Using Your ERP as a Sustainability Tool

If the complex web of interactions making up your company's supply chain feels like an Achilles heel,  you're not alone.

"For the vast majority of organizations, the impacts, risks, and costs lie in the supply chain," says Tim Greiner, managing director at Gloucester, Mass.-based sustainability consulting firm Pure Strategies and author of To demystify the supply chain, know the risks and costs. "As a result, that's where we can achieve the greatest improvements in sustainability and resiliency."

Tools such as supplier scorecards, for example, can shine a light far back into the supply chain and give companies "more power than they realize." And bringing the right data back to the core financials in a system like Microsoft Dynamics ERP can help make those strategic supply chain tools possible.

While using a scorecard to measure supplier performance and track their activities sounds simple enough in theory, actually leveraging that information into sustainable practices is a different story. The firm that wants to manage 10 key supply chain data points, such as energy, water risk, and greenhouse gas emissions, for example, would be attempting to track 10 million data points, not to mention interpreting and influencing them.

According to Greiner, laying the groundwork for sustainable supply chain strategies involves understanding where the greatest costs and risks occur and what solutions should be prioritized for maximum return. Enterprise Resource Planning (ERP) systems like Microsoft Dynamics can play an important role in that process. Being able to assign and track procurement spend according to specific vendors, for example, and then carry that information over to a general ledger (GL) for further analysis, can help companies assess potential environmental ...