Affect Of Utilizing Variant Configuration In Gross sales Orders On The Carbon Footprint Of An Enterprise

​​Sustainability is more and more related in in the present day’s enterprise panorama. Firms face rising stress to take care of transparency of their knowledge and operations. SAP gives complete sustainability administration options overlaying Environmental, Social, and Company Governance (ESG) knowledge reporting, local weather motion, the round economic system, and social duty.

SAP gives the subsequent local weather motion options supposed to scale back the carbon footprint of an organization’s whole worth chain (scope 1 to three) based mostly on precise enterprise transactions. These embrace:

  1. SAP Sustainability Footprint Administration;
  2. SAP Surroundings, Well being, and Security Administration;
  3. Local weather motion options.

Within the context of rising environmental consciousness and social duty, it’s turning into more and more essential for firms to think about their carbon footprint. One solution to reduce environmental affect is to optimize inside enterprise processes.

Other than these specialised options, firms can even make the most of commonplace SAP S/4HANA modules for enterprise course of optimization. The main target right here isn’t just on cost-efficiency but in addition on eco-consciousness. On the coronary heart of this transition lies integration of Logistics and Gross sales and Distribution, notably the Materials Variant Configuration characteristic. This device is a part of the broader Enterprise Useful resource Planning (ERP) suite provided by SAP S/4HANA. It serves as a common mechanism for customizing product choices based mostly on particular buyer necessities. It not solely aids in tailoring merchandise but in addition in streamlining stock, thereby lowering waste and vitality consumption.

Not like conventional ‘make-to-stock’ strategies, the place manufacturing volumes are predetermined based mostly on gross sales forecasts and former demand, the ‘make-to-order’ strategy supported by Materials Variant Configuration eliminates the necessity to maintain giant inventories of completed items. This, in flip, reduces vitality consumption in storage amenities and contributes to decreasing the corporate’s carbon footprint. The characteristic is tightly built-in with the ‘Materials Grasp Document,’ a centralized knowledge repository capturing important materials particulars throughout varied departments, together with manufacturing and gross sales. This materials grasp document is instrumental in shaping future product configurations and serves as a cornerstone for the corporate’s sustainability efforts.

Materials Variant Configuration gives extra than simply product customization and stock administration. It gives alternatives for additional customization by incorporating real-time environmental and seasonal knowledge. This adaptability permits firms to make dynamic, eco-friendly selections that aren’t solely useful for the planet but in addition probably worthwhile. By means of a posh array of choices and parameters, this characteristic will be custom-made to satisfy a company’s distinctive wants, making it a priceless asset within the trendy, eco-conscious enterprise surroundings.

Calculating Carbon Footprint in Materials Grasp Document

Within the SAP S/4HANA system, the ‘Materials Grasp Document’ serves as a centralized knowledge repository, storing various attributes and traits of supplies, reminiscent of their ID, description, models of measure, and different important particulars. With the rising emphasis on sustainability and ecological duty, it’s essential so as to add the carbon footprint of every materials to this document. Listed here are the preliminary evaluation and data gathering strategies that define the right way to incorporate carbon footprint knowledge into the Materials Grasp Document:

  1. Provider Knowledge. Collaborate with suppliers to acquire exact knowledge on carbon emissions generated in the course of the manufacturing of every materials used within the manufacturing of the ultimate product. Particularly, this is applicable to supplies that operate as uncooked supplies or semi-finished items within the completed product. The carbon footprint knowledge could also be recorded within the Materials Classification part in ‘Materials Grasp Document’ of every materials throughout the Supplies Administration module.
  2. Lifecycle Evaluation. Conduct an intensive lifecycle evaluation of every materials to guage its environmental footprint throughout extraction, processing, utilization, and disposal. The Manufacturing Planning module can create detailed product specs, together with the sorts of supplies used, their traits, and vitality consumption knowledge. This info permits an preliminary estimate of the carbon footprint for every unit of product, thereby facilitating extra correct environmental affect planning throughout all manufacturing phases.

    Past the Manufacturing Planning module, the Controlling module additional refines the calculation of a product’s carbon footprint. It permits for the distribution of environmental prices—like vitality consumption, waste administration, and emissions—throughout particular person merchandise or product traces. These prices will be allotted based mostly on varied elements, reminiscent of the amount of uncooked materials consumed, machine working hours, or emission volumes generated throughout manufacturing.

    By merging knowledge from each the Manufacturing Planning and Controlling modules, a fuller and extra correct evaluation of every product’s carbon footprint will be achieved. This mixed knowledge permits real-time environmental affect monitoring and changes to manufacturing processes to reduce carbon emissions. Moreover, the Controlling module can generate custom-made experiences detailing the corporate’s carbon footprint.

  3. Exterior Databases. Leverage current environmental affect databases to safe standardized carbon emission elements for generally used supplies.

Firms will quickly have the ability to use Inexperienced Token by SAP S/4 HANA for monitoring uncooked supplies, a characteristic already in use by some clients.  This may allow automated knowledge alternate regarding the carbon footprint of every materials. Nonetheless, firms can already begin evaluating their environmental affect utilizing present instruments.

Materials Variant Configuration in SAP S/4HANA

The important thing elements of the Materials Variant Configuration structure throughout the SAP S/4HANA module are illustrated in Image 1.

Image 1. Materials Variant Configuration in SAP S/4HANA 

The Gross sales and Distribution module in SAP S/4HANA seamlessly integrates Materials Variant Configuration, together with the dealing with of Gross sales Orders, that are formal requests from clients for particular merchandise. This device is a part of SAP S/4HANA and different Enterprise Useful resource Planning (ERP) techniques like SAP S/4HANA that enables for the configuration of advanced merchandise based mostly on buyer necessities. This device permits for the definition of varied product choices and elements, together with their compatibility situations and interdependencies.

In an ERP system, a specialised materials variant configuration permits for the creation of custom-made product variants based mostly on predefined parameters and situations. Central to this course of is the ‘Materials Grasp Document’, a unified knowledge repository capturing very important materials particulars throughout departments like manufacturing and gross sales. This document types the cornerstone for future product configurations. Every ‘Materials Grasp Document’ possesses distinct traits that outline the properties and parameters of each the elements concerned and the resultant product.

When a buyer locations an order for a custom-made product, the variant configuration mechanically considers the traits specified by the shopper. It subsequently selects the appropriate supplies or elements wanted to supply the custom-made product. Primarily based on the fabric variant configuration knowledge, a manufacturing order is formulated utilizing the preliminary gross sales order particulars. This manufacturing order inherits the product’s traits and the options requested by the shopper. For instance, if a buyer orders particular heat-resistant threads, the system would choose 100% staple meta-aramid fiber as the bottom materials, as a substitute of artificial fibers. The traits of the ultimate product would then be derived from the Materials Grasp Document of the staple meta-aramid fiber.

Variant of calculation Carbon Footprint of the completed items

SAP gives a specialised module known as ‘Sustainability Footprint Administration’. For firms not but prepared to take a position on this specialised resolution, a custom-made strategy utilizing current SAP modules will be thought of, as outlined beneath:

The mixing of carbon footprint knowledge in several Materials Administration, Gross sales and Distribution, Manufacturing Planning, Logistics, Controlling and different modules gives a sturdy strategy for monitoring and lowering a product’s environmental affect. The Supplies Administration module captures the carbon footprint related to uncooked supplies, elements, and semi-finished supplies. This knowledge is crucial for understanding the environmental affect on the preliminary levels of manufacturing.

Alternatively, the Controlling module can account for emissions derived from vitality consumption (pure fuel, oil, biomass, electrical energy, gasoline, paper, supplies, and many others.) in the course of the manufacturing course of. The system often is the following:

E = A x EF x (1-ER/100)

E = emissions;

A = exercise charge;

EF = emission issue;

ER = general emission discount effectivity, in a proportion.

The Controlling module can calculate the carbon emissions based mostly on electrical energy utilization. Firms can tailor this calculation methodology relying on their manufacturing location and the supply of renewable vitality in that space. Open knowledge on the proportion of renewable vitality produced within the nation will be included to refine these calculations. For example, if a manufacturing facility is positioned in a area the place 40% of the vitality comes from renewable sources, this proportion can be utilized to regulate the emission issue. The adjustment can decrease the general carbon footprint calculated, reflecting the cleaner vitality utilized in manufacturing. This knowledge must be up to date periodically, making certain that the emission calculations are all the time present and aligned with the most recent renewable vitality statistics.

Moreover, emissions will be mechanically calculated from electrical energy payments (an organization might discover the particular current applications), offering an correct and automatic methodology for accounting for this facet of the carbon footprint.

On the finish of the month, the corporate can allocate knowledge associated to the carbon footprint generated by companies supplied and work carried out to the merchandise manufactured throughout that interval. That is executed in response to the accepted methodology for distributing oblique prices throughout the firm. By doing so, the group ensures that the carbon footprint knowledge is precisely attributed to particular person merchandise, enhancing the reliability of sustainability experiences and facilitating higher strategic selections for lowering general emissions.

The mixing of Materials Variant Configuration in Gross sales Orders with these carbon footprint monitoring options gives a holistic strategy to not solely assembly buyer calls for but in addition attaining company sustainability targets.

Further advantages of utilizing the Materials Variant Configuration

There are some extra advantages of utilizing the fabric variant configuration for an enterprise:

Manufacturing optimization. Not like conventional ‘make-to-stock’ strategies, the place merchandise are pre-manufactured, ‘make-to-order’ manufacturing commences solely upon receipt of a buyer order. Larger scope for product customization permits companies to cater to area of interest markets, probably commanding increased margins. Moreover, the manufacturing is tailor-made to satisfy the exact necessities of the purchasers, making certain that the ensuing merchandise meet their long-term sturdiness and high quality expectations. Optimizing stock ranges and manufacturing schedules can cut back the necessity for frequent and long-term transportation, thereby lowering carbon emissions from automobiles.

Stock value discount. The make-to-order strategy eliminates the holding prices of completed items, liberating up capital in any other case tied up in inventory. The fabric variant configuration permits companies to satisfy buyer wants exactly whereas lowering the need to take care of giant stock ranges. This strategy not solely streamlines logistical prices but in addition lowers vitality consumption in storage amenities, thereby lowering carbon emissions. Decrease cupboard space necessities additionally lead to financial savings on service prices related to warehouse upkeep

Environment friendly useful resource utilization. As a result of manufacturing is initiated by buyer orders, sources will be allotted extra effectively, thereby lowering waste. This implies not simply useful resource financial savings but in addition a discount in emissions associated to waste disposal. The exact configuration of merchandise additionally permits the optimized procurement of uncooked supplies and semi-finished items. Every new buyer order clearly signifies the precise elements required for product manufacturing. Scheduling manufacturing based mostly on pre-configured merchandise permits the corporate to forecast its long-term uncooked materials wants, additional saving on stock storage prices. Correct product specs might result in extra exact forecasting of fabric wants, which may additionally cut back extreme useful resource utilization.

Seasonal elements consideration for manufacturing optimization. Within the default setup of SAP S/4HANA, there isn’t a specialised characteristic that instantly assimilates meteorological knowledge. Nonetheless, the system will be custom-made to combine with exterior climate companies to import related local weather and seasonal knowledge. This integration permits extra correct planning and adaptation of manufacturing processes based mostly on real-time climate situations and seasonal differences. The fabric variant configuration in gross sales orders helps the activation of custom-developed purposeful modules that may execute tailor-made logic. These modules can both use knowledge already built-in into the SAP S/4HANA system or make real-time requests to exterior companies, reminiscent of climate forecasting purposes, to fetch present info. Wanting ahead, this imported meteorological knowledge may very well be used for each fine-tuning manufacturing and optimizing logistical points, like route choice and transportation car alternative.

Packaging choice for completed merchandise. Clients have the choice to specify the kind of packaging for materials supply when putting an order. Relying on the chosen packaging, the system will carry out a recalculation of the delivered product’s carbon footprint. The system can even log packaging as a separate stock merchandise, full with an outline of its traits. As a definite stock merchandise, it may be quantitatively tracked and procured both from third events or via in-house manufacturing, relying on the kind of manufacturing.

Encouraging the number of low carbon footprint merchandise via pricing. The price of the ultimate product will be mechanically calculated based mostly on the chosen choices. Relying on the configuration of the ordered product, the system can flexibly set the bottom worth. It might additionally apply extra reductions or surcharges based mostly on the environmental affect of the chosen traits. This strategy to pricing can encourage clients to decide on extra eco-friendly decisions.

Implementing this pricing technique can have long-term advantages. As client habits knowledge is collected, the corporate can fine-tune the pricing algorithm to make it more practical. This data-driven strategy can even present insights into market traits, enabling the corporate to develop new, extra sustainable merchandise.

Choice for eco-friendly choices of the manufacturing. The system can retailer details about the environmental traits of each the completed product and its elements and equipment, the ERP system can mechanically recommend or choose eco-friendly supplies or elements, supplied that this doesn’t have an effect on the product’s purposeful traits. This contributes on to a discount in manufacturing’s carbon footprint.

Selling environmental duty via know-how. The variant configuration will be additional custom-made or built-in with different techniques to observe and account for environmental indicators all through the product’s lifecycle. This may embrace monitoring emissions throughout transportation, manufacturing, and even the disposal of the product.

Discount of returns and errors. Enhanced order accuracy can result in fewer returns and, consequently, decrease reprocessing and transportation prices.

Conclusion

Whereas not initially designed for environmental administration, the Materials Variant Configuration in SAP S/4HANA considerably enhances each manufacturing and logistics. This optimization has the additional advantage of probably lowering an organization’s carbon footprint, which refers back to the whole quantity of greenhouse gases, particularly carbon dioxide, emitted instantly or not directly by their actions. By integrating this characteristic with techniques and counting for environmental indicators all through a product’s lifecycle, firms can extra systematically observe and cut back their carbon emissions. This makes Materials Variant Configuration in Gross sales Orders improve enterprise course of effectivity and will be built-in into the corporate’s complete environmental technique.

The article is written by Albert Mukhamedshin. Albert Mukhametshin is a advisor and ABAP developer with over 13 years of expertise in implementing and optimizing SAP options, notably within the Gross sales & Distribution (SD), Materials Administration (MM), and Digital Knowledge Interchange (EDI) modules. His proficiency within the ABAP programming language is complemented by in depth expertise working with enterprises throughout industries reminiscent of metal, mining, oil & fuel, in addition to timber processing and federal retail distribution. Albert’s deep experience encompasses a broad vary of SAP-related abilities and a robust dedication to enhancing enterprise processes via superior know-how options.

To attain a complete understanding of SAP configurations and finest practices, Albert invitations you to discover his web site at https://erpflow.tech/. This platform gives an in depth number of articles that delve into totally different SAP system aspects, delivering insightful info and sensible steerage. The content material caters to each skilled SAP customers and newcomers, aiming to bolster your information and software of SAP functionalities inside your organizational framework.

Furthermore, for insights into the skilled journey and credentials behind the experience provided on the web site, be happy to go to his LinkedIn profile at linkedin.com/in/albert-mukhamedshin. Right here, you may join with him and keep up to date on the most recent traits and developments in SAP options. Participating with this skilled community will give you alternatives to debate challenges, share experiences, and discover new dimensions within the realm of enterprise useful resource planning and environmental sustainability.


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