Product Deep Dive: Welcome to Product Footprint Management from SAP
This week, SAP introduced the latest innovation in its fast-growing sustainability management product portfolio: SAP Product Footprint Management. As outlined by Gunther Rothermel, Head of SAP S/4HANA Sustainability Management, in his blog post, SAP enables turning environmental footprint calculations at scale into a regular habit. We are addressing with this product our customers’ challenge to provide transparency on their sustainability KPIs while lacking automation and scalability in calculation as well as visibility into the end-to-end business processes and supply chains.
SAP Product Footprint Management is a cloud application running on SAP Business Technology Platform, enabling calculation of product footprints periodically and at scale across the entire product lifecycle. Those footprints provide our customers insights regarding the environmental impact of their products for disclosure to business partners and for internal product and process optimization. The new product complements our existing proven SAP Environment, Health and Safety Management solution, allowing customers to track and manage their environmental footprints on a corporate level, and is embedded into SAP’s Chasing Zero strategy to create a sustainable future through zero emissions, zero waste and zero inequality.
In this blog post I will deep dive into SAP Product Footprint Management and will give you an overview on the product capabilities, business architecture, key differentiators, and provide an outlook on planned features – which is for sure subject to change. I will conclude with a short recap of the SAP Community Call on August-30th in which the product was introduced to partners and customers.
SAP Product Footprint Management enables integration scenarios to collect business activity and master data from SAP business applications as primary source for footprint calculation. You can define the replication configuration by selecting a set of plants and product groups and a time range. For ease of use we are offering live connectivity to SAP S/4HANA Cloud and SAP S/4HANA. This means we are re-using data that is already existing in your system and on which you can therefore rely on because it is used also for your operational business processes. In the initial release we are starting with the Inventory Management component, as this is used by almost all our customers, and replicate transactional data such as physical goods movements based on the configured scope. The replication is done at monthly aggregated granularity to reduce the load on business systems and data volume. Going forward we will also collect quantity structures from the Product Costing component and direct emissions and energy flows from the EHS-EM component. Automated periodic replication ensures that business and master data are in synch between the business system and SAP Product Footprint Management.
Emission Factors Management
Due to businesses’ high pressure for decarbonization we are starting with climate change (greenhouse gas [GHG] emissions, measured in kg CO2e) as the first footprint category. To evaluate the environmental impact of the collected business data and goods movements and to being able to calculate footprints at scale this data needs to be combined with emission factors. SAP Product Footprint Management offers the capability to import emission factors via templates from own lifecycle assessments (LCA) as well as from external LCA content providers. Those providers offer scientifically based lifecycle inventory (LCI) datasets with evaluations about the environmental impact of thousands of products and materials, see Greenhouse Gas Protocol for more information regarding those databases. In SAP Product Footprint Management, we expect customers to follow the requirements of GHG Protocol Product Standard (chapter 11.2, p.85): “Companies shall apply a 100 year global warming potential (GWP) factor to GHG emissions […]”.
Our first partner offering product-related emission factor datasets from their database is ecoinvent, a not-for-profit organization building on more than 20 years of experience in LCA methodology and around 18,000 datasets covering global supply chains. The ecoinvent emission factor datasets can be easily imported (license required) into SAP Product Footprint Management. In future we plan to enable other content providers as well so that you can use every provider if the data is put in the SAP format.
After having collected business data and relevant emission factors the foundation is laid for the calculation of the footprints. SAP Product Footprint Management in the first release supports our customers in calculating emissions from purchased products (including material acquisition and pre-processing emissions) at scale. Therefore, we deliver a pre-configured calculation template. Within this template you define the set of products you want to include in the calculation, based on their product group and plant, as well as the calculation period. The template selects a subset of business activity data needed for the calculation run. For material acquisition this data includes quantity of purchased materials from suppliers, stock transfers from other plants, and purchased materials consumed in manufactured products for the period. The products are then associated with the emission factors from the LCI database to enable bottom-up footprint calculation. This association is done via pre-shipped templates of mapping tables which can be configured by sustainability experts allowing to determine the best match of business data and emission factors based on material, supplier, country, and material commodity code characteristics. This configuration is simplified yet flexible, enabling mass coverage of product portfolio and reducing time to value.
The footprint calculation can be executed on demand for the configured period, you can further trigger only delta calculations from the previous iteration of the run and test runs to validate the calculated footprints and analyze for issues in the calculation. The footprint results are displayed per unit and in total and are broken down on different granularity levels like for example suppliers of purchased materials. Further, a consistent monthly average is calculated automatically. You can as well compare the footprints across the periods so that you can observe trends.
We will continue with including emissions from production activities in the calculation, midterm we will also include downstream processes (distribution, product use and end of life).
In Q4-2021 we plan to provide an Analytics Interface for integrating the calculated product footprints to SAP analytical applications like SAP Analytics Cloud (SAC) and legacy tools. We further plan to provide SAC content, footprint dashboards and reports with pre-configured key performance indicators to visualize and analyze the calculation results.
As we are not only targeting sustainability experts but all business users, we are also integrating the footprint information back into SAP’s business applications. With 2108 SAP S/4HANA Cloud and SAP S/4HANA 2021 we will deliver an embedded Sustainability Integration Component which supports the Data Acquisition and the Footprint Integration (see Business Architecture below). We are extending SAP S/4HANA and over time will embed the product footprints into all relevant end-to-processes – idea-to-market, source-to-pay, plan-to-produce, lead-to-cash and in finance – so that business users can consume this information in their daily work in their common application. As an example, a purchaser can then search by product and plant to view the product footprint master data and can correlate the impact of his or her purchasing decision – and ultimately change the buying behavior to reduce the overall footprint from purchased products. SAP S/4HANA key users and application developers from customers or partners can further extend SAP shipped business objects or enhance custom business objects with product footprint information at low development cost and high productivity.
SAP Product Footprint Management is a cloud application that is built on the SAP Business Technology Platform. In the application, within the Footprint Calculation Template, you define the scope you want to consider – like the period, plants, or product groups. Based on this scope the PFM Extractor calls the Data Extractor in the Sustainability Integration Component in ABAP. This re-use component is included in SAP S/4HANA and pulls the relevant business data – like material movements – from your SAP S/4HANA Cloud or SAP S/4HANA system and sends the aggregated data back to PFM. Besides the business data SAP Product Footprint Management pulls emission factors from external data providers like lifecycle assessment (LCA) databases. Those factors can be uploaded via templates, we provide a version pre-filled with data from ecoinvent (license required). Next, the business data is mapped to the relevant emission factors via pre-configured derivation rules and the respective product footprints are calculated. This calculation can be done monthly for all plant-material-product combinations. The footprint is stored in the Footprint Inventory, via the application the user can view and compare the results. In the future, there will be steering and analytics capabilities by connecting SAP Product Footprint Management and its Footprint Inventory via an Analytical API to SAP Sustainability Control Tower and SAP Analytics Cloud (SAC). Via the Sustainability Integration Component, the Footprint Inventory is also connected back to your SAP S/4HANA Cloud and SAP S/4HANA system so that your business users can access the footprints directly in their end-to-end processes and applications.
As you have now read a lot about the capabilities and architecture, let me summarize the top five key differentiators of our solution today. SAP Product Footprint Management…
- … offers a vast reuse of existing business data and structures from SAP S/4HANA. We focus on products, business partners and material flows – including cost estimates later this year. As this is valid primary data coming directly from your system you can rely on this data for the calculation.
- … enables a vast reuse of business logic, like using the logic from Inventory Management – such as “First in, First out” (FiFo) – to calculate the monthly footprint of your purchased products.
- … executes monthly calculations of all products in the system, handling a high amount of data. This will allow you to compare results and see optimization over time if you do business changes, like switching to raw materials with lower emissions.
- … delivers inbuild integration back to SAP S/4HANA systems and the end-to-end processes. Via extensibility the business users can have access to the footprint data directly in their daily applications, such as the planned integration to the purchaser requisition handling in SAP S/4HANA. This will also help them to include sustainability criteria in decision making.
- … provides emission factor management to help you uploading sustainability content. In the future this content can come from databases of your choice as well as from your suppliers directly.
Outlook & Planned Features
With the current scope of SAP Product Footprint Management, we have just started the journey to holistic product footprint calculation and management, as you see in the first figure. In the upcoming months we will constantly evolve SAP Product Footprint Management, deploying new features and functions every two weeks – We plan to enhance all mentioned product capabilities with new innovations. Our focus in the current development are the following milestones we plan to reach in Q4 2021:
- New APIs for Data Acquisition to support SAP S/4HANA customers on former releases as well as ECC customers.
- Calculation of manufactured products reusing the Product Costing structure.
- Analytical API to enable SAP SAC customers for holistic analytics.
In the area of footprint integration, we plan first use cases within operational procurement and SAP Integrated Business Planning (IBP).
For the next years we will further develop SAP Product Footprint Management according customer feedback and towards our vision: Calculate product footprints at scale considering the entire product lifecycle (Cradle to Grave) for disclosure to customers and internal product and process optimization.
I recommend you to also have a look into the SAP Road Map Explorer. There you find our delivered and planned innovations as well as their benefits for you and your company.
SAP Community Call Recap
In an SAP Community Call on August 30, 2021 Gunther Rothermel and I introduced SAP Product Footprint Management and provided insights on SAP’s overall sustainability strategy and product portfolio. With more than 700 registrants this session was a full success and demonstrates the high level of interest in the topic. You can watch the recording here:
In a nutshell, the session covered the following aspects (see also the presentation slides):
- Our ambition for Climate Action
- Managing Corporate Footprint and Product Footprint with SAP’s solutions to steer towards zero emissions
- Product Demo of SAP Product Footprint Management and the integration into SAP S/HANA Cloud, based on the example of a company producing cookies
- Product capabilities and planned features & milestones
- Embedding sustainability into Supply Chain planning with SAP Integrated Business Planning
- Overview on SAP’s Sustainability Management solution portfolio
During the session we received almost 100 questions concerning various aspects in the Q&A tool, which we really appreciate as it shows the great interest in the product and its capabilities. We tried to answer as many of the questions as possible during the session live or in the chat. We decided that we will merge all the (answered and outstanding) questions into a FAQ document which we will make available as a subpage in the SAP for Sustainability Community. Please stay tuned!
Additional Information and Updates
For more and in-depth details on SAP Product Footprint Management, I recommend you browsing through the respective section on the SAP Help Portal. There you find the Feature Scope Description, the end-user information about how to use the application, and the development section with all requirements as well as the configuration and calculation logics.
The latest expertise on SAP S/4HANA and SAP S/4HANA Cloud directly from SAP Product Engineering will also be shared in the Product Success Delta Training, taking place end of September 2021. This time, there is a dedicated slot covering Sustainability on September 24th. You find all information and the registration link in this blog post by Greg Hutcheon.
To stay up to date on SAP Product Footprint Management please follow me here in the SAP Community. In regular cadence I will publish blog posts giving you updates on all the product’s new features and functions as well as deep dives into the product capabilities. I’m also looking forward to engaging with you directly, feel free to leave your feedback in the comment section. For questions please see the Q&A here in the SAP for Sustainability Community. For sure you can also reach out to me directly.