Contribution of Procurement to the sustainability agenda

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


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

http://www.hbs.edu/research/pdf/12-035.pdf




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?


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


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


Agenda






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?


from this company?

Are you running the company in an environmentally

responsible manner?

Consumers Is this company

environmentally

responsible?


from this company?

YOU


Product and REACH Compliance: Supplier

Communication

© SAP 2008 / Page 10


Purchasing integration

At creation of a Purchase

Order, the compliance

status of the material is

checked


Agenda






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:


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


Manage increased supply chain risks

Avoid customer revenue loss

Increased focus on governance and compliance

Identifying of environment friendly materials


Create the info record

for sustainability


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



Manage increased supply chain risks

Avoid customer revenue loss



Sustainable Procurement Reporting and Analysis

Reporting & Analysis

Reporting and analysis of Vendor

Sustainability information

Need Content!

Business Value


Make informed purchasing decisions

Sustainability aspects over the life cycle of the product

Providing of metrics for buyers in Procurement


Governance and compliance requirements


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.


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.


Agenda






Sustainable Procurement Vendor Evaluation Info in Purchase Requisition

Vendor Evaluation Info, including

Sustainability Scores, displayed in side

panel when processing Purchase

Requisitions


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

[email protected]

+33 6 2274 4004

Technology

Contribution of Procurement to the sustainability agenda