How to Build a Sustainable Supply Chain with SAP IBP

How to Build a Sustainable Supply Chain with SAP IBP – 5 Strategic Steps

In recent years, as digital transformation has accelerated, companies have placed a strong emphasis on automating their supply chains, reducing costs, and responding more quickly to customer demand.

Yet one critical element is often missing: sustainability.

While the use of sustainable technologies in supply chain operations can unlock major gains in efficiency, aspects such as carbon emissions, carbon footprint reduction, waste management, and the principles of a circular economy are still too often treated as secondary concerns.

This is where SAP Integrated Business Planning (SAP IBP) comes in.

More than just a tool for improving demand forecasting or balancing inventory levels, SAP IBP is a holistic planning platform that weaves sustainability and climate targets directly into core business processes.

In this blog, you’ll find out why sustainability has become critical for the future of building supply chains, along with the strategic features that SAP IBP brings to the table and real-world examples of its application.

You’ll also discover how the combined expertise of Nagarro + MBIS supports companies on this transformation journey.

Why Sustainability Has Become a Business Imperative

The rules of doing business on a global scale are changing rapidly.

Today, sustainability is no longer just a concept mentioned in corporate social responsibility reports; it is a factor that directly determines competitive strength, cost structure, and even a company’s access to the market.

Many organizations encounter several fundamental problems when implementing sustainability initiatives or trying to contribute to sustainability through their operations.

The most common is the difficulty in balancing sustainability goals with short-term profitability expectations. 

Investors and stakeholders generally expect quick results, but efforts to reduce environmental and social impacts create value in the long term. This can lead organizations to postpone sustainability investments or limit themselves to superficial solutions.

Another typical problem is a lack of resources and expertise. Many organizations have limited access to the necessary human resources, budget, or technology. 

In addition, the failure to transform the internal culture, low employee participation in the process, and inadequate measurement tools are among the reasons that negatively affect sustainability performance.

Despite all this, ESG goals, regulations, the need to transition to a circular economy model, and stakeholder expectations require companies to accelerate their sustainability initiatives. Let’s take a closer look at these requirements.

The Role of ESG Goals and Regulations

The stance of investors and regulators is clear: companies with weak sustainability performance face major obstacles in accessing financing and even exporting. 

For instance, the EU Carbon Border Adjustment Mechanism (CBAM) imposes extra costs on businesses with high carbon emissions.

For companies that fail to prioritize carbon footprint reduction, this translates directly into pressure on profitability.

Transitioning to a Circular Economy Model

The traditional “take-make-waste” cycle has become unsustainable in today’s world. 

A circular economy approach encourages keeping materials in use for as long as possible through recycling and remanufacturing. 

For supply chains, this shift introduces entirely new planning dynamics that demand smarter, more flexible systems.

Customer and Stakeholder Expectations

Consumers today look beyond price tags — they care about the story behind the product. What raw materials were used? Under what conditions were they sourced?

What is the carbon footprint? Brands that cannot provide convincing answers to these questions quickly lose trust and credibility in the eyes of both customers and stakeholders.

What Is SAP Integrated Business Planning (IBP)?

To build a truly sustainable supply chain, companies need more than good intentions — they need the right digital backbone. That’s where SAP Integrated Business Planning (SAP IBP) steps in.

Running on SAP HANA, SAP IBP is a cloud-based platform that unifies demand, supply, sales, and operations planning. By linking these processes with real-time monitoring, it helps businesses optimize resources, balance inventory, and make faster, smarter decisions across the entire value chain.

Core Modules of SAP IBP

To make a sustainable supply chain a reality, SAP Integrated Business Planning comes with a set of powerful modules, each designed to tackle a different challenge:

• Demand Planning – Improves AI-powered demand forecasting to cut down on overproduction and waste.
  
• Supply Planning – Ensures efficient resource allocation, getting the right product to the right place at the right time.
  
• Sales & Operations Planning (SAP S&OP) – Aligns financial goals with operational plans for a unified strategy.
  
• Inventory Optimization – Reduces excess stock and prevents spoilage, supporting both cost efficiency and sustainability.
  
• Response & Supply – Adds agility by enabling quick responses to sudden changes in demand or supply.

• What-If Simulations – Lets companies test scenarios in advance to understand both financial and environmental impacts before making decisions.

Together, these modules provide the foundation for smarter planning, carbon footprint reduction, and long-term supply chain optimization.

SAP IBP’s Approach to the Supply Chain

What sets SAP IBP apart is not just its ability to drive operational efficiency, but also its capacity to align business plans with environmental and social goals.

Take, for example, a company considering a new production line. With SAP IBP, the decision-making process goes beyond cost and capacity calculations.

The platform also allows businesses to evaluate the potential impact on carbon emissions, ensuring that every choice supports both profitability and sustainability.

This approach takes traditional supply chain optimization a step further. With Integrated Business Planning for Supply Chain, companies can manage both financial sustainability and environmental sustainability side by side — treating them not as separate goals, but as interconnected drivers of long-term success.

Sustainability-Driven Capabilities of SAP IBP

Companies need concrete tools, data-driven insights, and an infrastructure that enables fast, decisive action to make a supply chain sustainable. SAP IBP delivers exactly that, with a set of powerful capabilities designed to embed sustainability into everyday planning and execution.

Managing Risk with Scenario Planning

The pandemic made it clear just how fragile global supply chains can be. With scenario planning in SAP IBP, companies can simulate potential crises before they happen.

Imagine, for instance, a sudden introduction of a carbon tax aimed at driving carbon footprint reduction. SAP IBP allows you to model how such a regulation would affect both costs and emissions, depending on which suppliers you choose to work with.

This way, you manage risks not only from a financial perspective but also through an environmental lens — aligning decisions with long-term sustainability goals.

AI-Powered Demand Forecasting

Excess production and unsold inventory are costly — not only in financial terms but also for the environment. 

With its AI-powered demand forecasting engine, SAP IBP analyzes a wide range of signals such as weather patterns, social trends, and historical sales data to generate far more accurate demand predictions.

A real-world example comes from Germany-based dairy giant DMK Group, which significantly reduced waste levels by leveraging this capability. It’s a clear demonstration of how inventory optimization and smarter planning can drive both cost efficiency and sustainability.

Reducing Waste with Inventory Optimization

Products sitting too long in storage risk either spoiling or becoming obsolete — an often overlooked burden when it comes to sustainability. With its Inventory Optimization module, SAP IBP keeps stock levels in balance, helping companies cut down on waste while also freeing up working capital.

Supply Chain Visibility and Real-Time Response

One of the biggest challenges in supply chain management is detecting problems too late. 

With the end-to-end visibility provided by SAP IBP, issues such as shipment delays or production disruptions can be spotted instantly.

This level of transparency not only protects customer satisfaction but also helps prevent unnecessary transport and re-production — both major contributors to carbon emissions.

In other words, real-time monitoring becomes a key enabler of both resilience and sustainability.

Simulating Impacts with What-If Analysis

Questions like “What if demand increases by 20%?” or “What if energy prices double?” span far beyond the CFO’s office — they’re now central to sustainability leaders as well.

With SAP IBP’s what-if analysis, companies can model the financial and environmental impact of different decisions before taking action. This makes it possible to select the scenario with the lowest carbon footprint, striking the right balance between profitability and sustainability.

Real-World Success Stories with SAP IBP

Theoretical benefits always sound convincing, but the real measure of a solution’s value comes from how it performs in practice. Across industries and regions, SAP IBP has done more than just speed up planning cycles. It has helped companies cut waste, optimize energy consumption, boost energy efficiency, and embed sustainability goals directly into business planning.

The following examples highlight how SAP IBP turns the vision of a sustainable supply chain into measurable results.

DMK Group | Cutting Waste with Demand SAP & S & OP Transformation

As one of Germany’s largest dairy cooperatives, DMK Group struggled with fragmented data structures that hindered both demand planning and progress toward its sustainability goals.

After implementing SAP & S & OP to establish a single platform with transparent data flows, the company reported a 10% reduction in waste and a 6% improvement in forecast accuracy.

This new level of transparency not only reduced raw material waste in milk management but also ensured that production decisions were directly aligned with the company’s broader sustainability targets.

Hyundai Mobis | Global Service Levels Through Inventory Optimization

With SAP IBP for Inventory, Hyundai Mobis brought data-driven control to inventory targets across 1.8 million service parts. 

By adopting a simulation-based approach, the company identified an annual savings potential of around $22 million on 300,000 high-turnover parts, along with monthly maintenance cost reductions of about $616,000 on 100,000 additional parts.

The results went beyond cost savings: immediate order fulfillment rates improved by 4%, intercompany transfers decreased by 10.2%, and the cycle for calculating target inventory became more than four times faster.

SLB (Schlumberger) | Cutting DIO and Saving $1 Billion in Inventory with IBP

Energy company SLB consolidated fragmented planning cycles into a single framework with SAP IBP, while strengthening its scenario planning capabilities.

The results were transformative: over $1 billion in inventory savings within four years, a 37% reduction in Days Inventory Outstanding (DIO) over three years, demand forecast accuracy reaching nearly 90% in certain business units, and planning activities that once took weeks now completed in just days — or even hours.

Nagarro + MBIS Expertise in SAP IBP Implementation

The true value of a technology solution lies in how it is implemented. Rolling out a comprehensive platform like SAP IBP requires an approach that balances local business dynamics with global best practices.

25 Years of SAP Experience

With more than 25 years of hands-on experience in SAP projects, MBIS holds the distinction of being Turkey’s first SAP Gold Partner. This recognition reflects not only technical expertise but also the trust and quality standards built through long-term partnerships.

Local Insight, Global Consulting Power

Since joining Nagarro’s global network in 2023, MBIS has combined deep knowledge of the Turkish market with expertise drawn from diverse industries worldwide.

In SAP IBP projects, the focus goes far beyond system setup. Advanced methods such as AI-powered forecasting, integrating ESG-aligned data into reporting, and running what-if simulations for sustainability analytics allow businesses to strengthen planning with insights that are both local and global.

Frequently Asked Questions About SAP IBP and Sustainability

Today, companies are expected to focus not only on financial performance but also on achieving their sustainability goals. Supply chains play a central role in this effort, as energy efficiency, carbon emission reduction, and optimized resource use are directly tied to how they are managed.

So how does SAP Integrated Business Planning (SAP IBP) make a real difference in advancing sustainability?

How does SAP IBP contribute to sustainability goals?

SAP IBP enhances visibility across the supply chain, enabling businesses to make more accurate and balanced decisions. For example, it prevents overproduction to reduce energy waste and optimizes logistics routes to cut carbon emissions. In doing so, companies not only keep operational costs under control but also embed their sustainability strategies directly into day-to-day operations.

Which sustainability metrics can SAP IBP track?

A sustainability strategy only delivers real impact when measurable metrics backs it. SAP IBP helps companies monitor key indicators such as carbon footprint reduction, energy consumption, recycling rates, supplier compliance, and waste generated from inventory management. Armed with this data, businesses can strengthen their sustainability reporting with hard evidence — turning commitments into verifiable results.

How does SAP IBP integrate with ESG strategies?

SAP IBP incorporates data on environmental impact, social responsibility, and corporate governance — the three pillars of ESG — directly into planning processes. This ensures that business decisions are not driven by financial factors alone, but also evaluated against sustainability criteria that matter to regulators, investors, and stakeholders alike.

Can SAP IBP be applied to sustainability across all industries?

Whether in food, pharmaceuticals, energy, automotive, or retail, SAP IBP can be tailored to the unique dynamics of each sector. In food, for instance, it helps minimize waste, while in logistics it supports lower-emission transportation models. In this way, companies across industries can turn sustainability from a vision into a practical, measurable business model.

How does implementing SAP IBP support sustainability reporting?

Sustainability reporting has become one of the most important tools for corporate transparency and accountability. By linking operational data with sustainability targets, SAP IBP makes it easier to produce reliable, consistent reports. This not only ensures compliance with regulations but also builds a trustworthy sustainability narrative for investors and customers alike.

Take the First Step Toward Sustainability with SAP IBP

SAP IBP transforms planning from a purely operational function into a process directly aligned with your sustainability goals.

From AI-powered demand forecasting and inventory optimization to scenario simulations, real-time monitoring, and end-to-end visibility, every capability is designed to deliver both greater efficiency and stronger environmental responsibility.

Whether you’re just starting on this journey or looking to take your existing processes to the next level, Nagarro + MBIS is here to help. Begin your sustainability transformation today by integrating the power of SAP IBP into your operations.