Net Zero for more sustainability in production
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Net Zero for more sustainability in production Savings potential and opportunities in the production environment
Initially ridiculed as a marketing-driven buzzword, sustainability is now a globally explosive topic. In order to counteract the effects of climate change, companies must also step up their efforts and continue to drastically reduce their greenhouse gas emissions. We have already provided information on how this can be done in the area of transportation and logistics with a direct impact on the supply chain in our blog (blog post "Sustainability in logistics"). But what about production? Not only energy-intensive industries consume a lot of energy, but also "classic" production facilities with large machine parks produce exhaust gases.
In order to be able to set levers in motion here, the ultimate goal of which is CO2-neutral production (zero emissions), the polluter pays principle must first be clarified. Furthermore, it is imperative to reduce the consumption of resources (zero waste). We have summarized for you here why "Data Process Mining" in particular provides valuable solutions in this context to at least come close to the "net zero target".
FAQs
Net zero supply chain management (net zero)(1) refers to the design and management of supply chains with the aim of successively reducing greenhouse gas emissions (CO2) to zero. In addition to the quality of products, services along the supply chain must also be put to the test.
Data process mining is a method for identifying digital traces left behind in information systems, for example in production, logistics and transportation. Visualization makes it possible to combine and evaluate this data in order to eliminate bottlenecks in processes and exploit further potential for optimization.
Climate protection targets and initiatives
The yardstick - not only in the figurative sense - for all activities should be the targets defined in the Paris Climate Agreement (Paris-Aligned) of 2015. According to this, it is necessary to limit the global temperature rise to 1.5 degrees Celsius by 2030 if possible. The agreement was preceded by the adoption of the 2030 Agenda, in which the United Nations laid down 17 Sustainable Development Goals (2), including - to remain in the current context - "sustainable production and consumption" and "global climate action".
Similarly, strategies can be derived that need to be implemented at company level in order to achieve Europe-wide climate neutrality (net zero) by 2050. The aim is to reduce both our own CO2 emissions and those caused by business-related third parties. In areas where this is not possible, the principle of offsetting applies, for example through contributions to climate protection projects.
Lean management as a driving force
But how do you start with life cycle assessment, especially in the area of production as a core element of the value chain? Data and its evaluation are also indispensable in this case. But first, a look at the company's internal organizational structure and processes can be helpful. In a recent blog post, we looked at the principles, methods and benefits of lean management, with a focus on transportation and logistics.
Especially when it comes to reducing the waste of resources, approaches from this can certainly be transferred to production.
Zero waste - the path to a circular economy
The next step is to subject the manufactured products to a cradle-to-cradle (C2C) check in accordance with the principles of the circular economy - ideally in the form of workshops. The central question here is: To what extent are components/products designed in such a way that they can be transformed back into raw materials at the end of their life/use cycle and recycled ? Keyword: zero waste. Determining this and, if necessary, reorganizing procurement is an ambitious task that requires participants from all departments. In terms of sustainability , however, there is no alternative in the long term, at least to a large extent.
What can data process mining do?
Data process mining sheds light on the proverbial darkness not only in warehouse logistics, but also in production and assembly. The task now is to evaluate historical process data stored in an ERP system, for example, and create transparency. The higher the quality of the data, the easier it is to obtain information about (unnecessary) deviations and inefficiencies in the processes with the support of software and artificial intelligence (AI).
Companies that use data process mining methods for process optimization for the first time are often amazed or even delighted at the opportunities they have to reduce energy and operating costs - and therefore also their carbon footprint.
Data pool for optimization and (external) documentation
It may initially sound like a mammoth task to sound out all the possibilities, prioritize them and structure them appropriately. However, the effort is more of an initial nature and pays for itself (to use a term from the business world). For example, you gain a solid, meaningful database that can be used, among other things, for the establishment and continuation of the Greenhouse Gas Protocol(3) .
This classifies greenhouse gas emissions into three categories: - Scope 1 refers to direct emissions caused by the company itself - Scope 2 refers to indirect emissions resulting from purchased services, such as electricity, heating or cooling - Scope 3 also includes indirect emissions that occur along the entire supply chain. Transport management systems (TMS) such as SAP TM and warehouse management systems (WMS) such as SAP EWM are also valuable data providers.
Data from SAP S/4HANA can also be documented and visualized in the SAP Sustainability Footprint Manager (SFM). We will come back to this in a moment.
Conclusion and outlook
Companies pursuing the goal of implementing net-zero supply chain management in order to ensure a sustainable future for future generations are advised to take the following measures as a first step:
- Create a solid database involving all relevant supply chain partners
- Set CO2 reduction targets for a defined period and establish them as a governance mechanism
- Utilize the (interdisciplinary) experience of employees from all departments
- Review product quality and, if necessary, reform procurement strategy by setting (minimum) standards
- Cooperate with suppliers and utilize economies of scale whenever possible
If you are convinced of the need for greater commitment, but have not yet found a suitable solution for you, here's a little tip: one of the upcoming blog posts will focus on "SAP Sustainability Footprint Management " - true to the motto "to be continued". This new SAP product makes it even easier to calculate the carbon footprint of goods across the entire value chain. This allows you to create meaningful reports that also convince stakeholders, supervisory authorities and the public, who are becoming increasingly aware of climate and environmental protection. Stay tuned!
We look forward to hearing from you!
Sources:
- Is Net Zero the same as climate neutral? | Climate Partner: www.climatepartner.com/de/climate-action-insights/was-bedeutet-net-zero-wirklich
- THE 17 GOALS | Sustainable Development (un.org): https://sdgs.un.org/goals
- Homepage | GHG Protocol: ghgprotocol.org
