Unlike their multi-billion dollar brethren, middle market manufacturers—those with between $100 million and a couple billion dollars in revenue—cannot as easily afford to maintain multiple ERP systems and numerous complex integrations to keep them all in sync.
How Manufacturing ERP Can Shrink Your Environmental Footprint. (Part 5)
This is because implementing and maintaining complex, one-off integrations costs almost as much for a middle market company as it does for a Fortune 100 company, but the middle market company has a lot less revenue with which to amortize that cost. So middle market companies will have a real need for out-of-the-box solutions for environmental management because they have the same if not greater environmental reporting requirements placed on them by the market, customers and regulators but have a smaller budget for compliance.
How can middle market manufacturers go about selecting environmental management tools? Currently, manufacturers with any degree of environmental footprint measurement and management capabilities rely almost exclusively on either standalone carbon footprint software or on one-off integrations between ERP tools and either packaged or custom software. Above, we have established that a more elegant, affordable and flexible solution involves the inclusion of environmental footprint management directly in the ERP package as a native piece of functionality. Determining who truly has this functionality and who does not should be a major concern for those evaluating enterprise software packages designed to deliver environmental footprint management.
To this end, here are seven specific levels of functionality to demand from any software vendor claiming environmental footprint management.
First, can they track environmental impacts like you can track cost? Because that is exactly what environmental impacts are, a cost, and they are driven by the same types of activities that drive financial cost. Every manufacturer keeps track of the costs to some extent, including standard cost or actual cost, at varying levels of granularity. Remember—everything that is purchased, every time materials or products are moved, every manufacturing activity, every business process, drives cost and also carries an environmental impact. How does the environmental footprint management solution take advantage of the existing costing system to reduce complexity in measuring environmental impacts?
Second, how is the environmental management tool linked into supply chain and materials management? One major contributor to the environmental footprint of a manufacturing company is its supply chain. Manufacturers need to understand what their products are made up of on a raw material level, the environmental impact of creating those materials, manufacturing them or mining them and the impact of transporting them to your plant.
Third, ask how the environmental management tool is linked to manufacturing operations functionality? After all, once you understand the environmental impact of your supply chain, you need to keep track of your own operations and your manufacturing processes. How will a solution help you see how much energy these processes consume, what emissions are associated with them, what chemicals they consume and what potentially dangerous chemicals like lead, cadmium or mercury are involved?
Next, look for how an environmental management tool track environmental impacts. The environmental management tool will need to allow you to measure how your product is used, how much energy it consumes, does it emit any substances when in use, can substances like cadmium, lead or other substances leak from it, etc.
Continued in Part 6