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Embrace Sustainability with SAP
Circular Manufacturing at scale
Build a regenerative business and embed circularity into core business processes
Welcome
In today's rapidly changing world, industrial manufacturing is facing a pressing challenge. It needs to balance customer demand, changing regulations, always-present supply chain risks and stakeholder expectations, while protecting our environment and conserving natural resources. Circular manufacturing is a response to this challenge.
Regulations such as the European Green Deal
- A zero pollution Europe
- Transition to a circular economy
- Achieving climate neutrality
Supply Chain Risks such as transportation & logistics disruptions
- Trade restrictions, tariffs, and sanctions
- Unstable freight costs and limited shipping capacity
- Labor shortages in manufacturing and logistics
Scarcity of raw materials such as steel, copper, aluminum, gold, plastic
- Increased demand for secondary materials due to regulatory requirements (circularity, carbon emissions)
- Incomplete or delayed order production caused by supply chain bottlenecks
- Fluctuating margins resulting from uncertainty in material costs
Stakeholder Expectations such as carbon neutral products
- Increasing demand for products with reduced carbon emissions
- Growing interest in refurbished products at lower prices
- Defined strategy towards carbon neutrality to appeal to green investors
WHY SAP
For the past 50 years, SAP has supported manufacturing companies in running efficient, linear production processes. As businesses shift towards a circular economy, the ability to reuse existing SAP solutions offers significant advantages.
SAP’s integrated capabilities enable seamless transitions to closed-loop systems, supporting material tracking, resource optimization, and end-to-end visibility. Its digital tools facilitate product lifecycle management, remanufacturing, and predictive maintenance, helping companies reduce waste and improve sustainability. By leveraging existing SAP investments, businesses can adopt circular practices without overhauling their entire IT infrastructure, making the transition both efficient and cost-effective.
With SAP’s cloud portfolio, businesses gain the scalability and flexibility needed to adapt to evolving market demands. Cloud-based solutions, such as SAP S/4HANA Cloud and SAP Business Network, enable real-time collaboration, advanced analytics, and improved supply chain transparency. This agility ensures that companies can continuously optimize their circular business models while staying competitive in a rapidly changing environment.
Organizations are experiencing a shift from a traditional, linear "take-make-dispose" model to a more sustainable and circular approach. At SAP, our circular manufacturing framework helps close the manufacturing loop by enabling companies to design products and processes that minimize waste, maximize resource efficiency, and prioritize the 4Rs:
Recycling Refurbishing Remanufacturing Repair.
REManufacturing
involves taking used products or components and restarting their lifetime by replacing worn-out parts, repairing defects, and performing thorough testing.
.
640 billion
is the potential annual saving in global material costs for the EU manufacturing sector by 2025, if circular manufacturing is adopted
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Refurbishment
is similar to remanufacturing but often involves a less-intensive process. It entails cleaning, repairing, and restoring used products to a good working condition, although not necessarily to a like-new state.
.
50 million
metric tons of global e-waste generation could be avoided annually by refurbishment
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Repair
is the process of fixing or restoring damaged or malfunctioning products to make them functional again. Repair extends the life of the asset, delaying the need for new products.
.
54%
of the world’s total delivered energy is consumed by industrial manufacturing companies, which makes decarbonization more urgent
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Recycling
involves the collection, processing, and transformation of waste materials into new products or raw materials. Recycling is the last resort when products or components can no longer be remanufactured, refurbished, or repaired.
90%
of energy can be saved by reprocessing plastic instead of making plastic from raw materials
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Design
Production waste and scrap could be a valuable source of material for other companies in the value chain. These materials could be sourced from new suppliers after their quality is validated and due diligence is done. To effectively manage this, careful planning is required, aligned with circularity KPIs, the production plan, and demand. A key element in this planning could be the introduction of "take-back campaigns" to better anticipate and plan the volume of materials to be returned. This approach would increase the profitability of the circular process while ensuring a reliable supply of secondary materials.
Reverse logistics
Reverse logistics is about closing the circle and getting products back at the end of their lifecycle or in case of defects. The better evaluation, testing and handling of returned products is organized, the higher the customer satisfaction and the more waste can be avoided through proper treatment of products
Plan & Source
Production waste and scrap could be a source of material for other companies in the value chain. These materials could be sourced from new suppliers, after their quality is validated and due diligence is done. This requires careful planning, aligned with circularity KPIs, production plan and demand.
Manufacture
Remanufacturing encourages the design of products that can be easily disassembled and reused instead of being discarded quickly. This approach creates a more sustainable and efficient manufacturing system that reduces the environmental impact of production and conserves resources. Manufacturing plants can play a key role in resource recovery by harvesting parts for reuse in the normal production process, similar to remanufacturing. This shift could lead to manufacturing plants evolving into facilities that not only produce but also dismantle, refurbish, and remanufacture, further supporting sustainability and resource efficiency.
Distribute
After Products are disassembled or refurbished, they need to be properly inventoried, stored and transported to their point of use. The point of use can either be an internal site for further processing or a customer purchasing the good to include it in their supply chain.
Operate
An asset maintenance strategy should optimize the asset lifecycle and support effective triage decisions. Modern technologies, such as digital twins, enable real-time monitoring of assets, help improve performance and provide timely maintenance. By analyzing data from the asset’s operational use, more informed decisions can be made regarding the optimal timing and process for repairing, refurbishing, or recycling certain components.
Did you know that...
Join the circular movement and make a difference today!
87%
of consumers will have a more positive image of a company that supports social or environmental issues.
< 8 million
new jobs could be created in the circular economy, where all forms of waste, such as clothes, scrap metal and obsolete electronics are reused, recycled and refurbished.
45%
circular manufacturing could slash the global greenhouse gas emissions from industry, agriculture, and land use.
Examples from the industry
Circular manufacturing is a well-established concept. These companies have already started their journey and are achieving great results.
Maximizing product value for the customer through remanufacturing
Giving new life to returned parts and contributing to more sustainable solutions.
Circular economy is the best answer to sustainability challenge
Prioritizing circularity can help to future proof your businesses
start your Circularity journey Now!
Elevate your path towards circularity
with our three-step approach.
Watch the video to learn more.
