Businesses across all industries are increasingly concerned about sustainability because ERP software can give them a competitive advantage over the long-term and is essential for their survival in the future. Business executives are realizing that the COVID-19 Pandemic is a major catastrophe and they must reduce costs, improve efficiency, and optimize production to stay competitive.
According to the Institute for Management Development, 62 percent of executives believe that a sustainability strategy is necessary to compete today and 22 percent believe it will in the future.
One way to achieve sustainability goals in business strategies is to implement Enterprise Resource Planning (ERP). This system is designed to improve production efficiency, reduce waste, increase supply-demand planning and drive greater organizational effectiveness. Many governments, including Singapore, provide funding and incentives to SMEs in order to digitize and automate their businesses.
Let’s take a look at six areas where ERP software can help you reduce waste, cut costs and reach long-term sustainability goals.
An ERP software will help you identify the source of waste, and optimize resource consumption.
There are many types of business waste. Not all of it is physical. Resource optimization, which is actually a way to reduce energy and material waste as well as labor costs, is called resource optimization. Resource management is critical for companies in many industries. This includes manufacturers, supply chains, and food and drinks companies that deal with chemicals and materials that could be harmful to the environment.
Storage Space and Paper Consumption
One of the objectives of ERP software is to reduce paper use. This saves paper, helps preserve the environment, and reduces storage space. This is particularly true for large companies and large offices that require a lot of document shredding to protect confidentiality.
One way to make your office paperless is to use a document management program such as Arion ERP Documents or Dropbox. Arion ERP Software Documents allows you to store, share and send previously scanned documents. You can also generate business documents like vendor bills, invoices, and contracts that can all be approved electronically.
Arion ERP Documents transforms and digitizes your documents using AI and OCR engines.
Wasteful inventory planning, as well as a lack of control over overstock, can lead to poor inventory management. If you are in the food or beverage industry, ERP software can help you track the shelf lives of your products and materials. The inventory module of ERP software should allow you to see how much food and materials have been wasted, as well as pinpoint where the problem is coming from. You can also see how much material has not been consumed or sold. This will allow you to identify which products are driving your business and which ones cost more.
The right removal strategy is crucial to avoid waste and provide visibility and control over perishable goods. Inventory management software with stock removal strategies built in, such as Arion ERP Inventory can be used to track and monitor product movements in real-time.
Here’s an example of the Arion ERP Inventory interface of how the FEFO strategy on certain products can be configured. The system will then pick inventory lots based on expiration dates.
Another type of waste is overproduction. This can be caused either by poor planning or forecasting, or a lack of reporting tools.
ERP software can help you overcome this problem by automating sales and inventory reports, which will show you which products and materials are not being used. You can use past sales data to determine which products should be reduced or increased in order to make informed decisions about demand planning.
Arion ERP has developed a Replenish to-Order function that allows businesses to purchase and manufacturing inputs, especially those with a short shelf-life when there is demand. This helps to align supply production with demand, reduce procurement, and decrease unnecessary procurement.
Learn more about Arion ERP’s Make-to–Order feature and how it can improve your procurement process.
Improve Coordination and Increase Visibility
Monitoring of the whole operation
An ERP software will give you a clear view of your company’s performance. Dashboards within the interface display metrics that are relevant to your company. Each department can get a clear overview of its activities and identify cost-cutting opportunities such as over-purchased material or the best delivery route. By displaying the most important metrics, each business function can gain a quick overview of its activities.
Departmental Coordination has improved.
If the business departments’ workflows are not coordinated, it can lead to wasted time and money. When one department cannot make decisions because of miscommunication or misinformation, the other department may have an unsynchronized workflow. In these cases, people must wait to receive information, sign-offs, approvals, and work completed by other departments.
A fully integrated ERP software allows for interconnections between departments and automates the flow of information. This allows for smoother, quicker, more transparent coordination and streamlined decisions.
Arion ERP Purchase, an ERP system, is linked to Arion ERP Accounting. This prompts the creation of a drought journal entry whenever a new Purchase Order has been confirmed.
Product Life-cycle Management and Quality Control
Products that are not up to quality standards can cause production delays and waste materials. ERP modules for manufacturing and production, such as Quality and Product Life cycle Management PLM help manufacturers detect, monitor, and track all production data.
The Arion ERP Quality module allows you to create quality control plans, schedule quality inspections and set up quality monitoring for specific steps in manufacturing or inventory procedures.
You should know how to manage production lines, identify equipment, and monitor schedules. With the help of quality management tools, such as automated quality alerts, you can reduce the production of defective products. You can also provide prompt attention to any errors and take corrective action if they occur.
Although errors and defects cannot be eliminated completely, quality management tools within an ERP such as Arion ERP software can reduce damage and waste quickly. This can save your manufacturing company lots of time and money.
Cloud Hosting Adoption Hosting your ERP in the cloud can bring additional benefits to both your company and the environment.
How ERP software can improve your company’s sustainability
Migrations of IT systems to the cloud can save you up to 30%-40% on total software ownership. You can eliminate the need to have your ERP software on-premise and the financial, human, and physical resources necessary to keep it up. The cloud can give your company flexibility and scalability when it comes to storage capacity and unused capacity.
Real-time data equals agility, better decision-making, and greater efficiency
An ERP system’s primary goal is to gather, store, and analyze data about all company activities in real-time. ERP software is able to instantly provide business data, allowing business managers to view this data and evaluate the effectiveness of their business strategies in real time. They can make adjustments to areas that are not aligned, or to better allocate and use resources.
ERP software users can choose which parameters should be displayed for each project. Real-time data, whether for Sales or Inventory management, can be used to identify the areas that bring the greatest value or least profit. This allows users to develop more effective strategies and decrease overproduction.
Let’s look at Arion ERP Accounting’s Analytical Accounting feature to see how real-time information can be used to help you make better decisions.
This feature allows you to see a clear overview of profitability for different departments, projects, or promotion periods across all Arion ERP modules, such as Sales, Purchase, Invoice, and Production. It also helps you identify areas that generate revenue growth and distinguish costs that may arise over time. Your general accounts (analytical) can be categorized by department, project, or product group to give a dynamic view of your loss/profit balance.
Arion ERP helps Port Cities to make their business more eco-friendly.
The best-in-class ERP software technology can be combined with industry knowledge in ERP software implementation to provide you with a robust, interconnected system that provides unprecedented efficiency and synchronization in production and reporting.
Each of these areas can help you adhere to your company’s sustainability strategies. They are all linked by Arion ERP, a flexible and well-rounded ERP software.
Arion ERP software is proud to offer a wide range of expertise for clients in a variety of industries, including Manufacturing, Supply Chain, Retail, and other sectors. To learn more about ways that your business can be more environmentally-friendly.