Protect your brand by managing waste!

Just the other day, I saw an announcement that a large French dairy and food manufacturer had been sued, for lacking a strategy to reduce their usage of packaging materials. As well as the absence of a vision to move towards more sustainable alternatives.

Now you could say that any (free) publicity, is good publicity. But we think that companies would rather share good news and gain positive attention. Which is why, in this blog, we take a brief look into 3 key elements with regards to Extended Producer Responsibility and waste management, so you’re in the know. We’ll also present automated IT solutions to streamline the process, providing insights and tangible business drivers to improve the processes.

Build and expand on your reputation:

Looking at waste management and disposal flows, if done wrong, there’s a considerable chance of damaged reputations. To reduce this risk, you might like to manage your waste and recycling flows, for a wide range of product groups. You want to protect your brand values and reputation by ensuring that your waste is discarded off properly, without polluting the environment. Thereby complying with reporting directives from EU and local governments.

Registering can be a pain

Typically, we see that the yearly volume of procured recyclable materials (plastics, carton, glass, aluminum, etc) is proportionally distributed over business units. With that, there is no insight how these volumes or ratios compare to other companies in the market. Neither an idea of local differences, nor if a certain product group is accountable for an unevenly large share of the consumption of recyclable materials.

Reporting requirements differ…

Laws and regulations change over time. Different rules apply per country. And these rules are becoming stricter, requiring more details in reporting each year. Although legislation is being drafted on European level to harmonize the reporting requirements, it is not finalized yet.

Reporting is considered an administrative burden, out of which you gain no benefits. In lean terminology, it’s an NVA. A nonvalue-adding activity, that you perform because of legal obligations.

Regenerate, recycle, rethink

Registration of your waste and recycling flows is required for reporting. With that you comply with legal regulations. But investing all this effort for a simple report seems like a waste of time. Since you already have setup a detailed registration system, per country, per product, why not use that data?

Calculate extended producer responsibility (EPR) obligations, plastic taxes, and corporate commitments to optimize material choices.

You can turn that non-value adding activity into something profitable…

It’s already out there, waiting for you to tap into. SAP helps to gather the data and to present it in a proper manner. You can use it to rethink how you treat these waste and recycling flows. Is it possible to change over to cartons, instead of plastic? Can you use bio-degradable plastics? Or recyclable packaging? You know how much was sold per region and how much of the fractions are recyclable. You can determine the biggest contributors and thereby also the areas where the most can be gained by optimizing processes.

How does SAP support this?

In a very straightforward way. A packaging structure is created, that resembles a Bill of Materials (BOM). The packaging structure breaks down into recyclable fractions. In below example we used paper, glass, plastic and aluminum. You can define multiple packaging structures, multiple fractions and assign them to products. The model allows for a lot of flexibility

As soon as you sell products, the beforementioned master data is used to multiply the fractions by the number of products that you sell. This can be used to report on the total number of fractions sold, in a region, or in further to be defined parameters. The result is very accurate reporting on a very low granularity.

Choose your waste management tool

The previous picture is based on SAP Recycling Administration. The “old” module that’s a part of SAP EH&S in the previous ECC setup. With the introduction of S/4HANA and the BTP platform, a new module is now available. SAP Responsible Design and Production (RDP).

Where REA ‘just’ multiplies the fractions with the number of goods sold, Responsible Design and Production (RDP) offers more advanced applications. It supports over 600 local and regional regulations. Of which SAP guarantees that they will update new reporting requirements in their BTP tooling.

The above table compares both solutions. SAP RDP is the latest and most advanced iteration. It connects through the Business Technology Platform (BTP) to your S/4HANA or ECC system. It also consumes the data and transforms it into the required reporting. Worthwhile to mention is the modelling section. RDP offers the possibility to compare different packaging types and recycling partners to come to a most beneficial situation that’s both cost-effective and beneficial for the environment.

Conclusion

Companies that produce and sell goods to consumers, need to report on the fractions of recyclable materials that they bring to the market. We see a lot of manual work being put into gathering the required data. SAP offers tooling that can remove that burden from your organization and bring back more benefits.

In summary, with SAP REA or RDP you can map relevant master data - articles, packaging, fractions, single use plastic, recycled plastic, exceptions by reusing existing data (e.g., parts lists with packaging data). The extended SAP master data integrates with SAP SD pricing, integration SAP CO controlling (accruals) and FI finance (payables tax)

This enables your company to:

McCoy & Partners have implemented the solution for some of ourcustomers. We’d be happy to setup a meeting and bring you in contact with our references. You can learn from their experiences and get their insights