A new study out of IFS North America, triumphantly reports that almost 77% of manufacturers conduct their business these days in a setting characterized by customers demanding they report on the environmental impact of their activities.

Green Trend Growing

Moreover, more than 80% of respondents feel that green supply chains will become more important to them over the next three years. Manufacturers cite social responsibility, mandates by their companies and pressure from customers as the principal forces driving this trend. Whatever its impetus, crow the authors, this development is a good thing, given the increasing “norm” this suggests is emerging on this front.

It’s Not Easy Being Green

But the IT revolution falls critically short in application, with a massive 87% of survey participants conceding that at least some of their supply chain data are still being handled in hard-copy form. A mere 5% rated their ERP software as “excellent” in its ability to handle green supply chain data. Fifty-four percent called it “poor” or “not at all helpful.”

For those manufacturers who engage in the sharing of their environmental data with customers, the great bulk (28%) continue to enter information from hard copy into spreadsheets, into supply-chain management solutions (16%) or into ERP solutions (20%). A quarter of respondents use purely paper-based solutions to manage this information. And a paltry 12% employ a system that allows their trading partners electronic access into their environmental and materials data.

On top of that, some 43% of respondents shrugged when asked of what types of functions their enterprise software is capable of in regards to its ability to track and share those environmental factors involved in their green supply chain initiatives.

It’s like 1982 out there, and it’s a disconnect, say the study’s analysts, that could prove a serious challenge for the days ahead.

Navigating the Path to Green

Without a system of integrated ERP functionality that can promise comprehensive environmental footprint management along the entire value chain—from the procurement of raw materials through to their eventual utilization—the manufacturing industry will eventually stumble in its journey along the green path. Without it, organizations cannot responsibly analyze their operations from the holistic perspective that will afford the critical big-picture view of their environmental influence.

The study called ERP Solutions in the Green Supply Chain and Multi-Mode Manufacturing, was conducted last December interviewing more than 200 executives, from whose manufacturing operations’ revenues exceed $100 million. It was undertaken in a bid to better understand how business software applications like ERP and EAM impact an organization’s efforts to green up their supply chains.

Strategic sales and operations planning (S&OP) is the newest old concept for manufacturers hungry for an integrated business-planning process that will help them deal with ever-more complex operations, mounting customer demand and the imperative to trim costs.

What:

Part process, part application (but ideally both), S&OP is, at its most basic, a method of sales forecasting that brings production in line with demand.

But here is a concept that’s evolved vastly in the quarter century since it dropped and today’s version is eminently more sophisticated. Ideally, this cross-functional planning process marries a company’s strategic, operational and business plans in a way that offers organizations a multitude of views into their firm and aids them in their efforts to make decisions that maximize opportunity and mitigate risk.

With it, managers can review supply-and-demand projections, and ruminate not only on the resulting financial impact, but whether the anticipated progression of events is in line with the company’s big-picture business plan.

Who:

Everyone. Indeed, among S&OP’s most prominent selling features is the ability it affords for collaboration across multiple business inputs—both within and beyond the organization.

An S&OP solution that involves multiple functional departments in the drive toward a single consensus plan — and that appreciates the impact of changes made throughout the value chain on a company’s financial and operational objectives — is the most useful of all.

Where:

Across the board. Too little participation from key corporate stakeholders does no one any favours.

When:

As soon as possible. A supply chain management survey recently conducted by AMR Research for Infor found that 88% of respondents are already using or planning to deploy an S&OP solution in the coming year.

Why:

The economic tumult of recent times has left a lot of companies with the realization that they cannot perform adequately without introducing a coordinated, synchronized business-planning system.

A well-tended and technology-enabled S&OP process:

• Ensures that a firm’s sales, purchasing, manufacturing and capacity-planning practices are in synch with the most recent iteration of its business plan.
• Smartly identifies the best allocation of company resources.
• Forecasts finance, marketing, sales and supply-chain functions in a coordinated fashion.

According to research from Aberdeen Group, managers who engage in successful S&OP programs enjoy healthier financial results in terms of customer-service levels, forecast accuracy, profitability and cash-to-cash cycle times.

How:

First, assign an S&OP planning team. Next, have them take stock and produce a demand forecast that’s measured against anticipated manufacturing, inventory, sales, HR, production, finance and logistics limitations.

Wherever possible, facilitate cross-functional comprehension by translating data into a language everyone — whether on the shop floor or the executive suite — can understand.

Stir as needed and monitor progress going forward.

Oh, and the inclusion of technology is crucial. Sales and operations planning is a process, after all, that’s best realized through smart technology.

A scattering of spreadsheets simply doesn’t provide the level of detail, collaboration, accountability or monitoring that a mature S&OP plan does. Enlist help.

According to this research, based on a survey of more than 260 manufacturing software decision makers, almost half are not currently equipped with the enterprise technology they need to adequately manage their environmental footprint. Further, went the study, another 28% have only limited capabilities.

Specifically, the study asked manufacturers to report back on to what extent their extant enterprise-wide software allows them to account for the impact of their company’s activities on the environment in the arenas of carbon footprint, solid waste, air and water pollution, product lifecycle and product end-of-life influence. Not surprisingly, the smaller the company, the less set up it revealed itself to be on this front. Only 20% of those responding companies reporting between US$250 million and US$999 million in revenue said they were tracking “some environmental measures” with their enterprise software, while 36% with US$1 billion or more in revenue said they already had this capability.

Managers have an eye on this kind of thing these days and well they should. As much as the pursuit of profits should provide motivation for a company’s growth and development, so, too, should the pursuit of a modest and manageable carbon footprint.

Internal efforts notwithstanding, there are lots of options available for folks keen to reduce their mark. Livclean is a carbon-offset provider based in Mississauga, Ont., that follows through, in a cleverly conceptual kind of way, on the financial value that those with an eye on the scene have attached to reducing carbons. Springing from an acknowledgment that change costs money, this organization rewards corporate efforts to reduce or sequester carbon emissions with the opportunity to sell the benefits to other operations that want to similarly offset the cost of their presence on the planet.

At 360, we’re on this.

Thanks to strategic and selective partnerships with the best software providers in the business, our enterprise software offerings already allow for everything from customer relationship management to financial control, from employee time tracking to inventory administration. And our full suite of business management solutions helps companies maximize sales efforts, expand relationships with customers and vendors, improve workflow efficiencies, reduce customer wait time, more effectively manage costs, enjoy more comprehensive access to accurate and up-to-date information, and, natch, increase profitability.

Up next: an enhanced option to track carbon usage, a software feature the IFS study found a full 83% of manufacturers consider somewhat or very important, and 63% would like to see their enterprise resources planning software vendor include as an embedded feature.

I’m keen to explore this path a little further. Travel it with me.

Tight economic times, after all, turn the screws on the imperative for a business to enhance all elements of its operational processes, and to do so while resisting the temptation to pile on yet more disparate technology, thus manufacturing an even more tangled chain of supply.

The complexity of integrating many different e-business products to achieve a seamless portal environment can seem intimidating. But there are lots of reasons why overhauling a supply-chain strategy into a simple, lean system is clever. Here are six of them.

1. It improves the lines of communication. If everyone is in regular receipt of the most up-to-date data, they can make smarter, better decisions and leverage the Internet to exploit real-time collaboration among suppliers, manufacturers, customers, vendors, product design partners and so on.
2. It increases access to information. If all interested parties have easy access to the latest on a project’s progress, there’s less time wasted in the updating and dissemination of same. What’s more, a lean supply chain that lets you make all your business decisions according to real and accurate data translates into a reduction in sales forecasting errors and a scene where mission-critical tasks are kept squarely on track.
3. It ensures that those rules that dictate the management of your business are firm and present. These include supply-chain visibility, sales forecasting, cash flow, customer loyalty, on-time delivery, credit control, minimum margin measurements and a whole host of other key measurements.
4. It reduces costs. Myriad reports crow about the savings businesses can enjoy with synchronizing their systems. On-time deliveries, for one, mean reduced costs of capital tied up in inventory, warehouse space and in writing off potentially obsolete stuff because less inventory needs to accumulate to meet fluctuating demand.
5. It increases everyone’s sense of control. A single system with lots of ways in means the vendor has direct access to a company’s goings-on and can view activities without having to wait on purchase orders or forecasts. The customer, more linked into the process than ever before, enjoys an improved ordering experience. And with a smart solution, you can ensure accurate registration of your employees’ time throughout your project lifecycle, meaning you can bill more frequently and with better precision.
6. It streamlines points of contact. By centralizing your system, multiple vendors, platforms and interfaces all retract into a single one.

An efficient, optimized supply chain system provides savings not just in costs, but also in time. Successfully integrating a range of inputs across the supply chain such that they spit out integrated, rationalized data means never missing an order, never missing a chance, never missing a beat.

Learn more about how our ERP manufacturing software and wholesale distribution software solutions can help you optimize your supply chain.

All businesses must deliver acceptable bottom line results to their owners or shareholders, or eventually perish. Most often, these bottom line results are sought in the form of lower input costs, better operational efficiency, more cost-effective overall business processes, automation, and the like. And all of this has an impact, up to a point. But what then? How much can costs be cut, realistically, before one starts hacking into the long term viability of the business? How much can one gain in increased operational efficiency, without eventually short-changing the customers who are the real source of long-term corporate success? In many cases, the answer is “not much”.

Almost always left unexamined, in our experience, is the question of what can be done to raise revenues and actually grow the business. All too often, revenue is assumed to be a constant, or worse, declining. Revenue generation, in general, is seen as being somewhat mysterious, and fundamentally hard to manage. Sales are seen as events that are inherently hard to predict with any real accuracy.

It may not be the conventional wisdom, but our 20 years of consulting experience strongly suggests that nothing could be further from the truth. In our experience, businesses systematically manufacture (or destroy) revenue in the same way as they go about producing their core product or service. And everyone in the company is involved, in some way. Starting with the Board of Directors, who define earnings targets. Executive leadership must then set the strategy and define the key corporate objectives. At the other end of the spectrum, products must be developed, produced, distributed, and maintained. Or services resourced. In between, leads must be generated, and followed up. Sales must deliver closed deals. In the end, Product, Marketing, Sales, Administration, Information Technology, and Executive leadership must all work together in a coordinated, focused fashion to maximize revenue potential. This we call the Revenue Manufacturing Process©. And each business has its own distinct version.

So the starting point for any successful Revenue Optimization initiative is to understand how your organization systematically manufactures revenue today. And far more importantly, how it systematically destroys potential revenue. How easy is it for a customer to buy something from your company? How do they find you? How do you find them? What happens when you connect? What do they need? Do you have it? Do they get it? How? Do your customers keep coming back? Why? More importantly, why not? Do you have the information infrastructure needed to effectively manage all these business processes and dynamics? Bottom line, how does management at all levels direct and manage the entire Revenue Manufacturing Process©?

Once all this is understood, you’re in a position to do far more of what counts to manufacture revenue, and far less of what destroys it. The result – revenue optimization and top line growth. And bottom line results.