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Contribution of Procurement to the sustainability agenda. by Franck Dupas, Business Development Manager, Procurement Solutions, SAP EMEA Sales. Presented at the SAP Procurement & Logistics Day 2012.
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SAP Procurement & Logistics Day 2012
30 augustus
Contribution of Procurement
to the sustainability agenda Franck Dupas, Business Development Manager, Procurement Solutions, SAP EMEA Sales
August 30th, 2012
© 2012 SAP AG. All rights reserved. 3
Agenda
Introduction: Procurement and Sustainability
The Products: REACH Compliance
The Vendors: Vendor Sustainability Evaluation
The Purchasing: Sustainability in Requisition and Catalog Search
© 2012 SAP AG. All rights reserved. 4
Social
Provide for health
and safety and fair
labor practices across
value chain
Environmental
Minimize negative
impact on the planet
across the entire value
chain & product lifecycle
Financial
Embed social and
environmental aspects
into business for higher
profits or lower risk
Holistically manage social, environmental and financial
risks and opportunities for profitability, reputation and compliance
What is Sustainability all about? – Raising Profitability!
“…that High Sustainability companies significantly outperform their counterparts over the
long-term, both in terms of stock market and accounting performance … is higher … by 4.8% ...” Harvard Business School, The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance, May 9, 2012 http://www.hbs.edu/research/pdf/12-035.pdf
© 2012 SAP AG. All rights reserved. 5
NGOs and Governments
+3,400 companies disclose their
sustainability performance,
+2000 new EHS regulations up 72% from 2007
Investors
$5 trillion in socially
responsible investment
funds
Customers
Sustainability as a common
evaluation criteria
Executive Management
Improve operating margins
(e.g., energy efficiencies, reduce waste)
Managing Sustainability Performance –
Is It Really Voluntary?
© 2012 SAP AG. All rights reserved. 6
Unorganized collection
leads to inaccuracies
Lack of alignment to company
structures and processes limits
insights and management
What Makes Managing
Sustainability Performance Difficult?
CSO Reports annually
Rapidly evolving
standards limits
ability to frequently
track progress
Information and data is
spread across many
people and systems
Communicates
Activists, Investors, Customers
EHS Manufacturing Supply Chain /
Procurement Finance HR Facilities Employees
MISSION
HR
Finance
Manufacturing
© 2012 SAP AG. All rights reserved. 7
Globalization Sustainability Economic Recovery
Focus on Efficiency
Growing Supplier
Risk
Supply base becoming
more global with
continued instability
Need to effectively
manage risk and
provide insights
Importance of
Governance
Increased pressure on
sustainability and CSR
objectives
New regional and
global regulations
Continued Focus
on Costs
Instantiating new
approaches to savings
that were developed in
the downturn
Continued pressure to
provide spend visibility
and management
Global Trends are Driving Change in Procurement
Practices
Demand for Rapid
Productivity
Employees requiring
intuitive self services
Focus on automated
and integrated
processes
© 2012 SAP AG. All rights reserved. 8
Agenda
Introduction: Procurement and Sustainability
The Products: REACH Compliance
The Vendors: Vendor Sustainability Evaluation
The Purchasing: Sustainability in Requisition and Catalog Search
© 2012 SAP AG. All rights reserved. 9
Product Compliance and Responsibility – Pressure from
All Sides
Customers/
Distributors
Regulators
Investors and other Stakeholders
Suppliers &
Partners
Comply with REACH, RoHS, Clean Air Act, ……..
Comply with ELV,
REACH, RoHS…..
Is your company
environmentally
responsible?
ISO 14000 registered?
Should I buy products
from this company?
Is this company
environmentally
responsible?
Should I buy products
from this company?
Are you running the company in an environmentally
responsible manner?
Consumers Is this company
environmentally
responsible?
Should I buy products
from this company?
YOU
© 2012 SAP AG. All rights reserved. 10
Product and REACH Compliance: Supplier
Communication
© SAP 2008 / Page 10
© 2012 SAP AG. All rights reserved. 11
Purchasing integration
At creation of a Purchase
Order, the compliance
status of the material is
checked
© 2012 SAP AG. All rights reserved. 12
Agenda
Introduction: Procurement and Sustainability
The Products: REACH Compliance
The Vendors: Vendor Sustainability Evaluation
The Purchasing: Sustainability in Requisition and Catalog Search
© 2012 SAP AG. All rights reserved. 13
Sustainable Vendors Sustainability in Master Data & Procurement Process
Sustainability Master
Data
Vendor Evaluation
Source of supply selection in
PR
Reporting &
Analysis
Vendor sustainability record
Captures sustainability details for a Vendor and computes an
overall score
Keeps track of vendor’s past performance
Vendor-Material sustainability info
record
Captures information for a vendor-material combination
Information is uploaded to catalog
Vendor Evaluation & Purchasing
Evaluate vendor based on sustainability in vendor evaluation
Source of supply selection in purchase requisition
Reporting & Analysis
Reporting and analysis of Vendor Sustainability information
© 2011 SAP AG. All rights reserved. 14 14 This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
Sustainable Procurement New Vendor Sustainability Record
New Vendor Sustainability Record
Captures sustainability details
for a Vendor and computes an
overall score
Keeps track of vendor’s past
performance
Business Value
Capture supplier details in a single repository
Exceed sustainability goals through increased visibility into
supplier records and performance
Leverage easy-to-use sustainability reports and shorten
evaluation times
Customer business challenges
Lack of central repository for vendor material data
Inability to evaluate vendors based on sustainability
criteria and benchmarking
Release Functionality:
© 2011 SAP AG. All rights reserved. 15 15 This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
Sustainable Procurement New Vendor Material Sustainability Info Record
New Vendor-Material Sustainability Info
Record
Captures information for a vendor-
material combination
Information is uploaded to catalog
through MECCM report
One place entry of material sustainability
details + more flexibility
Access points
Can be accessed from Buyer role both in
Portal and also NWBC
From existing Vendor Master in ECC
Side Panel
This screen is enhanced with side panel
to display graphs / analytics
Trend of particular Vendor with respect to
sustainable values
Business Value
Efficient information gathering
Proactive development of sustainable and best suppliers
Built-in sustainability for Procurement processes
Customer business challenges
Manage increased supply chain risks
Avoid customer revenue loss
Increased focus on governance and compliance
Identifying of environment friendly materials
Release Functionality:
Create the info record
for sustainability
© 2011 SAP AG. All rights reserved. 16 16 This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
Sustainable Procurement Vendor Evaluation and Purchasing
Vendor Evaluation & Purchasing
•Evaluate vendor based on
sustainability in vendor evaluation
•Source of supply selection in
purchase requisition
Business Value
Efficient information gathering
Proactive development of sustainable and best suppliers
Meet sustainable procurement goals
Release Functionality:
Customer business challenges
Manage increased supply chain risks
Avoid customer revenue loss
Increased focus on governance and compliance
© 2011 SAP AG. All rights reserved. 17 17 This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
Sustainable Procurement Reporting and Analysis
Reporting & Analysis
Reporting and analysis of Vendor
Sustainability information
Need Content!
Business Value
Increased focus on governance and compliance
Make informed purchasing decisions
Sustainability aspects over the life cycle of the product
Providing of metrics for buyers in Procurement
Customer business challenges
Governance and compliance requirements
Release Functionality:
New report that lists sustainability values for all
vendors. By default, only the current record for each
vendor is shown. All records can be selected and
listed.
© 2012 SAP AG. All rights reserved. 18
SAP Supplier Lifecycle Management Sustainability Scorecard
SAP Supplier Lifecycle
Management sustainability
features enables you to:
• Score suppliers based
on their social and
environmental
performance.
• Compare suppliers on
their performance.
• Track suppplier
development
• Manage your supplier
base from a
sustainability
perspective.
© 2012 SAP AG. All rights reserved. 19
Agenda
Introduction: Procurement and Sustainability
The Products: REACH Compliance
The Vendors: Vendor Sustainability Evaluation
The Purchasing: Sustainability in Requisition and Catalog Search
© 2012 SAP AG. All rights reserved. 20
Sustainable Procurement Vendor Evaluation Info in Purchase Requisition
Vendor Evaluation Info, including
Sustainability Scores, displayed in side
panel when processing Purchase
Requisitions
© 2012 SAP AG. All rights reserved. 21
SAP Enhancement Package 2 for SAP SRM 7.0 Sustainability Parameters in Catalog
SAP MDM catalog is enhanced to include sustainability information record details.
Sustainability
Indicator
Sustainability
parameters,
Certificates
Sustainability
Details Tab
Thank you
Contact information:
Franck Dupas
Business Development Manager, Procurement Solutions, SAP EMEA Sales
+33 6 2274 4004