Industry, resilience and sustainability

There is no doubt that sustainability is high on the agenda for the leather industry, not only because it has attracted criticism in the past for its environmental impact, but also because there is scope to improve financial performance across the supply chain through resource and process efficiency. Digital technologies are undoubtedly the key that can unlock these benefits, though the industry has to understand that it comes at a price.

“There is a lot of technology to give you better results in the products that you make,” says Gabriella Marchioni Bocca, president of Assomac – the National Association of Italian Manufacturers of Footwear, Leathergoods and Tanning Technologies. “There are machines that use less power, that minimise the loss of material, that enable better production in less time. All of this is the traditional definition of sustainability and the equipment already exists to enable more efficient production with a smaller impact on the environment.”

Bocca also runs her own company, Lamebo, which is the leading Italian producer of splitting band knives for the leather industry, fabricating products widely used in tanneries, shoe and leather manufacturing, as well as in other industry sectors. The company has a worldwide sales network selling its products in more than 90 countries across the globe.

Lamebo, like many other companies in the leather industry, is embracing the digital revolution that has transformed people’s personal and working lives. The application of digital technology to manufacturing processes has opened up many new opportunities for cost savings, efficiency, productivity and collaboration between different parts of the supply chain. It has also enabled companies to re-examine their investments in equipment and processes, as well as the way in which businesses are managed.

The revolution

It is in the area of sustainability that this technological revolution has made the most significant advances possible. The foundation of this is the ability to capture unprecedented amounts of data. It is now possible to know how efficiently pieces of equipment are running, to modelling scenarios to see how resource efficiency and productivity can be maximised, and to measure the impact on the environment, whether in terms of waste, consumption of energy and water, the emission of atmospheric pollutants or any other facet of an operation.

Digital technology is also enabling partners in the supply chain to work together in maximising sustainability gains all along the value chain, from primary resources to the distribution of the final product. The focus is shifting away from traditional automation processes to the development of more flexible and more efficient production methods, aimed at delivering only what is needed, when it is needed, in a way that limits any impact on the environment.

This is how the fourth industrial revolution – or industry 4.0 – is taking shape. Smart technology, advanced sensors, devices that communicate remotely through the internet of things (IoT) are all part of the increasingly complex web of data that both describes and influences the supply chain. This technology does not, however, come for free.

“If you see only the price then you cannot make a change, but if you look at what is happening in your company and with your equipment then you can create a better situation, and the industry must make real changes,” says Bocca. “We must look beyond the price of the technology.

“The higher price of sustainable technology leads to savings in the future. In Italy, power costs are really high. We have no nuclear power and everything comes from oil, which we don’t have in Italy. It is an expensive cost for all industries, so we are always trying to develop equipment that saves on resources – energy, water and chemicals – to save money and create less waste.”

Green is the colour

As there is a price for creating sustainable processes, it is important that companies are recognised for their willingness to invest. Assomac has understood this need and is highlighting those companies that have made improvements to their environmental footprint and have invested in industry 4.0 and sustainability tools through a project called ‘Supplier of Sustainable Technologies’. “If you see only the price then you cannot make a change, but if you look at what is happening in your company and with your equipment then you can create a better situation, and the industry must make real changes.”

As there is no internationally recognised reference point that it can use, Assomac has taken the first step of creating the Green Label (Targa Verde), a voluntary declaration certified by a party that defines the environmental impact of a machine by calculating its carbon footprint (CFP) and its life-cycle assessment (LCA). Machinery that has a Green Label is suitable for international standard environmental declarations, supports a company in calculation of its carbon emissions, and facilitates the implementation of auditing protocols.

The Green Label is intended as a means for footwear companies or tanneries to show that they are complying with environmental transparency and accountability regulations. Many companies associated with Assomac are keen to show that they can make a difference to the global sustainability agenda by providing technology that can drive production processes towards low-carbon, low biodiversity impact and resilient development.

In discussing sustainability with Bocca, it soon becomes clear that this work – resilient – is of great importance to her. After months of lockdown across Europe, after seeing first-hand the effects of Covid- 19, after seeing industries grind to a halt, it is not surprising that everyone is talking about resilience.

Lessons from lockdown

Italy was among the first countries in Europe to see an outbreak of Covid-19, with confirmation of the first cases in January. In the ensuing months, the disease had a dramatic effect on the economy and society as a whole with thousands of deaths, in a pattern that would be repeated across Europe and beyond.

The impact on the leather industry was, as with most industries, severe. The pandemic arrived at a time when an economic downturn had already begun and it quickly shut much of the global economy. Lockdown stopped production and dealt a hammer blow to demand. The health situation in Italy has improved, though Europe still has many concerns about how the pandemic will develop.

“Now, the situation is much better here,” says Bocca. “The real problem may come in the autumn but no one knows what will happen. I know people who have had Covid-19 and who suffered a lot. It is more than just a cold. It has had a big impact in Italy, on people and on industries such as ours.”

“The pandemic will have a big effect on how people think about how they do business in the future,” she adds.

The change that Bocca refers to is a reframing of the debate around sustainability. While it should continue to focus on the key areas of resource efficiency and cost savings through the implementation of new technologies, she believes the discussion should turn towards how companies are run and how they look after the safety of their employees.

“Now, after the pandemic, sustainability is about more than the Green Label,” she remarks. “It is also about the sustainability of the company, its resilience. It is about changing the rules for the people in a company, and for its suppliers and customers. Sustainability is not only about the environment, but also people. It is about social sustainability, which is a big challenge.”

The protection of employees has to be a collaborative effort. If a service engineer from Lamebo, for example, goes to inspect machinery at a client’s manufacturing plant, then that individual is exposed to the safety standards of both the employer and the client. Bocca now believes that the industry needs a way to signify or guarantee the standards to which companies operate in terms of employee protection.

“As entrepreneurs, we have to change to make the industry more competitive in the future,” she remarks. “That is partly about technology and partly about how the company is run.”

A second signal

One possibility is the creation of a Yellow Label to go alongside Assomac’s Green Label. This would reflect certain standards of safety, protection and sanitary conditions in the workplace. Bocca believes that properly protecting employees enables them to work better, whether in tanneries or any other step in the supply chain.

“In sustainability, carbon footprint and lifecycle management are important, but so is social sustainability. I’m sure about that. The Yellow Label would signify the health and safety of the employees in the company. Like earning the Green Label, there would a cost. You have to invest. But you can’t have a Rolls-Royce if you pay the price for a bicycle.”