Stringent climate regulations, pressure from investors, and rising customer expectations are forcing companies across industries to prioritize sustainability. It is time to act on their verbal commitment.

For most organizations, sustainable supply chain management encompassing procurement of goods and services to the point of delivery is at the core of corporate sustainability targets. However, enterprises looking to integrate sustainability into their operations need help with how to act, what resources to invest in, and what to focus on.

SAP Hack2Build is a rapid prototyping initiative for existing partners and prospective innovators using SAP technologies. Participants collaboratively work with SAP experts over seven days to ideate, develop, and showcase innovative solutions addressing business challenges.

During the SAP Hack2Build Demo Jam held on September 15, 2022 Infosys presented an innovative framework for organizations to identify, track, predict, and refine carbon emissions during Sales and Operations planning (S&OP) and make sustainable decisions. The Infosys solution adjudged a winner, is built on SAP Integrated Business Planning (IBP), S4 HANA, and SAP Business Technology Platform Services like SAP Sustainability Footprint Management (SFM) and SAP Integration Suite.

The Infosys carbon footprint solution calculates carbon emissions based on greenhouse gas (GHG) protocols and global warming potential (GWP) factors across an organization´s procurement, production, and distribution processes. Furthermore, the solution calculates CO2e emissions at each order level, giving better visibility to make decisions that ensure a smaller carbon footprint. The Infosys team worked closely with SAP’s technical, functional and GTM teams to launch the solution on the SAP Industry Cloud.

Infosys Solution for Sustainable S&OP Planning

The GHG protocol aims to control an organization’s emission of pollution gases by tracking three types of emissions (Scope 1 emission from assets managed by the organization, Scope 2 emission by electricity and fuel consumption and Scope 3 indirect emission from all purchases by the organization).  The S&OP process decides the level of supply chain activity needed in any organisation, hence one of the key driving factors for arriving at carbon footprint.

For organizations in an SAP environment, a typical S&OP planning in SAP IBP finalizes the production, distribution and procurement plans for the next 18-24 months. However, organizations still need to determine the  sustainability  impact of each of their decisions in S&OP planning, which is often not considered in traditional S&OP. That’s the gap that the Infosys carbon footprint solution aims to bridge by integrating GHG and GWP factors with the S&OP data, making sustainability a key consideration.

Here’s an overview of the Infosys solution.

Figure 2 Sustainable Sales and Operations Planning Solution OverviewThe Infosys solution integrates GHG emission factors and GWP for each greenhouse gas from the GHG framework into SAP IBP. It plays a vital role in calculating the carbon footprint for the complete planning horizon at each step of the S&OP process.

• The emission factors, the distribution plan and the mode of transport selected from the dispatch location help derive the distribution of CO2e emissions.
• The finalized production plan and the production footprint per unit from SAP PFM or manually entered by planners determine the carbon footprint for production.
• The finalized procurement plan and manual input of purchases emission per unit help arrive at the carbon footprint for purchase. Planners can consider various factors related to suppliers, like carbon emissions, lead time, and cost and make informed supplier procurement decisions.

In addition, there are other features to control carbon emissions effectively –

• Dashboards (Plan Vs. Actual emissions) and what-if scenario planning capability (e.g., means of transport decision of Air Vs. Ship) in SAP IBP allow planners to consider emission impact at every step of the S&OP decision-making.
• The Infosys solution also integrates actual sales, production, purchase and stock transport orders from SAP S4 HANA / ECC into SAP IBP and calculates actual CO2e emissions at order level in SAP IBP. This is then fed into SAP S4 HANA / ECC for the operations team to compare the order level, month-to-date, year to date emissions consumed with the planned numbers during S&OP.
• Based on the actual carbon emissions data derived in SAP IBP, the solution can also predict future carbon emissions by using SAP IBP’s machine learning (ML) algorithms

Proactively addressing challenges

The Infosys solution delivers a multitude of tangible business benefits, empowering companies to make informed, sustainable decisions, including:

• Reduce carbon footprint significantly with better planning and optimizing sustainable means of transport.
• Enhance visibility into high-carbon SKUs, enabling companies to strategize effectively and cut emissions.
• Curate a more sustainable product portfolio that aligns with eco-conscious consumer preferences by understanding the carbon footprint of various products
• Adopt a phased approach to achieving sustainable targets, as the solution can accommodate companies at different maturity levels of their sustainability journey.
  • Level 1: Plan & Estimate carbon footprint for the S&OP plan with scenarios and dashboards.
  • Level 2: Estimate Vs. Actuals Generate Carbon footprint for historical data and do plan vs. actual comparison by calculating carbon footprint accuracy through snapshots.
  • Maturity Level 3: Improve Estimate by using AI/ML algorithms to generate projected carbon footprint.
  • Level 4: Control & Limit by comparing order level carbon footprint data with WTD/MTD/YTD and target and generate appropriate alerts.
  • Level 5: Attain Sustainability Targets through automatic constrained plan generation that matches carbon footprint targets.

Driving Greener Futures with Infosys and SAP

As the world pivots towards a greener future, sustainable supply chain management emerges as a crucial enabler of corporate sustainability. Through its innovative and sophisticated framework built on the SAP platform, Infosys empowers companies to embark on their sustainability journey with conviction.

Holger Brammer, Global VP – Industry Ecosystem at SAP, captures it aptly – “It was amazing to see how fast Infosys developed their Sustainable S&OP and Carbon Footprint Management solution on SAP BTP and integrated their solution with S/4HANA, IBP and SFM. I’m quite confident that this solution will resonate very well with customers.”