Collaboration for sustainability: The power of hybrid thinking

In part two of our Energy Transition Talks conversation with Helena Jochberger, CGI’s Global Industry Lead for Manufacturing, she and Peter Warren share insights from their industries, emphasizing the advantages of cross-industry collaboration, the need to integrate renewable energy sources and the evolution of ESG principles in business strategy. Organizations worldwide face sustainability challenges, but this discussion reveals that innovative thinking and networks that transcend traditional industry boundaries are driving collective progress.

The convergence of energy and manufacturing industries is increasingly evident as both sectors embrace sustainability and technology innovation to address global challenges. As these industries align their strategies toward decarbonization and efficiency, valuable opportunities emerge to identify shared learnings, goals and practices for a more sustainable future.

Material passports: The key to transparency
 
Helena highlights the significance of tools like material passports in tracking CO2 emissions and resource origins, which aids in achieving shared sustainability goals across industries. These passports provide transparency in emissions reporting, similar to energy certificates that track energy provenance. 

Collaboration in the automotive sector

The automotive industry, particularly in Europe, exemplifies this trend through initiatives like Catena-X, which fosters collaboration among diverse stakeholders to enhance supply chain traceability and drive innovation in electric vehicle (EV) production and battery localization.

Decarbonizing steel: A renewable revolution 
 
Looking at the steel industry's decarbonization journey, Peter and Helena highlight the importance of integrating renewable energy sources. Helena notes that steel manufacturers are not only producing metal products but are also investing in upstream energy solution, such as acquiring wind farms and hydrogen production facilities, to secure clean energy. This approach reflects a shift towards broader adoption of sustainable practices in response to global challenges.

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Chapters

• 0:05 Energy and Manufacturing Ecosystem Integration
• 14:16 Embracing Hybrid Thinking in Business

Transcript

Peter Warren: 0:05

Hello everyone and welcome to part two of our podcast on energy and utilities and the intersection of how energy utilities overlaps and integrates well with manufacturing. Again, my guest today is Helena. Helena, you can reintroduce yourself. That would be great.

Helena Jochberger: 0:21

Absolutely. Thank you, peter, for having me. Helena Jochberger is my name, global Industry Lead for Manufacturing and in this role, of course a lot of touch points with Peter's energies and utilities industries. As we know, the world is working in ecosystems and cannot live and thrive alone.

Peter Warren: 0:40

That's very true. In the first part of this we touched on a bunch of different areas, including the world shift in energy and how things are moving forward. We thought for this next part we'd talk a lot more about supply chains and ecosystems, and you talked about working together. Supply chain, by literal definition for those on the call is sort of the traditional I make something, I ship something and it moves forward. In our term, an ecosystem includes that, but also the cooperation and the even competitive cooperation of the total ecosystem that makes that move forward. Did I explain that well for your industry, helena?

Helena Jochberger: 1:17

Definitely.

Helena Jochberger: 1:18

And let me start off maybe with a concrete example, when we talked in our previous podcast about the automotive industry and electrical vehicles, and one part in that is that especially in Europe, in Germany more precise, there has been founded an entire ecosystem with different working streams.

Helena Jochberger: 1:40

It's called CatenaX, like the Latin name for the chain, and it goes under the umbrella of the GaiaX network, which is supposed to bring together more of the same but also of other kind of collaborators. That means you will find in that kind of network as well automotive OEMs, automotive suppliers, but as well third party companies like technology providers, energy providers. To go back to your industry, to work on a certain target and purpose, and we as CGI, we are heavily involved in Katina X and we have developed one of the really first applications there. That's called the material passport. Because when you're working in a supply chain where you have a lot of suppliers moving towards one joint goal for all the parts that are built there, you need to determine the origin. You need to in the future time report on your CO2 emissions, and such kind of a product or material passport can be a great tool to do that.

Peter Warren: 2:46

Yeah, it's interesting. So one of the things that people know from our podcasts and our website is that we do a lot of energy trading and tracking and subsequently we're doing a lot of ESG tracking and reporting the providence of energy and moving forward. But there's an interesting overlap. So one of the things we like to explore on these podcasts is what we can learn from each other, what we can import from banking, what can we import from retail, what can we learn from manufacturing. And this idea about the material passport I found very fascinating because it's very similar to the concept of us using certificates for energy providence where it came from, who owns it and so on.

Peter Warren: 3:22

And these two networks, quite frankly, are colliding. I'm not sure how the industries will ultimately mush them together, but if you look at the hydrogen valleys in Europe and you look at the hydrogen regions in the United States coming up, they're trying to solve this sort of question A can I make it at pace and scale and supply the industries? But how do I track all this and trade this? How do you sort of see that from your perspective for somebody like Airbus you mentioned before or whatever other vehicle manufacturings?

Helena Jochberger: 3:54

Maybe let me start with the vehicle manufacturers. We know that the electrical vehicle at the moment in time seems to be our future, our common future. So that means the electrical vehicles are equipped with the batteries. Battery production will massively scale up in the next years to come and within that context there's a certain localization expected within the supply chain, especially when raw earth minerals are included like lithium.

Helena Jochberger: 4:23

Especially when raw earth minerals are included like lithium, cobalt and such, and the things with the batteries is, of course, that in the ideal state we will witness a circular economy so that we will have a second and a third life and will be refurbished, remanufactured for a better use than in smart houses, smart homes and such remanufactured for a better use than in smart houses, smart homes and such and I think in particular, here our industry is intersectioning very heavily. So for me it's a question how can we even do that better, also in terms of technology and terms of IT. What is your answer on that?

Peter Warren: 4:59

No, I fully agree with that too, because it lines up nicely with some conversations we've had. So, picking on the green steel industry we talked about that before the steel industry wanting to decarbonize. There's the primary product the steel industry wants to make, which is obviously their metal product, but they're now wanting to be participating in both the upstream inbound energy when did it come from? Where's the prov inbound energy? Where did it come from? Where's the providence of it? Where did it move forward?

Peter Warren: 5:27

Maybe even making some of themselves, maybe even buying some of those assets, maybe buying the wind farm, maybe buying a hydrogen production facility or putting an electrolyzer on premise. The other thing is, if I have all of that, then they're saying, well, if I've got this in my ecosystem, but let's say I'm having a factory slowdown, can I sell this to other people? You know, even selling the heat I think you mentioned that your own home is heated by industrial processes. But looking at that at a larger scale, but even maybe selling directly the hydrogen out the back door or selling the electricity that they could produce Do you see that something that is going to be just niche or do you think this is going to something that could bloom, uh, into other areas?

Helena Jochberger: 6:13

in terms of sustainable and also renewable energy parts. I would say this will grow larger, especially in the battery production, because the the new battery producers that we are witnessing, at least in europe, they are choosing quite carefully locations depending on the energy sources they will get. So that's, at the moment, the question about where to put my factory. But a prolongation of that thought would be, of course, entering, as you said, the energy production themselves, for the moment being it's niche or it's more high sophisticated. But that does not mean that, given the geopolitical aspects and issues we are facing worldwide, that this might not change, because you have to come up with new, innovative solutions, and that could be one of it, definitely.

Peter Warren: 7:03

Yeah, you and I met with a company that we've looked at doing business with and does work around the world, but they do that. That's a specific function they do. They look at the risk of where to put the factory it used to be. You put factory where you could get coal delivered to, for example, easily. It might be on a water or a lake or a rail line. Now there's all these other factors, and we heard from one of our big customers that they used to look at their supply chain every three to four years and I think the quote, if I'm not wrong, it was every quarter. Now it's a major discussion at the board level and all the way through the company. How do companies deal with that? How do they adjust? I mean, what's the data they need? How do they? Are they using AI? How is that even working for them?

Helena Jochberger: 7:47

Yeah, and I think you're touching upon the magic word of data. Without the data and, more in particular, without real-time data, you will not be able to track that. So I think one key aspect whatever we do at the moment is really integrating our systems so that they allow a seamless flow across the entire supply chain. So we need to have a holistic view on the data and the seamless data view, and then you need to come up, of course, on top with scenario planning, where, again, technology in forms of AI can help you determining which is the best approximation to a certain reality and then act upon it with certain business continuity plans in place. This is the thing most of the manufacturers we are speaking to are doing at the moment.

Peter Warren: 8:35

Yeah, again, we sort of broke that down for those in the audience and our voice of the client material was really they're looking for better decision making. That was one area Automating their engineering driving decisions and operations meaning real time shifts there, insights for the engineering what should I do differently, how should I behave differently? And scenario and operations management, which really hints towards digital twins, even digital triplets, as we've started to talk about, and the concept for those on the call too, is that a twin would be maybe monitoring the physical aspects of it. The triplet is using that data as input, but also looking at other factors, maybe the weather, maybe the demand in the market, other factors to come up with. Yet another further insight built upon the first insight, and really that comes back down to the other two things that people are looking at is what's the quality of my data and do I have the data governance to fix it? The quality of my data and do I have the data governance to fix it?

Peter Warren: 9:35

I know a factor for us is that going back to the agility we talked about in the first part of this session. Part one was that agility between those that are investing in all of this and those that are achieving results. They say it's their ability to absorb the data and react upon it, and you talked about it impacting their IT departments and so on. But it's also the line of business. If the business thinks it should be going left and all the data says, turn right, that's the thing that has to happen. And do you see that as a universal truth? Where do you see that going?

Helena Jochberger: 10:06

For most of the organizations?

Helena Jochberger: 10:07

Yes, definitely, and I think we have a call to action here for sure, because when we come from that generic macro trend of the shift in the world economic order you were touching upon it that has led to a certain economic slowdown that we are witnessing across all the industries right now, and in manufacturing, economic slowdown means okay, I have several chances I can cut my costs or I can increase my revenue, which is always the better solution, or doing both.

Helena Jochberger: 10:34

And when increasing the revenue, that means we need to come up with new product lines and move into new geographies, and this is what is happening right now. So they want to diversify themselves into new geographies, and for that they need such kind of a stable supply chain, and so at the moment, we really need all hands on decks, and that means also collaborating between IT and business. This is, in our terminology, our data-driven manufacturing approach, which includes, beyond the classical data and technological aspects, of course, on, organizational readiness and the way of working will change. So you need to have the leadership on board, you need to have the people on board that understand that value of data, and you need, maybe organizational changes as well in place to work more in a so-called plateau mode, so when you're producing, having the IT and the business physically but also organizationally combined.

Peter Warren: 11:32

So that's a great point, helena, and I see what the manufacturing industry is doing. I see where they're moving forward. They had industry 4.0, which was all automation. 5.0 brings in this aspect of that automation and driving efficiency, but also bringing the concept of ESG and sustainability into it. And yet I see, unfortunately, in my industry, a lot of people thinking that my competition is the people I used to compete against too, and they understand the industry and there's maybe a different pace for a lot of them not all of them, but for some of them. How do you see industry 5.0, manufacturers entering into energy utilities, what that's going to mean Really? My side of the line here are the energy utility clients. Do you see it disruptive? How do you feel about that?

Helena Jochberger: 12:23

I think the answer to that question has multiple layers, so to say, because manufacturing is a quite heterogeneous industry.

Helena Jochberger: 12:30

So you have some discrete and some process manufacturers and, within that, two cohorts.

Helena Jochberger: 12:35

Of course, you have a lot that are more like we define, digital leaders, who are really producing results from their transformation strategies and they have really the nose ahead when it comes to IT and business collaboration, when it comes to security topics, when it comes to using, for example, managed services.

Helena Jochberger: 12:53

So this is really the cohort that has the nose ahead in the race, so to say. And then we have the ones that are exploring right now, so that they are in the stages more of industry 4.0. They are still having some processes that are paper-based or they are really in the stage where they are extracting the data on the shop floor from their production lines and have not fully explored, I would say that opening box of Pandora, what the possibilities might be. But I would say, to go back to your question for the digital leaders, definitely they are making thoughts, like we previously discussed, on how do I get secure sourcing of energy, how can I get green energy. Maybe I go into production in the energy sector, but I would say, for the moment being, these are the early adopters.

Peter Warren: 13:48

So it's still in development. I think that leaves room for startups. I know we were talking to many of those people that are moving into the startup industry. I think the message I would leave people with and I'll kick it back to you for the energy and utility folks is that things are changing. Competition is coming from different directions. They may be coming with different thinking and different rules and regulations. We didn't get into the whole regulatory thing today, but you know how that all aligns. But just an idea to continue to look around and, to your earlier point, cooperate and work together. But I'll give you the final word, helena, and then we'll wrap up.

Helena Jochberger: 14:26

I would summarize the final words with. The world has become very ambivalent, so we need to learn with that ambivalence, with a hybrid thinking and what you said as well, with competitors can become companions in certain scenarios. So I think we should allow, from time to time, these thoughts. They might bring us further.

Peter Warren: 14:50

Thank you very much, appreciate your time and expertise, and thank you everyone for listening and we'll catch you on the next one. Bye, bye.

Helena Jochberger: 14:57

Thank you very much, bye, bye.