SAP Sustainability Services and Circular Manufacturing

Sustainability and Circular Manufacturing

As sustainability gains strategic importance across industries, SAP consultants are increasingly encountering opportunities to address environmental objectives within SAP implementations.

While many clients are now focused on achieving compliance with corporate sustainability standards and regulatory requirements, a more focused area of specialization is just beginning to take shape within sustainable manufacturing: circular manufacturing.

Though circular manufacturing is only just beginning, with few economically viable use cases, it can still be considered an inevitable progression in manufacturing, given the finite resources available to manufacturers, and the immense pressure they are under to make manufacturing more sustainable.

This emerging discipline is expected to lead to a new and corresponding area of SAP services which seeks to help clients adapt their operations for resource efficiency, waste reduction, and closed-loop systems: offering fascinating career possibilities for consultants interested in aligning their professional development with sustainability imperatives.

In this future-oriented article from IgniteSAP , we will explore opportunities for consultants considering a move into SAP sustainability services, and discuss how circular manufacturing is likely to become a viable SAP specialisation in the future, allowing consultants to make a substantial contribute towards the health of the planet as part of a rewarding career.

Circular Manufacturing

In recent years, the automotive, electronics, and consumer goods industries have started to experiment with circular manufacturing models to address challenges posed by resource scarcity and regulatory expectations.

Some automotive companies are now remanufacturing components like batteries, engines, and other high-value parts to reduce dependency on new materials and respond to extended producer responsibility (EPR) laws that require end-of-life product management.

Electronics manufacturers face similar constraints with materials like cobalt and lithium, used extensively in batteries and other components. By recovering these elements from end-of-life products, they aim to minimize material costs while improving sustainability.

Using SAP Sustainability Tools

SAP’s ecosystem of sustainability tools has expanded in response to these industry needs, offering solutions for resource tracking, compliance, and lifecycle management. SAP Product Lifecycle Management and SAP Environmental Health and Safety are enabling clients to track materials through recycling and recovery processes, for compliance with environmental standards.

SAP’s Integrated Business Planning (IBP) tool helps clients optimize inventory management, accounting for both new and recycled materials to improve resource utilization. Together, these tools can help companies monitor their resource flows within circular frameworks, paving the way for SAP consultants to deliver specialized services focused on circularity when demand is sufficient.

The economic and operational incentives for adopting circular practices are considerable. Circular models can reduce raw material costs, stabilize supply chains, and help companies avoid fines by ensuring regulatory compliance. There is also an increasing expectation among consumers that manufacturers will guarantee that their products are not contributing unnecessarily to global carbon footprints and plastic pollution.

This means opportunities for SAP consultants to work closely with clients on achieving both sustainability and operational objectives. An appealing proposition for those looking to make a genuine impact through SAP sustainability services.

However, the market is still in its early stages, and the demand for circular manufacturing expertise remains concentrated in specific sectors. Until circularity is more widely adopted, this specialization will likely be pursued by consultants interested in developing long-term sustainability solutions.

Can SAP Consultants Specialize in Circular Manufacturing?

Though there are applications of the circular manufacturing model existing today, the projected timescale of widespread adoption of these necessary manufacturing processes and the corresponding SAP services is difficult to determine.

Consultants looking to change manufacturing for the better by providing SAP services for circular manufacturing will certainly be in high demand in the future, but for now it is best to concentrate on acquiring knowledge in the broader SAP sustainability services.

Consultants can accumulate related skills and experience while cultivating knowledge in emerging sustainability solutions with a focus on circular manufacturing for the purposes of delivering whitepapers and speaking engagements. This can position consultants as experts in sustainability for manufacturing, which has the added benefit of amplifying their professional profile.

Specialization in SAP sustainability services, requires understanding of sustainability within the context of SAP’s technology stack, including modules for data management, compliance, and supply chain optimization.

Proficiency in SAP PLM and SAP EHS will allow consultants to help clients to track materials throughout the lifecycle, from sourcing to disposal. These tools will also be critical for supporting circular practices, particularly in regulated industries like automotive and electronics.

Building expertise in SAP IBP is also useful, as careful demand planning is integral to sustainable and circular models. SAP consultants with experience in IBP can help clients manage inventory levels based on recycled materials, allowing them to maintain resource efficiency without overshooting production needs. Given that many clients are unfamiliar with sustainable supply chains, consultants should prepare to guide them on how these practices benefit production, inventory, and logistics planning.

Beyond SAP certifications, cross-functional skills are essential. Knowledge of supply chain management, environmental compliance, and data science will provide consultants with the insights needed to align SAP solutions with the client’s sustainability objectives.

Understanding the specifics of regulatory frameworks, such as the EU’s Waste Electrical and Electronic Equipment (WEEE) directive or Extended Producer Responsibility (EPR) laws, will help consultants to configure SAP tools in ways that support compliance while advancing sustainability goals.

Familiarity with data integration techniques, particularly IoT and real-time data feeds, is equally important, as it allows consultants to implement systems that capture and analyze data on resource use, waste generation, and emissions from manufacturing.

Designing Modular Solutions For Circular Manufacturing

One future challenge SAP consultants will face in the field of circular manufacturing is balancing the need for customized solutions with minimising costs. Consultants will need to use SAP BTP for modular solutions or side-by-side extensions to implement solutions for resource tracking, waste management, and compliance reporting in a scalable manner without changing the core of client systems.

Other existing tools that could support future sustainable processes like circular manufacturing include SAP Ariba for sustainable sourcing, as it allows clients to ensure that materials meet specified sustainability criteria, SAP IBP, which can be used to facilitate the planning of recycled materials inventory, and pre-configured connectors, and SAP Analytics Cloud which will also be useful for real-time insights into circular KPIs, such as resource recovery rates and emissions metrics.

Modularity inherent in many solutions allows clients who are early adopters to experiment with circular models without overhauling their entire SAP landscape. In the years ahead SAP consultants with this knowledge will be able to use it as strategic advisors, demonstrating quick wins and gradually building confidence in the value of SAP’s sustainability tools.

Challenges in SAP for Circular Manufacturing

The complexity of circular manufacturing presents several challenges that SAP consultants must be prepared to navigate. One of the most significant obstacles is data integration across multiple systems, as circular models require continuous data exchange between SAP modules, IoT devices, and external sources.

Tools like SAP Master Data Governance (MDG) will be needed for ensuring data accuracy and consistency, especially as clients will need to track resources across complex production and recycling loops. Clients often lack experience in real-time data management, so consultants may need to guide them in configuring IoT devices and integrating real-time data feeds with SAP Digital Manufacturing Cloud.

Industry-specific environmental regulations is another challenge, as requirements vary significantly across regions and sectors. For instance, consumer electronics manufacturers may need to comply with WEEE directives, while automotive clients are governed by End-of-Life Vehicles (ELV) regulations. SAP consultants must be knowledgeable about these standards and prepared to customize SAP EHS to facilitate compliance reporting, and avoid penalties associated with these types of environmental regulations.

Changing attitudes towards the necessity for circular manufacturing initiatives on an industry-wide scale will need to be accompanied by change management at the level of individual clients.

Resistance to change among employees can slow implementation, so consultants should work closely with clients to build internal support once executives are on board. Structured training sessions on tools like SAP PLM and SAP Analytics Cloud, combined with regular updates on progress and sustainability gains, will help enthuse employees and demonstrate the potential value of circular practices.

Measuring Impact and Demonstrating Value

Once clients begin implementing circular practices, SAP consultants will have to define metrics and KPIs to measure the success of these initiatives.

Well-defined KPIs are essential for clients to understand the operational and financial impacts of circularity. For SAP consultants, this will involve configuring SAP Analytics Cloud (SAC) to provide real-time reporting on metrics such as resource recovery rates, waste reduction, and carbon footprint. SAC’s customizable dashboards already allow clients to monitor these KPIs continuously, so it can be used for creating visibility into the effectiveness of their circular processes.

A primary KPI in circular manufacturing is the percentage of materials recovered and reused. SAP consultants can set up SAC to track and report on this metric, helping clients assess the immediate cost savings from using reclaimed materials.

Another valuable metric is waste reduction, which can be monitored in SAP EHS. By tracking waste output before and after implementing circular practices, consultants can demonstrate quantifiable reductions, cost savings and compliance benefits.

Emissions metrics can be managed within SAP Green Ledger, which captures data on carbon emissions and other environmental impacts. Consultants can use this data to illustrate clients’ progress toward sustainability goals, particularly useful for organizations with public ESG (environmental, social, and governance) commitments.

SAP consultants can use these and other KPIs to reinforce the long-term value of sustainability and circularity, strengthening client relationships by providing ongoing insights that validate circular initiatives as both environmentally responsible and financially sound.

Long-Term Viability for SAP Circular Manufacturing Specialization

Though the specialization in circular manufacturing within SAP consulting is in its early stages, it holds significant potential for growth. However, the rate of adoption will likely vary across industries, with high-impact sectors such as automotive, electronics, and consumer goods leading the way, due to the high cost and limited availability of key materials in these industries.

Regulatory standards are likely to intensify, especially in regions like the EU, where the Circular Economy Action Plan sets ambitious goals for waste reduction and resource recovery.

This regulatory environment means the need for SAP consultants with expertise in compliance and lifecycle management will grow as companies are compelled to meet these requirements. Circular manufacturing also aligns with broader ESG trends, which investors increasingly expect companies to address. Consultants who position themselves early in this niche could become extremely valuable to clients looking to maintain investment appeal through strong sustainability credentials.

The timeline for circular manufacturing to reach widespread adoption is uncertain, and SAP consultants must balance the current market demand with projected growth. Realistically, the need for specialized SAP consultants in circular manufacturing may remain niche in the short term. However, as clients recognize the cost-saving and organizational resilience benefits, this specialization is likely to become more prevalent, evolving into a standalone practice area within SAP sustainability services.

For SAP consultants interested in sustainability, circular manufacturing offers a promising area to specialize, but for now it is more realistic to consider careers in the wider area of SAP sustainability services, blending technical skills in SAP’s sustainability tools with industry knowledge and cross-functional expertise.

By preparing now, SAP consultants can position themselves as early leaders in a transformation that, while gradual, is steadily gaining momentum. As the demand for sustainable practices intensifies, consultants with expertise in sustainable and circular manufacturing will be indispensable to clients: to balance profitability with environmental responsibilities.

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