According to the World Economic Forum, more companies are reimagining their supply chains and procurement policies to integrate sustainability into their core operations. An authentic commitment to sustainable practices that stretch throughout the supply chain is valuable in a competitive market.
Distribution ERP software enables companies to adhere to increasingly stringent environmental regulations while receiving real-time insights into inventory levels, product profitability, warehouse operations, and vendor sustainability practices. In this blog, we’ll examine the role of enterprise resource planning (ERP) software in driving sustainable distribution.
What is Eco-Friendly Distribution?
Eco-friendly distribution incorporates environmentally sustainable practices into the movement, storage, and delivery of goods. Actions include optimizing transportation routes, reducing waste, improving energy efficiency, and streamlining the supply chain. Modern supply chain expectations have evolved. Cost-driven models are adapted to include sustainable solutions and meet consumer demands for sustainably sourced and produced goods. Consumers are more aware of their environmental footprint and expect companies to reflect the same values if they want to retain their loyalty.
The benefits of sustainable distribution go beyond its ecological impact. There are multiple economic advantages that become clear with using ERP solutions. Operational efficiency leads to long-term savings by optimizing routes to reduce fuel usage. Energy-efficient warehousing lowers energy use, which is a major operational expense. Inventory management reduces waste by improving demand forecasting and reducing unnecessary stock in warehouses.
Sustainable Distribution Examples
Fossil fuels that are burned to create energy, whether for electricity or transportation fuel, account for over 75 percent of global greenhouse gas emissions, according to the United Nations. Route optimization and warehouse energy efficiency are sustainable distribution examples that contribute to operational profitability while benefiting the environment. An ERP system gives you greater oversight and control over these processes.
Transportation efficiency
Transportation is a significant component of distribution. It must be managed efficiently to ensure financial sustainability, as fuel prices and usage levels affect operational and product costs. ERP enables your company to manage fleet resources effectively, utilizing route planning to identify the most fuel-efficient delivery route.
Warehouse energy efficiency
Non-refrigerated warehouses use energy primarily for lighting and heating. Refrigerated warehouses increase electricity consumption and negatively impact sustainability efforts unless usage is rigorously managed. An ERP solution improves organizational reporting. It allows management to identify high operational costs and take steps to mitigate the expense with eco-friendly energy alternatives.
The Role of ERP in Sustainable Distribution
Efficient supply chain management is essential for all businesses, whether you operate domestically or abroad. ERP systems, such as Sage X3 Distribution, provide companies with a comprehensive overview of their supply chain to coordinate, streamline, and automate processes for improved efficiency and cost reduction. Efficiency strengthens sustainability efforts.
Excess inventory wastes resources and carries related costs. An inventory management system allows companies to analyze procurement processes and determine how supplier integration can reduce inventory levels to limit wastage. It also provides full upstream and downstream inventory traceability to identify and constructively address sustainability issues.
Companies use ERP software analytics to measure vendor performance, including their sustainability efforts, as it forms part of larger supply chain sustainability reporting requirements. Sage X3 distribution ERP software offers both retail and wholesale distribution features.
How ERP Systems Drive Sustainability in Your Supply Chain Distribution
ERP systems promote end-to-end traceability, which is essential for corporate sustainability efforts. Companies manage the social, economic, and environmental impacts across their value chain and use the information for accurate and reliable sustainability reporting. The transparent nature of end-to-end traceability informs consumers who want to know the origins of their purchases.
Distribution companies manage a complex chain of activities, and the success of each step is dependent on the preceding one. ERP systems help businesses become more efficient by providing data that improves planning for projects promoting sustainability, such as installing solar panels on distribution center roofs or procuring electric vehicles for fleets. ERP identifies issues early, allowing distributors to take action by reducing errors leading to inefficiencies.
Enhance your environmental, social, and governance (ESG) efforts with Sage X3 distribution ERP solutions from Panni while benefiting financially from an efficient supply chain. Reach out to Panni to learn more about our services and how we can support your sustainable distribution efforts.
