Contribution of Procurement to the sustainability agenda

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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.

Published in: Technology, Business
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Contribution of Procurement to the sustainability agenda

  1. 1. SAP Procurement & Logistics Day 201230 augustus
  2. 2. Contribution of Procurementto the sustainability agendaFranck Dupas, Business Development Manager, Procurement Solutions, SAP EMEA SalesAugust 30th, 2012
  3. 3. AgendaIntroduction: Procurement and SustainabilityThe Products: REACH ComplianceThe Vendors: Vendor Sustainability EvaluationThe Purchasing: Sustainability in Requisition and Catalog Search© 2012 SAP AG. All rights reserved. 3
  4. 4. What is Sustainability all about? – Raising Profitability! Holistically manage social, environmental and financial risks and opportunities for profitability, reputation and complianceSocial Environmental FinancialProvide for health Minimize negative Embed social andand safety and fair impact on the planet environmental aspectslabor practices across across the entire value into business for highervalue chain chain & product lifecycle profits or lower risk“…that High Sustainability companies significantly outperform their counterparts over thelong-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. 4
  5. 5. Managing Sustainability Performance –Is It Really Voluntary?Executive Management CustomersImprove operating margins Sustainability as a common(e.g., energy efficiencies, reduce waste) evaluation criteriaNGOs and Governments Investors+3,400 companies disclose theirsustainability performance, $5 trillion in socially+2000 new EHS regulations up 72% from 2007 responsible investment funds © 2012 SAP AG. All rights reserved. 5
  6. 6. What Makes ManagingSustainability Performance Difficult?Rapidly evolving standards limits ability to frequently Reports annually CSO Communicates track progress Activists, Investors, Customers Unorganized collection leads to inaccuraciesLack of alignment to company MISSION structures and processes limits HR insights and management Finance ManufacturingInformation and data is spread across many people and systems Supply Chain / EHS Manufacturing Finance HR Facilities Employees Procurement© 2012 SAP AG. All rights reserved. 6
  7. 7. Global Trends are Driving Change in ProcurementPractices Economic Focus on Recovery Globalization Sustainability Efficiency Continued Focus Growing Supplier Importance of Demand for Rapid on Costs Risk Governance Productivity  Instantiating new  Supply base becoming  Increased pressure on  Employees requiring approaches to savings more global with sustainability and CSR intuitive self services that were developed in continued instability objectives  Focus on automated the downturn  Need to effectively  New regional and and integrated  Continued pressure to manage risk and global regulations processes provide spend visibility provide insights and management© 2012 SAP AG. All rights reserved. 7
  8. 8. AgendaIntroduction: Procurement and SustainabilityThe Products: REACH ComplianceThe Vendors: Vendor Sustainability EvaluationThe Purchasing: Sustainability in Requisition and Catalog Search© 2012 SAP AG. All rights reserved. 8
  9. 9. Product Compliance and Responsibility – Pressure fromAll Sides Comply with REACH, RoHS, Clean Air Act, …….. Regulators Consumers Is this company environmentally responsible? Should I buy products from this company?Suppliers & PartnersIs this company YOUenvironmentally Customers/responsible? DistributorsShould I buy products Comply with ELV,from this company? REACH, RoHS….. Is your company environmentally responsible? ISO 14000 registered? Investors and other Stakeholders Should I buy products Are you running the company in an environmentally from this company? responsible manner?© 2012 SAP AG. All rights reserved. 9
  10. 10. Product and REACH Compliance: Supplier Communication © 2012 SAP AG. All rights reserved. 10© SAP 2008 / Page 10
  11. 11. Purchasing integration At creation of a Purchase Order, the compliance status of the material is checked© 2012 SAP AG. All rights reserved. 11
  12. 12. AgendaIntroduction: Procurement and SustainabilityThe Products: REACH ComplianceThe Vendors: Vendor Sustainability EvaluationThe Purchasing: Sustainability in Requisition and Catalog Search© 2012 SAP AG. All rights reserved. 12
  13. 13. Sustainable VendorsSustainability in Master Data & Procurement Process Vendor sustainability record Captures sustainability details for a Vendor and computes an overall score Keeps track of vendor’s past performance Sustainability Master Data Vendor-Material sustainability info record Captures information for a vendor-material combination Vendor Evaluation Information is uploaded to catalog  Vendor Evaluation & Purchasing Source of supply selection in PR Reporting & Analysis Evaluate vendor based on sustainability in vendor evaluation Source of supply selection in purchase requisition  Reporting & Analysis Reporting and analysis of Vendor Sustainability information© 2012 SAP AG. All rights reserved. 13
  14. 14. Sustainable Procurement New Vendor Sustainability RecordCustomer business challenges Business Value  Lack of central repository for vendor material data  Capture supplier details in a single repository  Inability to evaluate vendors based on sustainability  Exceed sustainability goals through increased visibility into criteria and benchmarking supplier records and performance  Leverage easy-to-use sustainability reports and shorten evaluation timesRelease Functionality: New Vendor Sustainability Record  Captures sustainability details for a Vendor and computes an overall score  Keeps track of vendor’s past performance 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 © 2011 SAP AG. All rights reserved. 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 14
  15. 15. Sustainable Procurement New Vendor Material Sustainability Info RecordCustomer business challenges Business Value  Manage increased supply chain risks  Efficient information gathering  Avoid customer revenue loss  Proactive development of sustainable and best suppliers  Increased focus on governance and compliance  Built-in sustainability for Procurement processes  Identifying of environment friendly materials Release Functionality: Create the info record New Vendor-Material Sustainability Info  for sustainability 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 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 © 2011 SAP AG. All rights reserved. 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 15
  16. 16. Sustainable Procurement Vendor Evaluation and PurchasingCustomer business challenges Business Value  Manage increased supply chain risks  Efficient information gathering  Avoid customer revenue loss  Proactive development of sustainable and best suppliers  Increased focus on governance and compliance  Meet sustainable procurement goalsRelease Functionality: Vendor Evaluation & Purchasing •Evaluate vendor based on sustainability in vendor evaluation •Source of supply selection in purchase requisition 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 © 2011 SAP AG. All rights reserved. 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 16
  17. 17. Sustainable Procurement Reporting and AnalysisCustomer business challenges Business Value  Governance and compliance requirements  Increased focus on governance and compliance  Make informed purchasing decisions  Sustainability aspects over the life cycle of the productRelease Functionality:  Providing of metrics for buyers in Procurement Reporting & Analysis Reporting and analysis of Vendor  New report that lists sustainability values for all Sustainability information vendors. By default, only the current record for each Need Content! vendor is shown. All records can be selected and listed. 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 © 2011 SAP AG. All rights reserved. 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 17
  18. 18. SAP Supplier Lifecycle ManagementSustainability 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. 18
  19. 19. AgendaIntroduction: Procurement and SustainabilityThe Products: REACH ComplianceThe Vendors: Vendor Sustainability EvaluationThe Purchasing: Sustainability in Requisition and Catalog Search© 2012 SAP AG. All rights reserved. 19
  20. 20. Sustainable ProcurementVendor Evaluation Info in Purchase RequisitionVendor Evaluation Info, includingSustainability Scores, displayed in sidepanel when processing PurchaseRequisitions© 2012 SAP AG. All rights reserved. 20
  21. 21. SAP Enhancement Package 2 for SAP SRM 7.0Sustainability Parameters in CatalogSAP MDM catalog is enhanced to include sustainability information record details. Sustainability Indicator Sustainability Details Tab Sustainability parameters, Certificates© 2012 SAP AG. All rights reserved. 21
  22. 22. Thank youContact information:Franck DupasBusiness Development Manager, Procurement Solutions, SAP EMEA Salesfranck.dupas@sap.com+33 6 2274 4004

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