Danone Serves Up a More Sustainable Future

Danone uses SAP solutions to manage sustainability across its organization (source: Fotolia)

Danone uses SAP solutions to manage sustainability across its organization (source: Fotolia)

One company’s bold commitment to reduce its carbon footprint by 30% is changing everything—for employees, the organization, and the greater good.

Danone products delight millions of people every day. Fueled by a holistic commitment to sustainability, Danone is satisfying more than the world’s appetite for healthy foods. They are helping consumers make better choices as they become more sustainable, one container of yogurt, milk, and water at a time.

With 35,000 items that come from water, milk, fruits, and plants, it’s no wonder sustainability is in this €17 billion company’s DNA. They aim to deliver sustainable, healthy products that drive overall economic performance. In fact, the company’s executive board sees sustainability as a strategic priority. Explains Franck Riboud, Chairman and CEO, Danone, “My vision for Danone: a company that creates economic value while creating social value.”

Danone has adopted a measured approach to integrate sustainable business practices across its 160 plants on five continents in over 120 countries. They’ve established carbon reduction as a guiding principle, and have even appointed a “Vice President for Nature.” Senior management has elevated carbon reduction to coequal status with business targets, and tied bonuses for 1,400 global managers to their performance around environmental objectives. The company also works hard to optimize water usage, which is key to operations. Transparency to consumers and retailers, as well as support for new standards and legislation in the countries where it operates, are foundational to Danone’s growth strategy driven by sustainability.

Partnership with SAP

To help achieve this remarkable transformation, Danone has partnered with SAP to help make sustainability an integral part of how Danone does business every day. The two companies are united by a shared commitment to innovative IT strategies that will meet their promises to consumers and the challenges of today’s environment, as well as comply with changing country regulations.

In a resource-constrained world where consumers want to make better choices, both companies know sustainability is not only about conservation or recycling. Real change can only occur by taking a measured business approach to determine the cost of materials and products across the supply chain, from sourcing to production to delivery and beyond.

As a result, Danone implemented SAP BusinessObjects solutions to collect, measure, analyze, and reduce its carbon footprint across its entire 35,000 product line. Relying on SAP BusinessObjects Profitability and Cost Management, SAP BusinessObjects Financial Information Management, and SAP BusinessObjects Data Services, the process captures highly detailed, monthly assessments of its product line by SKU across the entire lifecycle, from sourcing through production, transport, retail distribution, consumption, and end of cycle. Full integration with SAP ERP allows Danone to automatically retrieve information including bills of materials, production and delivery orders, and intercompany transportation. Danone can easily assess a range of product footprints, and incorporate allocation of emissions and costs generated by each process.

Employee Engagement

These SAP software solutions have fundamentally changed not only the way Danone does business, but also how employees think, work, and engage with the company. Employees have a deeper sense of pride in their work since every staff member is held accountable for the quality of carbon data in their business area. Specialists in lifecycle management collect and assess information from the supply chain, such as site-specific emission factors for components used during the raw-pack process. People with job titles like Carbon Master and Master Data Manager, along with users in manufacturing, purchasing, and transport units, provide additional input for things like emissions factors by transport types or energy consumption to complete the process. Teams perform calculations for insight and visibility into the carbon measurements at a product level via multi-dimensional modeling and analysis. Using SAP software reports and dashboards, employees can display the product carbon footprint intensity as grams of carbon dioxide equivalent (CO₂e) per kilogram or liter of product, as well as in absolute terms of metric tons of CO₂e emissions.

Towards a More Protected Future

Danone is well on its way to helping protect the world’s precious finite resources for future generations. It has reduced its carbon footprint by 22 percent, and is confident of reaching its target of 30 percent by the end of 2012.  Moving forward, they intend to simulate emissions when introducing a new material, or process into a product, brand, or country. This will improve and optimize design decisions, supplier choices, and investments, as well as support brand-related goals. Additionally, Danone recently selected the SAP Sustainability Performance Management solution to help holistically manage data collection, reporting and analytics across all social, environmental and economic initiatives. Danone is also working with suppliers so they can directly enter their data into SAP ERP, saving time and boosting information quality.

Future plans include enhanced reporting beyond SKU carbon footprint tracking. Danone will report emissions by product, factory, division, country, brand, customer, and time interval — then set benchmarks based on the intelligence. Executives envision a monthly “sustainability closing,” much like a financial closing, for greater transparency and stronger competitive advantage.

Consumers worldwide rely on Danone to bring them fresh, tasty dairy products and bottled water, as well as baby and medical nutrition products every day.  The company’s sustainability commitment is having an equally profound impact on the world in which all of us live.

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