The climate emergency is affecting all of us. But it’s impacting manufacturers as much as any sector. “Manufacturers risk being prime casualties of climate change, as commodities, ports, infrastructure, and factories fall victim to extreme weather disruption the world over,” says Gemma Thompson, senior consultant for strategy and growth at Proxima consultancy.
From hurricanes and typhoons closing plants that supply vital parts in the manufacturing process, to extreme weather preventing the manufacture of products themselves, our changing environment can have significant impacts.
Take one of the main innovations driving our economy. “Semiconductor manufacturing requires large quantities of water to keep machinery cool and wafer sheets free of debris,” says Anirudh Singh Munder, assistant manager for business intelligence firm The Smart Cube. “However, ongoing climate change issues pose a huge risk to the industry.”
Taiwan is the main hub for manufacturing computer chips, which end up in our computers, our phones and our cars. But the country has faced significant droughts since 2021, putting 90% of the world’s supply of semiconductors at risk.
Water scarcity is a pressing issue facing the manufacturing industry. Many processes are highly water-intensive, and regions experiencing prolonged droughts or water shortages are seeing a direct impact on production capabilities. Companies are being forced to invest in water-efficient technologies and alternative water sources, such as desalination or recycled water, to mitigate these risks – changes that can also result in broader shifts in the manufacturing process.
The opposite problem is at the heart of the shipping industry’s issues. Last year, the Panama Canal had to throttle traffic through it due to a historic drought at Gatún Lake.
“Restrictions on shipping through the Panama Canal have wide-ranging global impacts,” says Singh Munder. “For example, several ships had to take longer shipping routes, worsening delays at other ports and driving demand for trucking and rail services, increasing costs and greenhouse gas emissions.”
But it’s not just in the supply chain that the effects of climate change can be felt. Rising temperatures can affect everything from obtaining raw materials to manufacturing methods. Some processes that require air curing might need artificial cooling to work – any process that involves concrete has trouble setting properly above 32ºC, for example.
And inclement conditions can affect the running of factories to the point that they become unviable. Manufacturing activity in the United States has dropped more in smaller facilities than large ones, according to recent research. That’s because, the authors of the study believe, smaller facilities are less well-equipped to handle the changing temperatures inherent in climate change, and so have had to close to ensure the manufacturing process is done correctly and to maintain the safety of workers.
Research commissioned for the European Union suggests that worker productivity begins to drop at around 25ºC. A 2017 study found that a hot day in China, where temperatures reached 32ºC, cost a single factory more than $10,000 in lost production.
Plants employing fewer than 50 people were more likely to have to shut or slow down their output in response to rising temperatures, the researchers found over the four-decade-long study.
“It’s important to know that even in developed economies like the US, the effects of climate change are present and significant,” says Jacopo Ponticelli, associate professor of finance at the Kellogg School of Management at Northwestern University. “We need to understand that our economy is not immune to these effects.”
The impact is being felt in all areas of manufacturing, in all parts of the world – big and small, developed and developing. It’s therefore vital that manufacturers try and head off some of the most dangerous impacts proactively – not reactively.
“More and more, supply chain disruption of any form is highlighting the need for resilience,” says Gemma Thompson. That should take a number of forms. One is strengthening supply chains against climate-related risks. “This might look like enlarging inventories to account for shortages, or dual sourcing – obtaining the same product through two different geographical sources, in case of the disruption of one.”
Yet avoiding that risk can cause its own issues. “The trade-off, as with most cases, though, is cost,” says Thompson. “Both solutions increase production costs, but manufacturers must weigh this up against the cost – and risk – of doing nothing in an increasingly unpredictable climate.”
Want the best engineering stories delivered straight to your inbox? The Professional Engineering newsletter gives you vital updates on the most cutting-edge engineering and exciting new job opportunities. To sign up, click here.
Content published by Professional Engineering does not necessarily represent the views of the Institution of Mechanical Engineers.