Tag: sustainability

Digital Supply Chain – Women in Supply Chain a chat with @circular_nomad and @supplychnqueen

As well as running the Digital Supply Chain podcast, and the Industry 4.0 themed series of podcasts, I decided to also spin up a new series – themed around the topic of Women in Supply Chain. This series will strive to highlight the stories of women leaders in Supply Chain to attempt to address the current imbalance in their representation on panels, podcasts, etc.

Kicking off this series, I invited Sheri Hinesh (@supplychnqueen on Twitter), and Deborah Dull (@circular_nomad on Twitter) to join me for the inaugural podcast, as they have their own very successful Supply Chain podcast Supply Chain Revolution.

We had an awesome conversation covering topics as diverse as the impact of digital goods, the transition of our energy systems to clean energy, sustainable supply chains and the circular economy.

Listen to the podcast using the player above ☝🏻, and/or see the full transcript below 👇🏻:

Sheri Hinesh [00:00:00] And when you think about sustainability through the lens of supply chain and even digital, 50 to 80 percent of the revenue spend happens in supply chain. And so, do, up to 85 percent of the environmental impacts, social impacts of supply chain. so, who better then than us as supply chain practitioners who have that end-to-end interconnected view of the world of business, of the communities where we operate to really do something epic?

Tom Raftery [00:00:32] Good morning. Good afternoon, or good evening wherever you are in the world. This is the Digital Supply Chain podcast, and I am your host Tom Raftery

Tom Raftery [00:00:41] Hi, everyone, welcome to the Digital Supply Chain podcast. My name is Tom Raftery. This is the first of a new series that we’re going to run on Women in supply chain. And with me, I have two of the highest profile women in supply chain today, Deborah and Sherri. Deborah and Sherri, would you like to introduce yourselves?

Deborah Dull [00:00:59] Hello, I’m Deborah Dull. Thanks, Tom, for having us on. The most important supply chain related introduction about me is that I have a deep love for inventory.

Tom Raftery [00:01:12] Fascinating, fascinating, and that laugh there is from Sherri, Sherri, would you like to introduce yourself?

Sheri Hinesh [00:01:17] Hello, world digital supply chain, folks. My name is Sherri Hinish, and my vision is to change the world through sustainable supply chain, evangelizing the SDGs and making the world a better place. The world that we share. I’m also affectionately called the Supply Chain Queen. And I have a podcast with Deborah called The Supply Chain Revolution, where we share provocative points of view that challenge paradigms for progress, say it three times.

Tom Raftery [00:01:50] so, Sherri for anyone who is unfamiliar because this is a digital supply chain podcast, not a sustainability podcast, so, people might not be aware. What are the SDGs?

Sheri Hinesh [00:02:04] Sure, so, the SDGs are a framework where we can achieve as the human race can achieve economic and social and environmental prosperity in the world that we share. And with everything happening right now with Covid-19. This is really important for us to understand that we’re all connected. And the SDGs are 17 interconnected goals that would help us to achieve a better world by 2030. so, this is really about the decade of action. How can we encourage a world that has no hunger, where we have economic growth and prosperities in the community where we operate, that supply chain touches? Responsible consumption, responsible production, where we protect life below water and life on land. And it’s really a beautiful vision. I’ve devoted my life to really sharing this picture and framework of a better world, that’s super tangible that people can connect to and that we can really mobilize each other in a meaningful way in the world we share. We have to get there. We have to get in the canoe. Deborah and I always talk about this like get in the canoe. We can do it and we need inspiration right now more than ever Tom.

Tom Raftery [00:03:30] No, I get that completely, I’m a former sustainability analyst for seven years or so, before I joined SAP, so, you know, you’re completely speaking my lingo here. But tell me, I mean, maybe, maybe. Deborah, jump in here. What does sustainability have to do with supply chain?

Deborah Dull [00:03:46] Great question. so, one of the topics that I love most, which is related to but different than sustainability, is the idea of a circular economy. And I’ll explain what that is briefly. But the answer to your question is that the way the world operates is through supply chains. so, every supply chain manager impacts the planet and impacts sustainability. And when you talk about financial sustainability, environmental sustainability, social sustainability, the choices we all make in our day to day impact that where we buy, how we buy, how we manage our suppliers, do we make bridges or do we hold people negatively accountable, for example? All comes back to the human connection that Sherri talked about, certainly. And when we talk about the concept of a circular economy, I think supply chains are uniquely positioned to really catapult the businesses and organizations that we support. And what I mean by that is if we look at the way the world works today, we take an item from the planet. We make something very efficiently, we use it. And then typically that item gets thrown away. And there’s a new economic model that says, hold on a second. All those items we’re throwing away, there’s actually more money to be had. We could squeeze more out of those materials and everybody makes more money. And so, if we think about the way to circulate and loop all of these materials and resources, even like heat or organics or plastics or metals, it’ll come down to supply chains, ability to find, circulate, move it, track it, bring it back. Is it socially responsible? Is it safe for human consumption? And I can’t think of a discipline more impacted than supply chain. And the flip side, who can impact more than supply chain can? We certainly have to work across material scientists and economists and those who design these systems. But if we look at the US workforce alone, 37 percent of jobs are supply chain related. And so, we have this massive cohort. And given that we’re such a new field, I think we haven’t really been considered like that at a global scale. And these days, though, it’s hard to read the news or turn on the radio without hearing the word supply chain every five minutes, which if I take my rose coloured glasses on here, I see it’s just a tremendous step forward for our field.

Sheri Hinesh [00:06:14] And Deborah, you make a great point. That supply chain is truly the conduit. And when you think about sustainability through the lens of supply chain and even digital, 50 to 80 percent of the revenue spend happens in supply chain. And so, do up to 85 percent of the environmental impacts, social impacts of supply chain. so, who better then than us as supply chain practitioners who have that end-to-end interconnected view of the world of business, of the communities where we operate to really do something epic? In the next wave in the supply chain revolution. This is this is our purpose right now, so, we’re super excited.

Deborah Dull [00:06:58] If think about Tom, if we think about the impacts of digital digital supply chain. so, actually, fun fact. I wrote my master’s thesis on the digital supply chain. But at the time this was *mumbles* years ago, it was actually about digital goods. so, I talked to Amazon, the Kindle team, I talked to the Netflix team. I talked to Sony. And so, when they were moving digital goods around the world. And the reason why this is so, important is the cloud is a real physical place that’s supported by real physical supply chains. And so, as we who are in software make decisions about product or as we as consumers make decisions about how many copies of our vacation photos we keep. That has a physical impact in the cloud. And if we make choices, that requires twice as much storage space. That’s twice as many servers, twice as many spare parts, twice as many supply chains, twice as many power requirements, twice as many mechanics engineers to repair. And they’re going to be driving there. so, you duplicate the whole thing. The other interesting factor is how much energy A.I. takes in chugging through their algorithms. It’s something like 30 percent of the world’s power right now is being taken just to help AI think. And these are elements that I don’t think are highlighted enough but relate very much to digital supply chain. Regardless of the way you define digital supply chain, whether they’re digital goods or the digital backbone that supports the physical supply chain.

Sheri Hinesh [00:08:36] You know what’s crazy, so, right now, a lot of people are talking about this pivot to virtual and how we connect digitally and how the CO2 impacts. And I know, Tom, this is right up your alley because you post a lot about climate change. And I saw a quick and dirty study from IBM, and I think it was Jeremy Waite that positioned that the pivot to Virtual actually has the same impact as people driving every day. so, when we start to think about digital supply chain in the world, we share digital waste. And are we really being as lean and effective in this new way of working? Where’s the opportunity? so, I would I would love to hear your point of view, Tom, around that. What are you hearing and seeing?

Tom Raftery [00:09:23] so, I missed that post and I would have assumed that working virtually working from home, for example, like all of us are now thanks to Covid-19, would have had a lower environmental impact. But you’re saying that Jeremy’s post said that, no, it’s similar because the technologies we’re using require large amounts of technology which are carbon intensive?

Sheri Hinesh [00:09:51] Yet our energy grids are still dirty and highly reliant on fossil fuels. so, depending on where you are in the country with your energy mix, you still have this very comparable impact. so, I thought it was a really, you know, in terms of education, I think this is really the pulse here. And the opportunity is we need to accelerate the transition to renewables. And if we can do that, if we can do that, you know. What might that look like?

Tom Raftery [00:10:23] The cool the cool thing is that I’ve done a lot of work on this. The cool thing is, speaking of renewables, that the transition to those is happening not fast enough, but it is happening. And it’s happening not because people are suddenly turning into tree huggers. It’s actually happening because the renewables are a) cheaper to roll over than any fossil fuel alternative and b) faster to roll out. There’s a new offshore wind park being built in the UK on the Dogger Bank. It’s 3.6 gigawatts. That’s three and a half nuclear power plants worth of wind, offshore wind, and it’s being built in two years from start to finish. There is an equivalent. There’s an equivalent called Hinkley C in the UK again, Hinkley C is a nuclear power plant. It’s 3.5 gigawatts. so, comparable power output. It’s going to take 10 to 15 years to build it out. Whereas the wind park the offshore wind 2 years. so, right there and you know, nuclear has a place. I know some people are against it. It’s a polarizing generation, but it is carbon free, essentially, once you’ve built the nuclear plant, it’s carbon free. But it doesn’t scale. It does not scale. Renewables scale massively. There’s. Because, again, down to economics. There is a solar farm being financed right now to be built in the north of Australia. It’s called Five B. I think if I remember correctly, it’s being it’s being financed by, amongst others, Mike Cannon-Brookes from Jive. And it’s going to be ten gigawatts, 10 gigawatts, 10 nuclear power plants worth of solar with 22 gigawatt hours of storage. so, 22 nuclear power plants worth of storage in the Northern Territory in Australia. They’re going to draw a big cable off to the right to power the city of Darwin. And they’re going to draw an even longer cable north three and a half thousand kilometers to power the city of Singapore. And again, it’s down to economics. It’s because it’s the cheapest way to do it. Australia has vast, vast, vast tracts of unused desert which can be used for these kinds of projects, which can be used for turning Australia into a hydrogen economy. You know, they can just put a massive mass of solar plants, generate as much hydrogen as possible and sell the hydrogen off into the global markets for electricity generation or for transportation.

Deborah Dull [00:13:07] It’s amazing. I’m so, glad you brought that example up, Tom. And just to reiterate the brilliance and excitement around circular models. One of the tenets is a shift to renewable sources of energy. And, you know, there’s two questions to ask yourself on. If a model is circular or if it just falls under CSR, and that’s is it making you more money? You can go faster, and you could be cheaper if you’re looking at something like a circular business model and in supply chain. I don’t know how many more levers we have left to pull to get faster, cheaper. We’re pretty fast and we’re pretty cheap, free in most cases or nobody’s paying for it at least. We have a cost. so, we have to start thinking of other levers to pull to add additional value back to organisations we support. And so, the examples you’re giving are brilliant because we’re going faster, it’s cheaper. And then if we think about, let’s say, a spare part to support one of these farms that’s going in, we could start from scratch, start from the metal, from the earth. But that takes more time and it’s going to cost you more if you can refurbish and use B channel parts or even your own parts refurbishing or shocking, I see a world where all similar parts will be refurbished and shared and within a single industry it’s going to be much, much faster and it can be much, much cheaper because you’re not starting from virgin raw materials anymore. so, I think it’s a fascinating model. And the biggest message to get through this is you can make more money as a company. And it just so, happens that it’s also great for the planet. so, it helps to span this gap of the sustainability drive that we all know needs to happen. And the sheer economics of running an economy that we’re all becoming very aware of these days and I think is just a lovely example. so, thanks for sharing.

Tom Raftery [00:15:03] Yeah. And you mentioned something earlier, Deborah. You were I mean, you used the expression that a lot of people use of “throwing things away”. And I remember, I can’t remember when it was or where it was, but I remember reading some point somebody saying that “There is no away”. Away is not a place. It doesn’t exist, you know? You know, so, throwing things away doesn’t make sense. It is not a thing.

Deborah Dull [00:15:30] You are just moving it to someplace else. Yeah, exactly. I actually think in the next… After we mine the ocean for plastic and let’s not be mistaken, that’s exactly what companies are doing now. We are we are now mining the ocean. We will move to landfills. I’m guessing in the next 10 years because we are running out. We’re running out of gold. We’re running up copper. It is still on the surface of the planet. To your point, unless cities are burning and a lot of people say, oh, cool, you’re burning garbage to create energy. But that’s actually not great because you’re losing all the value in the material. So, yes, you’re getting a short-term boost of energy. But actually, in reality, that’s the closest thing to “away” that we have is to burn something and you can no longer get it back again. so, much better is to find a way to retain the value of that item and reuse it as many times as you can.

Sheri Hinesh [00:16:21] Yeah. What we’re what we’re talking about here in describing is really this shift where supply chains who have traditionally been viewed as maybe transactional. And this cost improvement, you know, riddle it down to as efficient as possible. They’re really transitioning to an innovative catalyst that is a strategic partner at the table. And in the future of work. In the future of business. Competitiveness will be defined how your supply chain can execute and innovate. And that’s where we really believe that that’s where the future’s heading. All of the things that are described in in circular economy and sustainability. Yes, you can do well and do good, but there is a business case to be made for why. How you connect people is equally as important when you think about purpose, economy and experience economy. People want to show up at work and not leave their values at the door and be a part of something that’s truly transformation on EPIC. And this is the opportunity that supply chains have because we are so, in the end and we are a tapestry of different professionals. You know, when you when you say supply chain, what does that even mean anymore? It could mean data science. It could mean sourcing and procurement. It could mean your own distribution. Logistics. It could mean inventory. Deborah loves inventory. If you ever meet Deborah Tom face to face and bring up inventory, make sure you have a stiff pour of whisky because she will talk to you for hours.

Deborah Dull [00:18:03] Digital inventory is also super interesting. I had a whole section in my thesis on it. Punch line. It basically comes down to master data, which is also a very interesting topic. People roll their eyes, but it’s not, so. It’s often considered the inventory of a digital digital goods supply chain. If you’re moving around digital goods, it’s your master data and that the way you manage your master data is similar to managing inventory and you can use a lot of the same principles. Super fascinating. I love this stuff. That was not even a whole stiff pour Sherri. so, that was like half a finger.

Tom Raftery [00:18:42] I had no whisky ready. Jeez, Deborah, come on. You could’ve warned me.

Deborah Dull [00:18:46] I know next time that’ll be a different one. We do something called drink and learns on our podcast and we invite you to come to a drink and learn where we drink and learn. And it’s really super fun. And you’re you’re open. You’re openly invited Tom anytime.

Tom Raftery [00:19:00] I appreciate it. Thank you. I have listened to your podcast, so, I’m aware of some of these things. Thank you. But for people for people who haven’t listened. This is a good learning experience. And I’ll put a link to your podcast in the show notes as well. Just in case, you know, people are not aware of, but they can follow through and subscribe and do subscribe folks like and do subscribe to this one, too. Just just in case you’re not already subscribed. We’re coming towards the 20-minute mark. We’re at 18.50, right now. Is there any final thing you want to say to people who, you know, have been listening so, far who’ve made it this far into the podcast? Any last messages you want to leave with them?

Deborah Dull [00:19:36] Absolutely. Look. OK. You’re pointing at me, so, we’re all. And we’re all we can see each other right now. so, my final words are, look. There’s enough bad news happening in the world. We are all probably indoors for something going on two to four weeks depending on where you are in the world. And there is another way to connect with each other. One use of this digital technology that, yes, is using energy and a server somewhere in the world is that you can find a new community. We have something that we call the supply chain rebel who really describes if you feel different than those around you. If you feel like you’re pushing back, if you feel like perhaps you don’t have a community connect to. We are your community. And whether you are feeling too old, too young, not experienced enough, too edgy, too soft, whatever the too is that you’re feeling in your surroundings where your people. so, do come join together with us. We have a great time and we really look forward to connecting with you all.

Sheri Hinesh [00:20:42] Yes. Thank you, sir. Thank you so, much, Tom, for inviting us. The disruptors, the Rebels. And in final message, like Deborah said, find us supplychainrevolution.com. I have admired Tom’s work and his point of view for many years. And I salute you and your fabulous swagger. I love the hat. I love your brand. So, we’re we’re just really thrilled to find others. And I think right now the the opportunity is there are others out here like you and we can unite, especially across digital platforms, social platforms and really change the world. I think that sometimes people forget the impact that you can have in the world we share. And that’s really this message that we would hope you walk away from, that you can change the world.

Tom Raftery [00:21:36] Super, super, Sherri. Deborah, thanks a million for joining me on the show today.

Deborah Dull [00:21:43] Thanks, Tom.

Sheri Hinesh [00:21:43] Thank you.

Tom Raftery [00:21:46] OK, we’ve come to the end of the show. Thanks, everyone, for listening. If you’d like to know more about digital supply chains, head on over to SAP.com/digitalsupplychain or simply drop me an email to Tom Dot Raftery at SAP dot com. If you’d like to show, please don’t forget to subscribe to it in your podcast application to get new episodes right away as soon as they’re published. And also, please don’t forget to rate and review the podcast. It really does help new people to find show. Thanks. Catch you all next time.

 

And if you want to know more about any of SAP’s Digital Supply Chain solutions, head on over to www.sap.com/digitalsupplychain and if you liked this show, please don’t forget to rate and/or review it. It makes a big difference to help new people discover it. Thanks.

 

Industry 4.0, Digital Supply Chain, and Sustainability – a chat with Hans Thalbauer

The buzz around Industry 4.0 is starting to grow so I decided it might be interesting to have a series of interviews themed around Industry 4.0 here on the Digital Supply Chain podcast. 

To kick off this series I asked my friend, and colleague Hans Thalbauer to come on the show to talk about where he sees the relationship between Digital Supply Chains, Industry 4.0, and how they can help organisations become more sustainable.

We had a fun, wide-ranging conversation covering manufacturing, connected assets, and the importance of using data for decision making in supply chains.

Check out the audio of our conversation using the player above, and/or the transcript below:

Good morning, good afternoon or good evening, wherever you are in the world. This is the digital supply chain podcast and I am your host Tom Raftery.

 

TR: Hi everyone. Welcome to the digital supply chain podcast. This episode is one of the series that are themed around Industry 4.0 and my guest on the show today is Hans Thalbauer. Hans, welcome to the show.

 

HT: Thank you very much.

 

TR: Hans, could you, for anyone who doesn’t know, could you introduce yourself to our audience?

 

HT: Yeah, absolutely. I’m if you will, a supply chain veteran. I was working in the supply chain space all my life. I’m with SAP 20 years. All these 20 years I was in supply chain, manufacturing, product life cycle management, operations areas. I’m working with customers around the world and having fun doing that.

 

TR: Good stuff, good stuff. And we’re, we’re on the digital supply chain podcast on the series that is themed around industry 4.0 for anyone who’s unfamiliar Hans, could you tell us what you think Industry 4.0 means, what actually is industry 4.0? Cos it’s kind of a buzz term that’s out there and everyone’s kinda got their own definition. What, what do you think industry 4.0 is?

 

HT: Yeah, you’re totally right. There are many, many definitions about industry 4.0. And if you will, there are also different nuances to industry 4.0 dependent on which region or which country we are. And so, if you just take it from, I think their original definition we are talking about the fourth industrial revolution. We are talking really about a step change in productivity. We are talking about really something significant happening to industries, manufacturing industries. And the digital transformation for manufacturing industries. Industry 4.0very often actually is narrowed down to manufacturing and operations, which is true, right? So there’s a lot happening in these two spaces in these two areas, but it goes beyond, it’s really about the digital transformation of manufacturing industries which is of course much broader than only the manufacturing and operations part. This would be my high-level positioning or, or definition of industry 4.0. So it’s really about the digital transformation of manufacturing industries.

 

TR: Okay. And again, we have a lot of terms here. This is the digital supply chain podcast and we talk about digital supply chain quite a lot, but we also have industrial internet of things and industry 4.0. Is there a, a kind of a natural segregation between those terms or are they kind of the same thing, just you know, different ways of looking at things or how do you see that?

 

HT: They’re the same and they are not. I mean, industry 4.0 obviously started in Germany  with the government initiative about, I want to say even seven to 10 years ago. And really started with the idea of there will be a big change. How can we prepare the industry for this change? The idea is that data are valuable and can be leveraged much different than ever before. Technology like machine learning, artificial intelligence can be leveraged in a very, very different way and really make a big change in how companies run manufacturing. How can actually companies be successful going forward. That was kind of the basic idea and leveraging data in order to do that.

 

In the US industrial internet of things has been created.  Very similar approach going in the same direction. It is broader and narrower at the same time. It has not a strong manufacturing focus. It has much more of a consumer focus and much more these IOT solutions related to consumer products, consumer usage and there are many, many examples of which  everyone is aware around the world from yeah all the products which have been introduced and really have the connectivity and really are consumer oriented. And I think everyone is using them every single day. And so this is kind of where the US discussion has gone much more IOT centric than industrial centric.   

 

If you go to China, there is of course a plan which is called China 2025 which is really also looking into productivity gains in manufacturing. Right? And there it’s really very, very much on manufacturing focus. If you go to Japan, it’s a robotics focus. If you go to India, it’s about Make in India, right? So the big slogan, how to introduce actually a much more efficient and manufacturing industry in India. And so there’s a common thread to all of this. All of it has to do with we get data from machines, from assets, from things, and we want to leverage this data in order to be more efficient, in order to be more precise, to predict outcomes, you know in the future, and really do things differently.

 

By the way, I also would say that industry 4.0 and sustainability go hand. The efficiency in manufacturing. The reduction of energy consumption in manufacturing, the reduction of water consumption during the production processes, all of this actually goes hand in hand. And so both topics for me are connected.

 

TR: Right? No, it is interesting you bring that up because sustainability is obviously a topic that a lot of people are interested in at the moment. It’s, it’s quite a hot topic, but a lot of people may not be aware that obviously sustainability is about doing away with waste. It’s about maximizing use of resources for the, you know, maximizing the, the outcome or the output using the minimal inputs. So it’s getting rid of waste. So to your point, yeah industry 4.0 is all about that, it’s all about getting the best outcome for the minimum inputs or the least waste.

 

HT: Yeah. It’s, it’s really perfectly defined rates are, and what you discussed is perfectly correct. Because when you think about it in the context of sustainability, we are talking about the circular economy. What does it mean? I need to be connected. I need to be connected to the business partners I need to be connected to the things, the more connectivity I have, the better I can manage actually their efficiency. And efficiency in transportation where I really make sure that the truck is never empty. That the truck really has actually the  shortest route to between point A and point B. So it’s all about reducing waste. It’s about water consumption, right? So water consumption, a big, big topic actually during production processes. If you can reduce that also in the product itself, if you can reduce the water in the products, big topic. If you think about energy, it’s biggest topic by itself, right? So with using the energy and then you see actually what companies are doing around the world and especially in the manufacturing industries how they go about  sustainability. It’s really taking the  idea of how can I reduce the carbon dioxide impact? How can I reduce the energy by itself or their consumption by itself. So all of this actually plays hand-in-hand with if I’m more efficient and I can be more efficient with industry 4.0 concepts, then I’m better off not only in my productivity but actually also in my sustainability efforts.

 

TR: Yeah, absolutely. And so  you mentioned different regions like Japan and India and America and Germany. Everyone has kinda got a different focus on it. Are they all industry 4.0? I mean what I’m saying is we’ve, we’ve titled it in some kind of way, IIOT in the U S Industry 4.0 in Germany, but is it all really the same thing? Is it all about maximizing our outputs and minimizing our inputs to get the best results for everyone?

 

HT: I think there is, there is something common around this, right? And then the common things around this is really connecting the assets, connecting the machines, getting the data. So now we have the data, now it’s about getting insights, right? So, okay, good. Now we can see actually much more. It’s a big step forward. I built these data lakes andand, and. The next step needs to be that I really learn from this data. And so there’s a massive amount of data. If you just think about every using the machine, every single assets delivers every milliseconds, hundreds of data. And so you get really this big, big data lakes. So we need machine learning, we need actually algorithms which are able to deal with this data. And I think technology made huge progress there.

 

So we do have technology in place in order to really understand the data and have machines telling us what it really means. So machine learning and artificial intelligence plays a huge role in this context. Why? Because what this leads to is that I really change the way how I run my business. At the moment every single supply chain in the world is an alert driven, reactive supply chain, which means something happens and I need to correct it, right? I’m always actually running after the fact something happened and I always tried to correct it. This is the thing. Exception-based management, exception-based management, alert driven, supply chain, whatever you want to call it. And this is really what, how everything is built up. But what if I can turn this around? What if I can use this data now in order to predict an outcome? Right? So, and this is a big thing and I think it’s not yet well understood in the market that this means all the supply chain around this world become predictive supply chains. So I predict not only the maintenance, I predict the quality of a product while I am producing the product, right? So reduce waste dramatically. It doesn’t go through the entire production line anymore and at the end I find out in quality control that well, it doesn’t meet my criteria. I can do that while I’m producing. I do the same on, on transportation. Right? So I don’t waste the time of, of waiting for a delivery. I can predict actually it might come exactly at this time. Right. And I predict that something might be in the way which doesn’t allow me to deliver at this time. And I can inform all the people who are involved before things happen. Right? And it’s always about, I really am enabling people and companies to look into the future and predicting outcome. And with that, reducing  inefficiencies on a very, very dramatic way.

 

TR: Interesting. I’m intrigued that you’re talking not just about manufacturing, but also about the logistics and deliveries because traditionally I think a lot of people would associate industry 4.0 with manufacturing, but not necessarily with the logistics, with the deliveries, with all that kind of stuff.  How, how does that fit in? Well,where, where does, let me ask an even broader question – where does the scope of industry 4.0 start and end?

 

HT: Like I mentioned before, right? So it’s really for me, the transformation of a manufacturing industry and not of manufacturing only, right? So the manufacturing processes, yes, of course. The operation processes. Yes, of course. But it’s really about the end to end processes in manufacturing. Right? We are talking about here, it’s really the digital transformation for the manufacturing industries, which would be, would be, I think, my description of it. And so where does it end? Where does it stop? I don’t know.  It’s really the whole design to operate process.  If I’m more efficient in designing a product if I have feedback and input at the, at the very beginning, if I introduced this idea of… I reduce whatever plastic consumption while I’m packaging my goods and all these kinds of things all go in design direction, right? It’s, it’s actually really about building an environment where I’m allowing companies to really look into the future. Like I described it before to start predicting an outcome before things happen. And with that running actually in a very, very, very different way than before.  So, yeah, that’s how we would describe it.

 

TR: Okay. Okay, cool.  So we’re getting to, I got to say, this is a journey, you know it’s, for any company it’s gotto be a series of projects to kind of roll out industry 4.0 technologies, it’s not going to be one individual project. It’s going to be a series of projects and it’s going to be an ongoing journey to get there. But where does it end? I mean, for many people, they’re still very analog, so they have a long way to go. For others, they’re further along the journey, but you know, will it ever end?

 

HT: It is an ongoing journey. It is a transformation. I wouldn’t put an end point on it. It’s really because we get smarter and smarter by the day by learning more and more and using data in a very different way. I would maybe an idea to describe it is we are still living very much in a transactional world, right? If you run the business processes in manufacturing, operations and logistics, it’s very much a transaction. I have a delivery and I transact the delivery, I execute on it and so on. And we changed it around and create a data-driven world  where I analyze I simulate and I just make my decisions based on this information. Right? I’m not just blindly executing a transaction anymore, I start simulating. And now if you, if you start doing that, it’s not necessary to do it for everything at the same time.  Of course, you start in certain areas and then you grow from there, right? And then you find out all of a sudden that, well, if I connect these data, I can be smarter. Right? So I give you an example.   If I’m, let’s say starting in predictive maintenance and I find out in this product, yeah, if I predict maintenance, if I reduce here, the maintenance schedule ends on, I really can save a ton of money by doing that, right? So I’m predicting I’m not just doing blindly scheduling, my maintenance for the asset, I’m really predicting when I need to do it and then I do it. So that saves a ton of money. But then the, the thing is if you really go to this data and then you find out what if we would design this asset differently, if the product would have been designed in the first place in a different way, the product would be more stable, more robust. And so therefore I wouldn’t even need to maintain this, this part which always breaks, right? So now you could start to connecting from maintenance you start now connecting the engineering world, right? So it becomes a maintenance driven engineering process, which doesn’t really happen at the moment. Right? So and now you can build these connections also to manufacturing and to logistics, right? If I understand from these other departments what they need, what would be the impact? What is the influence? If all of this would be much more harmonized, then actually I am better off in total. And so my recommendation is always, okay, start in the area where, where you, you think actually there is the biggest value for you, right? In many cases it’s in the maintenance or in the manufacturing area, but then really think about the possibilities you have. Learn from this data and now start to connect to the other areas, connect to engineering, connect to assets, connect to logistics. And by doing so you become much, much more efficient overall.

 

TR: Sounds like it’s a lot about breaking down silos and making organizations more horizontal.

 

HT: It is right without necessarily an organizational change. Right. So I think, I think actually what is always in the way is if systems or processes would require, we introduce that and this means also do I need to change my organizational set up of the company? Not necessarily. Here what we are doing is we connect these organizations with data. What we need to have is really the data needs to flow. We need to have a data model which allows that. We need to have a data lake where we not have only a data lake for operations and one for manufacturing and one for logistics. No, we need to have the possibility to correlate the data and connect this data and with that actually make every single organization unit in the company much smarter.

 

TR: Okay. Yep. Makes sense. One challenge I guess I see for for organizations is a lot of organizations are still not thinking data first and obviously to go down the route that you’re describing, that’s a mindset then that they need to switch to. And I guess that’s more people than technology thing, but how do we convince organizations to to make that change?

 

HT:  I think actually people would be and are willing very much so to switch to a much more data driven approach. They would be happy to get   the information they need in order to make a decision immediately in real time. They don’t have it right now. It takes a day in order to get a report. By then they have already made decisions hundred times during the day and transformed and executed on a transaction. So what do we need to get to is we need to get the information to the people so that they can make these decisions and I’mabsolutely convinced, I haven’t seen it once where people would be hesitating adopting this type of approach. They really like this approach. There is of course, one aspect, which is very important when you talk about this whole aspect of automation, the whole aspect of everything runs by robots and so on. There is the fear that it takes jobs away, right? And it’s not just a fear, it’s a fact, right? So in manufacturing on the shop floor in their houses what do you see right now is a lot of robotics are in there  and less and less people work in this environment. But you also where it’s very interesting if you look into statistics, the last 10 years, many new jobs have been created. There are new job titles which were not existing before. A chief digital officer, something 10 years ago, if you would’ve said, where’s your chief digital officer? Everybody would have said, what? What, what is that? Now every company has a chief digital office and not just the chief digital officer, but the whole organization around it. Right? Which, which really tells me this digital transformation really opens up completely new jobs and job titles we haven’t seen before, which tells me also that there’s a huge opportunity actually for people. Of course it means education, it means training, it means different skills, but in the services part of it, so operations, maintenance part of it, this is a big job area. And also in this whole data part, it’s a big, big job area with like I said, many new job titles, which we haven’t even seen before.

 

TR: Indeed, indeed. Hans, we’re coming towards the end of the show. We’re up on around 20 minutes now. Is there anything that I have not asked you that you think I should have?

 

HT: No. I don’t think so. I think  the discussion is very, very important. The discussion also needs to be that we need to understand how we really can leverage data, make this transition from transaction to a data driven approach that we go into this  predictive way of running a supply chain. So looking into the future instead of looking always into the past  this will have big impact in how companies run their businesses. Also, I think what is very, very important, it’s not just a hot topic to talk about sustainability. I think actually it’s essential to talk about sustainability and we need to have that as another dimension in this industry 4.0 discussion because this really enabled, Industry 4.0 enables us to be more sustainable and we need to measure it, we need to control it in a much better way and we need to leverage all the concepts which are being created from sustainability, circular economy, the whole waste reduction concepts and so on as part of the Industry 4.0. So it really goes hand in hand in my mind.

 

TR: Super. That’s great. Lastly, Hans, if people want to know more about yourself or about  Industry 4.0 or any of these things, where should I direct them to go? Where should they go?

 

HT: Well, go to sap.com. There you’ll find actually Industry 4.0 on the top where it’s a big theme and where you find a lot of additional material about Industry 4.0 and the approach SAP is taking. Yup.

 

TR: Okay. Super. Hans that’s been fantastic. Thanks a million for coming on the show.

 

HT: Thank you.

 

 

And if you want to know more about any of SAP’s Digital Supply Chain solutions, head on over to www.sap.com/digitalsupplychain and if you liked this show, please don’t forget to rate and/or review it. It makes a big difference to help new people discover it. Thanks.

 

Three Industries Where Technology Is Reducing Our Carbon Footprint

 

The science is in. We need to significantly reduce our carbon emissions to limit the amount of warming our planet undergoes as a consequence of climate change.

The good news is, technology is rising up to meet this challenge. The bad news is it needs to do far more, and do it faster. How is technology helping? Well, if we check out some of the industries with the highest carbon footprint (energy, transportation, and agriculture), we can see some of the massive disruptions that are happening there, and how they are impacting emissions.

1 Energy

The energy sector is undergoing a massive transition globally from a system powered by centralised, thermal generation based often on fossil fuel combustion, to one increasingly powered by decentralised renewable sources. And while it would be great if this was happening for reasons of climate concern, it is, in fact, happening for reasons of economics, which is better because it means it is sustainable in the long term.

Why do I say it is because of economics? Because the cost of wind, solar, and lithium-ion battery storage are falling. Falling fast (due primarily to the experience curve). Since 2012 the cost of wind power has fallen 50%, solar power has fallen 80%, and battery storage has fallen 87%. It is now at the point where unsubsidised, combinations of wind and battery storage, or solar and battery storage are able to beat natural gas on price.

Don’t take my word for it. At the Wolfe Research 2019 Power & Gas Leader’s conference last month (October 2nd, 2019) Jim Robo, Chairman, and CEO of NextEra Energy the biggest and most successful utility in the US said

“We see renewables plus battery storage without incentives being cheaper than natural gas, and cheaper than existing coal and existing nuclear… And that is game-changing”

Then, when you consider the amount of time it takes to deploy a power plant, renewables win again.

IMG_0029

And consequently, the share of new power generation being deployed globally that is renewable is rising rapidly, while the share of new fossil fuel generation is falling fast.

IMG_0030

And it is not just the supply side of the equation that is changing. The demand side is changing rapidly as well.

More and more organisations are demanding that their energy provider only supply clean, renewably sourced electricity. In fact, RE100, “a global corporate leadership initiative bringing together influential businesses committed to 100% renewable electricity” counts at time of writing (November 2019) 212 of the world’s largest companies (including my own employer SAP) as members. All 212 companies are either sourcing all their electricity from renewable sources or have committed to doing so in the near future. Companies do this because it is good for business. Consumers feel better about purchasing goods if they know they were produced using renewable energy, and employees feel better about working for organisations committed to renewable energy.

 

2 Transportation

So the carbon intensity of electricity, one of the main carbon polluters is falling worldwide on a gCO2/kWh basis. What about one of the other big polluters I mentioned at the start, Transportation. Well, fortunately, electric grids the world over are embracing renewable energy, because transportation is now starting to use electricity as a fuel, instead of dino-juice!

Why is transportation going electric? Three main reasons:

  1. Increasing environmental awareness among consumers
  2. Regulations from regions, countries and local governments and
  3. Economics – the costs to operate an electric vehicle (EV) are significantly less than a fossil fuel one

Nissan Leaf charging
Photo credit Tom Raftery

Greta Thunberg has done an amazing job of raising awareness in younger generations particularly about the dangers of climate change, but even before she burst on the scene, the 2019 regulations governing NEVs (New Energy Vehicles) in China and the 2020 emissions regulations for vehicle manufacturers in the EU (as well as local ordinances by cities restricting access to older, more polluting vehicles and countries on the phase-out date for the sale of Internal Combustion Engined vehicles) meant that vehicle manufacturers have had no option but to get on board with the electrification of cars and increasingly other modes of transport as well.

At a time when global vehicle sales are falling, sales of EVs are taking off.

statistic_id270603_battery-electric-vehicles-in-use---worldwide-2012-2018

Volkswagen, who have had some *ahem* reputational issues recently, have decided to embrace the Winston Churchill mantra of never letting a crisis go to waste, and are going all-in on EVs. They plan to spend €60bn (yes billion with a “b”) by 2024 to switch to electric, hybrid and connected vehicles. They will introduce up to 75 all-electric models, around 60 hybrid vehicles and plan to sell 26 million all-electric vehicles as well as around 6 million hybrid vehicles by 2029.

Perhaps even more tellingly, Daimler recently announced that they are stopping their internal combustion engine development initiatives and focussing instead on electric vehicles. The reason this announcement is so game-changing is that Daimler owns Mercedes Benz and Karl Benz, the founder of Mercedes Benz received the patent for the world’s first production internal combustion engine vehicle in 1886. Now 133 years later Daimler has decided that the era of the internal combustion engine is over, and EVs are the future.

And it is not just cars, motorbikes are also going electric with announcements of electric bikes from all the major manufacturers including Vespa, Yamaha, Honda, all the way up to Harley Davidson.

Buses, trucks (from the large class 8 all the way down to delivery trucks), and refuse collection vehicles are also going electric. This is important not just for reducing their carbon emissions, but also because these vehicles often work primarily in urban centres so converting them from diesel to electric will improve air quality, reduce noise pollution, and significantly reduce the cost of operation for these machines.

FuelUseVehicleCategory

Also, when you take into account the fuel use by categories of vehicle, you can see from the chart above that class 8 trucks, buses, and refuse collection vehicles consume far more fuel than other vehicle categories. Fuel use is of course, not just a good proxy for their potential to pollute, but also for their running costs so the economic case to shift these to electric is very strong. In the case of buses, battery-electric buses cost 20c per mile to operate over their lifetime, whereas diesel buses cost 75c and so, battery-electric buses will dominate the market by the late 2020s.

And it doesn’t stop there. Construction equipment is going electric. Ships are going electric. Even planes are going electric. Global consultancy firm Roland Berger is currently tracking 170 different electric plane initiatives (about 50% are in the urban air taxi space). While the Johan Lundgren, CEO of easyJet has said that:

easyJet is collaborating with US company Wright Electric to support their goal for short-haul flights to be operated by all-electric planes within 10 years

It is hard to think of a mode of transportation that is not moving towards electric drivetrains. And as we saw above in the section on energy, as our grids are getting cleaner daily, shifting transportation to electricity quickly drops transportation’s carbon footprint too (as well as reducing noise pollution, and cleaning up our air quality).

3 Food Production

Food production is the third industry where technology is about to play a huge part in reducing our carbon footprint. Agriculture globally accounts for about 13 percent of total global emissions. That makes the agricultural sector the world’s second-largest emitter, after the energy sector. And this doesn’t include emissions associated with deforestation to clear land for more agriculture.

However, shifting away from our current practices of food production to one where our plant food is grown in massive indoor vertical farms has the potential to significantly clean up agriculture’s environmental toll.

Indoor vertical farms use 95% less water and 99% less land than conventional farming practices. They use no soil, require no herbicides or pesticides and they can produce food in the middle of cities, thereby reducing drastically the crop’s food miles. When you are producing food so close to the point of consumption, you no longer need to optimise your produce for shelf-life, and you can instead choose to optimise for taste, and/or nutrition.

Then there is the clean meat movement. Clean meat is meat that is produced from either cultivating animal cells (without having to slaughter the animal), or by converting plant protein to take on the taste and consistency of animal protein as companies such as Beyond Meat and Impossible Foods are doing so successfully.

Our current means of producing plant food and meats are vastly inefficient and have a huge carbon footprint. This won’t scale to feed the population of 9-10 billion inhabitants that we are projected to reach in the coming decades, especially as the middle classes grow in the developing world and their meat consumption expectations grow too.

Converting to a system where we produce plants in massive vertical farms, and then using that plant food to create clean meat solves a lot of the problems associated with agriculture today such as the unconscionable cruelty we visit on the animals we breed for slaughter, the vast amounts of antibiotics that are used in agriculture leading to the development of multi-drug resistant superbugs, and agriculture’s massive carbon footprint.

Zebra
Zebra in Pilansberg reserve – photo credit Tom Raftery

If we return the land we have stolen from nature for agriculture back to the wild we can restore the enormous losses we have seen in recent decades in biodiversity, create a huge new ecotourism industry, and through reforestation sequester from the atmosphere much of the carbon we have emitted in the last century, mitigating the or possibly turning back the worst effects of climate change.

As the United Nations COP25 Climate Change Conference kicks off in Madrid, it is important to remember that although the situation with the climate is indeed dire, there are solutions. We just need to embrace them. Quickly.

This piece was originally posted on my Forbes blog

Apple puts its environmental initiatives front and centre at its spring event

 

LisaJacksonAppleRenewableEnergyApple held it’s annual spring event yesterday in Palo Alto to make iPhone, iPad, and iOS related announcements (amongst others).

However, this year for a change the first executive invited to address the audience was Apple’s vice president of Environment, Policy and Social Initiatives, former EPA Administrator, Lisa Jackson.

Lisa was greeted by warm applause which became more enthusiastic when she announced that 93% of Apple’s facilities worldwide are now powered by renewable energy. This means Apple is now well on its way to achieving its stated aim of being fully renewably powered globally. And in 23 countries, including the United States and China, Apple is already 100% renewably powered.

In China Jackson explained, Apple has a 40MW solar farm which has a minimal impact on the local environment, and allows for the local Yak farmers to graze their animals and grow hay under the panels (seen above). This solar farm produces more electricity than Apple uses currently in all of China.

Apple’s data centres are also fully renewably powered, and it has a policy of siting new data centres only if the site has access to renewable power. This was one of the reasons behind Apple’s choosing Ireland and Denmark for its two newest data centres last year.

In fact, since hiring Jackson away from the EPA, Apple has made some extremely positive moves in reducing its footprint, and greatly increasing its transparency. This focus on transparency may go some of the way to explaining Apple’s decision last week to move a significant portion of its iCloud storage business away from notoriously opaque Amazon to Google (although, it is as likely to do with diversifying suppliers, moving to a supplier more in line with Apple’s views on data privacy, and possibly easing the transition to eventually self-hosting the data).

Jackson also talked about Apple’s investments in forestry, and how Apple are using paper sourced from sustainably farmed forests for 99% of its packaging now.

Apple is demonstrating tremendous leadership in the energy and sustainability space (as well as the privacy space, but that another story!). Kudos to them, and interestingly Amazon appears to be finally getting around to supplying some of its operations with renewable energy too – though, it still shuns any kind of auditing or reporting on its energy and emissions. Sigh, maybe someday after seeing Apple put their environmental initiatives front and centre, Amazon will also see the value of doing this.

Epson EcoTank – an inkjet printer which doesn’t use inkjet cartridges

epson ecotank

“Oh boy, I just love buying inkjet cartridges”. Said no-one. Ever. They are expensive, they run out just when we need them most, or worse they clog, and there is never a recycling bin nearby when it is time to dispose of them.

So what’s the choice? Laser printers? Well, they are good for black and white printing, but they have a higher upfront cost, colour laser printers are very expensive, and they don’t give great results.

So as we posited  in the past, why doesn’t somebody create an inkjet printer with refillable wells, instead of disposable cartridges?

It took a few years, but Epson launched their EcoTank range of printers recently, and they are just that i.e. printers with refillable wells into which you pour the ink, as opposed to cartridges.

The printers ship with enough ink for about 4,000 pages of printing, after which you can buy refills, which are surprisingly inexpensive (around $60 on Amazon for another set of 4 bottles which yields another approx 4,000 pages).

The EcoTank printers cost a bit more initially than printers that take cartridges (they sell on Amazon for $399) but given the refills are inexpensive, that difference is quickly made up.

And they are far more convenient, because they need to be refilled far less often, and not using cartridges, there is no search for specialised recycling bins after topping up the ink.

Reviews for the EcoTank, both on tech sites, and on Amazon (4 out of 5 stars with over 100 reviews), are very positive, so there’s that too.

Well done Epson.

Apple, cloud computing, and enterprise supply chain management

Solar power

Apple’s recent announcements around renewables and supply chain transparency, put the major cloud providers to shame.

Apple had a couple of interesting announcements last week. The first was that they were investing $848m in a 130MW solar farm being built by First Solar in California. With this investment, Apple enters into a 25 year power purchase agreement with the solar farm, guaranteeing income for the solar farm, and securing Apple’s energy bills for the next 25 years in California. According to First Solar this is the largest agreement in the industry to provide clean energy to a commercial end user, and it will provide enough energy for Apple to fully power its headquarters, operations and retail stores in California, with renewable energy.

For it’s data centers, which hosts Apple’s iCloud, App Store, and iTunes content, Apple uses 100% locally generated, renewable energy. It’s Maiden, North Carolina data centre, for example, uses a combination of biogas fuel cells and two 20‑megawatt solar arrays — the largest privately owned renewable energy installation in the US, according to Apple. And it is now investing another $55 million in a third, 100-acre 17.5MW plant for the facility. You can find details of Apple’s other data centre facilities, and how they are powered by renewables, here.

Apple's Maiden Data Center Solar Array

The second announcement from Apple was the publication of its 2015 Supplier Responsibility Progress Report (highlights here, full PDF here). Apple has been criticised in the past for workers rights violations in its supply chain, so it is good to see Apple taking very real steps, positive, to address this. The amout of detail, the steps taken, and the levels of transparency in the report are impressive.

On underage labour, for instance, Apple’s policy requires that

any supplier found hiring underage workers fund the worker’s safe return home. Suppliers also have to fully finance the worker’s education at a school chosen by the worker and his or her family, continue to pay the worker’s wages, and offer the worker a job when he or she reaches the legal age. Of more than 1.6 million workers covered in 633 audits in 2014, 16 cases of underage labor were discovered at six facilities — and all were successfully remediated.

Apple also has strict policies around work week hours, health and safety, sourcing of conflict minerals, and the environment. In order to increase its transparency, Apple publishes its Supplier Code of Conduct, its Supplier Responsibility Standards, its Conflict Minerals Standard, as well as a list of its smelter suppliers and its top 200 suppliers amongst other documents. And Apple’s comprehensive list of environmental reports are published here.

What does this have to do with cloud computing and the enterprise supply chain management?

Well, Apple recently partnered with IBM in order to expand its userbase into the enterprise space. And it has opened its iWork office suite to anyone with an Apple ID, no Apple device required – though this was long overdue.

Comparing Apple’s cloud offerings to actual enterprise cloud players (or any cloud players, for that matter), you see there’s a yawning chasm in terms of transparency, reporting, and commitment to renewables.

Of the main enterprise cloud players:

  • Microsoft publish their Citizenship Report here [PDF]. And while it is a decent enough report, it doesn’t go into anything like the level of detail that Apple does. On page 53 of this report Microsoft mention that 47% of the energy it purchases is renewable. It does purchase renewable energy certificates for the other 53% so it can report that it is carbon neutral.
  • Google doesn’t produce a corporate sustainability report. Instead it has this page which outlines some of the work it does in the community. Information on Google’s energy breakdown is sparse. What is published is found on the Google Green site, where we find that although Google has many investments in renewable energy, and Google has been carbon neutral since 2007, Google’s actual percentage of renewables is only 35%.
  • IBM has a good history of producing corporate reports (though it still hasn’t published its report for 2014). However on the energy conservation section of IBM’s corporate report, IBM reports that sources 17% of its electricity came from renewable sources in 2013. However, they go on to note that this does not include the energy data of Softlayer – IBM’s cloud platform.

Cloud Providers Energy and Transparency

  • And finally, Amazon, who have arguably the largest cloud computing footprint of any of the providers, is the worst performer in terms of reporting, and likely in terms of emissions. The only page where Amazon mentions emissions, claims that it has three carbon neutral regions, but fails to say how they have achieved this status (or whether they are third party audited as such). The same page also claims that “AWS has a long-term commitment to achieve 100% renewable energy usage for our global infrastructure footprint” but it fails to give any time frame for this commitment, or any other details on how it plans to get there.

Taking into account last November’s historic deal between the US and China on carbon reductions, and the upcoming Paris Climate Change Conference in December this year (2015), where there are very likely to be binding international agreements on carbon reductions. This will lead inevitably to increased requirements for CO2 reporting from the supply chain.

With that in mind, including the % renewable energy as one of the factors when choosing a cloud provider, would be a very wise move.

UPDATE:
As pointed out to me on Twitter:

In that case, you could always go with GreenQloud. GreenQloud bill themselves as a drop-in AWS replacement and being based in Iceland their electricity is 100% renewable.

(Cross-posted @ GreenMonk: the blog)

Technology for Good – episode thirty four with Salesforce’s John Tascheck

Welcome to episode thirty four of the Technology for Good hangout. In this week’s episode our guest was SalesForce SVP of Strategy, John Taschek. John and I are both longtime members of the Enterprise Irregulars, but this was the first time John and I had had a conversation outside of email!

Some of the more fascinating stories we looked at on the show, included a very successful Kickstarter campaign for a small router which can completely anonymise your internet activity, Lockheed Martin announcing that they’ve made a breakthrough on nuclear fusion technology, and Satya Nadella’s response to his gaffe last week about women seeking a raise.

Here is the full list of stories that we covered in this week’s show:

 

Climate

Energy

Hardware

Internet of Things

Wearables

Mobility

Comms

Privacy

Open Source

Sustainability

(Cross-posted @ GreenMonk: the blog)

SAP Startup Focus in newly industrialised countries

Vishal Sikka, SAP CTO

As we have said before here, sustainability job number one is putting bread on the table. To that end, it was great to see SAP’s Startup Focus program take off so well, gaining over 1,000 companies signed up in less than two years.

We profiled the Startup Focus program on GreenMonk earlier this year, talking to three of the participant companies about it. They were very enthusiastic about how it had helped them break into the enterprise software market, and said they wished they’d joined the program sooner.

 

More recently, we spotted news from TechEd Bangalore that SAP CTO Vishal Sikka announced there that of the over 1,000 companies who have joined the Startup Focus program, 158 of the come from India. I’d love to know what percentage of the Startup Focus companies overall come from newly industrialised countries, and what level of employment they are helping create.

(Cross-posted @ GreenMonk: the blog)

Ariba’s AribaLive conference reviewed

AribaLive 2013

I attended the AribaLive event in Berlin last week – this is the European conference for Ariba customers and partners to share stories, network and learn from one another.

Ariba is a company which provides electronic sales and procurement solutions for companies. There are over 1 million companies in 190 countries using Ariba. Customer companies mentioned or presenting included Clariant, Solvay, Disney, Deutsche Bank, Astra Zeneca, Fujitsu, Aviva and EADS. Naturally I was curious to hear how their customers fared from dematerialising parts of their buying and selling processes.

I wasn’t totally clear on some of the advantages the Ariba offers buyers and sellers until Ariba President Kevin Costello, in his keynote explained it with a good analogy to the likes of Facebook, Amazon and eBay. As Costello said, Facebook has completely changed how people connect/reconnect. Similarly, eBay and Amazon have totally transformed how people shop for goods. I knew exactly what he meant as I’ve recently bought a new camera. I started by checking camera review sites and Amazon reviews to find the best camera for my needs. I then went to both eBay and Amazon to identify the best deal, from the most reputable seller. Being able to see peer reviews not just of the camera, but of the sellers as well, meant I was very confident when I decided to buy my secondhand camera, that I would get a good product at a good price.

In the same way, Costello said, the Ariba Network brings huge transparency to enterprise buyers and sellers, allowing them to make purchasing, or sales decisions more efficiently and with fewer concerns. In fact, the consumerisation of business commerce was a term used throughout the event.

Several customer presentations followed with organisations like Spanish building company FCC mentioning that they both source €2 billion, and cut 80,000 electronic invoices with their Ariba system annually. They estimate they are saving 10% per annum by using Ariba.

Apart from the efficiencies of using electronic solutions, how else does one benefit (to the tune of 10%, for example) by using Ariba?

invoice

Well part of the answer was provided in the talk given by EADS Vice President of Accounts Payable, Bob McCartney. He talked about the cost of dealing with incoming invoices for EADS. According to McCartney, dealing with an invoice manually costs EADS €15, running it through OCR brings the price down to €4 per invoice, while the price of dealing with e-invoices is €2. That is massive – electronic invoicing is half the cost of OCR’d invoices and seven and a half times cheaper than manual invoices. Right there you see a huge business case for e-invoicing.

Other advantages of electronic invoicing outlined by McCartney were – a recurring 22% cost saving, increasing on-time payment of suppliers, improved visibility/forecasting of the company’s cash position, and improved relations with suppliers (more process transparency, as well as on-time payments).

Finally, Ariba’s Supplier Risk Management solution was interesting to learn about as well. This solution allows users to, for example, figure out in the event of a natural disaster in a distant part of the world, what the potential impact may on your organisations supply chain. Though a more interesting use case, given it can drill down several layers into your supply chain may be avoiding the use of conflict minerals in your products, for example.

Full disclosure – Ariba paid my travel and accommodation to attend this event.

 

(Cross-posted @ GreenMonk: the blog)

Why are Salesforce hiding the emissions of their cloud?

Salesforce incorrect carbon data
The lack of transparency from Cloud computing providers is something we have discussed many times on this blog – today we thought we’d highlight an example.

Salesforce dedicates a significant portion of its site to Sustainability and on “Using cloud computing to benefit our environment”. They even have nice calculators and graphs of how Green they are. This all sounds very promising, especially the part where they mention that you can “Reduce your IT emissions by 95%”, so where is the data to back up these claims? Unfortunately, the data is either inaccurate or missing altogether.

For example, Salesforce’s carbon calculator (screen shot above) tells us that if an organisation based in Europe moves its existing IT platform (with 10,000+ users) to the Salesforce cloud, it will reduce its carbon emissions by 87%.

This is highly suspect. Salesforce’s data centers are in the US (over 42% of electricity generated in the US comes from coal) and Singapore where all but 2.6% of electricity comes from petroleum and natural gas [PDF].

On the other hand, if an organisation’s on premise IT platform in Europe is based in France, it is powered roughly 80% by nuclear power which has a very low carbon footprint. If it is based in Spain, Spain generates almost 40% of its power from renewables [PDF]. Any move from there to Salesforce cloud will almost certainly lead to a significant increase in carbon emissions, not a reduction, and certainly not a reduction of 87% as Salesforce’s calculator claims above.

Salesforce incorrect carbon data

Salesforce also has a Daily Carbon Savings page. Where to start?

To begin with, the first time we took a screen shot of this page was on October 1st for slide 26 of this slide deck. The screen shot on the right was taken this morning. As you can see, the “Daily Carbon Savings” data hasn’t updated a single day in the meantime. It is now over two months out-of-date. But that’s probably just because of a glitch which is far down Salesforce’s bug list.

The bigger issue here is that Salesforce is reporting on carbon savings, not on its carbon emissions. Why? We’ve already seen (above) that their calculations around carbon savings are shaky, at best. Why are they not reporting the much more useful metric of carbon emissions? Is it because their calculations of emissions are equally shaky? Or, is it that Salesforce are ashamed of the amount of carbon they are emitting given they have sited their data centers in carbon intensive areas?

We won’t know the answer to these questions until Salesforce finally do start reporting the carbon emissions of its cloud infrastructure. In a meaningful way.

Is that likely to happen? Yes, absolutely.

When? That’s up to Salesforce. They can choose to be a leader in this space, or they can choose to continue to hide behind data obfuscation until they are forced by either regulation, or competitive pressure to publish their emissions.

If we were Salesforce, we’d be looking to lead.

Image credits Tom Raftery

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(Cross-posted @ GreenMonk: the blog)