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

​​Sustainability is more and more related in at the moment’s enterprise panorama. Corporations face rising strain to take care of transparency of their information and operations. SAP provides complete sustainability administration options masking Environmental, Social, and Company Governance (ESG) information reporting, local weather motion, the round economic system, and social accountability.

SAP supplies the following local weather motion options supposed to cut 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 Setting, Well being, and Security Administration
  3. Local weather motion options.

Within the context of rising environmental consciousness and social accountability, it’s changing into more and more essential for corporations to think about their carbon footprint. One option to decrease environmental impression is to optimize inside enterprise processes.

Aside from these specialised options, corporations can even make the most of normal SAP S/4HANA modules for enterprise course of optimization. The main focus right here isn’t just on cost-efficiency but additionally on eco-consciousness. On the coronary heart of this transition lies integration of Logistics and Gross sales and Distribution, significantly the Materials Variant Configuration function. This software 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 additionally in streamlining stock, thereby lowering waste and vitality consumption.

In contrast to conventional ‘make-to-stock’ strategies, the place manufacturing volumes are predetermined based mostly on gross sales forecasts and former demand, the ‘make-to-order’ method supported by Materials Variant Configuration eliminates the necessity to maintain giant inventories of completed items. This, in flip, reduces vitality consumption in storage services and contributes to reducing the corporate’s carbon footprint. The function is tightly built-in with the ‘Materials Grasp Document,’ a centralized information repository capturing important materials particulars throughout numerous departments, together with manufacturing and gross sales. This materials grasp file is instrumental in shaping future product configurations and serves as a cornerstone for the corporate’s sustainability efforts.

Materials Variant Configuration provides extra than simply product customization and stock administration. It supplies alternatives for additional customization by incorporating real-time environmental and seasonal information. This adaptability permits corporations to make dynamic, eco-friendly selections that aren’t solely helpful for the planet but additionally probably worthwhile. By way of a posh array of choices and parameters, this function could be custom-made to satisfy a corporation’s distinctive wants, making it a beneficial asset within the fashionable, 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 information repository, storing various attributes and traits of supplies, reminiscent of their ID, description, items of measure, and different important particulars. With the rising emphasis on sustainability and ecological accountability, it’s essential so as to add the carbon footprint of every materials to this file. Listed below are the preliminary evaluation and data gathering strategies that define the way to incorporate carbon footprint information into the Materials Grasp Document:

  1. Provider Information. Collaborate with suppliers to acquire exact information on carbon emissions generated through 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 information could also be recorded within the Materials Classification part in ‘Materials Grasp Document’ of every materials inside the Supplies Administration module.
  2. Lifecycle Evaluation. Conduct a radical lifecycle evaluation of every materials to judge 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 information. This info permits an preliminary estimate of the carbon footprint for every unit of product, thereby facilitating extra correct environmental impression 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 strains. These prices could be allotted based mostly on numerous components, reminiscent of the amount of uncooked materials consumed, machine working hours, or emission volumes generated throughout manufacturing.

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

  3. Exterior Databases. Leverage present environmental impression databases to safe standardized carbon emission components for generally used supplies.

Corporations will quickly be capable of use Inexperienced Token by SAP S/4 HANA for monitoring uncooked supplies, a function already in use by some prospects.  This can allow automated information trade regarding the carbon footprint of every materials. Nevertheless, corporations can already begin evaluating their environmental impression utilizing present instruments.

Materials Variant Configuration in SAP S/4HANA

The important thing parts of the Materials Variant Configuration structure inside 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 prospects for particular merchandise. This software is a part of SAP S/4HANA and different Enterprise Useful resource Planning (ERP) programs like SAP S/4HANA that enables for the configuration of advanced merchandise based mostly on buyer necessities. This software permits for the definition of assorted product choices and parts, 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 information repository capturing important materials particulars throughout departments like manufacturing and gross sales. This file kinds the cornerstone for future product configurations. Every ‘Materials Grasp Document’ possesses distinct traits that outline the properties and parameters of each the parts concerned and the resultant product.

When a buyer locations an order for a custom-made product, the variant configuration routinely considers the traits specified by the shopper. It subsequently selects the appropriate supplies or parts wanted to supply the custom-made product. Based mostly on the fabric variant configuration information, 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 provides a specialised module known as ‘Sustainability Footprint Administration’. For corporations not but prepared to take a position on this specialised answer, a custom-made method utilizing present SAP modules could be thought-about, as outlined under:

The combination of carbon footprint information in several Materials Administration, Gross sales and Distribution, Manufacturing Planning, Logistics, Controlling and different modules provides a strong method for monitoring and lowering a product’s environmental impression. The Supplies Administration module captures the carbon footprint related to uncooked supplies, parts, and semi-finished supplies. This information is important for understanding the environmental impression on the preliminary phases of manufacturing.

Then again, the Controlling module can account for emissions derived from vitality consumption (pure gasoline, oil, biomass, electrical energy, gas, paper, supplies, and many others.) through the manufacturing course of. The components could be 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. Corporations can tailor this calculation technique relying on their manufacturing location and the supply of renewable vitality in that space. Open information on the share of renewable vitality produced within the nation could be included to refine these calculations. As an illustration, if a manufacturing facility is situated 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 information must be up to date periodically, making certain that the emission calculations are at all times present and aligned with the newest renewable vitality statistics.

Moreover, emissions could be routinely calculated from electrical energy payments (an organization might discover the particular present packages), offering an correct and automatic technique for accounting for this facet of the carbon footprint.

On the finish of the month, the corporate can allocate information associated to the carbon footprint generated by providers offered and work carried out to the merchandise manufactured throughout that interval. That is finished in accordance with the authorised methodology for distributing oblique prices inside the firm. By doing so, the group ensures that the carbon footprint information is precisely attributed to particular person merchandise, enhancing the reliability of sustainability stories and facilitating higher strategic selections for lowering general emissions.

The combination of Materials Variant Configuration in Gross sales Orders with these carbon footprint monitoring options provides a holistic method to not solely assembly buyer calls for but additionally reaching company sustainability targets.

Further advantages of utilizing the Materials Variant Configuration

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

Manufacturing optimization. In contrast to conventional ‘make-to-stock’ strategies, the place merchandise are pre-manufactured, ‘make-to-order’ manufacturing commences solely upon receipt of a buyer order. Better scope for product customization permits companies to cater to area of interest markets, probably commanding larger margins. Moreover, the manufacturing is tailor-made to satisfy the exact necessities of the shoppers, making certain that the ensuing merchandise meet their long-term sturdiness and high quality expectations. Optimizing stock ranges and manufacturing schedules can scale back the necessity for frequent and long-term transportation, thereby lowering carbon emissions from autos.

Stock value discount. The make-to-order method 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 method not solely streamlines logistical prices but additionally lowers vitality consumption in storage services, thereby lowering carbon emissions. Decrease space for storing necessities additionally end in 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 could be allotted extra effectively, thereby lowering waste. This implies not simply useful resource financial savings but additionally 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 particular parts 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 might additionally scale back extreme useful resource utilization.

Seasonal components consideration for manufacturing optimization. Within the default setup of SAP S/4HANA, there is no such thing as a specialised function that immediately assimilates meteorological information. Nevertheless, the system could be custom-made to combine with exterior climate providers to import related local weather and seasonal information. 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 information already built-in into the SAP S/4HANA system or make real-time requests to exterior providers, reminiscent of climate forecasting functions, to fetch present info. Wanting ahead, this imported meteorological information may very well be used for each fine-tuning manufacturing and optimizing logistical features, like route choice and transportation automobile selection.

Packaging choice for completed merchandise. Clients have the choice to specify the kind of packaging for materials supply when inserting 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 by means of in-house manufacturing, relying on the kind of manufacturing.

Encouraging the choice of low carbon footprint merchandise by means of pricing. The price of the ultimate product could be routinely calculated based mostly on the chosen choices. Relying on the configuration of the ordered product, the system can flexibly set the bottom worth. It could actually additionally apply further reductions or surcharges based mostly on the environmental impression of the chosen traits. This method to pricing can encourage prospects to decide on extra eco-friendly decisions.

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

Desire for eco-friendly choices of the manufacturing. The system can retailer details about the environmental traits of each the completed product and its parts and equipment, the ERP system can routinely recommend or choose eco-friendly supplies or parts, offered 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 accountability by means of expertise. The variant configuration could be additional custom-made or built-in with different programs to observe and account for environmental indicators all through the product’s lifecycle. This could 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 benefit of doubtless lowering an organization’s carbon footprint, which refers back to the complete quantity of greenhouse gases, particularly carbon dioxide, emitted immediately or not directly by their actions. By integrating this function with programs and counting for environmental indicators all through a product’s lifecycle, corporations can extra systematically monitor and scale back their carbon emissions. This makes Materials Variant Configuration in Gross sales Orders improve enterprise course of effectivity and could be built-in into the corporate’s complete environmental technique.

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

To realize a complete understanding of SAP configurations and greatest practices, Albert invitations you to discover his web site at https://erpflow.tech/. This platform provides an in depth choice of articles that delve into completely different SAP system aspects, delivering insightful info and sensible steering. The content material caters to each skilled SAP customers and newcomers, aiming to bolster your information and utility 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 at liberty to go to his LinkedIn profile at linkedin.com/in/albert-mukhamedshin. Right here, you possibly can join with him and keep up to date on the newest tendencies and developments in SAP options. Participating with this skilled community will offer 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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