Sustainability is becoming centre stage for both consumers and small and medium-sized enterprises (SMEs). Indeed, wholesale and distributor businesses have started to recognise the importance and benefits of “going green” – not just to their overall reputation and brand, but to the operational cost across their businesses too.
The UK has over 354,000 wholesale businesses supplying goods to 72,000 retail businesses and 330,000 catering or food service businesses, including hotels, hospitals, leisure facilities, factories, restaurants and more reports Andrew Davies, Head of Product Engineering at OGL Software. For many of these fulfilling social and moral obligations aligned to net zero initiatives is something new, with few having holistic sustainability strategies.
However, with new research revealing that 89% of small business leaders would first review and consider a company’s sustainability credentials before deciding to collaborate with them, the topic of sustainability needs to move further up business agendas. So how can wholesalers and distributors navigate the complex world of sustainability effectively?
The answer lies in senior level buy in supported by technology implementations that monitor, collate and deliver data to pinpoint where energy use and waste can be reduced. Cloud-based business software systems that bring together key strands of wholesale businesses, from stock, accounts, CRM, transport and warehousing, are critical to success. Disparate systems that don’t talk to each other, and at worst, manual record keeping, do not provide a full picture.
What are the key sustainability drivers?
Businesses typically adopt sustainable practices for various reasons, but customer demand is top of the list as surveys consistently reveal that customer pressure and improved brand reputation are the leading motivations for sustainability adoption.
Customers are more loyal to environmentally conscious brands and reputation significantly improves a company’s standing.
Another main driver is brand positioning and standing out from the crowd. In conversations with customers, it’s clear that while many have sustainability on their radars, they are only now starting to see it as a potential differentiator. Building a green image can set a business apart from any competition.
Sustainability product demand has increased and is now a major factor, with 62% of UK consumers now rating it as an important purchase criterion. This means that wholesalers themselves are more aware of ensuring they are stocking sustainable products and are favouring reputable brands’ items to maximise sales volumes.
As consumers become more aware of the impact of climate change, they are demanding more sustainable products and services. Sustainability isn’t just about being environmentally responsible though. It can also help businesses save money by reducing waste, energy consumption and operating costs. Tied to this, there are stringent regulations governing environmental practices and complying with these requirements is not just a legal obligation but also a crucial sustainability factor to avoid fines.
What role does technology play in sustainability?
Business software systems, and especially Enterprise Resource Planning (ERP) systems are central to simplifying a company’s green initiatives for several reasons. As with any organisational restructure, visibility and control are essential, along with sharing data across the business, simplifying and documenting new processes, increasing productivity, reducing manual tasks, and decreasing reliance on unsustainable products and services, such as paper and gas.
ERP systems automate and streamline various business processes, helping companies save time, money and resources. Sustainability isn’t just about recycling and using less paper. It’s about optimising operations. ERP systems provide visibility into the entire supply chain, enabling companies to make informed decisions about sourcing products sustainably and operating their facilities ever more efficiently – for example reducing operational costs with an environmentally-friendly warehouse.
That same visibility also offers businesses greater control over stock, with ERP noting the real-time, up-to-date stock levels, which allows wholesalers and distributors to manage stock more efficiently. They can carry out weekly or monthly supplier orders to avoid daily deliveries and, by optimising route planning, using technology to identify the most efficient routes and consider time windows, vehicle types and load capacity, wholesalers can improve their delivery services and implement scheduling capabilities that they did not have before.
ERP systems, such as Profit4, make businesses more agile and efficient. This includes improving inventory planning, reducing overproduction and automating sales processes. They can also offer tools for measuring sustainability metrics, such as product costing, capital budgeting and performance evaluation.
A multitude of integrations are available to customise any implementation. For example, digital signature capture can also be implemented so there is no need to print and sign delivery notes. Route planning optimisation through solutions like MaxOptra mean that everything can be delivered in full in one drop off, rather than over three or more deliveries one at a time. While integration of ecommerce solutions like eShop enables print catalogues to be eliminated.
With data from multiple sources all available via one business software, sustainability dashboards can be created for tracking and reporting. This means businesses can manage supply chains more efficiently, and accordingly streamline operations to reduce waste and carbon footprint.
Conclusion
As with GDPR, demand for transparent and proven ESG practices would lead to the introduction of a mandatory sustainability compliance rating, which might incur fines or bring about severe consequences for businesses that are not “going greener”.
By implementing ESG practices into their businesses, wholesalers and distributors will no doubt see a serious uptick in the volume of data they have coming in. That increased amount of data, alongside all of the sales and stock information they are already managing, will mean those businesses need help determining the data into action.
To help drive accountability and accelerate towards ESG, technology solutions like ERP which integrate all data forms into one, real-time, easily accessible and understandable dashboard will be critical to success. Reports on transition and other factors will also become more commonplace and real-time monitoring of all company elements, via ERP systems, will grow as businesses look at how they can ward off claims of greenwashing and become more proactive in their ESG risk management.
In summary, once a sustainability strategy is in place, technology will support the delivery of a sustainable business. By focusing on the data, businesses can move to make data-backed claims. Even small changes can lead to significant sustainability benefits, from consolidating orders to modernising transportation and sourcing suppliers closer to home. With business software at their disposal, wholesalers and distributors can make a substantial green impact, drive business efficiency and contribute to a better, more sustainable world.
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