Enterprise resource planning and sustainability in agriculture

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Categories: Agriculture, ERP, Sage X3
October 31, 2019
Farmer in a large greenhouse typing on a laptop computer.

Agricultural businesses need the right ERP to fully commit to sustainability efforts.

While sustainability is an important issue in many industries, it’s critically important in agriculture. Technology, including enterprise resource planning (ERP) solutions, can play an important role in sustainability for agribusinesses.

When it comes to enterprise resource planning and sustainability in agriculture, Sage X3 has the functionality and industry-specific features that help companies thrive.

Defining sustainable agriculture

Sustainable agriculture is a focus on practices that provide for society’s current food needs without jeopardizing future generations’ ability to meet their needs. Sustainability in agribusiness means maintaining a healthy environment while continuing to be profitable.

The challenge is that for many big agribusinesses, sustainability has not always been a top priority. A recent Medium article notes that at big farms “ideas around environmental sustainability are not only a low priority, they’re simply not discussed.” At smaller farms, while there is more discussion of sustainability, it’s sometimes just used for marketing purposes.

“Many of the farmers who care the most about sustainability can’t afford to put it into practice,” the article notes. “Raising plants and animals in a way that benefits (or at least doesn’t harm) the earth, the farmworkers, the animals, and the consumers is incredibly expensive. And Americans don’t like to pay a lot for food.”

Two farmers walking in their field.

Retailers and consumers alike are demanding more commitment to sustainability.

Why technology will make a difference

The reality is that the importance of sustainability is growing, driven by both corporations and customers.

On the corporate side, retailers are looking to their suppliers to demonstrate a commitment to and actions that drive sustainability across the board. Walmart, for example, has implemented a Sustainability Index program. The index collects and analyzes data on each product’s lifecycle, working with suppliers to improve sustainability efforts. Walmart provides suppliers with their scores, how they rank in comparison with other suppliers in the same field, and insights on how to improve sustainability.

At a more granular level, the Roundtable on Sustainable Palm Oil requires companies to comply with environmental and social criteria to be certified as a sustainable product.

Consumers are driving some of the corporate work, while the use of social media allows for consumer voices to be amplified and connected on sustainability issues.

For agribusinesses, having an ERP that tracks and demonstrates sustainability is critical. In many cases, these issues relate to inefficiencies in supply chain management. Here are some of the ways the right ERP solution can help:

  • Resource Efficiency. Supply chain optimization can reduce transportation mileage at each stage, reducing emissions and environmental impact.
  • Shipment Management. When suppliers and partners are not communicating well or have inadequate, incorrect or different information, shipments, ingredients, and products suffer.
  • Inventory Management. Agile supply chain management means a responsive, flexible and quick approach to day-to-day operations. This approach may have the greatest impact on inventory management, with real-time data on existing stock and expiration dates to ensure that the right ingredients and products are used in the right order.
  • Wastage Management. When you have better systems for predicting usage and tracking your supply chain, you can reduce the amount of waste, a powerful measure that can be used internally and externally.

Sage X3 provides agribusinesses with integrated functions designed to serve the industry. NexTec provides guidance on the selection, implementation, and optimization of agriculture ERP solutions.

Learn more about how Sage and NexTec can help your agribusiness improve its commitment to sustainability. Take a free tour of Sage X3 to learn more.