Over the last 18 months, we've seen a disruption in the supply chain, surging inflation, energy insecurity, climate disasters, evolving regulations, a shift in consumer demands, geopolitical upheavals in many countries, and the potential threat of a downturn. We've been living in a "permacrisis – an extended period of instability and insecurity.”
In the current extraordinarily complex and dynamic environment, business leaders need to drive strong near-term performance and invest in long-term profitable growth to build resilience over time. However, achieving that duality and carbon transition need to be addressed in a fair and inclusive way—a just transition by ensuring that energy is as low carbon and affordable as possible.
Leveraging the Dual Operating Model: Incremental and Transformational
As part of the sustainability strategy, companies must balance trade-offs among net-zero commitments, strategic investment to address cost in an inflationary environment, and secure energy and materials supply for value-creating tomorrow's businesses.
The enterprises will have to look beyond setting ambitions to tackling the real challenges of decarbonization with the sustainability priority of customers in mind to monetize and work backward across the supply chain by cutting costs and cutting carbon in end-to-end operations.
Companies can manage their transition risk by aggressively pursuing operational decarbonization measures, for example, through improving energy efficiency and optimizing supply chains while making longer-term investments in the supply chain and infrastructure and building new solutions like take-back business model, closed-loop recycling, digital twins, energy storage, green hydrogen, and carbon removal towards net zero in the long run.
For example, in a packaging and paper company, the sustainability objective is to challenge conventional packaging and invest in bio-degradable and paperboard-based packaging product mix as the demand for sustainable packaging grows.
The discrete manufacturing companies are looking to invest and enhance product mix allocation and upgrade product lines for sustainable product manufacturing to increase the sales of sustainable products like more carbon neutral, close to zero carbon products, and special products based on product demands and consumer insights.
Consumer product companies and retailers can maintain affordability and profitability to meet sustainability goals. Sustainability can be embedded throughout the entire product life cycle assessment to evaluate the environmental impact of a product and provide affordable sustainability pricing by embracing a circular economy while improving operating efficiency through unlocking channel growth, intelligent integrated planning, the right assortment mix, and having the right inventory for each store or channel.
Reducing carbon emissions from the entire supply chain is not just reducing fossil fuel usage or switching to another sustainable fuel. A whole chain of things needs to be changed in the supply chain.
Our Approach for Dual Operating Model Implementation
Sustainability starts with the business strategy. Incremental sustainability enhancements to existing businesses won't be enough, and systematic transformation will create a lasting competitive advantage. Organizations must involve cross-functions to embed a sustainable business transformation matrix.
Our sustainability framework and sustainability solutions
Tech Mahindra's Sustainability Framework has four key pillars: consulting, industry solutions, sustainable supply chain, and ESG reporting. Our industry-specific sustainability and ESG solutions are powered by SAP Intelligent Technologies and SAP Analytic Cloud to enable sustainability-driven business models and embed them into enterprise business strategy and operations.
We have been working with partnering organizations to discover and solve problems by exchanging capabilities in a collaborative ecosystem's data and platform economy. Our industry solutions approach is based on the broader sustainability framework starting from cross-industry sector collaboration to industry-specific domain drivers, which will drive specific solutions for industry problems.
Our ESG reporting platform provides end-to-end data support. We have developed ready-to-deploy flexible business rules, which convert raw ESG data for various emission inventory activities with the calculation and emission factors into meaningful insights as per the global and emerging ESG reporting standards and framework requirements.
The decision-makers in manufacturing, operations, sourcing, purchasing, logistics, and sales, can track their respective sustainability performance. The solution allows for incorporating climate impact analysis into existing ESG steering and reporting processes.
Businesses can add rules to make conscious decisions on the change process for better demand planning and transport planning and add better forecasts for packaging and transport emissions through scenarios modelling in our digital sustainability platform. We consider business process management and improve the maturity of digital processes to consider sustainability together during the digital transformation journey.
Improving sustainability within its value chain is no longer sufficient to meet sustainability goals. Tech Mahindra works with SAP to drive sustainable solutions using SAP sustainability product portfolio—product footprint management, holistic steering, and reporting – SAP Sustainability Control Tower, social capital – SAP EHS, and product compliance, to name a few.
Simplifying the Journey to a Sustainable Future
As net-zero has become an organizing principle for business, leaders must lay out a credible plan to deliver a transition to net zero while building and reinforcing to balance resilience with a secure, affordable, and clean energy future.
Companies need to transform their business and operating models to pursue long-term value creation. Companies recognize their relevance, competitiveness, and earning power in the longer term, which depends on their ability to reduce the carbon of the existing portfolio and maintain all sustainability initiatives while simultaneously up scaling their investments in more sustainable technologies.
Wherever you are on your sustainability journey, we can help you with our four pillars of the sustainability framework to support high-value creation by embedding sustainability into business strategy across enterprise activities.
About the Author
SAP Practice Head , Tech Mahindra
Avanish has over 28 years of experience in the Industry and SAP domain. Avanish is passionate about working in sustainability to enable business value-driven S/4HANA sustainable transformation for clients. He has extensive experience developing sustainability solutions for different industries using SAP technologies and digital platforms.
He is a certified sustainable supply chain professional and a regular blogger on sustainability, supply chain, and SAP. Avanish has a Bachelor’s in Engineering from IIT, Roorkee, and a diploma in sustainable business strategy from Harvard Business School.