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Danone Serves Up a More Sustainable Future

Heather McIlvaine

Danone products delight millions of people every day. Fueled by a holistic commitment to sustainability, Danone is satisfying more than the world’s appetite for healthy foods. They are helping consumers make better choices as they become more sustainable, one container of yogurt, milk, and water at a time.

With 35,000 items that come from water, milk, fruits, and plants, it’s no wonder sustainability is in this €17 billion company’s DNA. They aim to deliver sustainable, healthy products that drive overall economic performance. In fact, the company’s executive board sees sustainability as a strategic priority. Explains Franck Riboud, Chairman and CEO, Danone, “My vision for Danone: a company that creates economic value while creating social value.”

Danone has adopted a measured approach to integrate sustainable business practices across its 160 plants on five continents in over 120 countries. They’ve established carbon reduction as a guiding principle, and have even appointed a “Vice President for Nature.” Senior management has elevated carbon reduction to coequal status with business targets, and tied bonuses for 1,400 global managers to their performance around environmental objectives. The company also works hard to optimize water usage, which is key to operations. Transparency to consumers and retailers, as well as support for new standards and legislation in the countries where it operates, are foundational to Danone’s growth strategy driven by sustainability.

Partnership with SAP

To help achieve this remarkable transformation, Danone has partnered with SAP to help make sustainability an integral part of how Danone does business every day. The two companies are united by a shared commitment to innovative IT strategies that will meet their promises to consumers and the challenges of today’s environment, as well as comply with changing country regulations.

 

In a resource-constrained world where consumers want to make better choices, both companies know sustainability is not only about conservation or recycling. Real change can only occur by taking a measured business approach to determine the cost of materials and products across the supply chain, from sourcing to production to delivery and beyond.

 

As a result, Danone implemented SAP BusinessObjects solutions to collect, measure, analyze, and reduce its carbon footprint across its entire 35,000 product line. Relying on SAP BusinessObjects Profitability and Cost ManagementSAP BusinessObjects Financial Information Management, and SAP BusinessObjects Data Services, the process captures highly detailed, monthly assessments of its product line by SKU across the entire lifecycle, from sourcing through productiontransportretail distributionconsumption, and end of cycle. Full integration with SAP ERP allows Danone to automatically retrieve information including bills of materials, production and delivery orders, and intercompany transportation. Danone can easily assess a range of product footprints, and incorporate allocation of emissions and costs generated by each process.

 

Employee Engagement

 

These SAP software solutions have fundamentally changed not only the way Danone does business, but also how employees think, work, and engage with the company. Employees have a deeper sense of pride in their work since every staff member is held accountable for the quality of carbon data in their business area. Specialists in lifecycle management collect and assess information from the supply chain, such as site-specific emission factors for components used during the raw-pack process. People with job titles like Carbon Master and Master Data Manager, along with users in manufacturing, purchasing, and transport units, provide additional input for things like emissions factors by transport types or energy consumption to complete the process. Teams perform calculations for insight and visibility into the carbon measurements at a product level via multi-dimensional modeling and analysis. Using SAP software reports and dashboards, employees can display the product carbon footprint intensity as grams of carbon dioxide equivalent (CO?e) per kilogram or liter of product, as well as in absolute terms of metric tons of CO?e emissions.

Towards a More Protected Future

Danone is well on its way to helping protect the world’s precious finite resources for future generations. It has reduced its carbon footprint by 22 percent, and is confident of reaching its target of 30 percent by the end of 2012.  Moving forward, they intend to simulate emissions when introducing a new material, or process into a product, brand, or country. This will improve and optimize design decisions, supplier choices, and investments, as well as support brand-related goals. Additionally, Danone recently selected the SAP Sustainability Performance Management solution to help holistically manage data collection, reporting and analytics across all social, environmental and economic initiatives. Danone is also working with suppliers so they can directly enter their data into SAP ERP, saving time and boosting information quality.

Future plans include enhanced reporting beyond SKU carbon footprint tracking. Danone will report emissions by product, factory, division, country, brand, customer, and time interval — then set benchmarks based on the intelligence. Executives envision a monthly “sustainability closing,” much like a financial closing, for greater transparency and stronger competitive advantage.

Consumers worldwide rely on Danone to bring them fresh, tasty dairy products and bottled water, as well as baby and medical nutrition products every day.  The company’s sustainability commitment is having an equally profound impact on the world in which all of us live.

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Heather McIlvaine

About Heather McIlvaine

Heather McIlvaine is the Editor of SAP.info. Her specialties include writing, editing, journalism, online research and publishing.

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Why 3D Printed Food Just Transformed Your Supply Chain

Hans Thalbauer

Numerous sectors are experimenting with 3D printing, which has the potential to disrupt many markets. One that’s already making progress is the food industry.

The U.S. Army hopes to use 3D printers to customize food for each soldier. NASA is exploring 3D printing of food in space. The technology could eventually even end hunger around the world.

What does that have to do with your supply chain? Quite a bit — because 3D printing does more than just revolutionize the production process. It also requires a complete realignment of the supply chain.

And the way 3D printing transforms the supply chain holds lessons for how organizations must reinvent themselves in the new era of the extended supply chain.

Supply chain spaghetti junction

The extended supply chain replaces the old linear chain with not just a network, but a network of networks. The need for this network of networks is being driven by four key factors: individualized products, the sharing economy, resource scarcity, and customer-centricity.

To understand these forces, imagine you operate a large restaurant chain, and you’re struggling to differentiate yourself against tough competition. You’ve decided you can stand out by delivering customized entrees. In fact, you’re going to leverage 3D printing to offer personalized pasta.

With 3D printing technology, you can make one-off pasta dishes on the fly. You can give customers a choice of ingredients (gluten-free!), flavors (salted caramel!), and shapes (Leaning Towers of Pisa!). You can offer the personalized pasta in your restaurants, in supermarkets, and on your ecommerce website.

You may think this initiative simply requires you to transform production. But that’s just the beginning. You also need to re-architect research and development, demand signals, asset management, logistics, partner management, and more.

First, you need to develop the matrix of ingredients, flavors, and shapes you’ll offer. As part of that effort, you’ll have to consider health and safety regulations.

Then, you need to shift some of your manufacturing directly into your kitchens. That will also affect packaging requirements. Logistics will change as well, because instead of full truckloads, you’ll be delivering more frequently, with more variety, and in smaller quantities.

Next, you need to perfect demand signals to anticipate which pasta variations in which quantities will come through which channels. You need to manage supply signals source more kinds of raw materials in closer to real time.

Last, the source of your signals will change. Some will continue to come from point of sale. But others, such as supplies replenishment and asset maintenance, can come direct from your 3D printers.

Four key ingredients of the extended supply chain

As with our pasta scenario, the drivers of the extended supply chain require transformation across business models and business processes. First, growing demand for individualized products calls for the same shifts in R&D, asset management, logistics, and more that 3D printed pasta requires.

Second, as with the personalized entrees, the sharing economy integrates a network of partners, from suppliers to equipment makers to outsourced manufacturing, all electronically and transparently interconnected, in real time and all the time.

Third, resource scarcity involves pressures not just on raw materials but also on full-time and contingent labor, with the necessary skills and flexibility to support new business models and processes.

And finally, for personalized pasta sellers and for your own business, it all comes down to customer-centricity. To compete in today’s business environment and to meet current and future customer expectations, all your operations must increasingly revolve around rapidly comprehending and responding to customer demand.

Want to learn more? Check out my recent video on digitalizing the extended supply chain.

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Hans Thalbauer

About Hans Thalbauer

Hans Thalbauer is the Senior Vice President, Extended Supply Chain, at SAP. He is responsible for the strategic direction and the Go-To-Market of solutions for Supply Chain, Logistics, Engineering/R&D, Manufacturing, Asset Management and Sustainability at SAP.

How to Design a Flexible, Connected Workspace 

John Hack, Sam Yen, and Elana Varon

SAP_Digital_Workplace_BRIEF_image2400x1600_2The process of designing a new product starts with a question: what problem is the product supposed to solve? To get the right answer, designers prototype more than one solution and refine their ideas based on feedback.

Similarly, the spaces where people work and the tools they use are shaped by the tasks they have to accomplish to execute the business strategy. But when the business strategy and employees’ jobs change, the traditional workspace, with fixed walls and furniture, isn’t so easy to adapt. Companies today, under pressure to innovate quickly and create digital business models, need to develop a more flexible work environment, one in which office employees have the ability to choose how they work.

SAP_Digital_Emotion_BRIEF_image175pxWithin an office building, flexibility may constitute a variety of public and private spaces, geared for collaboration or concentration, explains Amanda Schneider, a consultant and workplace trends blogger. Or, she adds, companies may opt for customizable spaces, with moveable furniture, walls, and lighting that can be adjusted to suit the person using an unassigned desk for the day.

Flexibility may also encompass the amount of physical space the company maintains. Business leaders want to be able to set up operations quickly in new markets or in places where they can attract top talent, without investing heavily in real estate, says Sande Golgart, senior vice president of corporate accounts with Regus.

Thinking about the workspace like a designer elevates decisions about the office environment to a strategic level, Golgart says. “Real estate is beginning to be an integral part of the strategy, whether that strategy is for collaborating and innovating, driving efficiencies, attracting talent, maintaining higher levels of productivity, or just giving people more amenities to create a better, cohesive workplace,” he says. “You will see companies start to distance themselves from their competition because they figured out the role that real estate needs to play within the business strategy.”

The SAP Center for Business Insight program supports the discovery and development of  new research-­based thinking to address the challenges of business and technology executives.

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Sam Yen

About Sam Yen

Sam Yen is the Chief Design Officer for SAP and the Managing Director of SAP Labs Silicon Valley. He is focused on driving a renewed commitment to design and user experience at SAP. Under his leadership, SAP further strengthens its mission of listening to customers´ needs leading to tangible results, including SAP Fiori, SAP Screen Personas and SAP´s UX design services.

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Breathe Easier – The Technology Fighting Pollution

Danielle Beurteaux

If citizens of Beijing want some healthy air, they have to take matters into their own hands. At the end of last year, the city’s government announced the first red-level alert for air pollution, when the pollution was 10 times higher than WHO’s recommended levels. So Chinese consumers are buying personal air purifying devices so they can breathe easier.

Laser Eggs, a product made by local company Origins Technology, monitors and purifies air. Reportedly, thousands of the units have been sold in China since the product hit the local market in 2013.

The problem of air pollution isn’t, of course, only in China. The WHO estimates that 7 million people died from the effects of air pollution in 2012. What that has meant is a jump in technology that tracks air quality and provides some immediate relief for anyone trying to breathe.

In June 2015, the TZOA air tracker raised 152% of the campaign’s goal on crowdfunding site Indiegogo. The TZOA tracks more than air quality – it also covers UV, humidity, temperature, and a bunch of other metrics. All that data is collected and then delivered via a smartphone app. It’s also used to crowdsource research sent to the cloud for real-time mapping. (The device is a bit delayed, in case you were hoping for one soon.)

There are quite a few products that have appeared on the market in the past year or so that promise to monitor indoor and outdoor air quality, and more are trying to raise money with crowdfunding campaigns. There’s the Speck sensor, which monitors indoor air only, and the AirVisual Node, which also tracks outdoor air and aims to use the collected data to map global pollution levels.

Home appliance company Dyson recently released its Pure Cool Link fan, which monitors both indoor and outdoor air quality. It also cleans air with a HEPA filter, and the unit is controllable with an app.

Two of the problems with personal air purification devices are size and power. Researchers at the University of Southampton and the Japan Advanced Institute of Science and Technology have created a graphene-based sensor and switch that can detect pollutants without using much power, which the researchers call “extreme monitoring.”

What about taking care of outside air? Apart from planting a million trees, there are some interesting ideas being tested to help clean the air outside. The German startup Green City Solutions created the CityTree, which isn’t actually a tree. It’s a bench with a tall wall attached. The wall is covered in bio-engineered moss and acts as a pollution filter and cooling system. The inventors claim that it has the air cleaning properties of 275 trees. A chain of the units, they say, could act as a pollution-filtering wall. The pilot installations are in Oslo, Norway, and a handful of German cities; they’re expected to install more in Asia and Europe later this year.

While some areas have improved air quality, there are many places where breathing is unhealthy. The American Lung Association just released its annual “State of the Air” report; it claims that over 50% of Americans live in areas with bad air. Until high-level policy changes that would have the biggest effect on pollution levels happen, a personal air cleaner might bring some immediate relief.

Or you could grow a pollution-filtering “nose-stache.”

The Digital Economy isn′t on the horizon. It′s here, and it’s time for you to take advantage of the opportunities it presents. For more, read The Digital Economy: Disruption, Transformation, Opportunity.

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Sustainability Brings Rewards To The Paper And Packaging Industries

Jennifer Scholze

Research is pouring in about the importance of sustainability and environmental stewardship. As we become more aware of the problems associated with modern lifestyles, businesses of all types are flocking to catch up. This is impacting the paper products and packaging industries as much as any other.

Consumers now demand smarter and greener paper products and packaging. They reward green innovation with their patronage and their approval. This translates to support and loyalty that help businesses grow and prosper.

Moreover, regulation, decarbonization, globalization, and digitization are putting pressure to make many paper products obsolete. This doesn’t mean we don’t still need them; we do. It means that paper and packaging companies that can keep pace with the new demands of the digital economy will thrive.

Sustainability is impacting paper and packaging and even driving some of the old-school products to go digital. So, what does this mean for the industry’s future?

Sustainability climbs in consumers’ eyes

During the postwar period, Americans and citizens around the world learned that the bigger and flashier, the better. That is no longer the case. The world has seen a growing recognition of the toll that consumerism takes on the environment. Sustainability is now king.

For instance, studies show hotels that integrate green practices can enhance their images. They increase customer satisfaction through carbon footprint reduction and eco-friendly technology. They earn higher levels of customer loyalty. They bolster digital customer engagement. And they build their brands as environmentally conscious businesses.

There is dissention in the ranks about whether sustainability can integrate with capitalism. Some argue a definitive no, while others, like Hunter Lovins writing for the Guardian, offer evidence that sustainability is better business. They argue that being green literally leads to higher profits and more robust companies.

This isn’t just talk, either. Customers are more willing to pay higher prices to obtain greener products. This ranges from personal care to food, clothing to furniture. And it encompasses paper and packing products as well.

An analog product goes digital

Sure, paper and packaging seem like wholly analog products. They may integrate with digital buying models like e-commerce, of course. But we still tend to view them as old-school.

One of the most surprising aspects of the evolving paper and packaging industry, therefore, is its digital transformation. Consider “smart” packaging, which has digital enhancements. It can track the storage conditions of a warehouse to ensure a product doesn’t go bad. It can offer tracking information. It may even be able to tell you whether a product is genuine or not.

In today’s world of digital business and hyperconnectivity, this is useful stuff. It proves that industry 4.0 is taking into account many consumer desires. Sustainability. Reduced Waste. Reliability. Added Value.

So now the question becomes, where are these industries headed? What can we expect to see from paper and packaging in years to come?

 Where is the industry headed?

There are many ways to ensure reduced waste and increased environmental responsibility. After all, the world is no stranger to greener packaging. From recycled or reused cardboard to esoteric solutions such as a fungal replacement for Styrofoam, scientists and business leaders are working hard to green things up. Paper is no different; recycling has become the norm and other eco-practices abound.

But true innovation will go beyond recycling and finding inventive substitutes. In coming years, there are several distinct trends we can look out for.

For one thing, we can expect to see a significant decrease in lot sizes from many companies. This allows them to individualize their products to meet a growing array of consumer demands. Not only does this satisfy customers, it helps the environment. Smaller lot size means less waste. It means greater specification. And it means happier clients voting with their dollars for greener practices.

As hyperconnectivity takes hold, companies will offer consumers ever-greater knowledge on using products sustainably. The same is true for manufacturers themselves. By sharing intelligence with other companies, they will learn to maximize efficiency and reduce waste.

Last, expect consumer collaboration, helping companies provide closely targeted services on an individual basis. This helps reduce waste and meet customer needs every more efficiently.

A greener industry

As the digital economy continues to grow, the need for paper and packaging products will not disappear. They will likely always be with us in some form or another. As long as we deal in a global economy, we will need to transport goods from point A to point B.

The point, therefore, is not to eliminate paper and packaging. It is to green them up. It is to ensure that transport and shipping industries eliminate waste. It is to promote use of recycled materials in paper manufacture. And it is to encourage businesses to seek out smart and sustainable technologies.

Exploring new business models is time-consuming and expensive. However, companies that are willing to do it now stand the best chance of becoming the next innovators. Those companies will ride out changes in the digital economy and emerge on top in coming decades.

The IoT is transforming businesses, but at different speeds and scales. Learn more about the differences in The Internet of Things and Digital Transformation: A Tale of Four Industries.

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Jennifer Scholze

About Jennifer Scholze

Jennifer Scholze is the Global Lead for Industry Marketing for the Mill Products and Mining Industries at SAP. She has over 20 years of technology marketing, communications and venture capital experience and lives in the Boston area with her husband and two children.