SUSTAINABLE PROCUREMENT - National...

SUSTAINABLE SUSTAINABLE

PROCUREMENTPROCUREMENTOpportunities and Emerging Opportunities and Emerging

RequirementsRequirements

Peter Graf, Ph.D.Peter Graf, Ph.D.

Chief Sustainability OfficerChief Sustainability Officer

December 8, 2011December 8, 2011

© 2011 SAP AG. All rights reserved. 2

Safe Harbor Statement

This document is intended to outline future product direction, and

is not a commitment by SAP to deliver any given code or

functionality. Any statements contained in this document that are

not historical facts are forward-looking statements. SAP

undertakes no obligation to publicly update or revise any forward-

looking statements. All forward-looking statements are subject to

various risks and uncertainties that could cause actual results to

differ materially from expectations. The timing or release of any

product described in this document remains at the sole discretion

of SAP. This document is for informational purposes and may not

be incorporated into a contract. Readers are cautioned not to place

undue reliance on these forward-looking statements, and they

should not be relied upon in making purchasing decisions.


Leader in Apps, Analytics, Mobile & SME


Impact

of the world’s

athletic footwear provided

>86% >70%

of the world’s

chocolate production

automobiles manufactured

per day

>77,000households use energy

more responsibly with

Smart Grid solutions

>30 millionpeople work

more safely

using People Safety solutions

>2 million

>72%

of the world’s

beer production

>50%

of the world’s

packages couriered


Design

Source & Procure

ProduceStore & Ship

Sell & Use

Recycle

INFORMATION

TECHNOLOGYis key to holistically

managing economic,social and environmental risks and opportunities

The Role of IT in Sustainability


Risk

Reduction

Resource

ProductivitySustainable

Workforce

Business modelMarket capBranding

Sustainability Reporting and Analytics

Sustainable

Strategy

Sustainable

Consumption

ProductivityRetentionHealth & DiversityWorkforce planning

People Health and Safety, HCM

Compliance cost reductionProactive risk controlOperational continuity

OperationalRisk Mgmt

Cost reductionthrough process efficienciesSupply chain collaboration

Energy and Environmental Resource Mgmt

CompetitivenessNew marketsBrand valueCustomerloyalty

Sustainable Supply Chain and Products

The Business Case


Procurement Process

Budget Check / ApprovalBudget officer approval, annual appropriations

Requirement DefinitionStructured process,

referral process, complex

Required Sources of Supply

Priority Requirements

Acquisition Planning

Small BusinessSet-Asides

WorkloadManagement

OJEU Synopsis

Amendments

Socio-economic

policiespreferential programs

Structured BidOpeningFour-eyes principle

“Best Value”Bid Evaluation

Two-EnvelopeProcess

Regulatory Clauses Content Management;

EU Directive; US FAR

Corporate regulations

Change Orders(“Mods”)

FundsManagementIncremental funding

Central SupplierRegistration

Prompt Payment

Reporting

Receipt vs.AcceptanceSource Acceptance

Withholds/Retentions

Offsets

AdministrativeClosure

Down payments

Vendor Performance Management

How to evolve

this process for

sustainability?


Supplier Corporate-Level Reporting

Supplier Corporate-Level Reporting

Supplier Supply-

Chain Specific Impact Reporting

Supplier Supply-

Chain Specific Impact Reporting

Product attribute checkboxes

Product attribute checkboxes

Supplier Codes of Conduct

Supplier Codes of Conduct

Regulatory

Compliance (REACH, etc.)

Regulatory

Compliance (REACH, etc.)

Sustainable ProcurementFunctional Requirements

Sustainable Products

Risk and Performance

Complyat lowest cost

Managesuppliers actively

Optimizeyour network

Multi-dimensional product attributes


Sustainable ProcurementTechnical Requirements

cloud

Integrated suppliers:Hub and spokes

architecture

Cloud:Flexible

deployment

Mobile:

Informed decisions

by all participants

In memory:Manage big data

Integrated process:Sourcing, contracting, procurement, finance,

analytics, audit


Sustainable Procurement Networks

Process Manufacturing

Discrete Manufacturing

Energy & Natural Resources

CP & Life Sciences

Sustainable Procurement

B2B Integration

Data Privacy Management

AuditabilityNetwork Security

and Reliability



Buying $3.5 Billion Worth of Supplies in Line with FARComply with Regulation

LargeFederal Agency


500,000 Formulas in 1 System for REACH ComplianceComply with Regulation

� SAP Environment, Health and Safety Management application,

� SAP EHS Regulatory Content

� SAP Environment, Health and Safety Management application,

� SAP EHS Regulatory Content

Solution


Analyzing the Carbon Emissions of 3600+ CompaniesActively Manage Suppliers

� Poor insight to climate change business risk, cost-saving reduction activities and income-generating opportunities

� “Data goes into the Carbon Disclosure Project Database and never comes out”

� Poor insight to climate change business risk, cost-saving reduction activities and income-generating opportunities

� “Data goes into the Carbon Disclosure Project Database and never comes out”

Business Problem

� Time series and industry benchmarking analysis: best practice identification

� Transforms static data into dynamic ROI analysis and cost saving opportunities

� Time series and industry benchmarking analysis: best practice identification

� Transforms static data into dynamic ROI analysis and cost saving opportunities

Benefits & ResultsBenefits & Results


Mass Footprinting 35,000 Products Each MonthOptimize the Network


Save Up To $120M Every Year On Energy YourselfOptimize Your Own Operations


Selected Customer References

Sustainability

Reporting &

Analytics

Energy & Env.

Resource Mgmt.

Operational Risk

Management

Sustainable

Supply Chain

& Products

© 2011 SAP AG. All rights reserved. 17© 2011 SAP AG. All rights reserved. 17

In A Better Run World …

IT leaders become

sustainability

leaders

IT drives economic

opportunity for

everyone

IT helps companies

grow profitably and

sustainably

SAP innovates

social investing

SAP innovates

its own operations

SAP innovates

customer solutions

SummaryEvolution: Comply, Manage, Optimize

End game: Sustainable Purchasing Networks

Key requirement: Integration

Caution: Beware of the weakest link

www.SAPSustainabilityReport.com

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