How ERP and SCM Systems are Supporting Sustainable Businesses
According to Leadership in Energy and Environmental Design (LEED), 61% of business leaders believe that sustainability initiatives help differentiate businesses from competitors. Today, we look at how Enterprise Resource Planning (ERP) and Supply Chain Management (SCM) technologies can help give your business a competitive advantage by driving sustainable operations.
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In recent years, the demand for sustainable business practices has grown rapidly amongst both consumers and governments, with the United Nations even releasing the sustainable development goals (SDGs) - a global call-to-action to focus on sustainable issues that will benefit the planet and its population as a whole.
By now, many governments have implemented or are planning to implement policies surrounding environmental, social and governance (ESG) practices, meaning companies may face big fines or legal penalties if they do not comply. Further, companies are more likely to face reputational backlash if they don’t engage with sustainability issues or operate in a socially responsible and environmentally ethical way. Investing in sustainability is crucial for not only the future of the planet, but the future of businesses worldwide. Aside from the environmental and social benefits, businesses should focus on ESGs to attract customers and investors, mitigate risk and boost compliance.
According to Gartner, 87% of business leaders expect sustainability investments to increase over the next two years, making it clear that sustainability is a top priority among businesses. If organisations want to remain both competitive and compliant, they will have to invest in sustainable initiatives to ensure their business meets the standards of both governments and consumers worldwide.
Below we explore how ERP and SCM systems, such as D365 Business Central and D365 Supply Chain Management, can support organisations in developing sustainable practices.
Environmental Impacts
Identifying Problem Areas
Cloud-based ERP solutions, such as Dynamics 365 Business Central, provide easy access to information from multiple departments, allowing you to get a holistic view of business data. Access to this information can help you optimise resource allocation, which in turn helps to reduce energy consumption and material waste.
Optimising Supply Chains
A good supply chain management system, such as D365 Supply Chain Management, will help you plan the quickest and most efficient routes for deliveries. The AI Copilot feature in D365 Supply Chain Management can even take into account updates like geo-political news and extreme weather events which may affect logistics and plan accordingly. An optimised supply chain means minimised fuel consumption and carbon emissions.
Improved Stock Management
ERP systems give a clear overview of sales data and trends, stock levels and important details like shelf life, allowing you to manage inventory more effectively. Take the food retail business, for example. ERP can be used to identify which products are the most and least popular, so you can forecast inventory needs more accurately in the future, minimising waste due to spoilage and avoiding overproduction.
Similarly, the AI built into D365 Supply Chain Management also helps with forecasting and stock management, eliminating overstocking and helping your business to reduce waste once more.
Social Impact
With Dynamics 365 Business Central, businesses can choose what data is most important for them to record. Companies with a strong focus on sustainable issues can choose to record information surrounding social issues within the organisation, such as labour practices and supply chain ethics. Recording these kinds of social metrics can help ensure that the business is operating in a socially responsible way.
Further, the information transparency facilitated by ERP systems can allow stakeholders to monitor business performance and ensure it is operating according to its sustainability strategy.
If you would like to learn more about how you can leverage business solutions to improve your organisations sustainability, contact one of our experts today.
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