SAP REPORT
financial currency ,” explains Vallejo . He adds that businesses are also coming to realise that sustainability is now mission critical , and that it can help them achieve their economic goals .
“ If it hits the news that your supply chain is not operating in a sustainable way this can have a tremendous impact on your brand , and a disastrous impact on the consumption of your products ,” says Vallejo . “ Businesses are beginning to realise there is a relationship between success and operating sustainably .”
He adds : “ Increasingly customers are looking for sustainable products and services . Over time it will be the norm for products to be labelled for sustainability in the same way they ’ re labelled for ingredients . Companies that take the view that being profitable is all that matters will eventually cease to exist .”
OPTIMISING INVENTORY IS KEY TO BEING SUSTAINABLE Optimising inventory is another area in which SAP can help companies operate more sustainably . In today ’ s world , when it comes to inventory , the past can no longer be used to predict the future .
“ Inventory should be a function of how well you can predict both demand and supply ,” points out Vallejo . “ If it ’ s 100 % predictable , in theory you can have no inventory at all . Everything can be just-in-time .”
What SAP ’ s Integrated Business Planning solution does is help customers measure volatility , and it ’ s this that helps control spoilage and waste .
Vallejo says : “ We use a scientific method to right-size inventory across the supply chain , which we call multiechelon inventory optimisation . Companies have seen fantastic results using this technique . They ’ ve been able to reduce inventory , which not only lessens the drain on working capital but also reduces waste . This is especially important for products that can have a high carrying cost or deteriorate in value .
If it hits the news your supply chain is not sustainable it can have a big impact on your brand and on the consumption of your products
70 June 2022