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How to Increase Sustainability Using an ERP System

Reading Time: 4 Minutes 17.03.2021 Currents & Trends

A modern ERP system can help your business to become more sustainable

Nowadays, a company's success is not only measured by its financial achievements. Applicants, employees, customers and investors the like are expecting a stronger focus on sustainability in businesses, as many analysts and consultants keep pointing out, for instance Porsche Consulting in their whitepaper "Sustainability—A Key Factor for Success" from December 2020. The key to achieving this is the ERP system.

The profile of the ERP system has evolved over the last years, from a mere inventory management tool to the backbone of digital transformation. Most recently, it has assumed another key function: it now acts as the central hub for a more sustainable business. We explain how an ERP system can contribute to the protection of the environment already today:

  1. Save paper
    Even though the fully digitalized business may forever stay a mere vision, companies which process as many transactions as possible with their ERP system save a lot of paper, and thus contribute to the protection of the forests. The administration department, for example, can process all incoming invoices in digital form. Outgoing invoices, too, should be sent electronically whenever possible. In businesses where this is not possible yet, companies can still attach great importance to carbon-neutral mail. In production, too, people still use a lot of paper: bills of materials, work schedules, data entries, and the like. A mobile plant data collection (PDC) system not only puts an end to this, it also accelerates the cycle times.

  2. Reduce the consumption of resources to a minimum
    Sustainable resource management relies on the efficient, economical and profitable use of material. An ERP system supports this in many respects. For one thing, it is capable of intelligent production planning. You can use it to combine orders in such a way that the absolute minimum of waste is produced, for example in procedures like punching and laser cutting. Quality assurance on the basis of real-time data processing helps avoid mistakes and scrap in production and is therefore another way of reducing material consumption.

    Echtzeitdaten_bubble How to Benefit from Real-Time Data in Production:
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    However, there's more to sustainable production than just reducing the amount of material used. If you want to avoid overstock, you can manufacture smaller lot sizes, down to lot size 1. Automatic production planning takes care of resource planning and ensures that the right tools and specialists are available in time for the required quantity of material.

  3. Pave the way for circular economy
    By introducing product lifecycle management (PLM), companies take the first step toward circular economy. The basis for this is a functional supplier management system. It is paramount to paperless processes along the supply chain as you can use it to manage documents for proofing and verifying sustainable and ethical production conditions. A modern ERP system allows for the seamless traceability of lots and series back to the source of material used.

    Predictive maintenance also adds to this, and not only because it prolongs the lifecycle of products and machines. It also avoids the unnecessary replacement of spare parts and therefore an excessive material consumption. The desire for more sustainability also gives life to new business models like renting and pay-per-use models, returning and refabricating. Manufacturers and ERP systems must take this development into account.
  4. Stay current wherever you are
    More and more companies are working on viable and economic-friendly mobility concepts for their employees. Remote working is a central component of these new concepts. Persons who work from home save a lot of time since they don't have to get to the office every day. Besides that, many appointments at the customer's site and business trips become obsolete thanks to modern project management tools that are integrated in the ERP system. They allow you to access up-to-date information that is essential to distributed teams anywhere and anytime. ERP systems also promote efficient intralogistics. For instance, a real-time locating system (RTLS) helps you to quickly identify unnecessary movements.
  5. Reduce energy consumption
    The advancing digitalization increases the energy requirement of data centers. A reasonable use of the memory and computing capacities gains more and more importance. You should only collect and store those data that are actually necessary. Integrated, modular ERP systems avoid redundant data storage in distributed applications, thereby contributing to energy savings.

The transformation into a more sustainable operation involves changes throughout the company. Many of these concern the core processes and therefore the ERP system. It is therefore quite impossible to reach the sustainability goals without modern software.

Read more about the congenial duo digitalization & sustainability in this article:
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