IBM migrates Neste’s ERP in a transition to sustainable fuel

In 2015, Neste made the conscious decision to shift to a sustainable fuel business, which is where Marko Mäki-Ullakko teamed up with IBM to deliver new ERP

Impressive figures come from the Neste product line. In 2015, the company pushed its business in a new direction, delivering sustainable fuel products to both land-based vehicles, aviation, and general energy applications.

The company is widely known for its sustainable aviation fuel (SAF), which is capable of reducing flight greenhouse gas (GHG) emissions by up to 80% of figures shown by conventional fossil fuels. The fuels developed by Neste are not only chemical sustainable, emitting less carbon into the atmosphere, but the fact it's materials are also sustainably sourced makes it much more impactful in its efforts to deliver lower-emission fuels. 

At the onset of the transition, the focus was firmly placed on the product and the operational transformation came as a result of this as weaknesses in enterprise resource planning (ERP) reared their heads. 

Marko Mäki-Ullakko, Head of Integrated ERP at Neste, has been heavily involved in delivering ongoing updates to the company’s ERP systems and processes, namely the deliverance of the SAP S/4HANA® solution. This cloud solution was chosen as a suitable cloud-based software for fast-growing businesses. 

“On a process and data level, the supply chain for renewable products is quite different from that of the traditional oil business,” says Mäki-Ullakko. “It was in many ways a new kind of business, and we needed a new foundation to build it on.”

Mäki-Ullakko explains that the different fuel types altered more than the quantity of carbon emissions, but was a major transition point for its supply chain, which saw an operational shift that resulted in a new structure to the company’s data. The conventional means of supplying fuel no longer apply as the company relies on smaller deposits of materials like used cooking oil to make its products. 

“With renewables, imagine individual tank trucks picking up small loads of used cooking oil at a restaurant and then moving to the next stop. It’s a completely different footprint, and it generates entirely different data flows,” says Mäki-Ullakko.

As a result, the team at Neste discovered the inherent demand for auditable records from its supply chain to support its clients with their emissions reduction strategies. This effort comes as companies require supply chain transparency in order to fulfil their goals. 

Bringing IBM on board for ERP transformation

The importance of the relationship between Neste and IBM is, like any other partnership, alignment of views towards sustainability.

Towards the end of 2017, Nestle was developing its sustainable fuel supply chain and the need for transparency wasn’t truly realised until the company began working with IBM Consulting, which assisted in its delivery of end-to-end visibility. 

“IBM fully understood and shared our vision for growing the renewable side of the business, and what it meant for our implementation roadmap,” says Juuso Pusa, Vice President Supply Chain Management of Renewable Products at Neste. “The fact that we were able to scale up and adapt the project on the fly attests to the closeness of relationship and the depth of resources and industry experience IBM was able to bring to the project.” 

Over the years, the company—Neste and IBM—adopted a joint, experimental approach to developing the sustainable fuel firm’s visibility through sourcing and, as a result, Neste successfully adopted SAP S/4HANA on Microsoft Azure cloud across the majority of its supply chain operations. The team was also supported by Nordcloud, a cloud services training business for Amazon Web Services (AWS), Google Cloud and other software, to migrate the team to new systems.

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