The beauty and personal care industry is infamously plagued by waste and sustainability issues, even though there has been a shift towards more natural and sustainable products in recent years. With Industry 4.0 improving and enhancing manufacturing processes, could waste be effectively reduced at last?
The beauty and personal care (BPC) industry is large and has seen significant growth within the last few years, clocking US$534.00 billion in revenue in 2022, up from US$471.91 billion in 2020. While there has been a strong focus on sustainability in BPC in recent years, the sector is known for generating large amounts of packaging and for resource waste.
With the pandemic putting social and environmental issues in the spotlight, consumers are largely opting for brands that can deliver positive change; this is driving the growth of the natural and organic cosmetics market – from almost US$30 billion in 2021 to an expected US$50.5 billion in 2027. In fact many consumers have indicated that they would pay 35% to 40% more for a sustainable version of the BPC products they normally buy.
To keep pace with the demand for sustainable products, companies must find new ways to improve their operational processes and introduce sustainable manufacturing methods. But several questions remain: how can the BPC industry tackle sustainability issues more effectively? Can Industry 4.0 practices help? And have companies been successful in making a difference with new technological processes?
The role of Industry 4.0 in advancing sustainable development in the BPC industry
The BPC industry has shown a commitment to more sustainable manufacturing over the years, but more still needs to be done to address the immense amount of waste involved. This sector alone accounts for over 120 billion units of plastic packaging annually worldwide, the bulk of it unrecyclable. In addition to excessive packaging, BPC production processes use a tremendous amount of water, with around 52% of it becoming polluted or being lost through evaporation.
To that end, BPC companies like P&G Beauty, The Estée Lauder Companies, Shiseido, L’Oreal and COSMAX are now using various Industry 4.0 technologies like artificial intelligence (AI) and automation to track, monitor and improve their resource use to reduce their environmental impact and boost their sustainability efforts. Apart from these smart solutions, following manufacturing guidelines like those found in Cosmetics Europe’s Good Sustainability Practice for the Cosmetics Industry report can set the tone for improving cosmetics manufacturing processes.
While there are promising signs that these guidelines and tools are steering sustainability efforts in the right direction, a neutral benchmarking tool like SIRI can help facilitate these efforts. By establishing a set of standards and benchmarks, the BPC industry will gain even more clarity regarding its resource use and be able to identify the areas that need more attention, leading to greater efficiency and better resource management in the pursuit of sustainable outcomes.
Case study: COSMAX
When leading South Korean cosmetics original design manufacturer (ODM) COSMAX wanted to improve its processes and further its growth, it relied on Industry 4.0 processes to innovate and develop speed and flexibility to get ahead of its competition.
With the use of big data, COSMAX was able to adopt several new strategic practices to shorten the supply and demand cycle of raw materials and overcome supply chain disruptions. In addition, COSMAX was able to use modern IoT and supply chain technology to forecast and understand market trends to better understand consumer demands.
In doing so, the ODM was able to more effectively plan and enhance their business, operational and back-end systems, improving their supply chain management, manufacturing and distribution processes. These ultimately led to the development of an eco-friendly packaging roadmap and the optimisation of its distribution network to meet its customers’ changing needs and deliver an optimal brand experience.
Case study: L’Oreal
One of the giants of the global BPC industry, L’Oréal has made great strides in its supply chain sustainability strategy. The French personal care company has leveraged Industry 4.0 and digital technologies to upgrade many of its manufacturing processes in recognition of the changing sustainability landscape, supporting its commitment to better environmental practices.
Transportation and logistics play a big role in sustainability. To reduce the impact these operations have on the environment, L’Oréal launched a global initiative to build relationships with local transport companies and “co-create custom environmental solutions suited to each geographical zone”.
On the packaging front, L’Oréal has rolled out a suite of Industry 4.0 tools like AI, intelligent sensors and robots in its Lassigny factory to simplify the entire production process for its operators. Other tools like 3D printing and VR have helped to accelerate prototyping while reducing resources used in research and development.
The increased connectivity provided by IoT has also benefitted the company by improving product traceability and providing more transparency, so its customers get a clearer picture of where their products come from.
The future of the BPC industry
Improving sustainability in an industry known for waste is an uphill task. With the constant growth that the BPC industry is experiencing, many companies have understandably attempted to adapt and focus on improving their manufacturing processes to achieve better sustainability outcomes.
The use of modern technologies driven by Industry 4.0 can help fast-track the digital transformation of the BPC industry and accelerate its sustainability journey. This can already be seen in several large industry players with the use of advanced technologies like AI, automation and 3D printing.
To increase the effectiveness of these technologies and enhance the manufacturing process, SIRI can be used to facilitate the Industry 4.0 transformation of these companies. By adopting this suite of digital transformation frameworks and tools, large enterprises can boost their processes even more while small companies will be able to level the playing field in terms of their development.
Design an effective transformation journey for success
As a champion of Industry 4.0 adoption, the International Centre for Industrial Transformation (INCIT) has both the tools and the reach to provide support to major industries and manufacturers globally, such as those in beauty and cosmetics, as they prepare to ramp up their Industry 4.0 efforts.
To learn more about how you can design your transformation journey with success, contact us.