Working together in a co-innovation project, SAP customer Etienne Lacroix Group, SAP partner STMS, and SAP Co-Innovation Lab created a prototype for a generative AI solution that produces shipping labels for dangerous goods.

As the world’s No.1 fireworks provider, French pyrotechnics company Etienne Lacroix ships fireworks globally and has supported events such as the Burj Khalifa Grand Opening Fireworks Show in Dubai and Bastille Day, France’s national holiday that is celebrated on July 14 each year.

Logistics play a major role for the global player in the pyrotechnics sector, as shipping hazardous materials such as fireworks requires special precautions, especially when crossing international borders. Labels typically include warning pictograms and complex regulatory information in various formats. Recipients such as customs officers must be able to tell at a glance what sort of goods are inside, what the required shipping conditions are, and who is authorized to open the freight.

“On top of that, customers have their own specific requirements,” Eric Marini, director of Information Systems at Etienne Lacroix explains. “Also, there are different color codes in place for hazmat, depending on the country of destination. Red may mean danger in European countries, but in China, for example, it stands for celebration. Green has a different meaning in the Middle East that it does in the U.S., and so on.”

With so many different regulations in place around the globe, labeling the shipments at the end of the production line is not only time-consuming, but also leaves a lot of potential for human error. Now, with support from SAP partner STMS and SAP, the prototype for a generative AI solution was introduced that has the potential to reduce human involvement to a minimum.

Business AI Co-Innovation Project with SAP partner STMS

In early 2024, Sébastien Faure, general manager at STMS SOLUTIONS, a longtime partner of both SAP and Etienne Lacroix, participated in a Hack2Build event where SAP partners leveraged SAP technology to address pain points of their customers. The idea for a generative AI use case came up, and STMS approached its customer Etienne Lacroix.

At that time, IT and business experts at Etienne Lacroix were very interested in how generative AI could assist them in making their processes easier. 

“But I have to admit, I was also a little skeptical,” Marini says. “Everybody is currently talking about AI, about how to introduce it to the industry and the huge benefits we will reap from leveraging it. But suggestions are scarce when it comes to implementing it in a way that guarantees the company will benefit from it.”

“Together, we looked at the pain points of the company and discussed possible use cases with SAP Co-Innovation Lab,” Faure says. “We received the requirement from the business that AI should help avoid human tasks that are error-prone and don’t actually add value.”

Supply Chain Use Case with Generative AI

The team quickly identified that the administrative process of creating labels for shipping was a task currently performed by human employees that required a huge amount of time and focus. The huge potential for the usage of generative AI was evident. 

“With guidance from experts from the SAP partner organization, we were able to build a specific SAP app on SAP Business Technology Platform (SAP BTP) and SAP S/4HANA to organize and use AI,” Faure says. “We then collected feedback from the business experts at Etienne Lacroix and, in the next step, brought in the generative aspect.”

To meet the regulations from the customer, the developers from STMS aggregated all the necessary data and created a model on SAP HANA Cloud vector engine.

Thanks to SAP HANA Cloud vector engine, which was newly introduced in 2024, SAP Business AI can allow customers and partners to leverage large language models (LLMs) in a much more accurate way on multi-model database SAP HANA Cloud. In case of the generative AI use case for Etienne Lacroix, the LLM was ChatGPT 3.5 Turbo.

“Technically, this prototype leverages everything SAP has to offer in terms of AI right now,” Faure says. “The app uses SAP’s generative AI hub and SAP HANA Cloud vector engine to draw on all the necessary information and generate the label.”

The remaining human task is to validate whether everything on the label is correct. “That was the most important requirement,” Marini says. “Human intervention must be guaranteed, as with all AI use cases.”

“It’s the generative aspect that makes all the difference,” Miliau Pape from SAP Co-Innovation Lab says. The LLM suggests what should go on the specific label—such as warning pictograms—based on legal regulations, historical customer requirements, cultural standards, and so on. The Retrieval-Augmented Generation (RAG) provides the LLM with context and makes the outcome relevant and reliable. “Simply put, when the AI is trying to be as creative as possible, the RAG provides guardrails, so it doesn’t potentially go wild and come up with nonsense,” Pape says.

For each shipment, a prompt draws on destination, shipping route, specific customer data, such as the storage and language this customer required the last time, or the colors or signs used to indicate that the shipment contains hazardous materials and can only be opened by experts with a certain certification.

“My first thought when I saw this, was—simply put—wow,” Marini says. “Wow, they actually did it. Wow, this will make our lives easier. This generative AI use case, at this point, may still be only a prototype, but it’s an applicable idea, an actual use case for an actual pain point in our company.”

“To show the world of possible, push the boundaries of the technology—that is the purpose of the exercise,” Pape says.

Etienne Lacroix Group is in the process of migrating to SAP S/4HANA. With the components of the app ready on SAP Business Technology Platform, go-live is planned for 2025.

“Our ERP was aging and no longer very popular with business users,” Marini says. “Migration to SAP S/4HANA gives us access to the newest technologies such as generative AI. This motivates users to take ownership of their IT solutions again and brings our business and IT together. All in all, it allows our company to fully exploit the potential of our SAP system.”

He adds: “The generative AI solution for labeling shipments is a tangible proof of the power of AI, a real use case, and we have it in our company. It is a very decisive first step in our AI journey.”

WALLDORF — SAP SE (NYSE: SAP) today announced the general availability of the SAP Green Ledger solution, the most comprehensive carbon accounting system globally that integrates directly with customers’ financial data.

Part of SAP Sustainability solutions, SAP Green Ledger allocates carbon emissions to specific economic activities and transactions captured by ERP solutions from SAP. This innovation empowers organizations to accurately account for, analyze and report carbon footprints across products, services, and organizational units.

Addressing the growing consensus that decarbonization is required to combat climate change, SAP Green Ledger helps companies:

• Track and account for carbon footprints in relation to their financial impact
• Lower emissions alongside financial optimization and thus facilitate carbon budgeting
• Establish carbon planning for carbon neutrality and net zero targets
• Benchmark departments, business units and profit centers from both a financial and environmental perspective
• Prepare for sustainability audits
• Improve supplier-based processes to decrease carbon emissions in the supply chain (2025)

SAP Green Ledger builds on existing financial and ERP solutions from SAP that are established in thousands of companies worldwide. By extending these solutions to integrate emissions data, businesses can make more informed, sustainable decisions that link environmental impact with financial performance, enhancing compliance, efficiency and transparency.

“Enormous investments are required to abate CO₂ in order to curb global warming. Besides smart, reliable regulation also accurate data on emissions along the supply chain is paramount to trigger the necessary investment,” said Dominik Asam, CFO and member of the Executive Board of SAP SE. “Only by moving from averages to actuals – audited at reasonable assurance – can freeriding and greenwashing be avoided, thereby protecting such valuable investment and our planet. SAP Green Ledger delivers precisely that.”

Today, SAP Green Ledger provides a first step for businesses to address regulatory requirements by integrating financial and environmental data. It helps companies navigate the complex global landscape of sustainability regulations, such as EU CSRD*, while establishing a scalable foundation over time, to adapt to evolving regulations such as EU ETS** and EU CBAM†, as well as to international standards such as ISSB††. The launch of the solution marks the beginning of a new era in carbon accounting systems, which are expected to significantly impact businesses worldwide as decarbonization becomes a legal and market imperative.

SAP Green Ledger was developed with support from companies such as Accenture, Deloitte, EY and TCS (Tata Consulting Services) as well as with pilot customers such as Covestro. Covestro is currently evaluating SAP Green Ledger in an early pilot phase and testing the linking of carbon dioxide values to SAP Green Ledger, as they are generated during the manufacture of specific products in the supply chain.

Accenture is helping organizations achieve their net-zero and sustainability targets in a rapidly evolving regulatory landscape.  “As organizations seek to gain visibility into both the financial and environmental performance of their businesses, SAP Green Ledger can provide the sustainability metrics and insights needed to enhance decision-making that reduces emissions, drives efficiencies and optimizes performance,” said Stephanie Jamison, global resources industry practice chair and global sustainability services lead at Accenture. “As a strategic co-innovation partner, Accenture helped shape the development of SAP Green Ledger and can apply our understanding of the technology and its capabilities to help our clients get the most for their organization.”

Through its Strategic Advisory Group for Green Ledger, SAP was able to gain insights from Deloitte’s breadth and depth of knowledge in sustainability measurement and reporting. “SAP Green Ledger offers new levels of precision in carbon accounting for organizations as they track, manage and report their greenhouse gas emissions, and provides leaders with a holistic view of the costs and benefits of sustainability initiatives, enabling them to make data-driven decisions that can build business resilience,” said Jennifer Steinmann, Deloitte Global Sustainability Business leader.

Deloitte is working with companies as they adopt sustainability disclosure standards and get ready for assurance. “Technology solutions can help generate traceable, bottom-up emissions data,” said Veronica Poole, Deloitte Global IFRS and Corporate Reporting leader. “Leveraging the robust governance and controls of enterprise systems is needed to help organizations achieve the rigor that enhances corporate accountability and enables a move to reasonable assurance.”

SAP partner TCS has also cooperated on SAP Green Ledger, with a focus on accelerating action to achieve carbon neutrality. TCS Enterprise Solutions Global Head Vikram Karakoti said, “With our participation in the pilot program for SAP Green Ledger, TCS is embracing innovative sustainability solutions to build a better future. This will enable organizations to move beyond regulatory compliance and make sustainability a growth engine. By embedding carbon data into the enterprise planning process, organizations can unlock previously unexplored areas for growth, transformation and environmental renewal.”

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*The EU’s CSRD (Corporate Sustainability Reporting Directive) defines the rules concerning the social and environmental information that companies have to report. It entered into force on 5 January 2023.
**The EU ETS (EU Emissions Trading System) is a “cap and trade” system to reduce emissions via a carbon market. Since 2005, it requires polluters to pay for their greenhouse gas (GHG) emissions, covering emissions from the electricity and heat generation, industrial manufacturing and aviation sectors – which account for roughly 40% of total GHG emissions in the EU.
†The EU CBAM (Carbon Border Adjustment Mechanism) is the EU’s tool to put a fair price on the carbon emitted during the production of carbon-intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries. CBAM will apply in its definitive regime from 2026.
††The ISSB (International Sustainability Standards Board) is developing – in the public interest – standards that will result in a high-quality, comprehensive global baseline of sustainability disclosures focused on the needs of investors and the financial markets.

For more information, financial community only:
Alexandra Steiger, +49 6227-7-60437, investor@sap.com, CEST

For more information, press only:
Joellen Perry, +1 (650) 445-6780, joellen.perry@sap.com, PT
Daniel Reinhardt, +49 6227-7-40201, daniel.reinhardt@sap.com, CEST
SAP Press Room; press@sap.com

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