The world of manufacturing is becoming a greener place, to be sure, but the technological infrastructure required to manage this good-for-everyone evolution isn’t keeping the pace.
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.
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.
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.
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.