Welcome to this blog post! In today's edition, I want to outline how companies in process industries can accelerate product innovation using SAP Integrated Product Development (SAP IPD), and how our partner Gramont is helping customers bring this vision to life.
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[Image showing pictures of the products mentioned in the text.]
Every product on a supermarket shelf, whether it’s a yoghurt, a pasta sauce, a shampoo, or a house paint, starts life as a recipe. Behind every recipe are hundreds, sometimes thousands, of decisions: about ingredients, specifications, suppliers, compliance requirements, and how the formula translates into production. Yet in most companies today, the management of those recipes is fragmented. Some of it lives in spreadsheets, some in legacy R&D systems, some in ERP, and some only in people's heads.
This is the problem SAP Integrated Product Development (SAP IPD) is designed to solve.
In this blog post, you will learn how process industry companies can:
- Manage all product and packaging specifications in a single, structured digital environment
- Develop and calculate recipes with automatic roll-up of nutrients, allergens, sub-components, and sustainability data
- Collaborate digitally with suppliers on specifications, replacing manual email processes with traceable digital workflows
- Generate compliant ingredient and nutrition labels adapted to local market requirements
- Seamlessly hand over finished recipes to SAP ERP as bills of material, closing the loop between R&D and manufacturing
- Manage changes across specifications, recipes, packaging, and BOMs in a controlled, harmonized way
The Challenge: Fragmented Product Development in Process Industries
When we ask companies how product development is currently managed, the answers tell a familiar story. Some use a dedicated PLM solution. Many are partly integrated with ERP. And a significant number are still managing critical product data across multiple disconnected systems with no single source of truth.
[Image showing the fragmented product development process.]
The consequences are predictable. Data silos make it difficult to manage complexity. Slow handovers between R&D, regulatory, and manufacturing teams delay time to market. Poor visibility into product and specification data leads to errors. And the sheer volume of manual steps consumes time that could be spent on innovation.
In a poll of webinar attendees, the most common challenge was too many manual steps and spreadsheets, followed closely by compliance and documentation effort, and poor visibility of product data. These are not niche problems, but structural challenges that affect product development organizations across food and beverage, pharma, personal care, and other process industry segments.
The Solution: SAP Integrated Product Development (SAP IPD)
SAP IPD is an enterprise, software-as-a-service PLM suite built natively on SAP Business Technology Platform (BTP). It is designed specifically for process industries and addresses the end-to-end product definition lifecycle. From raw material specification through recipe development, packaging, labeling, and handover to manufacturing.
[Image showing the characteristics of SAP IPD as outlined in the text.]
Three principles underpin the SAP approach to solving these challenges:
- Connect processes: SAP IPD connects R&D and product design processes with the extended enterprise – supply chain, manufacturing, sourcing, quality – across the full product lifecycle. No more silos.
- Contextualize decisions: Because everything lives in a connected system, R&D teams can immediately see the cost, lead time, and compliance implications of their decisions as they make them.
- Collaborate with the ecosystem: Products are no longer developed in isolation. SAP IPD enables structured digital collaboration with contract manufacturers, ingredient suppliers, and packaging partners.
As a cloud-native solution, SAP IPD delivers quick time to value as organizations are up and running in days rather than months. It is ERP-agnostic, meaning you can connect it to SAP ECC, S/4HANA private cloud, or S/4HANA public cloud without waiting for a major transformation project. And it evolves continuously, with new capabilities released every month.
The End-to-End Business Process
Let us walk through how SAP IPD supports the typical product development journey in a process industry company.
[Image showing the process components of SAP IPD as outlined in the text below.]
Specification Management
Everything starts with specifications. When a product brief arrives from marketing or a project team, the R&D and product development teams begin by creating raw material specifications. SAP IPD provides a structured digital specification object with versioning, status management, and a fully configurable property tree.
The property tree is the DNA of a specification. It can capture composition data (sub-components and their percentages), nutrient values, allergens, diet suitability statements (vegan, kosher, halal, organic), contaminants, physical and chemical properties, sustainability data, microbiological information, and vendor details — all in one place. Standard industry templates are available from implementation, with the final 10–20% configured to match each company's specific requirements.
A key capability is the Compare Specifications function, which allows teams to compare two versions of a specification or two supplier specifications side by side, with differences highlighted automatically. This is particularly valuable when evaluating supplier qualification data or reviewing changes between versions.
Supplier Collaboration
Once a specification is drafted, collaboration with suppliers typically follows. In most companies today, this process runs on emails and static Word or Excel documents — slow, error-prone, and impossible to audit.
SAP IPD replaces this with digital collaboration rooms. A collaboration room links directly to the specification object, allows documents to be uploaded, and enables work items to be assigned to suppliers with due dates, priorities, and task descriptions. Suppliers are notified by email, work directly in the digital environment, and complete tasks that trigger notifications back to the buyer. Integration with SAP Ariba allows supplier lists to be imported directly.
The result is full traceability of the collaboration history without leaving the SAP IPD environment.
Recipe Development
With raw material specifications approved and released, recipe development can begin. In the Manage Recipes application, teams create formulas by selecting released specifications and assigning quantities. The recipe supports multiple types — experimental, development, general, and plant-specific — as well as alternatives and versions.
The real power of SAP IPD's recipe capability lies in its automatic calculations. As ingredients are added and quantities maintained, the system automatically rolls up:
- Sub-component composition (e.g., if chocolate is defined as cocoa solid, sugar, and milk powder, these appear at the sub-component level in the recipe calculation)
- Nutrient content, based on values maintained at the raw material level
- Allergens, including cross-contamination scenarios (e.g., “may contain” statements)
- Contaminants and other composition parameters
- Sustainability metrics such as carbon footprint
All calculations update in real time, and a built-in change log tracks every modification automatically, without any manual effort.
Packaging Specifications
Packaging teams work in parallel with product development teams, creating their own specifications for primary, secondary, and tertiary packaging components. These follow the same lifecycle as raw material specifications: creation, supplier collaboration, approval, and release. Once released, packaging specifications are combined with the finished recipe to create the finished good definition within SAP IPD.
Labeling with LabelNow
This is where our partner Gramont teamed up with us to support compliant labelling: Labelling is one of the most complex steps in the product development process. The same finished good may require different declarations for different markets, e.g., different allergen statements, different rounding rules, different nutritional program formats.
Gramont's LabelNow solution, built on the same SAP BTP architecture and Fiori user experience as SAP IPD, addresses this directly. It reads specification and recipe data from SAP IPD and uses it to automatically generate label content.
Key capabilities include:
- Ingredient declaration: The system reads sub-component level data from the recipe, applies QUID (Quantitative Ingredient Declaration) rules for rounding, and allows teams to group ingredients — for example, combining milk powder and water into a single “milk” declaration on the label.
- Nutrition labeling: Recipe nutrition calculations are automatically carried into the label. Teams define declared values, per-serving breakdowns, and reference daily intake percentages. A preview renders the formatted label.
- Nutritional programs: Country-specific formats are supported, including EU Nutri-Score and UK Traffic Light labeling.
- Translation with AI: Label content can be translated automatically using built-in AI, with an approval workflow for verification before the label is sent to print.
- Reporting: Compliant label reports can be generated directly from the system.
Handover to Manufacturing
The final step in the process is the handover from product development to manufacturing. SAP IPD provides a dedicated Handover Recipe Formulation to Bill of Materials application that converts a released recipe into a bill of material and publishes it directly to SAP Cloud ERP or SAP ECC in a single click.
The BOM is published with the relevant material codes, change numbers, and validity dates, and is immediately available in the ERP system for production planning and manufacturing execution. This is a fully out-of-the-box integration that requires no custom development and represents one of the clearest points of differentiation for SAP customers: the handshake between PLM and manufacturing is seamless.
Change Management
Product changes are inevitable due to regulatory updates, ingredient availability, cost pressures, or customer requirements. SAP IPD's change management capability spans all objects in the process: specifications, recipes, packaging, labels, and bills of material. Changes are tracked, versioned, and communicated across all impacted objects, ensuring that R&D, regulatory, and manufacturing teams remain aligned throughout the change lifecycle.
What are the Business Benefits of implementing SAP IPD for Process Industry Customers?
Companies implementing SAP IPD report measurable improvements across the key dimensions of product development performance:
- Faster time to market through streamlined, connected processes and elimination of manual handovers
- Lower development costs through better visibility, fewer errors, and reduced rework
- Higher quality through structured collaboration, digital specifications, and controlled change management
- Stronger cross-functional collaboration both internally and with external partners
- Improved compliance through traceable, version-controlled product data linked to regulatory requirements
How can I Get Started?
Whether you are running SAP ECC, S/4HANA private cloud, or S/4HANA public cloud, SAP IPD can be connected to your current landscape without waiting for a broader transformation project.
Gramont, one of SAP's leading PLM implementation partners for process industries, brings deep domain expertise across food and beverage, pharma, and personal care, with a customer base that includes some of the world's largest FMCG and life sciences companies, as well as mid-size and smaller organizations. Their team covers the full scope from business consulting through implementation and solution development, including the LabelNow labeling solution.
If you would like to explore any of the capabilities described in this post in more detail, reach out directly for a deeper live session.
More Information
[Image showing a QR code and links to SAP Community https://community.sap.com/t5/product-lifecycle-management-blog-posts-by-sap/recipe-formulation-and-s… and the PLM LinkedIn group at
https://www.linkedin.com/groups/9257139/.]
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