Manufacturers and distributors in all industries and regions of the world are reevaluating how their businesses impact the environment in which they operate, including their partners, customers and communities. From design and sourcing to production and distribution, manufacturers and distributors are rapidly establishing sustainability or “green” programs across their supply chain because they increasingly make real business sense. With Lawson business ERP software, companies can manage their environmental programs efficiently and achieve the green targets that many companies are now obliged to attain.
Most of these initiatives are at early stages, as companies evaluate how sustainability can become a more integral part of their business strategy, reputation and brand. Companies are focusing on their biggest cost areas and on areas that have the most significant impact on the environment. Sustainability programs leading the way for manufacturers and distributors include facility energy reduction, facility emissions reduction, and reduction of fuel consumption and emissions from their fleet and related product logistics.
Companies have also begun information technology (IT) initiatives to support their sustainability programs. However, these initiatives are far from mature. In most instances, sustainability is evolving largely as a disconnected set of activities, where individuals or departments use spreadsheets or home-grown software applications to track their efforts and report results. There is a definite need for integration and automation.
Business ERP software promises to be an important tool for companies to better manage sustainability programs across their supply chain. By using business software, companies can easily manage the sustainability programs across their entire organization in one place, gain greater visibility into their existing sustainability programs, and produce better results.
The Strategic Role of Business ERP Software in the Sustainable Supply Chain
We can break down business software’s role in sustainability programs into three elements: enterprise resource planning (ERP) software as the foundation; internal controls for governance, risk management and compliance; and enterprise performance management. Each of these levels is important to the effective execution, management and measurement of a manufacturer or distributor’s sustainability program.
The Foundation: ERP
Because ERP systems are often integrated and enterprise-wide, they can sensibly form the foundation for managing sustainability programs. One approach to the problem is to align ERP applications with the sustainability programs a company is implementing, and then incorporate internal control and enterprise performance management solutions to create a complete solution.
The reason why ERP systems can work so well as a foundation for sustainability program is that they help manage the transactions that flow through the enterprise and establish “one version of the truth.” For instance, the ERP system can show that a supplier is on the company’s preferred supplier list, which may mean the supplier meets company standards related to child labor or organic sourcing. Often, these metrics correspond to specific measurement metrics within the Global Reporting Initiative Sustainability Reporting Guidelines.
Governance, Risk Management and Compliance
Almost all sustainability programs contain elements of governance, risk management, and compliance. At this level, an internal control system allows companies to more effectively and efficiently manage these requirements ? whether government mandated or established by the company ? by providing an automated solution to manage control activities.
An internal control system can centralize the information manufacturers and distributors need to manage sustainability activities within any functional area (e.g., supply chain management) and across the enterprise. The approach focuses on four areas:
1.Documentation. Provide a central repository for all governance, risk management, and compliance-related documents that is accessible to auditors and managers, and where documents are updated as close to real time as possible.
2.Testing. Track testing activities, including what was tested, when, by whom, results, and remedial actions when testing failed.
3.User interface. Communicate all key information to the appropriate audiences through an intuitive, secure, role-based, user-defined portal.
4.Monitoring. Enable companies to manage key events and transactions within their ERP and other business applications to easily present any significant or material events to the appropriate audience.
As a result, the reporting layer can include the documentation or history of on-site audits of business practices for all the preferred suppliers listed in the ERP system.
Enterprise Performance Management
Enterprise performance management systems deliver business intelligence via dashboards, scorecards, reports and alerts that allow knowledge workers to thoroughly analyze complex problems and then take action. They are what let us know that sustainability objectives are being met or whether action needs to be taken to get the effort back on track. Role-based dashboards work as the heart of the solution and act as a gateway for sustainability activity management. Workers can quickly navigate from alerts to detailed reports to the actual transactional data.
Enterprise performance management also includes a workflow layer. The workflow layer is mandatory for managing the complex interactions of individuals engaged in sustainability activities, such as monitoring carbon dioxide emissions or energy usage. System-based controls, paperless activities, and electronic approvals promote repeatable and sustainable actions and allow manufacturers and distributors to easily monitor key events, while enabling simpler audit trails and reducing risk.
Project management is the discipline of planning, organizing, and managing resources to bring about the successful completion of specific project goals and objectives. Without setting measurable goals and keeping track of various efforts and resources, projects don’t stand a chance of seeing a successful completion.
