Calculating Transport Footprints with SAP Product Footprint Management
Co-Author: Matthias Wohlfahrt (Director and Head of Climate and Environmental Services at BearingPoint)
Earlier this year, SAP and BearingPoint announced a partnership on carbon and environmental footprint solutions (Press Release: SAP and BearingPoint Partner on Zero Emisions). We are very happy to announce that based on this partnership we released the first jointly developed capability in SAP Product Footprint Management: The calculation of Freight Transport footprints. This marks a huge milestone for our product and for sure also for our customers. We are now extending Value Chain Footprints from GHG Protocol Scope 3.1 (Purchased Goods) to additional categories, enabling the calculation of GHG Protocol Scope 3.4 (upstream transportation) and Scope 3.9 (downstream transportation), as well as Scope 1 (Direct emissions related to company-owned vehicles).
In this blog post you get many insights about the new capabilities and their background, including:
- Importance of Transportation in Footprint Calculation
- Challenges in Calculating Transport Footprints – and our Solutions
- Deep Dive on Freight Transport Features and Benefits
- Outlook on Planned Enhancements
Importance of Transportation in Footprint Calculation
According to the Global Logistics Emissions Council (GLEC), freight transportation causes between 8-10% of global emissions (GLEC Framework). However, due to economic growth in Asia, Latin America and Africa, the demand for freight transportation is expected to triple by 2050 (ITF Transport Outlook 2019). And also other sectors are having less of a hard time decreasing their reliance on fossil fuels. Therefore, the transport sector is predicted to become the most carbon-intensive of all sectors by 2040 (IPCC 2018).
Those impressive numbers clearly demonstrate why it is so important that companies start tracking the emissions of their logistics now. Transparency on the emissions is required to identify hotspots and to set the priorities for reduction initiatives.
Challenges in Calculating Transport Footprints – and our Solutions
Assessing emissions from Scope 3 is a big challenge for most of the companies. And so it is for transportation. Most companies have outsourced transportation and are not operating own vehicles. Logistics Service Providers (LSP or 3PL) and carriers themselves execute the transport and by that are in control operations and have the details on routing, vehicles and vehicle consumption. As a consequence, one option is to gather all CO2 data from the different 3PLs. This however causes a lot of effort and in addition there are also differences in the way 3PLs are calculating their emissions, making it difficult to come up with a harmonized big picture. With the new freight transport capabilities, SAP Product Footprint Management is addressing and solving this challenge. Our customers do not necessarily need the details from their 3PLs as the application simulates the operations of a 3PL. For inbound transports, purchase order data is sufficient to kick-off calculation as routing, vehicles, and transport specific emissions factors are supplied by application.
Finding and using the appropriate emission factors to assess the environmental impact of business operations is one of the key challenges in calculating product footprints. As pointed out in my previous blog post, we recently introduced some great improvements in SAP Product Footprint Management. For transportation, we are now even providing certain emission factors pre-configured in the application already.
Another challenge is to keep track of updates on regulations regarding calculation methodologies and/or reporting requirements. When it comes to transportation, SAP Product Footprint Management conducts its calculations in accordance with the GLEC framework as well as DIN EN16258. If changes to those norms happen, we are updating the calculation settings in the tool directly.
Deep Dive on Freight Transport Features and Benefits
The Freight Transportation capabilities are integrated into SAP Product Footprint Management as additional standalone apps for calculating the transport emissions for all your inbound and outbound transports. The apps are delivered with pre-configured content, including network data like seaports, airport, rail barge terminals, as well vehicle data and emissions factor from the Global Logistics Emission Council (GLEC). In the following I will provide you an overview on the new apps and deep dive into their features and benefits.
The Manage Data app is newly added to the data provisioning capabilities and enables you to create and alter data within Product Footprint Management directly. Master data entities for freight can be created and edited in this app without requiring a connection to your ERP system, and transactional data can be uploaded via .csv templates. Furthermore, imported master data from your ERP system will be displayed as view only (cannot be edited).
The app grants access to all data entities within one application and enables you to steer towards the respective data categories and functional areas to view, create, and alter the data within your system. Product Footprint Management provides a set of Master Data as a starter package: For example, within the Locations you can find information on seaports (924), airports (1115), barge terminals (88), rail terminals (304). GLEC vehicles cover trucks, ships, planes, and rail (279). There are also details about the Energy Types and Emission Factors provided. This includes 142 different emission factors, covering also latest ones like Hydrogen or Power to X (PtX) energy types. Add-on packages are available to enhance the content of this starter package.
With the new Calculate Transport Footprints app you are given the possibility to upload transport data from .csv flat files. Furthermore, you can review your uploads and check if they were successful. It is possible to set-up your own networks and locations, and there are embedded engines for routing and distance.
The Manage Calculation Errors app provides you an error dashboard giving an overview about the calculations that you have conducted as well as their status. Raw data is provided by the client and is then converted into the correct format in order to be usable within Product Footprint Management. The provided and converted data can then be processed by the system. To calculate the correct footprint results, the application either uses configured client-specific transport routes, or an automated calculation logic based on the great circle distance to calculate the respective distances and hence emissions. As soon as the data is processed, it is automatically validated and detailed feedback is provided on issues within the data (e.g., incorrect postal codes). Those issues must or can be adjusted to successfully trigger the calculation, or to even improve the results. Valuable information is presented to review if calculations were successful, if the right data was drawn (e.g., number of parcels and shipments), or if the correct scenario was selected.
Another great highlight is the View Transport Data app which features dynamic reports. This app provides you the business intelligence functionalities you were looking for by generating charts and detailed reporting on the calculated data within the tool directly. You have multiple options to select and receive the KPIs that you need for your carbon reporting. The granularity measures and dimensions differ vastly. You can opt for the total Well-to-Wheel (WTW) emission or you can also view Well-to-Tank (WTT) or Tank-to-Wheel (TTW) emissions. Moreover, KPIs like distance per unit (in km), number of parcels or shipment, volume, and weight or tkm are available. You can view monthly as well as yearly data but also many more dimensions are available, such as transport mode, service provider, leg types, parcel target, and source location. Furthermore, you can download the created sheets to easily implement them in your reporting.
This release is just the starting point, in the upcoming months we will constantly develop the functionalities further. We are for sure planning to leverage the master data and material flows that are already replicated from the SAP S/4HANA or S/4HANA Cloud system which is connected to SAP Product Footprint Management. This way, data on weight as well as the start and delivery location of the transports is already available and will enable a high degree of automation in the calculations. We also plan to publish APIs to connect to other sources for receiving data, as well as to provide a direct integration into SAP Transportation Management for automatically leveraging the transportation data that is available in this tool.
For improving the routing algorithms, we plan to enhance geocoding services, delivering more precise distance calculations. The transport footprint calculation results can already be visualized in various ways with the comprehensive inbuilt analytics options, to enhance this even further we plan to introduce visualizations on maps. This will show you all transportation flows on a world map allowing you to quickly identify emission hotspots:
With the new Freight Transport capabilities, we already enable the calculation of the respective value chain footprints (Scope 1, 3.4 & 3.9). Of course, we are planning to also enable the break-down and calculation of the transport emissions on product level, to calculate the footprints of the respective lifecycle stages inbound transport of (raw) materials and outbound transport of finished products, and to include the respective emissions in the overall product footprint calculation
Additional Information & Updates
For a holistic application help with all details on the new transport functionalities (will be added in the next days) as well as all other product capabilities in SAP Product Footprint Management pls. have a look into the SAP Help Portal. The What’s New section further provides you an overview on all released features and functions.
For more latest updates and more information on planned future capabilities I also recommend checking out my blog post SAP Product Footprint Management: Q3-22 Updates & Highlights. This post covers improvements in emission factors management, integration into SAP S/4HANA Inventory Management, an outlook on our plans, customer adoption updates and a recap and recording of the S/4HANA Delta Training.
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.