Track your environmental impact by joining the green supply chain

5/21/2011 at 12:00 pm by The Sage ERP Team

Green Supply Chain

The demand for environmentally safe technology and ecologically-minded practices is higher than ever. This can be read not only in the needs of manufacturing customers, but also in the general tone of the federal government as well as the public at large. Mid-size enterprises are particularly susceptible to market demands like this. One solution being embraced by more and more companies is the green supply chain.

The green supply chain creates an information link between vendors, manufacturers and customers. It is a manifestation of ERP technology that unites partners in manufacturing with data in order to reduce environmental waste and coordinate better business practices.
Boston’s Affinity Research Solutions recently surveyed a number of executives from middle and large-market manufacturing firms. According to Manufacturing Business Technology, their goal was twofold: to understand how often green supply chain initiatives were being deployed by these companies and to what extent ERP and other business software applications played a role in these initiatives.

While green supply chain practices seem to be increasing in prevalence throughout the industry, it’s important to note that they can vary from vendor to vendor. In fact, Affinity’s study was careful to take into account that there is no supply chain standard. That’s why their primary questions were:

How involved is your company in the green supply chain?
What types of environmental factors are you tracking, and how much of this information is shared with supply chain partners and how much with customers?
How does your company value the environmental information collected?

The results of the study show that around 70 percent of manufacturing business use ERP technology to form a link in the green supply chain. The main reasons given were either for non-financial ecological reasons or because customers were increasingly demanding it.

The most commonly tracked environmental data was the chemical content of the products produced by the manufacturer. Besides this information, companies kept track of the chemical content of the materials they purchased, as well as the organization’s overall environmental impact.

Another important revelation from Affinity’s survey was the fact that while nearly all of the respondents who used ERP technology for green supply chain compliance reported their environmental tracking to partners along the chain, only around 10 percent reported the same information to customers.

Affinity also asked by way of conclusion what these executives thought lay ahead for green supply chain ERP usage. The general consensus was that it is a growing field and that increased government regulation and customer demand are responsible for its rise in popularity.