This blog post series is part of a set of technical enablement sessions on SAP BTP for Industries.
Check the full calendar here to watch the recordings of past sessions and register for the upcoming ones!

Authors: Amine Mabrouk, Alice Magnani, Trinidad Martinez

Welcome to the first blog post of the series Deliver real-life use cases with SAP BTP – Returnable Packaging. In this blog post series we present a simple but powerful example on how the SAP Business Technology Platform , in short BTP, can enable a circular economy business models for plastic packaging.

In this first blog, we introduce the challenge of plastic waste, explaining the need for circular business models in the field of consumer product packaging. Then, we propose an example of a circular business model, that we prototyped using BTP. Lastly, we discuss the architecture of our prototype, the several services that we chose in BTP for implementing our prototype, and the arguments that motivate our choice.
In the next blog posts, we will move from theory & design to practice & runtime, so that we can show you how each of the components have been implemented in detail.
The full series will give you a hands-on experience of the drafted prototype. You will learn not only how to design but also how to implement the prototype.

By the end of this blog post series, you will have a better understanding of the challenges of plastic waste, and how to craft solutions on top of the SAP Business Technology Platform to help customers in their industry out there.

We hope to get you inspired!

Let’s get started!

The challenge of plastic waste

Let’s take a moment to think about all the plastic items that we use in our daily life: where do they end up when we don’t need them anymore? We might think that most of those are recycled, but unfortunately, this is not the case. According to the report Plastics and the Circular Economy deep Dive by the Ellen Mc Arthur Foundation, on average only 14% of the plastics is collected for recycling. Also recycling is an inefficient process, at the end only a tiny percentage of plastics, 2%, gets recycled. 98% of the plastics that we produce annually comes from virgin feedstock, so we are continuously producing plastics that are immediately trashed. 40% of it is landfilled, 14% incinerated, and an enormous amount, 32%, is leaked into the environment, with unacceptable consequences for the planet and human health.

Most of the plastics that are produced and trashed come from packaging, and if we think for example about the way consumers use goods packaging, the business model is mostly linear: we buy a product at the supermarket, for instance a bottle of detergent, we use it, and we trash it after its first usage, in the best case, sorting it for recycling.

The rate of pollution this business model is generating is not sustainable for our environment, and we need to find alternatives. Recycling more and better is not going to solve the problem, because, as already said, recycling is inefficient, and it also downgrades the quality of plastics. Replacing plastics with other materials, such as paper, metal, or glass, is not a way out either, as it would result into unintended consequences, such as an increase of GHG emissions and food waste.

The entire plastic industry must be redesigned as a whole, to ensure the plastics we produce stay in the economy for a long time. We must adopt a Reduce – Reuse – Recycle scheme, avoiding the use of plastic in the first place, and when this is not possible, plastics must be designed to be reused multiple times and recycled only at the end of its lifecycle.

Multiple circular business models for plastics packaging are being proposed, and in general they fall under 4 different groups, depending on whether consumers can refill the plastic packaging themselves or if they need to return it to the manufacturer, and if they can access this refill/return service from home or elsewhere.

An interesting survey exposing various solutions can be found in Reuse. Rethink packaging, by Ellen McArthur Foundation. It is important to notice that each business model has its pros and cons, and it is not easy to find one that scales and brings profit for all the parties involved: manufacturers, consumers, retailers, and specialized packaging companies. However, there is a real need for exploring viable solutions, which will be more and more encouraged by legislations in the years to come. The United Nations, for instance, pledged to deliver a Global Plastic Waste treaty by the end of 2024, to promote the Reduce-Reuse-Recycle schemes, and local governments are starting to take actions to support virtuous business models. We think that there will be more and more room for SAP partners to develop solutions to enable the transition to a circular economy for plastics.

In the rest of this blog post, we focus on an example of Return on the go business model for plastic packaging. This is not to be taken as a best practice, but instead, as a showcase on how you, as a partner, can use SAP BTP to enable such kind of scenarios.

As a consumer, imagine you buy a bottle of detergent in a supermarket. After usage, instead of trashing it, you can bring it back to the supermarket, where a smart returnable packaging station is installed. You drop your bottle at the station, the machine takes a picture and detects exactly which kind of bottle you have returned. You are then refunded for the price of the bottle with a corresponding amount of supermarket loyalty points. A dedicated packaging company takes care of collecting the returned bottle at the supermarket station, washing and reselling them to the detergent manufacturers, who refills them and ships them back to the supermarket.

In this scenario, everyone has benefits and contributes to the sustainability of the business model. Consumers are refunded for the cost of the packaging, and they enjoy using a nicer packaging, since the bottles are designed to last in the long run. Retailers improve customer loyalty through the refund scheme. Packaging companies reduce the need for raw materials and their environmental impact, by reusing bottles instead of producing new ones. Manufacturers on their side can improve brand loyalty through this sustainable initiative and reduce their packaging expenses.

Let’s see how we prototyped this scenario in SAP BTP.

The proposed prototype

We aim to support the Packaging company in efficiently managing the return of empty bottles from consumers and redistributing them to detergent manufacturers.

The challenges to address are as follows:

1. Track and manage the flow of returnables.
2. Validate returned empty bottles.
3. Encourage end consumers to return bottles and raise awareness.

1 – To tackle the first challenge of tracking and managing the flow of returnables, we suggest utilizing SAP Returnable Packaging Management (SAP RPM). This SAP Industry Cloud solution enables the tracking of returnable packaging materials throughout the supply chain, providing information on quantity, location, and condition.

2- For validating returned empty bottles, we propose extending SAP RPM with AI capabilities. This would allow the detection of bottle types and sizes, enabling the granting of corresponding reward points to consumers.

3- To encourage end consumers to return bottles and raise awareness, we suggest developing a custom application that allows consumers to track their returnables, monitor their CO2 savings, and earn loyalty points. This application would complement SAP RPM, which primarily serves the packaging company.

Solution Demo

We have implemented a prototype based on this proposed solution. You can watch a demo video of the prototyped solution here.

The proposed solution architecture

Let’s see the proposed solution architecture that we implemented to cover the discussed business scenario:

As showed in the proposed solution flow and demo, consumers return bottles to the Smart Returnable Packaging Station. Each time a new bottle is returned, the Smart Returnable Packaging Station calls an API offered by our AI-powered Returnable Packaging prototype running in SAP Business Technology Platform. The bottle picture as well as some other details, like for example the returnable packaging station machineId and the consumer userId, are sent as parameters.

To implement the backend, we have leveraged the Serverless module available in the SAP BTP Kyma runtime, to reduce the implementation and operation effort of our prototype. We have implemented a lightweight serverless function using Node.js (Python is also a possible option), by simply developing our function code snippets without having to build and maintain their container image or their infrastructure.

Every time the Kyma serverless function receives a picture:

• it calls an API exposed by our SAP AI Core model, that analyzes the picture and determines the packaging type of the returned bottle.
  The Destination service facilitates the connection between our Serverless Function and the AI Core deployed model.
• our application stores some data like for example the customer’s return’s history.
  For storing this data we use SAP HANA Cloud.
• for each returned bottle, we create the corresponding return document in SAP Returnable Packaging Management Industry Cloud Solution we are extending, that creates the corresponding document in the associated SAP S/4 HANA Cloud backend.

Identity Authentication Service allows our application to provide a central Identity Provider and SSO capabilities.

Another feature our prototype provides is the possibility for the Consumer to check his loyalty points and sustainability goals through a Web Browser or a mobile application. We have chosen to implement the user interface with SAP Build Apps that is a low-code/no-code tool, and to embed SAP Analytics Cloud graphics into the user interface.

Exploring other possibilities

Other runtimes, tools and services could as well have been chosen to develop our prototype. Let’s explore now some other architectural options and the motivation behind our decision to choose the selected components and technologies.

Option 1 – Kyma: As explained in the Proposed Solution Architecture previously, for our prototype we have leveraged the Kyma Serverless module to be able to prototype our solution fast and with reduced operations effort. But sometimes you need to be able to customize your infrastructure in a lower level than the Serverless Functions allow. In those cases, you can then leverage the full Kubernetes cluster set of features that that Kyma provides, to speed up cloud application development and operation while providing more flexibility than the Serverless module allows.

Compared to pure Kubernetes deployments, with Kyma you save time to pick the right tools and the effort to keep them secure and up to date while offering the flexibility to use the modules you need from Kyma and complement them with other Kubernetes tools.

Obviously, teams that already have experience with Kubernetes, containerization, and microservices find a perfect home with SAP BTP, Kyma runtime. Also, existing applications running at other vendors Kubernetes environments can be easily migrated into SAP BTP as long as they have no hard dependencies to the previously used infrastructure.

Option 2 – Cloud Foundry runtime: Cloud Foundry is another runtime that could have been leveraged to implement our prototype backend, instead of Kyma.

With the BTP Cloud Foundry runtime you can build full smart solutions focusing on the application code
and freeing developers from lower-level concerns like configuring the infrastructure, standing up the instances, managing scaling, … required in the Kyma runtime, while offering more flexibility than the Kyma serverless function.

Option 3 – ABAP Runtime: ABAP runtime is also an option for our application to be developed on SAP ABAP language and offers the possibility to leverage the ABAP Restfull Application Programming Model. It can be a good choice if your team already has ABAP knowledge.

Option 4 – SAP Fiori/SAPUI5: As explained before for developing our end user interface we have leveraged SAP Build Apps, allowing us to design our application visually (simply with drag and drop) without writing code. SAP Fiori and SAP UI5 are also good options for pro-developers that want to create their user interface reusing existing SAP UI5 libraries and Fiori Elements.

We can of course still embed SAP Analytics Cloud graphics inside our SAP Fiori/SAPUI5 application as we did with SAP Build Apps.

The choice of the user interface technology is often done based on developers’ knowledge and preferences.

Implementation

Now that we’ve got a clear understanding of the architecture and components that compose our prototyped solution and we saw the prototyped solution we would like to deep dive on the three main components to learn how we did configure, implement and deploy them in the SAP Business Technology platform.

• SAP AI Core – how to build and deploy our AI Model in SAP AI Core.
• SAP Kyma – how to build our Serverless Function in Kyma, consuming the AI Core model as well as other BTP Services to implement our AI-returnable packaging backend business logic.
• SAP Build Apps – to build the user interface allowing the customer to check his/her loyalty points and sustainability goals.

The details about each one of the components is explained in the separated blog link:

Part 1: Deliver real-life use cases with SAP BTP – Returnable Packaging – this blog
Part 2: Deliver real-life use cases with SAP BTP – Returnable Packaging – SAP AI Core – coming soon
Part 3: Deliver real-life use cases with SAP BTP – Returnable Packaging – SAP Kyma
Part 4: Deliver real-life use cases with SAP BTP – Returnable Packaging – SAP Build Apps – coming soon

Useful References

Here below you can find some links to additional resources around the Plastics waste management topic.

• Circularity Report, 2022, PlasticsEurope.org
• PLASTICS: THE COSTS TO SOCIETY, THE ENVIRONMENT AND THE ECONOMY, 2021, WWF – World Wide Fund For Nature
• The Global Commitment – 2022 Progress Report, Ellen MacArthur Foundation
• The future of packaging in the circular economy, 2023, Accenture and SAP

Wrap up

And that’s it for this industry use case! We hope you have enjoyed the reading.

This blog covers a session part of a series. Check the full calendar, register to the upcoming sessions and review the already recorded sessions here. You can also earn official Technology Knowledge badges that can serve as accreditation of the expertise acquired by attending these sessions and passing the associated web assessment. All the details are available in our central blog Deliver real-life use cases with SAP BTP.