sustainable procurement - national...
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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.
© 2011 SAP AG. All rights reserved. 3
Leader in Apps, Analytics, Mobile & SME
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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
© 2011 SAP AG. All rights reserved. 5
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
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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
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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?
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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
© 2011 SAP AG. All rights reserved. 9
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
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Sustainable Procurement Networks
Process Manufacturing
Discrete Manufacturing
Energy & Natural Resources
CP & Life Sciences
Sustainable Procurement
B2B Integration
Data Privacy Management
AuditabilityNetwork Security
and Reliability
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© 2011 SAP AG. All rights reserved. 11
Buying $3.5 Billion Worth of Supplies in Line with FARComply with Regulation
LargeFederal Agency
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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
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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
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Mass Footprinting 35,000 Products Each MonthOptimize the Network
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Save Up To $120M Every Year On Energy YourselfOptimize Your Own Operations
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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
© 2011 SAP AG. All rights reserved. 18© 2011 SAP AG. All rights reserved. 18
SummaryEvolution: Comply, Manage, Optimize
End game: Sustainable Purchasing Networks
Key requirement: Integration
Caution: Beware of the weakest link
www.SAPSustainabilityReport.com