Sustainability: The Perception, the Myth and the Truth
Until fairly recently, the general perception was that a company had to choose whether to pursue sustainability or profitability, but they could not have both. Thankfully this is no longer the case.
Digital transformation enables companies to create a smart enterprise that delivers results for society and for shareholders. A key component of any smart enterprise is the Supply Chain—an area where they can build in the flexibility and capabilities necessary to achieve sustainability. At AspenTech, we help our customers address sustainability challenges. In doing so, we also aim to make sustainability economically sustainable. Economic sustainability allows an organization’s green initiative to thrive and provide environmental and social value in the short and long term.
Organizations are struggling with tradeoffs of a different kind: how can they remain profitable and relevant while balancing the impact of operations on people, the planet and profits? Too often this balancing act is less successful than some might claim.
AspenTech customer FP Corporation (FPCO), Japan’s largest manufacturer of food containers, and a logistics supplier, is one company that has been able to strike this critical balance. FPCO is committed to environmental advancement, avidly recycling used food containers and PET bottles. With more than a billion containers sold each month, this has created a unique challenge for FPCO’s sustainability efforts.
Reconciling Complex Food Distribution with Sustainability Goals
FPCO maintains a strong focus on customer service and understands the importance of maintaining high quality food distribution. The company realized the process used to select a plant to manufacture its products to optimize transportation and inventory costs was extremely complicated. It became clear to management that current forecasting, planning, scheduling and distribution processes were at odds with FPCO’s initiative to create a “sustainable, recycling oriented society.”
For FPCO to achieve its goal, selling recycled products needed to be an economically sustainable activity. The company chose aspenONE Supply Chain Management (SCM) to help provide stable and responsive food distribution in an efficient, sustainable, environmentally friendly way. AspenTech worked with partner Time Commerce to implement these supply chain solutions and provide support to FPCO.
Supply Chain Management and Sustainability
Here are three core supply chain solution areas and how they can create meaningful change:
Strategic Manufacturing Optimization: The biggest cost optimization savings opportunities are available when a company is assessing or re-designing the production and distribution network in place, exploring manufacturing capabilities/flexibility options and raw materials sourcing.
With Strategic Manufacturing Optimization, an organization has the ability to effectively prioritize CAPEX decisions to achieve long-term sustainability metrics, evaluate alternate supply options and P&L impact, plan reshoring activities, and design the best distribution network to minimize transportation inefficiencies.
Sales and Operations Planning/Integrated Business Planning (S&OP/ IBP): To achieve financial and sustainability metrics, plans should be based on forecasts and assumptions. This will help optimize the end-to-end supply chain holistically by creating optimal plans that will help achieve financial and sustainability metrics.
By optimizing planning, the environmental impact of procurement can be reduced, and excess or slow-moving inventory can be minimized. Production and distribution plans can be created holistically to ensure customer demand is met using the least amount of resources. AspenTech planning models can take sustainability metrics into consideration, for example, modeling emission limit constraints and carbon offset credits to ensure the management of trade-offs and the mitigation of risk.
Sales and Operations Execution (S&OE): S&OE is all about the management of change by aligning supply chain and operations – that is, how you respond and then manage daily upsets.
AspenTech’s S&OE platform improves productivity and efficiency by aligning teams via a common collaborative hub, enabling proactive decision-making and helping to ensure against unsafe plant processes that could lead to environmental release.
aspenONE Supply Chain Management enables FPCO to fully maximize margins while balancing supply and demand. It provides quick and easy access to the latest supply capability of all plants in the network along with associated costs, allowing them to develop the most optimal plan.
"AspenTech’s solution was the only one that could manage our complex supply chain requirements."
-Morimasa Sato, President, FPCO
Based on the success our solutions have achieved in propelling meaningful change, AspenTech and FPCO are 2020 winners of the Supply and Demand Chain Executives Green Supply Chain Award. FP Corporation used our Supply Chain Management solutions as enablers to help reduce CO2 emissions by 135,000 Mts and waste by 374,096 Mts. The close concert of production and near-term distribution planning optimization made these results possible. At AspenTech, we make sustainability economically sustainable.