Our environment needs intelligent planning

Unfortunately, the climate crisis is quite clear to all of us, both as consumers and in thecorporate world. The task of ensuring that products and services are carbon neutral by 2030without costs simultaneously skyrocketing or necessary goods not being delivered will be animportant exercise in logistics and planning processes. This requires the right decisions andintelligent solutions, and we need to ask ourselves: Which material from which suppliershould we choose? Where and how will we produce? Which mode of transport should wechoose? What are the total costs in terms of carbon dioxide, money and delivery time? Canand will we make compromises?

Choose the best alternative
We need a solution that lets us make the best, most useful and, at the same time, mostcarbon neutral decisions across the entire supply chain. A solution that provides an overviewbased on up-to-date online data, shows the consequences and allows us to make the bestbalanced decision based on different alternatives. New IT planning tools together with theright logistics set-up give a precise view of the environmental consequences of differentdecisions (carbon dioxide impact). Below example shows three alternatives where a totalscore is automatically calculated for carbon dioxide (CO2) consumption, financial impact anddelivery time.

Using a tool like the above for a sales order makes it possible for the sales representative torecommend a customer or management ways to reduce carbon emissions whilst remainingprofitable. Another example is enterprises that proactively adjust processes and adapt theproducts they plan to produce and make available for sale in the individual countries in theirstrategic and tactical planning (sales and operations planning - S&OP) for the purpose ofensuring local carbon reductions and thus avoiding potential fines.

Valid data
Valid data are a prerequisite for planning correctly. ERP systems provide transparency anddata for planning tools in relation to carbon emissions across the entire value chain, includingproduction, raw materials, energy consumption and transport. Enterprises can furthermoreintegrate data from product databases or third-party solutions to analyse and understandcarbon-related information. Sharing of carbon data between the parties in the value chainobviously ensures coherence, and various initiatives already exist today, for example in theautomotive industry.

Optimised logistics set-up
As with traditional planning data, carbon-related data must be included and reflected inbusiness processes and IT systems. If a product can be transported quickly by air, but with ahigher carbon emission than when transported by truck, these two alternatives must beincorporated in the logistics and data model. If production can produce with a lowerconsumption of energy, but with a higher consumption of labor, these data must be includedand maintained in processes and master data.Advanced planning is based on valid data and a carbon-optimised logistics setup.

Advanced planning is based on valid data and a carbon-optimised logistics setup.

“Advanced Planning & Scheduling” tools
There are several good advanced planning and scheduling solutions on the market today,such as SAP IBP, Kinaxis, o9 and Anaplan. These solutions have different strengths andweaknesses, but what they do have in common is that the planning phase typically starts witha forecast followed by network planning across suppliers, production capacities, warehousesand customers concluding with detailed planning at machine or departmental level.

How to get started
Planning for the lowest possible carbon dioxide consumption every time is obviously best forthe environment. But a dynamic world with frequent changes in deliveries from suppliers,transport conditions, conditions in production and customer needs and wishes requires swiftreplanning and decision-making. In such a situation, the planning solution must present thebest possible scenarios in a simple and clear manner in, for example, a score card or a controltower, thus allowing the enterprise to make the best decisions with intensified focus on thelowest possible carbon dioxide consumption.

Deloitte readily provides support on the journey of expanding and validating data in ERPsystems (for example SAP ECC and S/4HANA), implementing new logistics processes andselecting and implementing new planning solutions. Deloitte moreover has extensiveexperience in other relevant areas such as management consulting, change management,testing, reporting and compliance.