OpenSAP Ce1 Week 4 All Slides

Week 4: Technology Enablers for Circular Business Models
Unit 1: Circular Economy: It Takes a Network

Circular economy: It takes a network
Content overview
▪ What is meant by “networked economy”?

▪ Why are networks important in the context of the circular
economy?
▪ How does SAP plan to support the networked economy?
© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 2

Kristen Hanel in an interview with Paige Cox
Paige Cox,
SVP, Head of SAP Business Network,
SAP
Kristen Hanel,
Solution Advisor, SAP

SAP Business Network
To enable the “loops” in the

circular economy, SAP believes
we need:
A global network of partners

Business
Community
Network-wide process orchestration
that redefines collaboration
Integrated intelligence to deliver

predictability
One platform to easily connect with Ariba Other

SAP and third-party networks Network Networks
Logistics Business Asset Intelligence

Network Network
Learning points
▪ Economy is evolving to a networked economy.

– The trend goes from the intelligent enterprise to the network of intelligent enterprises and network resource planning.
– Transparency of the entire value chain and material flows in a multi-enterprise collaboration is key to bring the
circular economy to life.
▪ SAP aims to build a business community network that allows companies to connect with their entire ecosystem in a
holistic, non-fragmented way. In a first step, procurement, logistics, and manufacturing are brought together, allowing
cross-network collaboration beyond company borders. Data and insights provided by the network allow better decision
making across these “ecosystems” of companies—enabling circular loops.
▪ SAP is concentrating on a cross-functional network of networks that combines procurement networks, logistics
networks, and manufacturing networks to give multi-enterprise commerce flow.
▪ Procurement traditionally comprised buying and selling.
– Today, companies require transparency and traceability of sourced products and material, for example, in order to act
sustainably and responsibly and to meet legal and compliance requirements.
▪ Logistics was traditionally fragmented with point-to-point connections to, for example, several logistics partners.
– Today, companies require full transparency of downstream and upstream product and material flow. In the context of the
circular economy, this is required to close loops. This can be multiple tiers. (Paige calls this “N-Tier networks”.)
▪ Manufacturing traditionally comprised order fulfillment.
– Stimulated by the trend toward a circular economy, companies now use other business models like “pay to lease”. This
requires more visibility of where products are after they have been shipped, how they perform with the customer, and
technology solutions like “digital twins” of materials.
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Unit 2: Analytics with the Internet of Things
Analytics with the Internet of Things
Content overview
▪ What (briefly) is the Internet of Things (IoT)?

▪ How can/why should IoT with analytics support
circular business models?
▪ Let’s look at a few examples
▪ Summary

What is the Internet of Things?
▪ Connecting things to the Internet

▪ Supporting sensor hardware, with software tying
the things together
▪ Supported by data analytics capabilities

How do IoT and analytics enable the circular economy?
▪ IoT and analytics can support circular economy

business models with:
− Performance tracking
− Predictive maintenance
− Track and trace of materials and assets
− Digital twins
Source: https://www.sap.com/products/iot-data-services.html
Farming example
Source: Screenshots from SAP Analytics Cloud presenting data from small holder farmers in Africa

Some examples…
▪ Compressed air as a service

▪ Tracks performance of compressors
▪ Increased service efficiency
▪ Higher customer satisfaction
▪ Less waste

Summary
▪ The Internet of Things allows physical objects to be

connected to the Internet, allowing the analysis of
performance using analytics capabilities.
▪ This connection and tracking allows businesses to
create a performance feedback loop to allow the
company to maintain the product and bring it back for
upgrading, remanufacture, or recycling at the most
optimal point.
▪ It helps guarantee a high level of reliable product use
for the consumer.
▪ IoT and analytics can be used to build product-as-a-
service models.

Further links and material
▪ SAP Internet of Things (IoT) technology

https://www.sap.com/products/iot-data-services.html
▪ SAP Analytics Cloud – advanced analytics
https://www.sap.com/uk/products/cloud-analytics.html
▪ Digital twins
https://www.sap.com/products/supply-chain-
management/digital-twin.html
https://www.hannovermesse.de/en/news/news-
articles/sap-introduces-a-cloud-solution-for-digital-twins
▪ Predictive maintenance
https://www.sap.com/products/predictive-asset-
insights.html
▪ Compressed Air Service from Kaeser
https://www.kaeser.com/int-en/company/press/press-
releases/l-sigma-air-utility.aspx

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Unit 3: Technology for Reverse Logistics
Technology for reverse logistics
Content overview
▪ What is reverse logistics?

▪ Technology for reverse logistics
▪ How this works in real life: example of Lexmark

What is reverse logistics?
“Simply put, reverse logistics is the process

of moving materials back from their consumer
destination to their point of manufacture or
the distribution centre in order to recapture
their value for re-distribution, or dispose of
them properly. Reverse logistics is only
necessary when a product or material is
being sent ‘backward’ in the supply chain.”
Source: Hollingsworth
https://www.hollingsworthllc.com/guide-reverse-logistics/

Technological enablers – market study
“67% of Companies Automatic data capture

44%
Use Technology to Technology: 80%
Cloud computing Manufacturing: 64%
Improve the Reverse 37%
Logistics Process” Predictive analytics/Big data
25%
Blockchain Technology: 36%
14% Manufacturing: 28%
Other
Source of diagram and quotation:
UPS – Reverse Logistics in Today’s Digital Landscape (2019) 7%
Other technological enablers
Additional technology to consider:

▪ Sensors and monitoring devices
▪ Asset inventory management
▪ The Internet of Things (IoT)
Source: Circular Economy Practitioner Guide – Reverse Logistics:

https://www.ceguide.org/Strategies-and-examples/Dispose/Reverse-logistics
Kristen Hanel in an interview with John Gagel
John Gagel,
Chief Sustainability Officer, Lexmark
Kristen Hanel,
Solution Advisor, SAP

Learning points from the interview
▪ Lexmark’s Cartridge Collection Program includes:

– The box the new cartridge is shipped in is used to return the used cartridges
– The used cartridge goes back to Lexmark and is remanufactured or recycled
▪ Lexmark runs this program:
– To meet regulatory requirements (for example, in the EU)
– To help customers to be more sustainable
– To reduce Lexmark’s costs and footprint (less usage of virgin material and fossil fuels, less landfill, etc.)
▪ What can go wrong?
– Think through the logistics plan–both outgoing and reverse and the lifecycle of the product
– Design your products to be circular from the outset, and for multiple lifecyles
▪ The program is successful because:
– The product is designed for reuse (multiple lives) and longer use (durability) and with the entire circular
lifecycle in mind
– Three pillars: Sustainable Design, Efficient Use, Responsible Reuse and Recycling

▪ Technology and research paper from UPS, Reverse Logistics in Today’s Digital Landscape (2019)
https://www.uspsdelivers.com/wp-content/uploads/Reverse_Logistics_in_Todays_Digital_Landscape.pdf
▪ Hollingsworth – Guide to Reverse Logistics – an excellent overview of processes and all the jargon!
https://www.hollingsworthllc.com/guide-reverse-logistics/
▪ Circular Economy Practitioner Guide – Reverse Logistics
https://www.ceguide.org/Strategies-and-examples/Dispose/Reverse-logistics
▪ SAP Asset Intelligence Network
https://www.sap.com/products/asset-intelligence-network.html
▪ Information on Lexmark’s circular economy initiative
https://csr.lexmark.com/circular-economy.php
▪ Information on Lexmark’s recycling program
https://csr.lexmark.com/return-recycle.php
▪ Information on Lexmark’s cartridge collection program
https://www.lexmark.com/en_us/products/supplies-and-accessories/reuse-and-recycling-program/cartridge-
collection-program.html

Thank you.
open@sap.com
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Unit 4: Analytics for Your Environmental Footprint
Analytics for your environmental footprint
Content overview
▪ Climate action challenges

▪ Emission categories
▪ Climate 21 North Star demo (Labs preview)
▪ SAP Product Footprint Management architecture

Climate action challenges
Market Risks Regulatory Risks Investor Risks Reputational Risks
Product Carbon Footprint

is unknown
NO Data
NO Calculation NO Insights
Access to capital
NO Steering
Business model
Sourcing strategy Product portfolio

Customer demand
Location strategy

Emissions categories – example carbon footprint
CO2e from
CO2e from Production
Purchased e CO2e from
Materials CO2e from Outbound Product
Inbound e
Transport CO2e
Transport
e e
e

Climate 21 North Star demo

SAP Product Footprint Management architecture
S/4HANA OPTIMIZE Intelligent Enterprise Applications

Design to Operate
SAP
Lead to Cash
Source to Pay
Record to Report
Collect
Activate
Business Activities C21 Scores
Product Footprint
EVALUATE
ASSESS
Management
Sustainability Footprint
Content Footprints
(Data & Rules)
Assessment Analytics
(Absolute & Relative)
(Actual & Planned)
(Dashboards &
SAP Business Benchmark)
Technology Platform
Footprints C21 Shared Footprints
Reference Life cycle inventory data service from Shared footprints by other
Cloud Content external content providers companies
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Unit 5: Blockchain
Blockchain
Content overview
▪ Why is traceability important in the context of

sustainability and circular economy?
▪ How can blockchain support raw material traceability
across supply chains?

Blockchain
Traceability in the context of the circular economy – benefits
Increasing Circularity Risk Reduction Enabling Interorganizational

Minimizing the input of virgin Ensuring companies only source Accountability
natural resources and increasing from suppliers that meet their Validating sustainability claims
the use of return flows, such as sustainability and ethical policies and substantiating ethical
recycling sourcing claims

Blockchain
The current problem with batch traceability
A
?% A
B ?% B
?% C
C
Aggregation Comingling Refining/Production Supply Chain Transparency
Non-sustainable A, B, C… are often mixed up Meaning traceability is

and sustainable during production extremely difficult
inputs
“Overall supply chain transparency is poor, with 65% of procurement leaders having
limited or no visibility beyond their tier-1 suppliers.”
Source: The Deloitte Global Chief Procurement Officer Survey (2018)

Blockchain
How can this be solved?
A
30% A
B 20% B
50% C
C
Aggregation Comingling Refining/Production Supply Chain Transparency
Non-sustainable are traced using digital twins of the allowing transparency from
and sustainable material (tokens) that are written into a different origins to be measured
inputs… blockchain… by counting the digital tokens

Blockchain
Darren West in an interview with James Veale
James Veale,
Co-founder, GreenToken by SAP
Darren West,
Business Development Director, Circular Economy,
SAP

Blockchain
Learning points
▪ Companies need visibility into where their raw materials are from and to what extent they are sustainable.
▪ Raw material is usually traded on a bulk basis. Sustainable and non-sustainable commodities are mixed up
during aggregation and production. Because they all look the same, and get all mixed together, traditional
technology solutions using batch traceability don’t work!
▪ GreenToken by SAP uses tokens to distinguish sustainable raw materials and non-certified raw materials.
– Example: 1 green token for 1 ton of sustainable palm oil; 1 red token for 1 ton of non-certified palm oil
– The tokens serve as digital twins. When material gets mixed up, the tokens are mixed up in the same
way. This way, the mass balance of sustainable and non-certified palm oil can still be tracked.
▪ GreenToken uses blockchain to store the information.
– The advantage is that information cannot be manipulated—a risk with traditional database technology.
– Because the algorithms are not as complex as cryptocurrency, it does not need a lot of power.

Blockchain
▪ Web page www.green-token.io

▪ Contact James Veale LinkedIn I email
▪ Blockchain: Lets talk about the Elephant in the room...

https://www.linkedin.com/pulse/blockchain-lets-talk-
elephant-room-james-veale/
▪ A battery of misleading information?
https://www.linkedin.com/pulse/battery-misleading-
information-james-veale/
▪ Plastic announcements:
https://plasticenergy.com/saps-greentoken-and-plastic-
energy-announce-plastic-tracing-blockchain-partnership/
▪ GreenToken: Sneak preview of our 2021 plans
https://www.linkedin.com/pulse/greentoken-sneak-
preview-our-2021-plans-james-veale/

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Unit 6: Machine Learning and Artificial
Intelligence
Machine learning and artificial intelligence
Content overview
▪ What is machine learning (ML) and artificial intelligence (AI)?

▪ How can ML/AI enable the circular economy?
▪ Example: Reducing pesticide, fertilizer, and water use in an
agricultural cooperative

What is machine learning and artificial intelligence?
Software that emulates human intelligence:

▪ Computer vision
▪ Natural language processing
▪ Classification
▪ Clustering

How can ML/AI enable the circular economy?
ML/AI can help with:

▪ Design – products, components and materials
▪ Circular business models
▪ Optimizing circular infrastructure

▪ Global population growth and growth of middle class

▪ Need to feed the world
▪ Technology and AI needed to support regenerative
and efficient food production

▪ Real-time crop and weather tracking

▪ Satellite and drone imaging
▪ Data-driven recommendations
▪ Reduced pesticide, fertilizer, and water use
“A team of agronomists at ACA has trained the

machine learning algorithm using appropriate
information for the region and the crops it supports.
With such precise data, the group takes preventive
action when it spots anomalies.”
SAP News, October 2019

Summary
▪ AI simulates human intelligence to carry out activities

such as computer vision, natural language
processing, classification, and prediction.
▪ AI has an important role in the circular economy in
materials and product design, business model
optimization, and circular infrastructure optimization.
▪ AI is a powerful capability to (among many other
things) optimize natural resource use.

Further reading and links
▪ Artificial Intelligence and the Circular Economy, Ellen MacArthur

Foundation (2019)
https://www.ellenmacarthurfoundation.org/publications/artificial-
intelligence-and-the-circular-economy
▪ AI and ML – an opinion on the difference from Bernard Marr, published in
Forbes
https://www.forbes.com/sites/bernardmarr/2016/12/06/what-is-the-
difference-between-artificial-intelligence-and-machine-
learning/?sh=3208817a2742
▪ United Nations global population estimates
https://www.un.org/en/global-issues/population
▪ ACA – the Asociación de Cooperativas Argentinas C.L.
https://www.acacoop.com.ar/nosotros.html and SAP News article
https://news.sap.com/2019/10/sap-asociacion-de-cooperativas-
argentinas-sustainable-agriculture/
▪ Artificial Intelligence at SAP
https://www.sap.com/products/artificial-intelligence.html

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Unit 7: Digital Inclusion
Digital inclusion
Content overview
▪ Context
▪ Interviews with rePATRN and PYXERA Global
▪ Learnings for the circular economy

Digital inclusion
Background
“We see plastic waste as a threat

to our way of life and danger to the
environment.
But we also look at this as an
opportunity.”
Oliver Boachie, special advisor from the Ghanaian Ministry

of Environment, Science, Technology, and Innovation
(MESTI) – Interview for SAP News, 2020
Digital inclusion
Social inclusion benefits of a circular economy
“By connecting the informal

economy of the waste collectors
to the formal economy, we can
ensure they receive a fair wage,
and later on, get services like
training or child care”
Maggie Buggie, Chief Business Officer at SAP Services –

speaking to the World Economic Forum about the Ghana
project in 2020 and quoted in SAP News.
Digital inclusion
Darren West in an interview with Jeffrey Provencal
Jeffrey Provencal,
Founder and Managing Director, rePATRN
Darren West,
SAP

Digital inclusion
Learning points from interview with Jeffrey Provencal
▪ rePATRN recycles plastic bottles in Ghana. Currently exports, but

hopes to bring the closed loop to Ghana.
▪ Goals: to get volume to recycle and raise the living standards of the
individual waste collectors who are “unseen” – in the shadows – the
“informal sector”; they are the core of rePATRN.
▪ How does technology help with digital inclusion?
− Identify the actors. Support them and elevate their status from
informal to formal so that they can access social contributions and
further benefits.
− When it gets to 900 tons per month of volume, rePATRN can buy
land and equipment and recycle PET in Ghana (rather than
export), which brings the circular loop close to home.
▪ What holds rePATRN back in implementing the circular
economy?
− Volume
− Regulation for food-grade plastics and laws to mandate minimum
recycled content (to achieve a level playing field with virgin plastic)

Digital inclusion
Darren West in an interview with John Holm
John Holm,
Vice President, Strategic Initiatives, PYXERA Global
Darren West,
SAP

Digital inclusion
Learning points from interview with John Holm
▪ PYXERA Global is working with native American tribes in

Alaska, Montana, Colorado, the Great Lakes, and other
regions on circular economy transition that can be inclusive,
particularly to traditionally disadvantaged communities.
▪ The circular economy affects so many social issues
directly that we have to frame the entire ecosystem to
identify the issues for community.
▪ Look for where they need help to transition to a new
economic, circular model. Use an ecosystem model; have
everyone moving together, for example: health, education
– might be important to the circular economy
transition, particularly disadvantaged communities.
▪ Also bring in leading partners to enable these communities
and work collectively (John mentions First Mile and
Metabolic, who are specialists in social engagement and
systems thinking). For example, in Alaska, native
American tribes have issues with housing, technology.
Use technology to drive inclusion.

Digital inclusion
rePATRN
▪ Web site: www.repatrn.com
▪ Instagram: https://www.instagram.com/repatrn/
▪ Twitter: https://twitter.com/repatrn?lang=en
▪ SAP and rePATRN mentioned in SAP News: https://news.sap.com/africa/2020/10/ghanas-
ambitious-plan-to-minimize-plastic-waste/
PYXERA Global
▪ Web site with focus on circular: https://www.pyxeraglobal.org/circular-cities/
▪ Paradigm Shift publication: https://www.pyxeraglobal.org/paradigm-shift/
▪ Inclusive Circular City Design Webinar: https://www.youtube.com/watch?v=tkOLq6axqAo
▪ SAP and PYXERA Global: https://www.pyxeraglobal.org/partnerships/
Further reading
▪ Chatham House on CE and Inclusion: https://www.chathamhouse.org/2019/05/inclusive-
circular-economy
▪ PACE Action Plan for Plastics:
https://pacecircular.org/sites/default/files/2021-02/circular-agenda-plastics-feb2021_FINAL.pdf

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Week 4: Technology Enablers for Circular Business Models

Unit 1: Circular Economy: It Takes a Network

▪ What is meant by “networked economy”?

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 2

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 3

To enable the “loops” in the

A global network of partners

Integrated intelligence to deliver

One platform to easily connect with Ariba Other

Logistics Business Asset Intelligence

▪ Economy is evolving to a networked economy.

© 2021 SAP SE or an SAP affiliate company. All rights reserved.

▪ What (briefly) is the Internet of Things (IoT)?

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 2

▪ Connecting things to the Internet

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 3

▪ IoT and analytics can support circular economy

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 5

▪ Compressed air as a service

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 6

▪ The Internet of Things allows physical objects to be

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 7

▪ SAP Internet of Things (IoT) technology

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 8

© 2021 SAP SE or an SAP affiliate company. All rights reserved.

▪ What is reverse logistics?

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 2

“Simply put, reverse logistics is the process

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 3

“67% of Companies Automatic data capture

14% Manufacturing: 28%

Additional technology to consider:

Source: Circular Economy Practitioner Guide – Reverse Logistics:

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 6

▪ Lexmark’s Cartridge Collection Program includes:

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 7

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 8

© 2021 SAP SE or an SAP affiliate company. All rights reserved.

▪ Climate action challenges

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 2

Market Risks Regulatory Risks Investor Risks Reputational Risks

Product Carbon Footprint

Sourcing strategy Product portfolio

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 3

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 4

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 5

S/4HANA OPTIMIZE Intelligent Enterprise Applications

Footprints C21 Shared Footprints

© 2021 SAP SE or an SAP affiliate company. All rights reserved.

▪ Why is traceability important in the context of

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 2

Increasing Circularity Risk Reduction Enabling Interorganizational

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 3

Aggregation Comingling Refining/Production Supply Chain Transparency

Non-sustainable A, B, C… are often mixed up Meaning traceability is

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 4

Aggregation Comingling Refining/Production Supply Chain Transparency

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 5

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 6

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 7

▪ Web page www.green-token.io

▪ Blockchain: Lets talk about the Elephant in the room...

© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 8