As customers demand safer and more sustainable products, companies such as SAP are in a position to help companies stay informed about their suppliers’ materials–and those of their suppliers’ suppliers. To that end, SAP today rolls out two new cloud computing solutions that provide manufacturers and their supply chains the ability to manage and track sustainability data. True, the need to stay compliant and out of trouble is one driver. But, as sustainability becomes integrated throughout companies’ DNA, and not just a silo, it will become more important for company employees and their partners to access such information in real time–and avoid any pitfalls that could harm a company’s reputation.
And trouble can come in many forms: chemicals that are unsafe and, of course, illegal in some countries; new recalls and regulations that make it more challenging for companies to operate in a cross-border environment; and a sloppy supplier that one manufacturer may have caught using dubious substances yet tries to pass off their products to other companies. So how is SAP leveraging itself in the market?
As a leading business enterprise software company, when it comes to corporate social responsibility (CSR) SAP has already put its money where its mouth is. The company has saved at least a half billion dollars implementing energy efficiency measures. In turn, the company has released energy management software products that help its clients accomplish the same goals. And when it comes to people, SAP recently launched a social sabbatical program in three countries, including Brazil, and provides its software at little or no cost to social entrepreneurs in India. With that background, SAP’s experience should help the company entrench itself in the growing sustainability and risk management data market as more companies try to stay on top of growing compliance requirements and stakeholders’ expectations.
First, is SAP’s Product Stewardship Network (PSN), an “online collaboration community” that in the words of SAP’s Vice President of Sustainability Solutions, Scott Bolick, will provide a “many-to-many” network linking manufacturers to suppliers. PSN could become particularly valuable to companies whose performance and reputation rely on the chemical make up of their products. With PSN hosted on the cloud, companies can import vendors into the system and invite others into the network. As suppliers change the materials and compositions of their products, that information will be updated almost immediately, allowing companies to stay current with parts and raw materials within their supply chains. Previously supply chain managers had to cope with email trails and internal databases that could easily lead to a wayward supplier falling through the cracks and then cause headaches down the road–now all this relevant information is updated automatically.
Environment, health and safety (EHS) data has long been the gateway to offering companies the tools to monitoring sustainability-related performance metrics such as greenhouse gas emissions and water consumption. Now SAP believes it has given EHS compliance tracking a boost with its other cloud computing product, EHS Regulatory Documentation OnDemand. With regulations at the national and local level in constant flux, compliance has posed greater risks and become more expensive for companies. For process manufacturers, including those in the pharmaceutical, food and textile sectors, keeping track of these constant changes is the bane of a supply chain manager’s or compliance officer’s daily job. In the past, companies would develop an expensive internal database or purchase such a product off-the-shelf. With this EHS solution based on the cloud, companies will be able to stay abreast of such regulatory changes and update those pesky safety data sheets instantly.
Watch for this market to become even more crowded as large enterprise software companies and startups attempt to enter this lucrative market not only because of regulators, but due to the louder demands of customers and stakeholders that the products they purchase are manufactured more ethically and responsibly.
Leon Kaye, based in Fresno, California, is a sustainability consultant and the editor of GreenGoPost.com. He also contributes to Guardian Sustainable Business, Inhabitat and Earth911. You can follow Leon and ask him questions on Twitter.
Image courtesy SAP