Designing sustainability into supply chains

SAP’s Martin Barkman on why sustainability must be embedded across the supply chain, from product design and manufacturing to distribution and reuse

Multiple factors influence purchasing decisions: cost, convenience and some form of verified status are important, but today’s consumers also expect goods that are environmentally friendly. 

As a result, organisations are reinventing the way they plan, design and produce products and services, with sustainability now front of mind. Yet sustainable product design can be technically challenging, as businesses seek to straddle the twin demands of sustainability and product quality.

With pressure increasing on businesses to make their operations more climate responsible. Industry bodies now exist to help organisations measure and recalibrate their social and environmental impact. The Sustainable Apparel Coalition and the Sustainable Packaging Coalition are just two among many.

Measuring is important; a company cannot change what it is unable to measure. But once a business has a clear picture of its sustainability goals it then has to achieve these - and that, of course, is the difficult part.

In the context of supply chain, sustainability is most effective when it is designed into the product itself, in the pre-manufacturing stage, so that a product uses different, or fewer materials, is designed to last longer, be more repairable and more recyclable, when it has reached the end of its useful life. 

Clearly, businesses need expert help with this, and German multinational software giant SAP is in the vanguard of organisations who offer tech-driven sustainability solutions that can be embedded at every stage of a product’s life – from drawing board to recycling centre.

SAP customers generate 87% of total global commerce, and its advanced analytics help customers make a difference to both their bottom lines and also the environment.

SAP hard-bakes sustainability into its solutions, so that businesses can think green and behave green, from one end of the supply chain to the other.

“The supply chain encompasses every part of the process, all the way from design and manufacture to planning, logistics and asset management,” says  Martin Barkman SVP Global Head of Solution Management, Digital Supply Chain at SAP. “Each of these not only has a direct impact on sustainability but they’re also inter-related.”

This is why SAP solutions are designed to work at every stage of a product’s life cycle - from how it is conceived to how it is recycled.

Barkman says that regarding sustainability, SAP solutions can be categorised broadly as enablers of lower or zero emissions, zero waste and a circular economy. 

Barkman and his global team help businesses across all sectors worldwide keep sustainability top of mind every step of the way, from product concept to product consumption.

“If you think about how a product is going to be manufactured when you design it, then that's a much better and more holistic approach,” says Barkman. “A properly designed product will impact how sustainably that product can be manufactured.”

Not just how it is manufactured, either, Barkman says, but also how a product is distributed. “Design can impact the cost of logistics, and ultimately also how the customer experiences the product,” he adds.

How SAP is able to bring together the stages of design, production and distribution - and digitalise those processes and allow them to operate continuously with each other - “is super-interesting to me”, Barkman says.

Barkman says that when designing a product with sustainability and the circular economy in mind “you have to think about whether the raw materials can be reused, if they are biodegradable, and if they are readily available”. 

He adds: “Then when it comes to manufacturing you want to know you’re making it in the right location – that you're not generating too many emissions transporting the raw material.”

The manufacturing process itself also poses sustainability challenges, Barkman points out.

“You have to be smart about keeping equipment properly maintained, so that you’re not constantly replacing and disposing of components,” he explains. “The aim is to extend the life of all of your supply chain assets.” 

Barkman adds: “It can get complex, which is why SAP solutions are absolutely geared to helping companies navigate through all of this, to make sure they’re always headed in the right direction.”

On the ground, SAP solutions help businesses make joined-up sustainable decision-making in practical ways, its software allowing companies to manage what needs to be in any given product’s bill of materials.

A bill of materials is a list of parts, items, assemblies, subassemblies, documents and drawings required to create a product. 

“A business might need to make a change to a product’s bill of material,” says Barkman. “We can help them make that change at the design stage, and then translate this into a bill of material for the various manufacturing steps.” 

He adds: If a business can do this digitally on an ongoing basis then that’s going to drive both productivity and sustainability to a whole new level.” 

When it comes to embedding sustainability into company-wide processes surely there are challenges? Changing regulations from country to country, for example.

“Of course, we want to ensure our customers have the right tools, processes and systems to be in compliance with regulations,” says Barkman. “But in some ways, it’s gone way beyond regulations. The journey into sustainability kind of began with that base level of regulations, and these don’t really change.” 

Now, he says, the real challenge is more about keeping up with customers’ ever-more ambitious sustainability goals.

“The United Nations has set some pretty top-level sustainability goals, and many of the businesses we meet have rigorous aspirations and goals for how they want to operate, and how they want to help lead us towards a more sustainable world. I’d say that the real challenge is how we lead these companies towards those noble, but high-level, goals.

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