December 3, 2023

​​Sustainability is more and more related in right this moment’s enterprise panorama. Corporations face rising stress to take care of transparency of their information and operations. SAP presents complete sustainability administration options overlaying Environmental, Social, and Company Governance (ESG) information reporting, local weather motion, the round financial system, and social duty.

SAP gives the following local weather motion options supposed to scale back the carbon footprint of an organization’s complete worth chain (scope 1 to three) based mostly on precise enterprise transactions. These embrace:

  1. SAP Sustainability Footprint Administration;
  2. SAP Surroundings, Well being, and Security Administration;
  3. Local weather motion options.

Within the context of rising environmental consciousness and social duty, it’s turning into more and more essential for corporations to contemplate their carbon footprint. One option to reduce environmental influence is to optimize inner enterprise processes.

Other than these specialised options, corporations may also make the most of commonplace SAP S/4HANA modules for enterprise course of optimization. The main focus right here is not only on cost-efficiency but in addition on eco-consciousness. On the coronary heart of this transition lies integration of Logistics and Gross sales and Distribution, notably the Materials Variant Configuration characteristic. This instrument is a part of the broader Enterprise Useful resource Planning (ERP) suite supplied by SAP S/4HANA. It serves as a common mechanism for customizing product choices based mostly on particular buyer necessities. It not solely aids in tailoring merchandise but in addition in streamlining stock, thereby decreasing waste and power consumption.

In contrast to conventional ‘make-to-stock’ strategies, the place manufacturing volumes are predetermined based mostly on gross sales forecasts and former demand, the ‘make-to-order’ method supported by Materials Variant Configuration eliminates the necessity to maintain giant inventories of completed items. This, in flip, reduces power consumption in storage amenities and contributes to decreasing the corporate’s carbon footprint. The characteristic is tightly built-in with the ‘Materials Grasp Report,’ a centralized information repository capturing important materials particulars throughout numerous departments, together with manufacturing and gross sales. This materials grasp file is instrumental in shaping future product configurations and serves as a cornerstone for the corporate’s sustainability efforts.

Materials Variant Configuration presents extra than simply product customization and stock administration. It gives alternatives for additional customization by incorporating real-time environmental and seasonal information. This adaptability allows corporations to make dynamic, eco-friendly selections that aren’t solely useful for the planet but in addition doubtlessly worthwhile. Via a fancy array of choices and parameters, this characteristic will be personalized to fulfill a company’s distinctive wants, making it a invaluable asset within the fashionable, eco-conscious enterprise surroundings.

Calculating Carbon Footprint in Materials Grasp Report

Within the SAP S/4HANA system, the ‘Materials Grasp Report’ serves as a centralized information repository, storing various attributes and traits of supplies, resembling their ID, description, models of measure, and different important particulars. With the rising emphasis on sustainability and ecological duty, it’s essential so as to add the carbon footprint of every materials to this file. Listed here are the preliminary evaluation and knowledge gathering strategies that define the way to incorporate carbon footprint information into the Materials Grasp Report:

  1. Provider Information. Collaborate with suppliers to acquire exact information on carbon emissions generated through the manufacturing of every materials used within the manufacturing of the ultimate product. Particularly, this is applicable to supplies that operate as uncooked supplies or semi-finished items within the completed product. The carbon footprint information could also be recorded within the Materials Classification part in ‘Materials Grasp Report’ of every materials inside the Supplies Administration module.
  2. Lifecycle Evaluation. Conduct a radical lifecycle evaluation of every materials to guage its environmental footprint throughout extraction, processing, utilization, and disposal. The Manufacturing Planning module can create detailed product specs, together with the kinds of supplies used, their traits, and power consumption information. This data allows an preliminary estimate of the carbon footprint for every unit of product, thereby facilitating extra correct environmental influence planning throughout all manufacturing phases.

    Past the Manufacturing Planning module, the Controlling module additional refines the calculation of a product’s carbon footprint. It permits for the distribution of environmental prices—like power consumption, waste administration, and emissions—throughout particular person merchandise or product traces. These prices will be allotted based mostly on numerous components, resembling the amount of uncooked materials consumed, machine working hours, or emission volumes generated throughout manufacturing.

    By merging information from each the Manufacturing Planning and Controlling modules, a fuller and extra correct evaluation of every product’s carbon footprint will be achieved. This mixed information allows real-time environmental influence monitoring and changes to manufacturing processes to attenuate carbon emissions. Moreover, the Controlling module can generate personalized reviews detailing the corporate’s carbon footprint.

  3. Exterior Databases. Leverage present environmental influence databases to safe standardized carbon emission components for generally used supplies.

Corporations will quickly be capable to use Inexperienced Token by SAP S/4 HANA for monitoring uncooked supplies, a characteristic already in use by some clients.  This may allow automated information alternate regarding the carbon footprint of every materials. Nevertheless, corporations can already begin evaluating their environmental influence utilizing present instruments.

Materials Variant Configuration in SAP S/4HANA

The important thing elements of the Materials Variant Configuration structure inside the SAP S/4HANA module are illustrated in Image 1.

Image 1. Materials Variant Configuration in SAP S/4HANA 

The Gross sales and Distribution module in SAP S/4HANA seamlessly integrates Materials Variant Configuration, together with the dealing with of Gross sales Orders, that are formal requests from clients for particular merchandise. This instrument is a part of SAP S/4HANA and different Enterprise Useful resource Planning (ERP) methods like SAP S/4HANA that permits for the configuration of advanced merchandise based mostly on buyer necessities. This instrument permits for the definition of assorted product choices and elements, together with their compatibility circumstances and interdependencies.

In an ERP system, a specialised materials variant configuration permits for the creation of custom-made product variants based mostly on predefined parameters and circumstances. Central to this course of is the ‘Materials Grasp Report’, a unified information repository capturing important materials particulars throughout departments like manufacturing and gross sales. This file types the cornerstone for future product configurations. Every ‘Materials Grasp Report’ possesses distinct traits that outline the properties and parameters of each the elements concerned and the resultant product.

When a buyer locations an order for a custom-made product, the variant configuration mechanically considers the traits specified by the client. It subsequently selects the appropriate supplies or elements wanted to provide the custom-made product. Primarily based on the fabric variant configuration information, a manufacturing order is formulated utilizing the preliminary gross sales order particulars. This manufacturing order inherits the product’s traits and the options requested by the client. For instance, if a buyer orders particular heat-resistant threads, the system would choose 100% staple meta-aramid fiber as the bottom materials, as an alternative of artificial fibers. The traits of the ultimate product would then be derived from the Materials Grasp Report of the staple meta-aramid fiber.

Variant of calculation Carbon Footprint of the completed items

SAP presents a specialised module referred to as ‘Sustainability Footprint Administration’. For corporations not but prepared to take a position on this specialised answer, a personalized method utilizing present SAP modules will be thought-about, as outlined under:

The combination of carbon footprint information in several Materials Administration, Gross sales and Distribution, Manufacturing Planning, Logistics, Controlling and different modules presents a strong method for monitoring and decreasing a product’s environmental influence. The Supplies Administration module captures the carbon footprint related to uncooked supplies, elements, and semi-finished supplies. This information is important for understanding the environmental influence on the preliminary phases of manufacturing.

Then again, the Controlling module can account for emissions derived from power consumption (pure gasoline, oil, biomass, electrical energy, gas, paper, supplies, and so on.) through the manufacturing course of. The formulation would be the following:

E = A x EF x (1-ER/100)

E = emissions;

A = exercise fee;

EF = emission issue;

ER = total emission discount effectivity, in a share.

The Controlling module can calculate the carbon emissions based mostly on electrical energy utilization. Corporations can tailor this calculation methodology relying on their manufacturing location and the supply of renewable power in that space. Open information on the proportion of renewable power produced within the nation will be included to refine these calculations. As an example, if a manufacturing facility is situated in a area the place 40% of the power comes from renewable sources, this share can be utilized to regulate the emission issue. The adjustment can decrease the general carbon footprint calculated, reflecting the cleaner power utilized in manufacturing. This information must be up to date periodically, guaranteeing that the emission calculations are all the time present and aligned with the most recent renewable power statistics.

Moreover, emissions will be mechanically calculated from electrical energy payments (an organization might discover the particular present applications), offering an correct and automatic methodology for accounting for this facet of the carbon footprint.

On the finish of the month, the corporate can allocate information associated to the carbon footprint generated by companies offered and work carried out to the merchandise manufactured throughout that interval. That is accomplished in response to the authorised methodology for distributing oblique prices inside the firm. By doing so, the group ensures that the carbon footprint information is precisely attributed to particular person merchandise, enhancing the reliability of sustainability reviews and facilitating higher strategic selections for decreasing total emissions.

The combination of Materials Variant Configuration in Gross sales Orders with these carbon footprint monitoring options presents a holistic method to not solely assembly buyer calls for but in addition attaining company sustainability targets.

Extra advantages of utilizing the Materials Variant Configuration

There are some extra advantages of utilizing the fabric variant configuration for an enterprise:

Manufacturing optimization. In contrast to conventional ‘make-to-stock’ strategies, the place merchandise are pre-manufactured, ‘make-to-order’ manufacturing commences solely upon receipt of a buyer order. Better scope for product customization permits companies to cater to area of interest markets, doubtlessly commanding larger margins. Moreover, the manufacturing is tailor-made to fulfill the exact necessities of the shoppers, guaranteeing that the ensuing merchandise meet their long-term sturdiness and high quality expectations. Optimizing stock ranges and manufacturing schedules can scale back the necessity for frequent and long-term transportation, thereby lowering carbon emissions from automobiles.

Stock value discount. The make-to-order method eliminates the holding prices of completed items, releasing up capital in any other case tied up in inventory. The fabric variant configuration permits companies to fulfill buyer wants exactly whereas decreasing the need to take care of giant stock ranges. This method not solely streamlines logistical prices but in addition lowers power consumption in storage amenities, thereby decreasing carbon emissions. Decrease space for storing necessities additionally lead to financial savings on service prices related to warehouse upkeep

Environment friendly useful resource utilization. As a result of manufacturing is initiated by buyer orders, assets will be allotted extra effectively, thereby decreasing waste. This implies not simply useful resource financial savings but in addition a discount in emissions associated to waste disposal. The exact configuration of merchandise additionally allows the optimized procurement of uncooked supplies and semi-finished items. Every new buyer order clearly signifies the particular elements required for product manufacturing. Scheduling manufacturing based mostly on pre-configured merchandise permits the corporate to forecast its long-term uncooked materials wants, additional saving on stock storage prices. Correct product specs might result in extra exact forecasting of fabric wants, which might additionally scale back extreme useful resource utilization.

Seasonal components consideration for manufacturing optimization. Within the default setup of SAP S/4HANA, there isn’t any specialised characteristic that immediately assimilates meteorological information. Nevertheless, the system will be personalized to combine with exterior climate companies to import related local weather and seasonal information. This integration allows extra correct planning and adaptation of manufacturing processes based mostly on real-time climate circumstances and seasonal differences. The fabric variant configuration in gross sales orders helps the activation of custom-developed useful modules that may execute tailor-made logic. These modules can both use information already built-in into the SAP S/4HANA system or make real-time requests to exterior companies, resembling climate forecasting functions, to fetch present data. Wanting ahead, this imported meteorological information could possibly be used for each fine-tuning manufacturing and optimizing logistical points, like route choice and transportation car selection.

Packaging choice for completed merchandise. Prospects have the choice to specify the kind of packaging for materials supply when putting an order. Relying on the chosen packaging, the system will carry out a recalculation of the delivered product’s carbon footprint. The system may also log packaging as a separate stock merchandise, full with an outline of its traits. As a definite stock merchandise, it may be quantitatively tracked and procured both from third events or by means of in-house manufacturing, relying on the kind of manufacturing.

Encouraging the collection of low carbon footprint merchandise by means of pricing. The price of the ultimate product will be mechanically calculated based mostly on the chosen choices. Relying on the configuration of the ordered product, the system can flexibly set the bottom worth. It could additionally apply extra reductions or surcharges based mostly on the environmental influence of the chosen traits. This method to pricing can encourage clients to decide on extra eco-friendly decisions.

Implementing this pricing technique can have long-term advantages. As shopper habits information is collected, the corporate can fine-tune the pricing algorithm to make it more practical. This data-driven method may also present insights into market developments, enabling the corporate to develop new, extra sustainable merchandise.

Choice for eco-friendly choices of the manufacturing. The system can retailer details about the environmental traits of each the completed product and its elements and equipment, the ERP system can mechanically counsel or choose eco-friendly supplies or elements, offered that this doesn’t have an effect on the product’s useful traits. This contributes on to a discount in manufacturing’s carbon footprint.

Selling environmental duty by means of know-how. The variant configuration will be additional personalized or built-in with different methods to watch and account for environmental indicators all through the product’s lifecycle. This will embrace monitoring emissions throughout transportation, manufacturing, and even the disposal of the product.

Discount of returns and errors. Enhanced order accuracy can result in fewer returns and, consequently, decrease reprocessing and transportation prices.


Whereas not initially designed for environmental administration, the Materials Variant Configuration in SAP S/4HANA considerably enhances each manufacturing and logistics. This optimization has the additional benefit of probably decreasing an organization’s carbon footprint, which refers back to the complete quantity of greenhouse gases, particularly carbon dioxide, emitted immediately or not directly by their actions. By integrating this characteristic with methods and counting for environmental indicators all through a product’s lifecycle, corporations can extra systematically observe and scale back their carbon emissions. This makes Materials Variant Configuration in Gross sales Orders improve enterprise course of effectivity and will be built-in into the corporate’s complete environmental technique.

The article is written by Albert Mukhamedshin. Albert Mukhametshin is a guide and ABAP developer with over 13 years of expertise in implementing and optimizing SAP options, notably within the Gross sales & Distribution (SD), Materials Administration (MM), and Digital Information Interchange (EDI) modules. His proficiency within the ABAP programming language is complemented by intensive expertise working with enterprises throughout industries resembling metal, mining, oil & gasoline, in addition to timber processing and federal retail distribution. Albert’s deep experience encompasses a broad vary of SAP-related expertise and a powerful dedication to enhancing enterprise processes by means of superior know-how options.

To attain a complete understanding of SAP configurations and finest practices, Albert invitations you to discover his web site at This platform presents an intensive collection of articles that delve into totally different SAP system aspects, delivering insightful data and sensible steerage. The content material caters to each skilled SAP customers and newcomers, aiming to bolster your information and software of SAP functionalities inside your organizational framework.

Furthermore, for insights into the skilled journey and credentials behind the experience supplied on the web site, be at liberty to go to his LinkedIn profile at Right here, you’ll be able to join with him and keep up to date on the most recent developments and developments in SAP options. Partaking with this skilled community will offer you alternatives to debate challenges, share experiences, and discover new dimensions within the realm of enterprise useful resource planning and environmental sustainability.