The principle of continuous improvement: how do companies achieve the 1.5° climate target?

In my first job as an engineer in the automotive industry, I was confronted with recording the main, secondary and distribution times at many workstations with a stopwatch in my hand and designing the workstations ergonomically. The employees then had to work on a piecework basis and meet the standard.

In the discussion with the Japanese car industry, I then came across the Principle of continuous improvement encountered. Every employee in the Japanese automotive industry had a duty to constantly make small improvements in their workplace. The methods were not new, we were all familiar with them, but the principle had not been applied in European and American industry because of the stopwatch systems via REFA and the systems of predetermined times. We adapted these continuous improvements very quickly and achieved productivity gains of between 5 and 8 % p.a. - and this continuously for years. However, the systems leveled off after a while and new impulses were always needed, which had to be introduced by engineers through process or product innovations.

I am now observing that continuous improvement is being used to achieve the 1.5° climate target. For years, I have seen companies launch sustainability processes in Scope 1, 2 or 3 projects in order to achieve these targets, which are usually set by regulations and laws. The measures are identical to the principle of continuous improvement. This applies in particular to measures that are influenced by the company itself. These are 40 to 60 % of the CO2 footprint.

Mr. Johann Soder, COO of SEW-Eurodrive, told us that some time ago he invited his managers to a Sunday breakfast in the factory to show them the power consumption when the factory was closed. His request to switch off the power not only led to improvements in the software for starting up the machines, but also to the development of new start-up strategies for the machines. These activities led to considerable energy savings and also increased the availability of the highly automated machinery. Mr. Soder will also discuss these topics in our Munich Management Colloquium on March 5 and 6, 2024.

Companies from different sectors will show how sustainability projects can be implemented efficiently:

Mechanical engineering
Stefan Klebert, Chairman of the Executive Board, GEA Group
Lecture title: "Leading the way in climate protection: GEA's plan for Net Zero by 2040"

Health
Dr. Bernd Montag, CEO, Siemens Healthineers AG
Lecture title: „"Sustainability as a purpose: why climate and health protection belong together"

Process industry
Dr. Norman Goldberg, CEO, tesa SE
Lecture title: "Co-creation to accelerate sustainable product innovations and technology transformations"

Aviation industry
Dr. Sabine Klauke, CTO, Airbus
Lecture title: „Collaborative transformation: aviation on the road to decarbonization"

Building materials industry
Dr. Uwe Knotzer, Managing Partner, Knauf KG
Lecture title: „Knauf - the path to our sustainability goals"

Chemistry
Dr. Christian Hartel, Chairman of the Executive Board, Wacker Chemie AG
Lecture title: „Transformation to climate neutrality - opportunities and challenges"

The case studies show: In order to achieve the 1.5 % target,...

• secondary raw materials: The use of scrap instead of primary materials reduces CO2 consumption by 2/3.
• renewable energies: For a battery-powered vehicle, the footprint can be reduced from 56 tons per vehicle to less than 15 tons by using green electricity for battery production and use.
• To realize the circular economy as the most sustainable form of economic activity: Secondary first and a closed circular economy require resource efficiency, recyclability and energy efficiency in products. Cross-industry approaches are required to increase the secondary rate in materials.
• drive innovation: Without disruptive innovations in new technologies and processes - such as alternative fuels in the automotive industry.

The distribution of the measures is shown in the following diagram based on a real case study.

The CIP process also gives management certainty that the CO2 targets will be achieved in the desired figures.

Prof. Dr. Dr. h. c. mult. Horst Wildemann is a professor at the Technical University of Munich and heads the management consultancy TCW. On March 5 and 6, 2024, he will be hosting the Munich Management Colloquium for the 31st time with over 80 speakers from leading companies