How can ERP enable Supply Chain Sustainability for UK-based Manufacturers?
Being an island country, the United Kingdom (UK) understands the perils of climate change and the resulting rise in sea levels. Therefore, the government of the UK is a front-runner in the drive to decarbonize.
While the government is doing its bit towards the environmental side, businesses are responsible for the social, legal, and governance criteria for sustainability. A comprehensive approach covering all these areas will result in a sustainable supply chain.
In today’s global economy, English manufacturers must transition to more sustainable and ethical business practices, to remain profitable. As the government is standardizing compliance goals and sustainability benchmarks, fundamental changes in consumer behavior have also motivated supply chain managers to adopt sustainable practices. The principles of sustainability are built upon the realization that socially responsible practices and products are not only good for people and the planet, but are also good for building positive brand awareness, competitiveness, and long-term profitability.
What is Supply Chain Sustainability?
Supply Chain Sustainability is a holistic view of supply chain processes that affect the environmental, social, economic, and legal components of the business. Factors like amounts of waste, carbon footprint, air pollution, labor violations, and workforce safety are at the core of supply chain sustainability. End-to-end sustainability efforts must extend from raw material sourcing, production, and storage to last-mile logistics and even to product returns and recycling. A sustainable supply chain integrates ethical and environmentally conscious practices while remaining profitable and competitive.
Historically, supply chains were simply about logistics and material movement. However, the rise of digital supply chain technologies has empowered managers with analytical tools and 360° visibility, helping them evaluate supply chain components that demonstrate corporate social responsibility. Corporate Self-governance is very important in developing sustainability as it looks at the organization’s internal framework of procedures, practices, and controls. This includes internal processes utilized to govern the business, comply with regulations, conduct external audits, and guide decision-making.
When aiming for a sustainable supply chain, manufacturers should identify critical issues and areas of improvement. The company board should create guidelines and establish key performance indicators (KPIs) to help the business move towards a sustainable supply chain. Scientific recommendations and government regulations are great reference points for companies to align their sustainability efforts. The company should prioritize collaborations with sustainable suppliers to reduce waste, cost, and environmental impact. Now, let’s look at how an ERP can help with sustainability in the supply chain.
What is the Role of ERP in a Sustainable Supply Chain?
ERP software brings real-time operational and financial data on a singular platform. The modular design helps companies execute department-wise sustainability efforts and study their results holistically to achieve positive sustainability outcomes. ERP allows manufacturing companies to meet compliances, exceed customer expectations, cut costs, optimize processes, and improve overall efficiencies.
The Role of ERP in Building a Sustainable Supply Chain can be understood with the points below:
- Improved Supplier Collaboration – ERP keeps the records of sustainability data for vendors and materials. You can maintain vendor certificates relating to a vendor’s compliance with environmental initiatives and labor policies. The supplier selection criteria in ERP include factors like pricing, product quality, lead times, and vendor’s compliance certifications. Manufacturers can use this information when evaluating vendors and materials during the purchasing process, ensuring Supply Chain Sustainability Software.
- Waste Reduction – ERP helps companies audit the length and breadth of the supply chain to determine areas that need improvement. Issues will show up in areas of over-production or over-purchasing of materials, which can often be attributed to errors around demand analysis. ERP can help companies make accurate production and procurement plans and reduce any wastage. The efficient production schedules and better inventory management delivered by ERP can boost the company’s efforts for a sustainable supply chain.
- Better Visibility – The supply chain visibility offered by ERP leads to many advantages for today’s global and agile businesses. It allows them to reduce complexity, improve communication, stay nimble and enforce their commitment to sustainably sourced goods. By supplying quantitative data on various processes, ERP can track the movement of materials at every step of the supply chain. Any fraudulent activity along the chain can be instantly identified and rectified. With Bi-directional tracking and tracing abilities, the root cause of any unfortunate event can be speedily identified, thus reducing its intensity and impact.
- Improved Compliance – The basic purpose of compliance is to ensure that manufacturers adopt sustainable practices in their operations. Businesses in the UK are required by the government to furnish comprehensive reports on their compliance efforts. An ERP software already contains much of the information required for compliance with environmental regulations that simply needs to be pulled from the system in the form of automatically generated reports. Even the handling and disposal of hazardous materials can be checked as per the laid standards, and reports can be generated for audit purposes. By ensuring compliance, ERP is doing its bit to ensure a sustainable supply chain.
By using an ERP system, manufacturers can make their supply chains more efficient. Processes such as tracing every product from raw material to finished product to ensure its sustainability while reducing waste are undertaken automatically by the ERP. Integrating government, risk, and compliance with your ERP software makes the process of regulatory compliance and reporting so much simpler – and safer.
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