Why manufacturers’ focus on costs is hampering sustainable growth

Manufacturers must change their mindset to successfully transform.

The potential to build sustainable and resilient operations is on the minds of every manufacturer this year. Yet, many manufacturers are only implementing sustainable processes to reduce energy consumption, save costs, and meet regulatory requirements.

To truly thrive, manufacturers must embed sustainability into their core business purpose, moving beyond a purely cost-saving mindset.

Here's how manufacturers should approach this in 2025:

1. Shifting from tactical to strategic thinking

Manufacturers often focus on short-term gains when implementing technologies like AI, prioritising immediate cost reductions over long-term strategic benefits. For example, organisations that simply use computer vision to replace expert human inspectors to cut costs overlook the opportunity to use this powerful AI-based technology for strategic quality improvements and reducing defects. In 2025, leading manufacturers will adopt a holistic approach to digital transformation, focusing on quality improvement, risk management and supply chain resilience to boost competitiveness.

2. Pivoting from technology-first to purpose-first

Early adopters often get caught up in the excitement of new technologies without a clear business purpose. Don't start with the technology; start with the business goals. Instead of asking, "How can we use this technology?" manufacturers should ask, “How can technology help us achieve our sustainability and resilience objectives?" This purpose-driven approach ensures that technology investments align with business strategy and deliver meaningful and sustainable outcomes. It’s important to understand that not every benefit of sustainable manufacturing will be reflected in cost reductions; many of the most valuable outcomes, such as enhanced brand reputation and increased resilience, contribute to long-term value creation.

3. Evolving from siloed thinking to holistic integration

Sustainability Transformation isn’t just a simple digital transformation with a series of isolated projects. It’s a fundamental shift across the entire product lifecycle with a focus on sustainability - from sourcing to end-user experience. Breaking down departmental silos and fostering collaboration is key to embedding sustainability into every decision.

By embracing this shift in mindset, manufacturers can harness the power of technology to achieve their sustainability goals and unlock new levels of innovation and competitiveness.

The rise of AI agents over the coming year will also offer unprecedented opportunities for manufacturers to comprehensively automate and optimise manufacturing supply chains.