Data on environmental impact originates from literally every part of a company, and can take many forms. This means that technologically, environmental footprint management can be a major challenge. But the nontechnical barriers to launching an effective environmental management program are not to be underestimated, either.

ERP Manufacturing

How Manufacturing ERP Can Shrink Your Environmental Footprint. (Part 2)

Many of the problems companies experience as they try implement an environmental program of this type stem from the lack of clear ownership. Who within the company owns the issue—is it the production manager, is it a district or regional manager, the marketing department or someone else Within many companies, this is not decided with sufficient clarity, and therefore questions and tasks with regard to environmental management can tend to fall between chairs. ? While the IT department may own the ERP system, clearly IT is not where environmental footprint management should reside.

In more and more companies, there is an assigned environmental manager. This person may also hold the position of quality manager or production manager. This is a positive development, but typically, these people still don’t have the power to get things done outside of a very narrow band of responsibility. They can order some reports from others in the organization, and perhaps induce people to fill out some forms to gather data, but they have very limited hard power. In other companies, environmental management programs are driven by the marketing or sales department. Sales-led initiatives can actually lead to a slight increase in power as the promise of increased revenue and sales results can motivate a number of people throughout the enterprise due to either direct fiscal incentives or a general desire to grow the company.

Indeed, some companies have been able to market and brand themselves as “green” or environmentally responsible, and have by virtue of this been able to carve a competitive niche for themselves. But as more and more companies position themselves in this way, marketing on the basis of environmental responsibility will depend on having better documentation and proof points than competitors who are making the same claims.

But as successful as sales-led environmental initiatives may be, the mandate to launch a broader and more effective environmental management program is possible once it becomes an issue at the board of directors’ level. Once the importance of measuring and managing an environmental footprint becomes a part of the corporate strategy and a means of managing board-level risk, a company is in a position to put much harder policies into place and can in effect force the different departments and cross functional teams to collaborate around the issue. When the mandate for an environmental management program comes from the president or CEO, and when that chief executive is actively involved in advocating for and tracking deliverables, it is more likely that the required resources will be made available to assure success.

One other alternative situation involves an environmental program being driven by the CFO. With increased pressure from the investor community, the CFO could in fact be the high-ranking executive with an intimate understanding of the implications and importance of environmental footprint management when it comes to securing investment capital. The CFO also tends to have substantial hard and soft power within an organization, and can command significant organizational resources directly and through influence with other C-level and line managers.

Continued in Part 3