If you’re like most Australian manufacturing businesses, you’re probably getting pretty good at juggling. Between rising costs, a skills shortage, and a supply chain that's anything but stable, the last thing you need is another priority fighting for your attention.
And yet, sustainability is no longer optional – it's knocking at your door.
With mandatory climate-related reporting on the horizon, Australian manufacturers are under growing pressure to clean up their operations, whether they're ready or not.
But the data is starting to show the reality: going greener doesn't have to mean going backwards. In fact, for many manufacturers, it's quietly becoming a competitive edge. Turns out, sustainability pays off, in more ways than one.
In this post, we'll explore how to cut through the noise and turn sustainability from a compliance headache into a genuine business advantage. We'll explore:
Australia’s headed towards net zero
Australia remains committed to net zero emissions by 2050, with key incremental targets including a 62-70% cut in emissions by 2035. Since then, new environmental policies have already made big improvements – but there’s a long way to go.
In 2024, manufacturing clocked in as the largest soufrce of emissions within the stationary energy sector, representing 28% of total emissions.
It's no question: Manufacturing plays a pivotal role in helping Australia meet its environmental commitments – and it’s safe to assume that future rules and regulations will aim to further encourage sustainable practices.
“Australian industry must decarbonise to remain competitive in a
world where net zero is business as usual.’’
- Climate Council, Australia’s Clean Industry Future: Making Things Here In A Net Zero World
The world’s headed towards net zero
In 2015, 196 countries across the world signed the Paris Agreement – a legally binding treaty aimed at slowing the effects of climate change. This move makes sustainability a priority for manufacturing industries and supply chains across the globe, and means international customers and suppliers will increasingly favour manufacturers that can prove their green credentials.
Why should manufacturers embrace sustainability?
Manufacturers have had a lot to contend with in recent years – making the industry’s continued growth, in both earnings (2.3%) and employment (3.5%), particularly impressive. But key to the industry’s performance has been manufacturers’ willingness to adapt, pivot and innovate to meet new challenges. (Check out how SGESCO MAX, pivoted its business from service provider to manufacturer in just 12 months, with Wiise ERP).
Australian manufacturing’s biggest challenges:
KPMG's Realising Industry 4.0 report lays out some of the biggest challenges for manufacturers include:
One strategy for improving sustainability within manufacturing is the creation of a ‘circular economy’ – essentially, a waste-free business. In a circular economy, businesses focus on high-efficiency production, minimising waste, maximising the product’s useful lifecycle and recycling or reusing products where possible.
A circular approach tackles manufacturing’s biggest priorities of lowering its carbon footprint while helping to increase profit margins. In fact, a recent report from the CSIRO suggests that by doubling the circularity of Australia's economy, we can expect a net economic benefit of $26 billion in GDP by 2035.
This isn’t a one-off finding – the general consensus is that prioritising environmental, social and corporate governance (ESG) concerns can lead to real business benefits, such as increasing growth, competitiveness and shareholder returns.
“A new global Industrial Revolution is underway as the world aims to get to net zero
emissions and limit dangerous global warming, and this is shifting investment away from
polluting industries towards clean ones.”
– Nicki Hutley, Climate Councillor and independent economist
Agreeing that prioritising ESG and circular manufacturing processes is one thing – putting it into practice is another. While the biggest manufacturers may be more heavily incentivised to put sustainability at the top of the agenda, for smaller and mid-sized businesses, the task can seem daunting.
In KPMG’s 30 Voices on 2030: The ESG Revolution, Kate Morris, founder of Adore Beauty, admitted: “It’s sometimes hard as a smaller company to do the right thing from a governance perspective. It can slow down a fast-moving, digital business like ours and you are not always rewarded for it by the market”.
Steps towards sustainability
The first step for any manufacturer aiming towards circular processes should be to assess end-to-end operations and identify the lowest hanging fruit – in other words, opportunities to make the biggest environmental impact.
Up to 80% of a product’s lifetime emissions can be influenced during the product design stage, so prioritising sustainable manufacturing choices – from design to delivery – can add up to significant carbon reductions. Investing in technologies that can identify and mitigate the least efficient processes can create big environmental gains for Australian manufacturers.
Key considerations for becoming a smart manufacturer
Enterprise Resource Planning (ERP) software offers a wide range of capabilities that can enable businesses to reduce waste, maximise efficiency and make smarter, more informed decisions about every aspect of their operations – from energy use, to materials sourcing and logistics.
For growing manufacturing businesses, a single, advanced ERP software can combine many of the key features found in ‘green’ technologies and provide a more cost-effective, easy-to-implement solution to meet sustainability goals.
Wiise ERP is designed to meet the unique needs of manufacturers, providing powerful tools for capacity planning, warehouse management and calculating landed costs, alongside sustainability features such as:
Wiise provides a foundation for effective traceability management, enabling manufacturers to track products through their entire lifecycle, from design and production to usage, return, and recycling.
As ESG reporting becomes increasingly scrutinised and regulated, the ability to trace and report on every step of production will become a necessity for manufacturers. Wiise traceability features include:
Inventory management plays an often over-looked role in sustainability, arming manufacturers with the ability to avoid overproduction, track quality and manage product returns – all of which is essential for minimising waste and identifying opportunities for reuse and/or recycling. Wiise inventory management enables manufacturers to:
Wiise production journals offer a highly detailed record of production output, enabling manufacturers to not only see productivity for specific machine or work centres, but also machine energy consumption and run times, as well as scrap and wastage quantities for different materials and components.
The ability to see energy and material use and wastage, in real-time, is critical in helping manufacturers to identify opportunities for minimising consumption and supporting circular processes.
Eco-friendly product design: ERP systems can integrate with Product Lifecycle Management (PLM) tools to help manufacturers design products that are easier to disassemble, repair, and recycle. This ensures that products are designed for circularity from the outset.
Bill of Materials (BOM) for reuse: ERP software helps create BOMs that include recycled components or materials, ensuring products are designed with sustainability in mind. This also helps in identifying parts that can be reclaimed for future use.
Where do we go next?
Sustainability isn't just a list of regulations – it's an opportunity too. A chance to become more competitive, to rethink and redesign processes, to aim for better, greener, more efficient and productive manufacturing methods.
As the world increasingly prioritises sustainability, Australian manufacturers that lead the way will position themselves not only as industry pioneers, but also as preferred partners in global supply chains.
Start making your manufacturing more sustainable today:
Change doesn't have to be overwhelming. With the right-sized tools and technologies, sustainability can be tackled incrementally – and cost-effectively.
Read more of Wiise's insights on smart manufacturing here: