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How important is sustainability to you?


Consumers of all kinds are looking for statements and proof of environmental responsibility on the part of companies whose products and services they buy. Manufacturers are facing green supply chain mandates from their customers, who are more and more intending to make purchasing decisions not only based on price and quality, but on the environmental impact and the contribution to global warming. 

Manufacturers are under pressure from all fronts to document their environmental impact. This documentation might have been intended in many cases primarily to prove compliance with government mandates, to 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 most manufacturing companies, data on how operations impact air, water and landfills is difficult if not impossible to get. And data originates from virtually every activity and department of the company, making environmental management initiatives both a political and data logistics nightmare. Adequate information technology (IT) systems are not yet in place to collect the data.

Data on environmental impact may originate from almost every part of a company and can take many forms. Considering this technologically, environmental footprint management is a major challenge. If you move something, if you buy something, if you manufacture something, if you consume something, if you turn a light switch on or if you turn on a computer or a machine, it all has an environmental impact – so you really need to keep track of pretty much anything that you do inside the company in order to measure an environmental footprint. So, if you want to do it in a credible way, you need to actually keep track of activities across the whole enterprise, with mostly every process. That is extremely hard when you are trying to solve it with stand-alone solutions or even another set of spread sheets, apart from the rest of your enterprise system. Mastering the environmental footprint, after all, requires that you review the complete value chain and also look across the entire product lifecycle from the raw material sourced from mines, forests, etc. to the end user or customer. You must actually see what affect your product has when it is used and what will happen when it is eventually disposed or decommissioned. True environmental footprint management will involve a complex and huge body of data – and the natural place for that data and where most of it is already to be found is within the enterprise system, the ERP system.

After all, environmental accounting and financial accounting are very much alike in the sense that everything that you do has a financial impact and needs to be tracked in ERP and similarly, everything you do has an environmental impact that can also be managed in a centralized way within ERP.

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 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). 

In more and more companies, there is an assigned environmental manager who may in many cases also hold the position of quality manager or production manager. This is generally a positive development, but typically, these people very often 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 could induce people to fill out some forms to gather data, but they have very limited hierarchical power. It is certainly true that in most companies, not much can happen without a clear mandate from the top management.

Once the importance of measuring and managing an environmental footprint becomes a part of the corporate strategy and becomes a means of managing board-level risk, a company is in the position to put much harder policies into place and may effectively get many departments and cross functional teams to collaborate around the issue.

Many very robust and popular enterprise software suites were not initially designed to track and manage environmental impacts or are designed in a way, that makes it difficult for the vendor to simply add a new layer of functionality that would accomplish this. And even if these ERP Systems have a more modern or even SOA orientated design to simply add new software components that interact with the existing functionality in order to track environmental impact data, Middle market manufacturers – those with between 70 million and a couple billion Euros in revenue – cannot easily afford to maintain numerous integrations with additional stand-alone systems. So middle market companies will have a real need for out-of-the-box solutions for environmental management, because they have the same environmental reporting requirements demanded by the market, by the customers and by the regulators but have a much smaller budget than large enterprises with large IT departments.  

So currently, manufacturers with any degree of environmental footprint measurement and management capabilities rely almost exclusively on either stand-alone 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 three questions to ask enterprise software vendors that claim to offer a solution in this area:

1. Do you have a tool or functionality embedded and integrated in your enterprise resource planning system that is able to track environmental impacts within the organisation?

2. If so, how is this environmental management tool linked into manufacturing operations, supply chain and materials management?

3. How much flexibility will you have in configuring, expanding and changing this environmental management tool, since measurement and management requirements are not static but constantly changing?


Generally spoken, any manufacturer and project driven construction, assembling and service orientated enterprises should ask about the flexibility of those embedded tools, since they will gather its data not only from all manufacturing related process structures but also from others as service management, project data and product livecycle management and additional external data alike.

IFS ECO-Footprint Management of course delivers value to the customer by enabling visibility and control for sustainability through all states of a product lifecycle, through the entire supply chain to the use phase and end of life. It facilitates environmental and compliance reporting such as REACH, RoHS or WEE.
It is an embedded solution with no need for integration with third-party products that quantifies environmental impacts as one more cost of business processes and product using data is mostly already in the solution. The standard enables a variety of reporting and even budgeting. 

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