Politicians love to talk about restoring America’s manufacturing base. So why do they keeping making it tougher for manufacturers to operate? Not just in the United States, but also around the world, government regulators are placing, or preparing to place, new and more stringent environmental monitoring demands on manufacturers.

ERP Manufacturing

How Manufacturing ERP Can Shrink Your Environmental Footprint. (Part 1)

European directives on Registration, Evaluation, Authorization of Chemicals (REACH), Waste of Electronic and Electrical Equipment (WEEE) and Restriction of Hazardous Substances (RoHS) affect any company doing business in Europe. State governments in the US, including California, are also emulating these regulations.

Investors, with the encouragement of the US Securities and Exchange Commission and similar bodies elsewhere in the world, are paying more attention to the environmental liabilities of the companies they fund. Several statements of position (SOP) from the American Institute of Certified Public Accountants (CPA) also deal specifically with the need for accounting of environmental liabilities in financial statements of audited companies.

Consumers are looking for proof of claims of environmental responsibility on the part of companies whose products and services they buy. And manufacturers are facing green supply chain mandates from their customers, who are intent on making purchasing decisions not only on the basis of price and quality, but also on the basis of environmental impact and the contribution to global warming.

Manufacturers are under pressure from all fronts to document their environmental impact. This documentation may be intended primarily to prove compliance with government mandates, compete for business in request for information processes, or to deliver decision support for sound environmental management practices. Regardless of how environmental impact is used, within the vast majority of manufacturing companies, data on how operations impact air, water and landfills is difficult if not impossible to get. While adequate information technology (IT) systems are not yet in place, manufacturing ERP systems are ideally suited to collect the data, data that originates from virtually every activity and department of the company, making environmental management initiatives eminently achievable.

This series of articles examines not only the ERP technologies but also the organizational dynamics necessary to successfully implement an environmental footprint management program that can encompass not just carbon emissions, but also all organizational impacts on the environment. We will also suggest specific questions that should be asked of ERP software vendors that claim they can deliver environmental footprint measurement and management capabilities. A thorough and flexible environmental program, enabled by enterprise software, can prepare a manufacturer for virtually any environmental mandate from the private or public sector. But this degree of flexibility and agility really requires both a firm commitment from management and a very tight and intimate integration between environmental functionality and the system where most environmental impact data is already housed, ERP databases.

That’s the good news. If you have a robust ERP system, much of the information required for compliance with environmental regulations already exists, and simply needs to be pulled from the system through the creation of automatically generated reports. Because your ERP system is involved in every transactional step of your organization’s processes, environmental data that is not yet captured by the ERP system can be through some simple adjustments to the system rules.

Continued in Part 2