ERP software: the key to sustainable business

The European Corporate Sustainability Reporting Directive, which came into force at the start of 2023, stated that investors and stakeholders must have access to data to be able to make strategic decisions around sustainability. This is hardly a surprise given the bleak statistics we continue to see in the news focused on global warming.

It’s not just governments calling on businesses to work more sustainably. Research shows that consumers are viewing the issue with equal importance. In fact, 81% of consumers would prefer to buy from a sustainable supplier and 60% want sustainable goods.

Given this shift, a growing number of businesses are seeking to better understand the environmental impact of every stage of their supply chain – something that will directly affect manufacturers.

Here’s how an ERP system can help a manufacturing business work smarter and more efficiently.

Visibility and traceability

Unlike manual systems, enterprise resource planning (ERP) software ensures data is visible in real-time - something that is key given the fast paced nature of modern manufacturing businesses.

With all data stored in a central location, the status of every project and production line can be accessed whenever required. Alongside this, an ERP system allows you to keep accurate records of operational activity, tracking important sustainability metrics such as energy usage, water consumption, waste or carbon emissions.

Should you be required to generate a report to prove adherence to regulatory requirements or your environmental social and governance (ESG) credential, these can easily be created in a standardised format, in just a few clicks.

Improving workflows

The most recent data, collated in 2020 found that the manufacturing sector contributed to 10.6% of waste in the EU, which was around 167 million tonnes. Left to decompose, waste generates methane gas which contributes to greenhouse gases.

For manufacturers, waste isn’t just physical – it can mean wasted time and resources from staff and machines being underused or tasks being duplicated which can increase energy requirements.

ERP systems are designed to improve information flow across the entire business, from the factory floor to the finance department, so all teams can view whatever data required in a matter of seconds.

Not only does this reduce the amount of actual time wasted chasing paper trails or physically speaking to other departments, it ensures that everyone is working from a single source of information, significantly reducing the chance of error, oversight or duplicated work.

Optimising warehouse management

As well as reducing wasted resources and machine downtime, an ERP system helps to ensure that the warehouse is stocked at an optimal level – all year round. Those reliant on manual systems will appreciate the scale of this challenge, especially given recent supply chain disruption.

Whether your manufacturing business operates on a Make-to-Order (MTO) or Make-to-Stock (MTS) model, accurately aligning production schedules with supply with demand can ensure that the best possible decisions are made when it comes to logistics, such as shipping.

Partially filled delivery vans are not only costly from a monetary perspective, they are also a major contributor to carbon emissions. With all information stored digitally, teams can easily evaluate delivery routes and models to ensure that the most environmentally conscious decisions are made.

Optimising production

A lot of manufacturing processes are energy intensive, however this doesn’t just relate to the day-to-day running of machines. Maintenance and repairs, the processing of raw materials, heating and cooling will also drain precious resources.

With the right technology in place, manufacturers can not only optimise production schedules and better control energy usage, they can also reduce the chance of machines failing suddenly – something that is costly and can lead to huge spikes in energy usage when re-started.

While renewable energy sources are a great alternative they require significant upfront investment, research and development, something that is simply unachievable for many smaller organisations.

Find out more about the benefits of an ERP system and how technology can help your business work smarter.