With SAP S/4HANA 2023 FPS01 release, Extended Warehouse Management (EWM) embedded in SAP S/4HANA, you can use batch-specific units of measure to better handle configurable products throughout the entire logistics chain. ... View more

Dear Members My client is using combined orders (MILL_OC). We are trying to combine two or more child orders. But while saving system is not allowing to save the order and giving message 'kindly maintain profit center'. Client is first converting planned orders in to production order and at this stage profit center is copied in production orders but when we are combining these production orders (child orders) into one combined order,system is throwing this message. Kindly help where we are missing? Regards Rajneesh ... View more

For the past 5 years American Metals Market has recognized innovation and excellence in the steel industry and last week announced the winners of the 2015 Awards for Steel Excellence.  See some of the highlighted winners below:     Best Innovation, Product: Gerdau Long Steel North America Win is for GGMULTI, a multi-grade merchangt bar product for 10 different steel grades and standards.   Best Operational Improvements:  ArcelorMittal Dofasco Win is for the automation of its KOBM steelmaking process from oxygen blow to end tap with the goal of increasing consistency and output of high-quality steel.  Key improvements led to improved worker safety, accuracy and consistency of end-point carbon control, reducing the re-blow rateto less than 1 percent, lowering aluminum additions and reducing tapping time.  The whole approach saved more than $10 million per year.   Information Technology: Gerdau Long Steel North America Win is for eGerau, launched in November of 2014,  an e-commerce platform for Gerdau customers to search on information quickly and easily.   Customers can search for product availability by size, type and location, consult future mill schedule, place and review orders, check shipments and consult financial statements.   ... View more

Purpose: This document will help to understand the overview of Steel Industry business and process flow from customer/supplier perspective and industry’s supply chain. This document will explain a business case i.e. Make-to-order at the product level and its mapping to SAP by order creation scenario and how variant selection takes place in the order. 1. Business Trends in Steel Industry- the current trends in the steel industry majorly focusses at the below three parameters:- A. Vital Business constraints • Cost-cutting measures • To stabilize and control the process • To ensure a high level of Customer Satisfaction • Dynamic and varied Product Mixes • Stiff Statutory & Regulatory Compliances B. Current Environment • To optimize the Utilization of Asset • A shift of Business value chain to Global Value Chain • To plan Overcapacity / Relocation • High Demand for Innovation • Success factors in Merger and Acquisition C. Major IT Trends- Steel Industries are now moving towards:- • Consolidation and centralization of IT assets • Shared Service and Center of Excellence Models • Efficient Plant Operations Management • Better Supply Chain planning • Looking beyond Sourcing Solutions • Accurate Product & Process redesign 2. Steel Industry Value Chain-Supply chain management  The Supply chain of the Steel Industry as shown in Fig 1 illustrates the involvement of supplier-end customer throughout the value chain and the business function pillars supporting this chain. Fig. 1 Supply chain management 3. Business Challenges in the steel industry a.  Specific challenges:- i. Fluctuation in demand for steel by property sector (38% of demand) Infrastructure construction, followed by a demand for machinery, cars, and shipping. ii. Reduction of Carbon footprint/Improving energy efficiency iii. Volatile raw material price, Dynamic and complex configurable product based Pricing strategy. iv. Product-mix improvement: Multiple Steel product lines across different mills. v. Increasing operational efficiency and raw material management vi. Integration of business between Trading company & manufacturing units spread across different countries vii. Lack of qualified professionals. viii. Lack of effective support for customer services - inability to meet customer demand for collaboration and information b. Generic challenges i. Unable to address the requirements that customers have which are becoming much more demanding ii. Enterprise-wide standardization and seamless integration of core processes iii. Lack of real-time, transparent data; limited visibility of inventory and production iv. Redundant data maintenance elimination v. Reduce transaction costs, reduce operating costs and shorten time to market vi. Improve supply chain management and distribution channel 4. Steel Manufacturing Process Flow Fig 2. Process flow of steel manufacturing Reference: http://www.steel.org 5. Customer perspective at Demand side- Business Process The below figure represents the flow of the process from translating the opportunity to order followed by manufacturing of the ordered product and finally invoicing and shipping it to the customer.  Apart from core, the other business functionalities which support the process are also explained in the figure. The details provided under individual steps illustrate the functionality. Fig 3. Process flow from order to invoice 6. Supplier/vendor perspective at Supply side- Business Process The below figure depicts the process of procuring the material via supplier which is being managed through supplier relationship management and then manufacturing the product and finally invoicing and shipping it to the customer. Apart from core, the other business functionalities which support the process are also explained in the figure. The details provided under individual steps illustrate the functionality. Fig. 4 Process flow from purchase to invoice of material via Supplier relationship mgmt • MRO- stands for Maintenance, Repair, and Operations • Sourcing-To Identify supplies and components needed for product manufacture and services for a company’s daily operations as well as negotiating the optimal commercial terms for the company. 7. Business Process-SAP mapping Business Process SAP Mapping Procure to Pay Materials Management (MM) & Finance (FI) and Controlling (CO) Make to stock Production Planning (PP-PI) & Controlling (CO) Make to order Sales and Distribution (SD) & Finance (FI) and Controlling (CO) Financial management Finance (FI) and Controlling (CO) People management Human Resource (HR)& Finance (FI) 8. In product variant scenario the business process case at the product level is as explained below - • Steel Products have a complex selection and combination of different characteristics & properties which define their product mix. • There are specific checks related to the rolling mill to be covered which includes– steel properties/Grades, width, allowed thickness, length, etc. a. Process Mapping in SAP • SAP addresses this Business Process through Variant Configuration. • Different classes are configured for Hot Rolled, Cold Rolled, Galvanized, Tin plated products of steel. • Characteristics and permissible values are created which defines steel dimensional properties and compositions based on mill like dimensional tolerance, product standard, and steel grades, etc In the steel industry, the following typical steps of make-to-order scenario takes place which has been explained by creating a sales order and how the variant selection functions in the order:- Step 1. Once the inquiry (from a customer) and quotation (from manufacturer) phase is over and the customer sends a purchase order, the Sales order creation takes place • Here based on the region the sales organization can be classified as domestic sales or international sales for example 1000 or 2000 • A steel industry can have multiple sales offices so this is also considered during order creation and this helps to monitor the region wise sales volume. Step 2. Select the material and manually input the order qty, Amount, usage (this is to identify during reporting how much business transaction happened for which type of customer) and delivery time, in case of text to appear on the order document the same can be written at the text box. In steel industry, the same material can be manufactured in different plant locations, hence Plant can be manually entered during the sales order creation. Step 3. Material configuration: At the time of order creation there are specific checks that have to be performed during configuration of material like thickness, tolerance, etc. For example, on item thickness, a tolerance range is defined in the system and if the user enters beyond the permissible tolerance range then the system will check and give an error message. Further texts input like sales remarks or Inspection by 3rd Party comments can be entered in sales order at the time of material configuration. Step 4: At order header level in Text tab special remarks that is useful during the logistics process can be included which can be captured on the sales document like freight cost and material delivery date. Step 5: After the final configuration of material save the order and the order will be directed to the production planning and control for manufacturing. Step 6: After the material is manufactured at the plant, the corresponding sales office receives the production confirmation and ready for dispatch schedule. The accounts officer verifies the credit limit of the customer and sends clearance to dispatch the material, the logistics are then planned and outbound delivery and PGI followed by Invoicing take place. Finally, the ordered material reaches to the customer’s location and based on the payment terms the customer pays the invoice amount thereby settling the outstanding account.  This completes the sales cycle. b. The Business Benefits • By mapping to SAP, it facilitates easy material master maintenance and reduction in the number of material codes. • Also different characteristics and properties like grades, thickness, width, length, etc. can be tracked in the system. Reference: 1. http://www.scmp.com/business/article/1074097/steel-sectors-plight-illustrates-extent-chinas-challenges 2. http://www.lgsglobal.com/clients-srsl2.html 3. http://www.avepoint.com/assets/pdf/news/Press_Release_Gartner_Symposium.pdf About the author: Rahul Prakash Rahul is a Consultant in the Manufacturing SAP practice of Infosys. He has over 6 years of experience in sales and marketing in metal industries with 2 years of global consulting experience. He is an SAP-SD Certified Application Associate and has been part of global SAP rollouts, and has worked with established companies in the Steel and Automotive. Rahul holds an MBA in Marketing & IT from ICFAI BUSINESS SCHOOL Hyderabad, India, and Metallurgical and Material Science Engineering degree from National Institute of Technology Jamshedpur, India. ... View more

The Indian Iron and Steel Industry is 100 years old with Tata Steel (formerly Tata Iron and Steel Co) setting up its first integrated steel plant in 1907 in Jamshedpur (India, Jharkhand State). This was also the first core sector to be freed from the licensing regime. The demand by the sectors like infrastructure, automobiles, real estate has put India’s Iron and steel industry on the global map. The demand for steel in India is expected to rise by 7% in the next FY as compared to 5.5 % of the projected growth in 2012-2013. After China, Japan, and the USA, India is the 4 th largest producer of crude steel in the world. Major Public sector and private sector companies like Tata Steel, SAIL, ESSAR Steel, JSW Steel, JSPL and expanding their capacity.  Currently, Indian steel companies are producing 70 million tonnes of steel and by 2020 is expected to reach a staggering 200 million tonnes surpassing in Japan and USA. The consumption of Steel largely depends upon the performance Infrastructure and automobile sectors.  The recent announcement by the Government to put 1$ trillion investment in infrastructure would give a boost in demand for the steel Industry, especially in long products. The per capita consumption of steel in India is meager 39 Kg compared to a global average of 150 Kg. Hence India is a long way to catch the global average and surely this can be indicative to demand rise of steel and scope of capacity expansion for Indian steel companies in years to come.   The Major challenges that the industry is currently facing are:- Availability of low-grade ores in India that leads to export high grade impacting production cost High power cost and non-availability of metallurgical coke Hurdle in land acquisition and regulatory clearances- like Mining bans in Karnataka and Goa Sluggishness to adapting sales and distribution practices towards customer-centric approach Attracting and retaining key talents Future Outlook: India has enormous scope for steel consumption and for Indian steel manufacturer to expand its business.  The untapped market in rural infrastructure development and upsurge of sectors like packaging and engineering services are definitely going to create demand for steel and its products. Because of vast Iron ore reserves and other dependent raw material availability at a lower cost, Indian steel manufacturer can produce steel to catch the demand locally.  The large pool of technical human resource and advanced steel manufacturing technology may help to produce superior quality of steel towards meeting the demand of various sectors.   References: http://www.business-standard.com/article/markets/uninspiring-outlook-for-indian-metals-minerals-in-2014-113122301015_1.html http://www.accenture.com/in-en/landing-pages/Documents/industry-steel/POV-Steel-Development-online.pdf http://www.icra.in/Files/ticker/SH-2014-Q1-1-ICRA-Ferrous%20Metals.pdf http://steel.nic.in/Long%20Term%20Perspectives.pdf http://www.ibef.org/industry/steel.aspx http://www.cci.in/pdfs/surveys-reports/Iron-and-Steel-Industry-in-India.pdf http://articles.economictimes.indiatimes.com/2014-08-11/news/52687424_1_national-steel-policy-vishnu-deo-sai-steel-production ... View more

HBIS Tangshan Iron and Steel Group is a Chinese mill products company producing high-quality iron and steel plates. Read how, to secure an industry-leading position in China and abroad, it implemented SAP ERP – integrating operations across subsidiaries and business models. HBIS Business Transformation Study ... View more

Hello. I'm currently trying to put data in PLPO table with Length Calculation data, but it seems that BAPI have tables parameter, but do noting in that BAPI. Is there anyone to use to try put Length Calculation data by that BAPI? ... View more

Relevance: Fabric production with Super BoM and Super Routing. Finished fabric: Fully configurable. Scenario: Our client gets requirement from customer. Customers are stitchers, who order all the parts of a garment and then stitch them together to give it a shape of a garment. Hence, sale orders get created with line items representing different parts of a finished garment that we wear in our daily life. Let's assume a T-shirt will consist of main body,cuff,collar and trim. Hence, the customer will ask for a quote for all of these parts, together. For example, an order will be: 10,000 KG : MAIN BODY 1,000 : TRIM 100 PC : COLLAR 100 PC : COLLAR 200 PC : CUFF 200 PC : CUFF And the corresponding sale order will be created in the manner, shown below: Figure 1: Sale order with all components needed to stitch a garment once the sale order will be created, it has to be costed, which will be based on sale order configuration. So, each item is the sale order would depict its dependent component, when we see the configuration via the menu path of the sale order. Figure 2: Sale order configuration screen Costing of sale order components will happen based on the above configuration and hence it is very important that object dependencies at PP end would work perfectly. Now, we should check whether the configuration components are matching with the cost components, resultant out of sale order costing. Figure 3: Sale order costing result Figure 4: Matching components in costing and configuration for the same sale order Point to be noticed is that Sale Order cost estimate do not show all the levels within the BoM of a finished part. it will only show the immediate level[for example: Greige fabric and dyes/chemicals/recipe etc.] Figure 5: Cost components of a finished fabric So, if we think to download/extract all of the line items of finished fabric cost estimate, it is directly not possible from finished fabric sale order cost estimate. We have to go to each and every step of the fabric structure[like Greige Fabric, Dyed Yarn, Recipe etc.] and then only we can avail the rest of the detail. Figure 6: Cost components of greige fabric All of these materials[greige fabric, dyed yarn] present in the structure of the finished fabric are having Configurable MTO strategy, which is linked to requirement type customized for MTO- Configurable material. Now, let us check how the production orders have been created and addressed in relation with the same order. SAP has given standard transaction code COOIS to check all the production orders tagged to a specific sale order. Outcome of the said transaction has been checked for the sale order under discussion. Figure 7: Order information system Outcome is all the production orders, required to produce finished fabric along with it's components. This is why MRP has to happen on sale orders at hand. We will analyze one of such production order and check if the GR against the production order has updated sale order stock valuation table EBEW or not. Figure 8: Before going to production order confirmation screen, let us validate the theory that none of the fully configurable materials are having standard cost updated in the material master. Reason being, standard cost will be against sale order items, for which these materials are being produced. Now, as per process of MTO - Configurable material strategy without sale order being a cost object, we would be settling the production order cost to corresponding materials, as the valuated sale order stock is intended. For the purpose of this article, I kept the material not maintained with any variance key. So, the production order will not be having any variance key copied, nor any variance shall be calculated. Only thing will happen that difference between GR and GI will be settled on to the material, as material is the receiver in the settlement rule. Figure 9: Difference between GR and GI Notice: the yarn will be receipted at the sale order cost estimated price, once the production order is confirmed. Of course, the yarn[YDR1/024CNOCC001] should have a BoM and routing, along with object dependencies, if required. In the case of discussion, spoilage has been included, as well in the BoM of yarn. Our PP consultants have used reference characteristics and MDATA procedures to set up quantity calculated of components. For example: $self.S_QTY = (mdata$self.S_QTY + (mdata$self.S_QTY * $root.K_YDL /100))   ---- this code tells the system to calculate the header material quantity to be calculated by adding up header material quantity and a defined loss % multiplied by the header material quantity. If I see the BoM for YDR1/024CNOCC001[Dyed yarn], I can see it having YGR1/024CN0CC001[greige yarn] and some recipe. Since, process orders are not being used, PP team has created materials to define recipe, which consists of certain chemicals/dyes. So, the cost of BoM and the recipe[chemicals] is the cost of dyed yarn[YDR1/024CNOCC001] to be produced. This cost estimate becomes the GR value for the dyed yarn. Figure 10: Sale order cost estimate depicting the dyed yarn cost Figure 11: Settlement of production order via KO88 transaction and related accounting documents. The settlement transaction will change the value of sale order stock's MAP. Let us see how. Before settlement execution,the MAP was Inr 200.55. Figure 12 a: Table view for sale order related stock segment[before settlement] Figure 12 b: Table view for sale order related stock segment[after settlement] So, it is seen that MAP is increased for the material[in this case dyed yarn, which was the receiver of settlement]. Though, the stock value of the produced fabric/material/component remain same as per the GR value. In other words, total stock value remain = (total stock*standard price), before and after settlement. Accounting entry of settlement will be: CHANGE IN STOCK SEMI-finished due to production/Factory output of production      Cr. PRICE DIFFERENCE             Dr. At the time of production order settlement, CO-PA document has got generated. As per the PA transfer structure, the price difference went to a custom value field related to "Other Cost". Figure 13: Depicting CO-PA actual line item posted for the settlement of production order. Figure 14: Account based CO-PA postings reflecting the settlement. As early derivation of characteristics is activated, ACODA table capture the sale order characteristic "SHADE CODE". Figure 15: Early derivation of characteristics [SHADE CODE = "NOTAPPLIED"] In a similar way, another production order has been settled for the same sale order. Point to be noted is all of the production orders will be settled to respective materials, as the stock is valuated. Total variance will be settled to FI and hence, we shall see the variance calculation for the production order. In order to calculate variance, order is to be TECOed. Figure 16: Results of variance calculation for target cost version 0 Now. the production order settlement shall settle the cost to material and the variance to CO-PA, at the time of settlement execution. Figure 17a: Outcome of settlement run Figure 17b: Showing the senders Figure 17c: Showing the receivers Now, let us check what has happened to the MAP and standard price of the fabric under discussion. We shall see the sale order stock values from EBEW table. Fabric code: KGFBYCTN0241O Figure 18a : Valuated stock before settlement Figure 18b : Valuated stock after settlement Point to be noted: Before and After the settlement transaction, only the MAP has been changed for the fabric. The standard price remain fixed at Inr 213.59. Coming to the accounting document related to the settlement, following entries have been passed: 592001 CHANGE IN STOCK SEMI 22,910.50      Cr. 592102 PRICE DIFFERENCE-REV 22,910.50                   Dr. 592102 PRICE DIFFERENCE-REV 22,910.50     Cr. 592994 PRD-Split-OPPV 2.34                                  Cr. 592996 PRD-Split-INPV 22,912.84                                       Dr. The above postings are result of S/4 HANA Finance' new functionality of splitting the price variances/differences according to variance categories. Figure 19 : Splitting of price difference and assignment of G/L accounts   4 CO-PA documents have been posted, as well, while settlement. Why 4? They are related to the posting of price difference[calculated variance] settled to FI, reversal of main price difference account and simultaneous splitting into specific variance categories. Figure 20 : Final accounting entries Following the MTO scenario, the variances are settled to CO-PA during production order settlement. I shall now show when the COGS is getting posted to CO-PA in MTO scenario. As per standard process of MTO, COGS should be posted to CO-PA[provided availability of required configuration]. Assuming the client can make partial delivery at their wish, one delivery document has been created with 10 KG of finished fabric KFFBYCTN0241O. Net value of finished fabric is Inr 1000. So, accounting document will be 1991 XYZ . 1,000.00 Dr. 400000 SALES - DOMESTIC - F 1,000.00    Cr. Figure 21 : COGS posting to CO-PA at the time of billing document generation Detail of the CO-PA line item validate the idea of COGS posting to CO-PA. In this case, COGS has been posted to custom value field VV300. Figure 22 : COGS posting in CO-PA COGS value is the same as it appears in sale order stock table EBEW. The standard price for 1 KG of fabric is Inr 43,688.09. Total sold quantity is 10 KG and hence, COGS value is = Inr(43,688.09*10) and this value is being associated to value field VV300, which represent COGS in CO-PA. The variance against an production order = [(GI+confirmation) - GR]. The variances appears under "total actual cost" column and will be calculated via variance calculation transaction. In this case, the variance is Inr (-25,524,418.21). As the variance is negative, if settled, it will reduce the fabric's MAP. A message may pop-up intimating the same. Figure 23 : Settlement of production order Figure 24 : Impact of settlement Figure 25 : Before and After settlement MAP of the fabric from EBEW table As a result of settlement and S/4 HANA Finance' new production variance splitting functionality, following entries gets generated. GL          GL Description                 Amount                                   Dr./Cr.       Profit Center                     Order 590000 CHANGE IN STOCK FINI   25,524,418.21                           Dr.         1024FKN000                  4300000020 590101 PRODUCTION VALUE DIF 25,524,418.21                          Cr.         1024FKN000 590101 PRODUCTION VALUE DIF 25,524,418.21                          Dr.         1024FKN000 592994 PRD-Split-OPPV                0.16                                            Cr.         1024FKN000 592996 PRD-Split-INPV                  1,793.53                                     Dr.         1024FKN000 592997 PRD-Split-RSUV                24,743,332.35                           Cr.         1024FKN000 592998 PRD-Split-PRC                   3.65                                            Dr.         1024FKN000 592999 PRD-Split-QTY                   782,882.88                                Cr.          1024FKN000 7 CO-PA documents will be generated for the posting lines starting from 2nd onward. Figure 26 : CO-PA documents generation at the time of production order settlement. At this point, production order balance becomes "0". Conclusion - Some of the features have been introduced with newer releases. But, the basic remain same for MTS and MTO scenarios.                                                         ... View more

The world needs to change. Even before the Paris agreement, signed in 2016, it has been clear that we cannot go on like this if we want to avoid climate change causing general, long-term trends like the rising sea levels and rising temperatures and more deserts. The negative impact of industries during the last century on the environment due to the causation of some of the world’s most severe environmental concerns cannot be denied. But at the same time industries have a huge potential or you can even say are the key to save the planet from those same problems. How can we solve this?  The answer is environmental technology. What does this mean for a company in industries like Mining, Metals or Plastics? There are two options. Either they disappear or they change dramatically. To go on like that will not be an option. The pressure of politics and society will not go away. But another reason is even more convincing – no change will lead to a slow financial death. Let’s go back to the reason behind all that: our planet earth. Over centuries industries have taken a lot from natural resources, used it and produced besides goods a lot of waste. I’m talking about exploitation here. But we cannot go on like that without sacrificing mother earth and finally OURSELVES. Therefore industries need to think of how to take less from nature and stop producing waste that pollutes the environment. The industrial revolution brought new technologies with immense power but did not care much about the environment. The recent rise in global concern for climate change has led to new laws and regulations resulting in  higher costs for energy and waste and subsequently the development of new environmental technology. An example here is the transformation to renewable energy and smart technologies. Change always means leaving a comfort zone, which is defined as, “a state in which things feel familiar to a person and they are at ease and in control of their environment, experiencing low levels of anxiety and stress.  Clearly many of us are now being forced out of our comfort zone as stress and anxiety rise due to the impacts of climate change.  We are being pushed to give up on some habits that functioned during the past but that are now not sustainable. -. And change means the future is uncertain. Companies speak  about this change like turning from the bad to the good. Leaving the dark side behind and turning to a bright future with a healthy mankind and a clean and unpolluted environment. This sounds honorable but has nothing to do with the everyday reality of how the economy works. Any output or new way of working or producing has to also have the means/money to cover the costs for production. So what’s in for industries besides this great feeling of doing some good and talking about it? The answer is a digital change to an environmental technology basis that will help the companies to survive in the new environment they have to act in  and also to gain financial benefits on the long term. Where to start to undergo such changes? A different strategy based not only on short term but also long-term Investments. Up to a few years ago a period of ten years was considered as a reasonable planning horizon within companies. Today many entrepreneurs claim that is not possible to oversee a period longer than five years and they limit their long-term planning to periods not longer than that. If strategy means the very detailed planning of all actions than in today’s economy even five years seem to be a long period because of the extremely fast changes. But this is not what strategy is about. For sure, all possible options, varieties and turnarounds need to be well thought out. But on long-term planning, granularity decreases not leading necessarily to a disadvantage. It opens up a view on what is essential. This is why companies should not lose their long term view in this fast-changing world. Long-term planning and investments do not lead to fast success and quick ROI. But if you look at the end result you will see that it is not only worth it, but there is also no alternative. To constantly adapt to the world´s new challenges, it is worth thinking about a fundamental change to become a digital company using smart technologies.   Let’s take a look at an example of the steel industry. Steel production needs a lot of electricity. To reduce the consumption, deeper insights into the actual levels of consumption for various processes and activities are are crucial. Smart technology opens up a lot of new possibilities to get this visibility. With consumption-monitoring tools that serve as an analytical data hub, companies can capture insights in planned, consumed, current and future consumption. This helps to understand the use of electricity and identify saving potentials. It can also enable real-time detection of unauthorized energy consumption. It lowers electricity costs due to improved adherence to plan. Severstal, largest producers of coking coal and iron ore in Russia, took this new path and reduced its annual loss by $12 Million. This example shows that some profits can already be gained in early stages of digital transformation. In the long term these profits however will even materialize more and more. As global concerns for climate change will continue to put pressure on technological developments, companies will have the chance to adapt step by step to what is needed not only to become an intelligent enterprise but also to gain profits from any step in the right direction and finally make their contribution on the way to save our planet. Check out these links to learn more about Severstal and other stories How Machine Learning Will Help Severstal Prevent Energy Fraud (sap.com) https://news.sap.com/2018/09/severstal-machine-learning-prevent-energy-fraud/ More Sources: https://www.msn.com/en-us/weather/topstories/natural-disasters-linked-to-climate-change/ss-BB18caEg Environmental Technology | Impact of technology on the environment (edinburghsensors.com) ... View more

  As innocuous as a “proposed carbon border adjustment mechanism regulation” from the European Union (EU) might sound, U.S construction companies and their building materials suppliers would be wise to keep a close eye on the new policy, whether they do business in Europe or not. As currently proposed, the CBAM policy unveiled by the European Commission in July is slated for implementation in 2023. It would tax imports of certain materials and goods based on the greenhouse gases emitted to manufacture them to curb carbon “leakage” in the region. That occurs when European companies shift carbon-intensive production abroad to take advantage of more relaxed standards, or choose lower-cost, more carbon-intensive imported products over products sourced in the EU. Of particular interest to construction companies, their building materials suppliers and their customers, the CBAM initially will apply to goods deemed at highest risk of carbon leakage, including steel, cement and aluminum. Importers must begin reporting emissions embedded in their goods beginning in 2023, though they won’t have to actually pay financial adjustments based on the emissions content of those goods until 2026. Ultimately, the goal of the policy, the European Commission said, is to level the playing field so greenhouse gas emissions are reflected uniformly in the prices for imports and EU-produced materials and goods, eliminating an incentive for EU companies to import cheaper, more carbon-intensive products from abroad, or to shift production to places like the United States where emissions rules are laxer. As globally interconnected as construction supply chains have become, policies like the CBAM are bound to encourage policymakers around the globe to adopt similar measures. Canada is among those poised to do so. With pressure mounting to create a uniform global carbon price, how long before a long-discussed carbon-reduction tax and/or new GHG-reduction regulation becomes reality in the United States? For construction and other industries, the implications likely will be broad, as JP Morgan’s Vincent Juvyns notes in a recent post to the firm’s website. “In our view regulatory interventions will increase, and these interventions will underpin carbon prices not only in Europe, but also globally. The result will be an increase in the cost base of companies in a growing number of sectors.” In this kind of environment, the competitive edge goes to construction companies and building materials suppliers who find ways to stay a step ahead of regulators—and in step with the growing demand from shareholders, end customers and the public at large for greener products, companies and brands. Many companies have already started compiling spreadsheets and producing an annual sustainability report. The next step is to ensure sustainability and carbon-related KPIs and strategies are measured, improved and elevated so they carry the same weight as other continuously measured financial KPIs. From engineering to production planning to sales, finance and logistics, all facets of a manufacturing enterprise need access to information and insight that enable them to factor the green line into core decision-making. And come reporting time, they need to be able to document compliance with regulatory requirements. All this becomes possible with a robust, enterprise-wide digital platform. Italy’s Arpa, which makes surface materials and high-pressure laminates, has used such a platform to cut consumption of water, energy and other resources at its production facilities by 80%, reduced scrap waste down to almost zero and implemented a 24/7 production cycle that has resulted in substantial cost savings. Digital capabilities also are enabling companies to design products to meet their own sustainability goals and those of their customers, and to illuminate simpler, more cost-effective circular pathways that reduce waste and keep valuable materials in use longer, such as designing for modularity, extended in-service life, repurposing, recycling and/or reuse at end-of-life. In many cases, approaches like these are predicated on having a central source of current data and information that is accessible to multiple parties in real time. Tata Steel Europe, a key supplier for the massive HS2 high-speed railway construction project in the United Kingdom, is using a blockchain-based shared ledger to store data about the chemical composition of the steel panels it’s providing—data it can use not only for EU compliance reporting, but also when the time comes to repurpose or recycle the steel panels. Going forward, companies must be able to track the make-up, and prove the origin, of their embedded products. That’s particularly important for companies selling (or planning to sell) products into the EU, because if they’re unable to accurately document carbon footprint information, they could put themselves at a significant price advantage relative to competitors that are able to provide that documentation. The roll-out of increasingly aggressive carbon-reduction policies and targets in the United States, Europe and elsewhere also puts a premium on digital tools that enable building materials suppliers to seamlessly conduct business in emission credit trading frameworks. Suppliers like Austria’s RHI Magnesita, which makes refractory products for cement, steel and other building materials, are already using these types of tools to integrate CO 2  emission credit trading into their core business. As of now, the CBAM would apply only to direct emissions emitted during the production process, not to indirect emissions. Still, because supply chain emissions on average are 11.4 times higher than operational emissions, according to CDP, a non-profit organization that manages a global environmental disclosure platform, there’s a growing focus on indirect emissions from the supply chain, increasing the likelihood that we will soon see policymakers take aim at indirect emissions, too. Supply chains themselves are already moving in that direction anyway. With their $5.5 trillion in buying power, the more than 200 businesses that are part of CDP’s supply chain group, including some of the world’s biggest brands and most prominent manufacturers, are requesting that their suppliers provide information about (and in some cases, take action to reduce) their carbon footprints. Søren Skou, CEO of Maersk, one of the world’s largest maritime shippers, is calling for similarly bold steps, having recently urged his industry to shift entirely to carbon-free fuels. All of which suggests that companies must have the ability to evaluate supply chain partners based on their sustainability performance. Ruth Porat, CFO of CDP member Alphabet, an offshoot of Google, explained why that’s critical: “With CDP, we can measure and influence how our suppliers integrate climate change into their operations. In 2020, 96% of our surveyed suppliers reported their carbon footprint, and 75% shared their targets to reduce it. This visibility allows us to better select, support and partner with our suppliers on their climate-related targets.” Achieving that level of visibility requires companies across a supply chain to be digitally networked so they can share data, verify its origin and accuracy, and make decisions accordingly. Because one company’s poor sustainability performance can put an entire supply chain at risk in terms of added cost, diminished reliability and tarnished reputation, it’s reasonable to expect companies in the construction business to choose supply chain partners that can provide credible, auditable documentation of a strong decarbonization track record. The rise of groups like the CDP points to a growing recognition by companies that alignment across the value chain is critical to responding to new policies like the EU’s CBAM. By creating digitally connected business networks that stretch beyond company and even industry borders, companies in the construction supply chain can share information and collaborate on everything from raw materials sourcing and product design upstream, to last-mile logistics and even product usage, returns and recycling processes downstream. For construction companies that choose to embrace this kind of collaborative, data-intelligent thinking, the low-carbon economy becomes fertile territory for growth and competitive differentiation, not just another regulatory burden. For more on how SAP is helping metals, paper, packaging and green material companies improve their supply chain outcomes visit SAP.com This article originally appeared in Construction Executive, and is reposted here with permission. ... View more