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Norwegian: Embedding sustainability in the supply chain

Explore Norwegian’s journey with SAP

Norwegian needed to move away from manual, decentralized procurement processes to gain better control. Using SAP Ariba solutions, it has achieved a 360-degree view of contracts, sourcing, and suppliers. But that’s not all. The new procurement system also better supports the airline’s journey to sustainability leadership and a carbon-neutral future.

100

%

of indirect spend run through SAP Ariba solutions.

1

centralized depository for procurement information across the company.

To control sustainability, you’ve got to control your value chain. SAP Ariba solutions enable a 360-degree view of procurement processes and suppliers, fueling our objective to become best in class on environmental sustainability in Europe.

Knut Olav Høeg
Executive Vice President, IT and Business Services
Norwegian Air Shuttle

The Challenge

Reimagining procurement to support ambitious sustainability targets

In fewer than 30 years, Norwegian Air Shuttle (Norwegian) has grown from a plucky startup challenging larger airlines to the fourth-largest low-cost carrier in Europe.

 

Norwegian aims to become travelers’ preferred airline by combining affordable fares with operational excellence and helpful, friendly service. It also has a genuine commitment to sustainability. In 2015, the company was named the most fuel-efficient airline on transatlantic routes. Two years later, it was one of the first airlines to introduce the new fuel-efficient Boeing 737 MAX. With measures such as data-driven fuel management, in-flight waste management, and sustainable fuel offtake agreements, it wants to reduce its CO2 emissions by 45% by 2030.

 

But true sustainability requires a keen view of procurement and the supply chain, and Norwegian relied on paper and spreadsheets to track assets and supplier contracts. It needed to consolidate procurement and supplier management, run tenders professionally, and gain better control to truly realize its goals and company values.

With SAP Ariba solutions, we can run efficient tenders, manage contracts effectively, monitor supplier performance and risk, and take swift action when needed.

Knut Olav Høeg
Executive Vice President, IT and Business Services
Norwegian Air Shuttle

The Solution

Professionalizing procurement with a portfolio of integrated solutions

Norwegian saw SAP Ariba solutions as the perfect fit for its cloud-first, software-as-a-service approach. The solutions offered the comprehensive coverage and high quality that would allow the company to professionalize all aspects of its procurement processes. And Norwegian knew a connected portfolio of SAP Ariba solutions would cover the company’s evolving needs, from sourcing to procurement to risk management.

 

The airline set out to implement the SAP Ariba Sourcing and SAP Ariba Contracts solutions in an eight-week project. A unified solution for tenders, contracts, and suppliers would enable efficient, consistent supplier management practices across the company. Using standard and prepackaged reports where possible would help the airline streamline processes and reap maximum benefit from software upgrades in the cloud.

 

And with the SAP Ariba Supplier Lifecycle and Performance and SAP Ariba Supplier Risk solutions, Norwegian could build risk due diligence into procurement processes, letting it monitor supplier performance across a range of sustainability and other criteria.

The Result

Holding suppliers and the company accountable with greater visibility

With a comprehensive view of tenders, contracts, and suppliers across the company, Norwegian now has robust control of its supply chain and the systems built into it.

 

Using standardized templates and processes, it can run consistent tenders that deliver on its requirements, support a stable value chain, and qualify and quantify supplier sustainability performance. In a highly regulated industry, it can more easily manage supplier qualification by gathering and monitoring supplier certificates and combining this information with performance data, including from third parties, for a 360-degree perspective.

 

The company can also follow up efficiently on suppliers, helping ensure they comply with the contracts they’ve signed.

 

User feedback has been positive. Centralized procurement information, consistent templates, and tools such as integrated electronic signatures and sourcing libraries help teams work efficiently across diverse parts of the procurement landscape.

At Norwegian, we are serious about sustainability. SAP Ariba solutions are fundamental in our drive to become carbon neutral by 2050.

Vanda Kanaviņa
Procurement Manager
Norwegian Air Shuttle

Future Plans

Evolving procurement continuously as the company grows

Norwegian demonstrated tremendous agility during the COVID-19 pandemic. Having refocused on short-haul passenger travel across Scandinavia and Europe, the company is now entering an exciting new phase.

 

The airline plans to integrate procurement more tightly with ERP systems and enable efficiencies such as source-to-contract and procure-to-pay processes. It wants to further develop supplier risk engagement requests, supplier measurement and categorization, and the use of KPIs.

 

The company is also forging ahead with its pursuit of sustainability leadership. It is working closely with suppliers of sustainable aviation fuel to help develop this market. Fleet renewal and operational efficiency are the other two levers that will help the airline realize its ambitious CO2 emissions reduction program. On the waste management side, Norwegian is targeting a 100% reduction in nonrecyclable plastic use and a 30% reduction in single-use plastic consumption by 2023, aiming to recycle 100% of the single-use plastic consumed. Other measures include finding green sources with which to power data centers.

 

Whatever the future holds for Norwegian, the company is confident SAP Ariba solutions will continue to play a vital role in these pioneering efforts.

SAP helps Norwegian run better

Key business outcomes and benefits

  • Increased control and efficiency of contracts, sourcing, and risk management
  • 360-degree view and robust control of suppliers with integrated systems
  • Enhanced supply chain visibility that supports efforts to reduce carbon emissions by 45% by 2030
  • A better user experience with centralized information and consistent, intuitive templates

Featured solutions and services

  • SAP Ariba Sourcing lets you standardize processes, track sourcing activities, reduce sourcing cycle time, and achieve sustainable savings.
  • SAP Ariba Contracts supports a single integrated view of contract data so you can negotiate savings, capture revenue opportunities, and safeguard compliance.
  • SAP Ariba Supplier Lifecycle and Performance helps you reduce onboarding and qualification cycle time and scale compliance for your supply base.
  • SAP Ariba Supplier Risk enables you to mitigate supply chain and operational disruption while protecting your revenue and reputation.

About Norwegian

Norwegian stands for excellent service and great value. Its route network focuses on connecting a broad range of domestic routes in Norway, across the Nordics, and to key European destinations.

Industry Region Company Size
Passenger travel and leisure Fornebu, Norway >3,500 employees
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