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How PwC enables customers to drive down costs and CO2 at the same time
The rules of supply chain optimization have changed. There was a time when increasing process efficiency to deliver against P&L goals was the be all and end all. Today, organizations also factor in the environmental impact their supply chains have on the planet.
Motivations can vary. It could be to mitigate risk, reduce costs, meet regulatory requirements, satisfy consumer demand, build brand reputation, or myriad more. What remains constant is the growing commercial imperative to develop and maintain supply chains with lower carbon footprints.
When PwC, a platinum partner, collaborated with Celonis on the optimization of a major manufacturer’s supply chain, it developed a solution that delivered against both commercial and sustainability goals. At Celosphere 2023, two members of the PwC team behind this solution walked attendees through it all.
Visualizing everything, everywhere (all at once)
Based in Germany, PwC’s client manufactures, stores, and distributes thousands of products across numerous sites, and multiple countries. Each item requires a range of materials, and many need processing or assembly at multiple sites prior to final distribution to the end users.
Every movement of every material, pre-optimization, generated carbon emissions (and costs).
“So we developed with Celonis a solution which enabled us to extract, analyze and visualize all the transactional data of all the material movements between all the different plants and warehouses”, explained Daniel Matzat, Finance Transformation Manager at PwC Germany.
By visualizing these material flows at each stage of the entire production cycle in a series of intuitive dashboards, PwC’s customer gained a wealth of actionable insight, including:
Optimizing for cost
The customer was able to identify and eliminate instances where materials were moved from one site to another and then back again without undergoing any further processing (making the transportation needless and costly). Similarly, the visualizations revealed potential inefficiencies in product distribution, like shipping finished goods from France back to Germany before sending them on to Spain. Despite the immense complexity of the operation, PwC’s solution lets the customer easily identify production practices inflating operational costs.
Optimizing for emissions
“A big advantage of our solution is what we call the ‘ton-kilometer analysis’,” says Matzat. Based on live transactional data, Celonis calculates the kilometers involved in transporting materials between the customer’s various facilities, suppliers and vendors – for every material, at every stage of production.
Meanwhile, a management dashboard displays the corresponding tons of carbon dioxide produced by each of these material movements. This instant, data-driven insight enables the customer to pinpoint and address particularly polluting processes – as well as assess the impact of any measures taken to address them.
Tangible benefits for customer and planet
Insight is only as valuable as the benefits it generates. In the case of the actionable insight PwC and Celonis provided, the financial and sustainability benefits for the customer were significant.
Kenny Petzold, Senior Finance Transformation Manager at PwC Germany, detailed the impact of the supply chain optimization PwC orchestrated: “We have identified optimization potential to reduce costs more than €1 million per year by reducing unnecessary goods movement and by reorganizing plants and warehouses. Carbon dioxide [from transport emissions] has also been reduced by nearly 1,000 tons.”
Lowering its carbon footprint in this way also qualified PwC’s customer to enjoy cheaper interest rates from German banks – delivering further significant financial gains.
A future where CO2 optimization is standard
With global transportation costs spiraling, it’s easy to see how the sort of carbon dioxide optimization PwC has developed for its clients could become standard practice for manufacturers. Making sure every single movement of materials makes sense, counting every kilometer (and making every kilometer count) is a great way to avoid unnecessary expense – while driving sustainability at the same time.
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