Synaptic Connections Newsletter 2019 Week#43
October 21, 2019 www.Synapticpackaging.com Image - Cuba
Week#43 Good morning! Welcome back on a Monday. I hope you had a great weekend. We are currently in a series exploring Big Data Convergence on Sustainabilty. Last week we took a look at LCA, Life Cycle Assessment, and provided macro guidance on the best ways to benefit from the use of LCA. Today, we are going to explore Sustainability and ERP systems (Enterprise Resource Planning).
ERP is the digital back-bone of manufacturing. Many know the leading brands of ERP software such as SAP and Oracle. ERP systems seek to capture all critical performance metrics of an organization including sales forecast, product bill of materials, purchasing agreements, manufacturing production scheduling, logistics, and production output tracking. A well run ERP system provides digital roll-up reporting and analytical dash-boards for leadership decision making.
Sustainability is a very metrics driven science, and a complex one at that. Measuring and reporting Sustainability impact, Year-over-Year (YoY) requires robust data. Static data (snap-shot) is a good place to start, however to deliver YoY performance, dynamic data systems will be necessary. The large ERP software platforms are positioned well to capitalize and empower these deliverables.
Current ERP systems embody much of the critical data needed. With a few modifications, and customized report development; dynamic Sustainability analysis tools can be generated through the ERP software. The ERP platform allows you to profile the components you use in your Bill of Materials (BoM) - for example, by material type and weight. The purchasing modules allow you to profile your suppliers, their Sustainability metrics, and their geographical location for calculation of transit emissions. The manufacturing module then brings all of these components together, with your internal operations, and your production quantities.
So, how does this drive Sustainability? When Retailers, QSR, and CPG’s develop their corporate Sustainability strategies - they will need to measure performance year-over-year against those strategies. The ERP back-bone will be the tool to compute those metrics. As suppliers selling into these customers, you will need to develop products that align to those metrics. As we all know, product development takes time, so it is best to get strategic alignment now - before the purchase decisions are measured by these metrics. If not experienced already, very large purchasing decisions will be made on the basis of these Sustainability objectives and metrics. The analysis and modeling from the ERP system will empower the buyers to make informed decisions.
In closing, I’ll share a little levity and advice from personal experience. Don’t ever talk on your phone in an airport about how to build a “Package BoM” in an ERP system! Most especially, when you are giving instructions to a purchasing manager on how to “connect the components to make the package BoM work”. :-) Some conversations are simply better in private, and this is one of them. Have a great week and enjoy the articles below!
The purpose of this newsletter is to stimulate innovative thoughts and constructive dialogue through the lens of sustainability. New subscribers can send an e-mail to the link below to sign-up.