The German software company SAP is a leader in using computer analytics to help a company reduce its environmental footprint while also saving a few bucks. This week, SAP unveiled software that can establish how much CO2 and water it takes to make an individual product.
SAP’s first partner on the technology is Groupe Danone, the French multinational foodmaker known in the U.S. as Dannon. By the end of the year, Danone expects to be using SAP’s technology to evaluate 35,000 products, according to Peter Graf, SAP’s chief sustainability officer.
Many firms are reluctant to look deeply into the supply chain, that web of outside manufacturers and suppliers that supply the components of an end product. The endeavor is expensive and doesn’t at first seem to be of much use. But as customers demand greener goods and regulations begin to force industry to lower its carbon emissions, business are paying closer attention.
The exemplar in supply chain efficiency is the outdoor clothier Patagonia, which has made a crusade of working with its suppliers around the world to flush out waste at the factory, and then present the results on its website.
SAP software doesn’t require that level of zeal or transparency. It takes the company’s Business Objects software suite, which was created to analyze other business functions, and applies it to the “bill of materials” that is essentially a product’s ingredient list. For a cup of yogurt, Graf said, it might comprise everything from the raw plastic used to make the lid to the crop of strawberries.
(Which also explains how Danone is applying the analytics to 35,000 products. No, there aren’t 34,996 kinds of Dannon yogurt you’ve never heard of. That’s the number of combinations of materials that make up the products in question.)
From there, product managers and suppliers can work together to plug in as much information as is known about the carbon emissions generated and the water used to make these component parts.
Along the way, Graf said, it may become clear that one supplier is using more resources than another. And in many cases that may nudge the supplier to change its wasteful ways in order to keep in its client company’s good graces.
Article by David Ferris, appearing courtesy the Matter Network.