processes such as the use of compressed air and cutting fluid as well as machine and method choices for a tool manufacturing company. This will facilitate a prioritization of improvement areas in the future. There is also a need to study social aspects to understand the conditions for implementing new sustainability measures within the case company. Since sustainability stands on three different pillars, where one of them is concerned with the social aspect. Primarily this study is focused on five main objectives i.e. to do a study of energy use in a modern engineering industry (from a sustainability perspective); mapping energy use in the tool manufacturing plant, to create comparable measurement figures for the various energy sources of the machines; to develop a model for how to calculate the total energy cost for manufacturing a certain product item in a product from a sustainability perspective; and to look into the social sustainability point of view (Sandvik Coromant, 2019).

To address the problem, an investigation around the following research questions will be presented in this Master thesis:

RQ 1. How can energy use be studied, mapped and its efficiency be improved in a tool manufacturing industry?

RQ 2. How can EnPIs and energy cost tool be developed and implemented in a tool manufacturing industry?

RQ 3. How can social sustainability be measured and improved in a tool manufacturing company?

The research questions will be answered in the following way:

Regarding RQ 1, a bottom-up energy audit along with Sus-VSM is implemented in this study. The first phase of the audit is survey, followed by energy analysis and energy efficiency measures. The audit helps to study the energy use as well as leads to the suggestion of energy efficiency measures based on current use. While Sus-VSM complements the audit to map the energy use of different energy carriers for four prioritized products in production line. This reflects the environmental sustainability as it would help the case company to reduce energy use and equivalent GHG emissions in the future.

RQ 2 involves the development of new EnPIs and an energy cost tool. The proposed EnPIs for the support and production processes helps to support energy related decision making or future investments. The energy cost tool incorporates the production and facility in its calculation of cost of manufacturing, energy use and GHG emissions. The two aspects eventually reflect the economic sustainability as well as supports environmental sustainability.

With regards to RQ 3, it involves conducting a survey with ten explicit statements to study the working environment of case company. The statements present an opportunity to investigate and suggest improvements in their respective areas if required. This research question reflects the social sustainability viewpoint, thus completing the triad.

As this research is focusing on the three parameters of sustainability, the research questions were designed accordingly. The 1st research question covers the environmental perspective. The 2nd research question supports environmental as well as economic perspectives. The 3rd

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research question satisfies the social perspective of sustainability. The focus of the study has been more on strategizing than on tools and techniques that facilitate implementation of energy intensity-reducing measures.

1.4. Delimitation

Sustainable manufacturing is a broad concept which has different aspects to it like manufacturing technologies, product lifecycles, value creation networks and global manufacturing impacts (Bonvoisin, et al., 2017). The researchers in this study have confined the scope only till manufacturing technologies perspective and briefly touched upon the value creation networks. The Sus-VSM, energy audit, EnPIs fall under the category of the prior while the social sustainability falls under the category of the latter. The delimitations were considered based on the objectives and purpose described by the case company. Apart from this, no specific or direct limitation was set by the researchers on the study.

1.5. Case Company description

This chapter is an empirical contextualization of a progressively tight investigation of the case company AB Sandvik Coromant, Gimo. This sections briefs about the Sandvik Groups’ structure, glorious history (Both Sandvik Group and Sandvik Coromant), Sandvik Coromant’s sustainable work, sustainable objectives, current and future sustainable challenges in the manufacturing area. This also includes a basic analysis of Sandvik Coromant’s annual and sustainable historical reports. This empirical study background study concludes with a detailed analysis of the need of sustainable manufacturing in Sandvik Coromant and the tool manufacturing companies.

1.5.1. About Sandvik Group

The Sandvik Group was established in 1862 by Göran Fredrik Göransson, who was first on the planet to prevail with regards to utilizing the Bessemer strategy for steel creation on a modern scale (Sandvik, 2020). At a beginning period, tasks concentrated on high caliber and included worth, interests in R&D, close contact with clients, and fares. This is a methodology that has stayed unaltered as the years progressed. As ahead of schedule as the 1860s, the item run included drill steel for rock-penetrating (Ibid). The organization's posting on the Stockholm Stock Exchange occurred in 1901. The manufacturing of hardened steel started in 1921 and cemented carbide in 1942. Manufacturing of cemented carbide apparatuses started during the 1950s in Gimo, Sweden. Sandvik Group has three major business areas such as Sandvik Machining Solutions (SMS), Sandvik Mining and Rock Technology (SMRT) and Sandvik Materials Technology (SMT) (Ibid).

Sandvik has persuaded that sustainability is a genuine business advantage and a driver that upgrades Sandvik's competitiveness. Most of the clients need to work with feasible providers. Investors and Shareholders are setting sustainable guidelines to put resources into organizations. By aligning the presentation of Sandvik's new financial objectives with its sustainability objectives the organization needed to underline the significance of long-term sustainable goals. Sandvik takes a comprehensive perspective on the sustainability objectives. It thinks about its operations, supply chain and customer offerings with specific targets for each

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of them that complement each other, and the organization continually attempting to see the full picture and have the greatest constructive outcome.

Figure 2 Different divisions of Sandvik group

Sandvik Machining Solutions fabricates all types of tools and tooling frameworks for cutting edge metal cutting (Sandvik, 2020). The business zone involves a few brands that offer their own items and administrations, for example, Sandvik Coromant, Seco Tools, Dormer Pramet and Walter (Ibid).

Sandvik Mining and Rock Technology supplies gear, devices, administration and backing for the mining and development ventures (Sandvik, 2020). The major business areas of SMRT is rock penetrating and cutting, crushing and screening, loading and hauling, burrowing/tunneling, quarrying and demolition work (Ibid).

Sandvik Materials Technology creates and makes items produced using propelled hardened steels and uncommon alloys, including cylindrical items, metal powder, strip and items for mechanical warming (Sandvik, 2020).

1.5.2. About Sandvik Coromant

The tool manufacturing company in the present study is AB Sandvik Coromant in Gimo, Sweden. It was established in 1942. The company is a world leader in manufacturing cemented carbide tools like turning, milling and drilling in metallic materials (Sandvik Coromant, 2020). It has around 1500 employee, making it a large-scale enterprise. There are various industrial solutions in the following sectors: Aerospace, Automotive, Die & mould, Medical, Oil and gas, Power Generation and Wind Power (Ibid).

Sustainable business is one of its primary focus. The company intends to have customers to cut faster or use the tools longer than in the past (Sandvik, 2019). It continues to improve circularity for customers through recycling and buy-back programs for the used tools. Another focus is on raw materials and the packaging which will reduce CO2 emissions and increase circularity. The commitment has led to 80% circularity through the buy-back program (Sandvik Coromant,

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2020). It implements green factory and sustainable facilities concept where the efforts lead to reduction in cost, energy and CO2 emissions. The emissions have been consistently monitored over the past few years which has led to 20% reduction overall (Ibid.).

The production in Gimo is divided into two factories – manufacturing of cemented carbide inserts and tool holders. Sandvik Coromant’s biggest customers are the metal, automotive and aerospace industries. The plant works with cutting edge technology for the manufacturing of products. Hence, there is a constant need to adapt to new technologies and to find more efficient ways to produce the tools.

2. Theoretical framework

This chapter presents the theoretical fundamentals covered in the thesis study. It consists of sub-chapters for each theme relevant to the study.

2.1. Sustainable Manufacturing

Sustainable manufacturing is defined as “the integration of processes and systems capable to produce high quality products and services using less and more sustainable resources (energy and materials), being safer for employees, customers and communities surrounding, being able to mitigate environmental and social impacts throughout its whole life cycle (Machado, et al., 2019). Various definitions have been proposed to characterize the word ‘sustainability’. For example, sustainability has been characterized by previous Prime Minister of Norway Gro Harlem Bruntland as the casing work where in the necessities of the present age are met without trading off the capacity of people in the future in meeting their prerequisites (Jawahir, 2008). Some of the reasons companies are pursuing sustainability in manufacturing are: to increase operational efficiency by reducing costs and waste; to respond to or reach new customers and increase competitive advantage; to protect and strengthen brand and reputation and build public trust; to build long-term business viability and success; to respond to regulatory constraints and opportunities (EPA, 2018).

It is imperative to discuss about the overall context about Sustainable Manufacturing in general to get a wider perspective. Bonvoisin et al. (2017) defined sustainable manufacturing solutions in four dimensions with overlapping scopes which they identify in literature as “layers”. They discuss the layers as follows.

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Figure 3 Classification of sustainable manufacturing, Bonvoisin et al. (2017)

Based on the above classification of layers, it can be said the focus of this thesis falls somewhat under the first category of “Manufacturing technologies” and also briefly under “value creation network”. This is since the core theme in the case study is about tracking energy use in the production line and suggestions to improve energy efficiency while also analyzing social sustainability dimension.

2.2. Energy Auditing

Abdelaziz et al. (2011) defined energy audit as “an inspection, survey and analysis of energy flows for energy conservation to reduce the amount of energy input into the system without negatively affecting the output”. It is a method which helps in proposing possibilities to reduce energy expenses and carbon footprints, thus becoming a key point in the area of energy management. The energy audit, for an organization, helps to understand, quantify and analyze the utilization of energy. The detection of waste takes place as well as it identifies critical points and discovers opportunities where the energy use can be potentially reduced. Through the means of eco-efficient and feasible practices as well as energy conservation methods, overall energy efficiency of the organization will be more profitable. This in turn would lead to reduced energy costs (Saidur, 2010).

According to Vogt PE et al. (2003), there are two distinct and fundamental approaches to model a facility’s energy use: top-down and bottom-up. The requirements of bottom-up model are metering installation and an exhaustive inventory of all facility equipment, as well as the energy use pattern of each facility device. It is necessary to sum the energy use of all facility’s equipment in order to determine a facility’s total energy use. While the top-down model uses the high-level information that a facility regularly collects regarding its activities and performance and further associating that data with the corresponding energy use. Sathaye and Sanstad (2004) state that the fundamental difference between the two audit methods is the perspective taken by each on consumer and firm behavior and the performance of markets for energy efficiency.

Manufacturing technologies

• How things are manufactured • Where the research is

oriented based on processes and equipment, development of new or improved manufacturing processes, maintenance of equipment, determination of process resource use, process simulations and energy efficiency of building.

Product lifecycles

• What is to be produced • Where the research is

primarily based on product (good or service).

• The linked discipline is product design aspects like product lifecycle management, intelligent product, product sustainability assessment. Value creation networks • Organization context • Where the research is

oriented based on companies or

manufacturing networks. • Examples of the

approaches include resource efficient supply chain planning, industrial ecology.

Global manufacturing impact

• Mechanism context • Where the research

exceeds the conventional scope of engineering. • Examples of approaches include development of sustainability assessment methods, education and competence development, development of standards.

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While performing an energy audit, it is important to identify unit processes. Unit processes are used to divide the energy use of an industry into smaller parts. They are defined by the energy service to be performed and are further divided into two categories: Production processes and support processes (Rosenqvist, et al., 2012). The unit processes are general for all industries, thereby provides an opportunity for comparison of a given unit process between different industries or businesses. Sommarin et al. (2014) put forward two approaches in order to perform a bottom-up energy audit, first one being ‘The Unit Process-approach’ and the second being ‘The KPI-approach’. The latter approach is divided into three different levels.

• Overall figures like MWh/ton, kWh/m2, MWh/turnover etc.

• Support process-specific figures like ventilation, compressed air etc. • Production process-specific figures such as melting, moulding etc.

The Unit Process-approach for bottom-up audit is adopted for the thesis. The first part of an audit is setting up an energy balance diagram (Sommarin, et al., 2014). Using the unit process categorization method, a general way of structuring data is obtained. A unit process is based on the purpose of a given industrial process for example cooling, drying, internal transport etc. (see Table 1) (Ibid.). There are three parts of an audit: Energy survey, Energy analysis and Suggested measures (see Figure 4) (Rosenqvist, et al., 2012). Energy survey phase defines the system boundary, identifies unit processes, quantifies energy supply and allocates energy to unit processes. Energy analysis phase identifies problems within systems, idling, outdated technologies, assesses potential for energy efficiency. Suggested measures identify possible solutions to the problems, calculates impact of the solutions by analysis and evaluates economic impact (Ibid.).

Table 1 Structure of unit processes categorization (SÖDERSTRÖM, 1996)

Production process

Disintegrating

Support process

Ventilation

Disjointing Space heating

Mixing Lighting

Jointing Pumping

Coating Tap water heating

Moulding Internal Transport

Heating Cooling

Melting Steam

Drying Administration

Cooling/freezing Packing

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Figure 4 Energy Audit process developed by (Rosenqvist, et al., 2012)

2.3. Energy Efficiency

Energy efficiency is defined as “the ratio of useful energy or energy services or other useful physical outputs obtained from a system, conversion process, transmission or storage activity to the input of energy” (IPCC, 2018). The 2012 Energy Efficiency Directive (2012/27/EU) set of binding measures for the European Union to reach 2020 energy efficiency target. The target here is defined as “20% reduction of energy use (in primary and final energy) compared to the business-as-usual projections”. There was further increase in the target which proposed to target 32.5% energy savings compared to a reference case, with a clause for an upwards revision by 2023. The EED Article 8 states “large enterprises in all EU member countries must conduct energy audits every four years, starting from December 2015”. This was established in Sweden in 2014, through the law on Energy Auditing of Large Companies (2014:266). It states the first audit should be done in the four-year period 2016-19. The Swedish government introduced “Energisteget” (the Energy Step) which is a programme to support implementation of energy efficiency measures. The large companies that have carried energy audits in accordance with EED requirements may apply for financial support to invest in energy efficiency measures. The total budget for the program is around SEK 125 million for the years 2018-20 (International Energy Agency, 2019).

Sorrell et al. (2000) and Palm and Thollander (2010) discussed about the barriers for the adoption of cost-effective energy efficiency measures in industry which can be categorized into three factors: economic, behavioral and organizational. Cagno et al. (2013) have extended this categorization and further divided the barriers into technology-related, organizational, information, economic, behavioral, market, competence, awareness and government/policies. There has also been attempts to categorize the driving forces for improved energy efficiency. Thollander and Ottosson (2008) in their research, categorized driving forces into market related, current and potential policy instruments, and organizational and behavioral factors. Thollander et al. (2013) categorized these driving forces into financial, informational, organizational and external and organizational and behavioral factors. Trianni et al. (2017) further conducted a recent study where they classified the driving forces according to the type of action the driving force represents, for instance, regulatory, economic, informative and vocational training.

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2.4. Value Stream Mapping

Value Stream mapping (VSM) is an important technique used in lean manufacturing to identify waste, by adapting, as necessary, for green and sustainable manufacturing (Faulkner & Badurdeen, 2014). A value stream is defined as “all the actions, both value added and non-value added, currently required to bring a product through the main flows essential to every product: the production flow from raw material into the arms of the customer, and the design flow from concept to launch” (Rother & Shook, 1999). Value stream mapping can be utilized to improve any procedure where there are repeatable advances. They would then be able to stop the line to take care of that issue and get the procedure streaming once more (Mukherjee, 2019). Table 2 presents a comparison of criteria considered in traditional VSM and Sus-VSM.

Table 2 Comparison of Traditional VSM and Sus-VSM (Bown, et al., 2014)

Type of waste/issue Traditional VSM Sus-VSM Metric type

Time waste + + Economic

Raw material waste - + Environmental

Process water waste - + Environmental

Energy waste - + Environmental

Job hazards - + Societal

Ergonomics - + Societal

Note: + sign indicates inclusion and - sign indicates exclusion.

Lean manufacturing instruments don't think about environmental and societal benefits advantages. The prosaic value stream mapping (VSM) system looks at the financial matters of an assembling line, a large portion of which are with respect to time (process duration, lead time, change-out time, and so on.) (Hartini, et al., 2018). Consolidating the capacity to catch environmental and societal execution outwardly through VSMs will build its handiness as an apparatus that can be utilized to evaluate producing tasks from a sustainability viewpoint. Various investigations have tended to the augmentation of VSM to fuse extra rules. Majority share of these endeavors have concentrated on adding vitality related measurements to VSMs, while a few different examinations allude to 'practical' VSM by remembering natural execution for ordinary VSMs (Hartini, et al., 2018) . This examination has built up a technique for VSM coordinated with condition metric and social measurement for ensuring sustainable manufacture (Ibid).

Sustainable VSM recently created has a general arrangement of measurements that will have wide application across numerous enterprises. In any case, further customization might be expected to evaluate explicit parts of different organization (Ibid). In general, the sustainable VSM (Sus-VSM) is normally used to evaluate economic, environmental and social sustainability performance in manufacturing industry. In order to evaluate the, existing measurements for sustainable manufacturing execution appraisal are analyzed to recognize basic rules and measurements to be included for the Sus-VSM (Faulkner & Badurdeen, 2014).

2.5. Cost tool in manufacturing

According to Nord et al. (2015), in order to develop a cost model for an optimized manufacturing company, the operation time, type of operations and carrier used should be considered. Since it might have incredible impact on energy use in the production unit. Along these lines, it is essential to dissect energy use in the production unit for an appropriate analysis.

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To empower simple energy planning, leasing, and structure, it is important to have accessible tools and techniques for energy use prediction based on the driving factors. In that manner, a production company could budget the energy cost and plan various operations for different products. For instance, guideline part examination is utilized to recognize significant factors of vitality use in low energy utilization tasks. Basic direct relapses between day by day or month to month vitality use and total energy use show great fitting outcomes solid for a further examination (Ibid).

2.6. Energy Performance Indicators

When it comes to Energy Performance Indicators (EnPIs), it is important to know what it implies. “Energy Performance Indicator (EnPIs) is a measure of energy intensity used to gauge the effectiveness of your energy management efforts” (50001 Store, 2020). EnPIs are used to understand energy performance corresponding to energy use and energy efficiency (EE) (ISO, 2020). Thus, playing a vital role in evaluating efficiency as well as effectiveness of Energy Efficiency Measures (EEM). The implementation and monitoring of EnPIs is imperative to support energy related decision making. EnPI and energy baseline (EB) represent two key interlinked elements enabling measurements pertaining to EE, use and performance. EnB forms the basis to quantify the energy performance before and after the implementation of improvement actions. Figure 5 represents the relation between EnPI, EnB, energy target and measurement of performance before and after implementation (Ibid.).

Figure 5 Concept of energy performance indicators (EnPI) in baseline period and implemented period (ISO, 2020)

Based on characteristics, there are four types of EnPIs according to ISO 50006 and IEA reports: energy use, simple ratio, statistical modeling and simulation modeling used for EE improvement (ISO, 2020; Shim & Lee, 2018). Energy use is “using the total energy use over a period of time” for instance kWh, GJ etc. (Ibid.). Energy intensity is an example of single ratio which is defined as “rate of energy use per unit activity data” like specific energy use (SEC), energy use (kWh) per production (ton) (ISO, 2020; Shim & Lee, 2018; Lawrence, et al., 2019). A statistical model could be a linear regression model or a non-linear regression model (Shim & Lee, 2018). A simulation model can be applied over each boundary to measure the improvements in EE as well as energy performance (Ibid.). There are three primary EnPI boundary levels according to ISO 50006: individual, system and organizational (ISO, 2020). Organizational level represents major interactions between departments, total energy use, related expenses and overall performance (Schmidt, et al., 2016). System level refers to the evaluation of process line level where a comparison can be drawn with similar processes if possible. EnPIs on individual level are usually done for a detailed assessment of energy use

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and related cost per manufacturing step or equipment level (Ibid.). One other categorization according to REF divides into three explicit levels: overall figures, support process-specific figures and production process-specific figures (Thollander, et al., 2014).

2.7. Social Sustainability

Social Sustainability is about identifying and managing business impacts considering both positive and negative impacts on people (United Nations Global Compact, 2020). The quality of a company’s relationship along with engagement with its stakeholders is deemed to be critical (Ibid.). Whether directly or indirectly, companies affect what happens to its employees, working professionals in the value chain, customers and local communities. And it is imperative to manage these impacts proactively (Ibid.).

According to Woodcraft (2015), social sustainability is another strand of talk on sustainable development. It has created over various years because of the predominance of ecological concerns and technological arrangements in urban turn of events and the absence of progress in handling social issues in urban areas, for example, disparity, displacement, livability and the expanding requirement for reasonable housing (Ibid.). Even though the Sustainable Communities strategy plan was presented in the UK a decade prior, the social elements of sustainability have been to a great extent ignored in discussions, arrangement and practice around sustainable urbanism. There is a developing enthusiasm for comprehension and estimating the social results of recovery and urban advancement in the UK and globally. A little, however developing, development of engineers, organizers, designers, lodging affiliations and neighborhood specialists pushing an increasingly 'social' way to deal with arranging, building and overseeing urban communities. This is a piece of a global enthusiasm for social sustainability, an idea that is progressively being utilized by governments, open offices, arrangement producers, NGOs and organizations to outline choices about urban turn of events, recovery and lodging, as a feature of an expanding strategy talk on the supportability and strength of urban areas (Ibid).

There is an increasing awareness among customers and stakeholders of organizations to think about the product as well as process from a sustainable perspective right from the early stages of manufacturing (Digalwar, et al., 2020). This global demand from the businesses and customers initiates the need to develop methodology for sustainability assessment for manufacturing organizations (Ibid.). Scientists argue that organizations are important actors for creating wellbeing for the society as well as environment (Fobbe, et al., 2016). The roles of organizations are evident when looking at the impacts of financial crisis on society. For instance, the financial crisis of 2008 lead to austerity programs, thus affecting the social element of communities. Thus, employment, income levels, quality of life and work determined by the companies have an impact on social framework even beyond the economy (Ibid.).

One of the most real and predictable drivers for industry is sustainability. This theme opens at various issues as per the three manageability columns: condition, monetary, and social. With respect to last one, there is a need for strategies and instruments (Papetti, et al., 2018). As the fourth industrial revolution is progressing, so this is a second test for ventures that should be serious decreasing their opportunity to showcase coordinating new advancements on their creation destinations. From these points of view, the social sustainability in a workplace is

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planned for featuring the job of the people under the Industry 4.0 worldview. Another transdisciplinary technique to support the sustainable manufacturing is social sustainability. It permits structuring an associated domain (IoT system) planned for estimating and advancing social sustainability on creation destinations. The work additionally comments the connection between social sustainability and productivity. In fact, streamlining the human works grants to improve the nature of the working conditions while improving proficiency of the production work. The contextual investigation was performed at an Italian sole maker. The objective of the investigation was to improve and enhance the completing zone of the plant from a social perspective with the point of view of computerized producing (Ibid).

3. Literature Review

This chapter intends to look further at the bodies of literature that have emerged around the key theoretical concepts. It gives a picture of what is sustainable manufacturing and for what reason is it significant for organizations. Likewise, brief overview of different factors and practices utilized for this study has been introduced. To conduct the thesis successfully, it was important to carry out a literature review of the topics mentioned in the previous chapter. The literature review chapter consists of existing theories in the following order: sustainable manufacturing, energy auditing, energy efficiency, Value Stream Mapping (VSM), energy cost tool, social sustainability and energy performance indicator (EnPIs). By implementing this, the focus of the research was specified keeping the project objectives as a reference. The following are parts that describe the approach, the methods for data collection, the structure and the quality of the report.

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3.1. Sustainable Manufacturing

The environmental concerns have become exponentially inferable from the expanding utilization of characteristic assets and contamination. Subsequently, to address the previously mentioned concerns it gets essential to effectively execute the sustainable manufacturing frameworks (Zindani, et al., 2020). Successful evaluation can be made by giving the necessary qualitative and quantitative data. Particular divisions arranged to sustainability must be worked inside an association to advance the improvement of sustainable culture (Ibid.). Procedures must be set up to guarantee the utilization of the methodologies and the targets for sustainable association.

Cherrafi et al. (2016) reviewed and analyzed several literatures to integrate three management systems in a model i.e. lean manufacturing, Six sigma and sustainability. ‘Sustainable manufacturing’ and ‘Lean Sustainable Manufacturing’ were used as keywords in their searches among others. They identified seven major gaps relevant in this direction: “the need to develop an integrated metrics and measurement system to measure lean/Six Sigma and sustainability performance; the need to develop an integrated model applicable to many industries and functions; the need to focus more on the context of SMEs to assist them to successfully implement lean/Six Sigma and sustainability; the need to investigate the applicability of lean/Six Sigma and sustainability to the service industry; the need to study the human side in a more comprehensive manner, the need to study how to extend the implementation of lean/Six Sigma and sustainability to emerging and underdeveloped countries, and the need to cover the pre-implementation phase” (Ibid.).

A systematic review was done by (Machado, et al., 2019) which was intended to identify how sustainable manufacturing is contributing towards the development of Industry 4.0 agenda and to gain a broad understanding about the links between the two. Their research suggests that concepts of sustainable manufacturing can support the implementation of Industry 4.0 in the following aspects: “developing sustainable business models; sustainable and circular production systems; sustainable supply chains; sustainable product design; and policy development to ensure the achievement of the sustainable goals in the Industry 4.0 agenda” (Ibid.).

3.2. Energy Audit

Vogt PE et al. (2009) discussed the advantages and disadvantages of top-down and bottom-up energy modelling techniques. The results from their research showed that the top-down model is preferred on the “basis of cost, time to construct, model operation, model maintenance effort, accuracy etc.” (Ibid.). They suggested that accuracy of either model is about the same (plus/ minus 5%) where the errors using the bottom-up model could appear from: “the estimates required by numerous small loads not justifying metering; meter malfunctions; meter reading; data collection and entry and unknown unlisted equipment additions and deletions”.

Backlund and Thollander (2015) examined the suggested and implemented energy efficiency measures from energy audits conducted within the Swedish energy audit program. Their research found that the largest potential for energy efficiency improvements found in audit reports is in the support processes such as space heating and ventilation. This was applicable to manufacturing as well as non-manufacturing firms. They also found that the implementation rate of the suggested energy efficiency improvement measures is 53% while 47% being the

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implementation gap (Ibid.). Andersson et al. (2016) presented a literature review of the then present incomparability between energy audit policy programs due to differences. They concluded that important elements such as the free-rider effect and harmonized energy end-use data should be defined and included in the evaluation studies. They also concluded more consistency is needed in how categorizations of EEMs are made (Ibid.).

3.3. Energy Efficiency

The Energy Policies of IEA Countries for Sweden (2019) report recommends that the government could complement the adopted targets with a different metric to better capture improvements in energy efficiency in the final use. It also further states the energy efficiency targets should be aligned with Sweden’s climate targets ensuring with actions that energy efficiency effectively helps reduce emissions. The government also should regularly assess the contribution of taxation on energy efficiency improvements and ensure it is sufficient to incentivize energy efficiency further in order to fulfil the energy savings requirements for 2030 (International Energy Agency, 2019).

Energy efficiency for a machine tool, is affected by intrinsic characteristics and processing conditions (Zhou, et al., 2016). The energy efficiency for energy losses such as motor loss, mechanical loss and hydraulic system etc. if affected by intrinsic characteristics. While from the perspective of machining process of machine tools, reactive power losses affect energy efficiency mainly for real output like standby energy use, air cutting energy use, reactive power use of acceleration and deceleration etc. that are related to inertia force. (Zhou, et al., 2016) categorized the existing energy use models into three: 1) the linear type of cutting energy use model based on Material Remove Rate (MRR), detailed parameter of cutting energy use correlation models and 3) process-oriented machining energy use model. They drew two major conclusions for future study: 1) through introduction of correlation analysis of machine tools, parts, tools and processing conditions, accuracy of current energy use models could be improved, 2) more scientific evaluation system is required for the assessment and test of machining tools energy efficiency.

Mert et al. (2015) presented how services can improve the energy efficiency of a machine tool based on a case of machine tool manufacturer. They identified existing and potential services to increase the energy efficiency of machine tools. The existing services are: Process consulting, training, condition monitoring, retrofit; the potential services are commissioning, training, hotline service, maintenance agreement, spare part supply, retrofit.

3.4. Energy Management

To have a successful in-house energy management practice, Johansson and Thollander (2018) outlined ten factors. The factors included are:

• Top-management support; • Long-term energy strategy; • A two-step energy plan; • An energy manager position; • Correct energy cost allocation;

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• Visualization and Energy competition.

They state these factors should not be a replacement for energy management standards but as a method or tool to achieve the outlined factors for success. Their paper was carried out in terms of Swedish context, it remains to be seen if these factors could be generalized to other countries except Sweden. Paramonova and Thollander (2016) discussed the possibilities for participation of industries in industrial energy-efficiency networks (IEENs) to overcome typical industrial energy-efficiency barriers in small and medium enterprises (SMEs). They suggest that participating in energy-efficiency networks can shift companies’ attention to behavioral aspects as IEENs contribute towards changing attitudes and behavior by allowing companies to learn from their own and others’ experiences. While this may be applicable to most of the cases, but there might be instances where the companies tend to just “green wash”. It might be so that the companies would participate in these IEENs just for the sake of it while having no actual implementation on ground. With regards to the change of attitude and behavior, the top-level management might turn out to be too stubborn and rigid. Thus, refusing to accept any kind of changes in their working structure. This calls for a need where the data could be quantified as to how many SMEs participating in the IEENs contribute to meaningful implementation of measures. It remains to be seen if the suggested IEENs would be applicable for large scale enterprises and not only SMEs.

3.5. Value Stream Mapping

Value stream mapping is a venture improvement device to help in envisioning the whole production process, speaking to both material, information and other carrier stream. Characterized value stream as assortment of all exercises value included just as non-value added that are required to bring a productor a group of products that utilization similar assets through the primary streams, from raw material to the end clients (Agarwal & Katiyar, 2018). Value stream mapping empowers to more likely comprehend what these means are, the place the worth is included, where it's not, and most critically, how to enhance the aggregate procedure. Value stream mapping (VSM) furnishes the user with an organized representation of the key advances and relating information expected to comprehend and wisely make upgrades that improve the whole procedure, not only one segment to the detriment of another (Plutora, 2020).

The thesis concentrates on VSM as it identifies which include improvement for big business programming arrangements using a rearranged cascade system. The thesis alludes to programming highlights as the "product" being created right now. Unlike procedure maps, or flowcharts, that show just the means associated with the procedure, a VSM shows essentially more data and utilizations a totally different, progressively straight configuration (Ibid.). The way to create basic VSM is all around archived and generally utilized in industry (Rother & Shook, 1999). Endless articles exist on the utilization of ordinary VSM the survey of which isn't the focal point of this paper. This approach inspects endeavors to stretch out ordinary VSM to catch supportability execution. These endeavors can be partitioned into two general classes (Rother & Shook, 1999):

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• Studies which are delegated environmental/energy VSM, where the centre is joining environmental/energy appraisal in VSM.

• Concentrates that are characterized 'sustainable' VSM.

Torres and Gati (2009) broadened the EPA lean and environmental toolkit, which they call environmental VSM (E-VSM) and approved the technique with a contextual analysis in the Brazilian liquor and sugar manufacturing industry. The essential center is water utilization at a definite level by partitioning water misfortunes into inactive, genuine, inherent, utilitarian, and genuine useful misfortunes. In any case, the visual ID of water squander inside the procedure through the progression line approach proposed isn't clear. Recognizing the absence of accentuation on vitality utilization in VSMs, the US EPA therefore made another toolbox for lean and energy mapping (US EPA, 2007). The utilization of visuals, for example, a vitality dashboard to imagine if vitality objectives are met is empowered here.

Simons and Mason (2002) proposed a technique called sustainable VSM (SVSM) to upgrade sustainability in manufacturing by breaking down GHG gas discharges. Even though it is alluded to as a sustainable VSM, the structure doesn't legitimately consolidate cultural measurements; they are thought to be fused in a roundabout way by excellence of following financial or environmental benefits being joined by social benefits. Fearne and Norton (2009) consolidated the SVSM made by Simons and Mason (2002) with sustainability metrics made by Norton (2007) to make a reasonable worth chain map (SVCM) method by putting accentuation on connections and data streams between nourishment retailers and nourishment producers in the UK. Essential environmental performance indicators (EPI) set by UK Department of Environment, Food, and Rural Affairs (DEFRA) are to be remembered for the SVCM while other EPI's are to be chosen by the client dependent on the given procedure and industry (Norton, 2007).

This approach considered a wide exhibit of environmental metrics, for example, vitality utilization during the procedure, transportation, and any capacity stages just as water utilization and material use. The SVCM technique was approved through a contextual analysis of sourcing and pressing of cherry tomatoes over a year time span; as surveying vitality utilization was troublesome undertaking, they replace that measurement with information from LCA directed by Guinee (2002). Likewise, with numerous different examinations, this SVCM, as well, doesn't consolidate any social metrics; the strategies to quantify the diverse Environmental Performance Indicators (EPIs) or clear visualization of chosen EPI's isn't addressed.

3.6. Energy Performance Indicators

Kanchiralla et. al (2019) developed a taxonomy for the categorization of EEU and emissions for the processes as well as identified the intensive processes through analysis of EEU and CO2 emissions in the engineering industry. They presented several potential EnPIs based on system boundaries like organization, system, process levels for the engineering industry. The study could not confirm if the results could be extended and generalized to engineering industries beyond Sweden. Johnsson et al. (2019) investigated potential energy key performance indicators (KPIs) where the scope of the research was the Swedish wood industry. They presented currently applied energy KPIs along with their magnitudes while also proposed new innovative energy KPIs. The authors suggest the findings of their study could be extended to other countries apart from Sweden which possess prominent wood industry. A framework was

Sustainable Manufacturing: Green Factory : A case study of a tool manufacturing company