Supplier Relationship Management

mySAP SRM

Thomas Depeweg SAP AG, Product Management SRM

Contents

Supplier Relationship Management Motivation mySAP SRM Overview mySAP SRM Components

 SAP AG 2002, mySAP SRM, Andrea Rota 2

Supplier Relationship Management

The bulk of your spend is with a few key suppliers

But non-strategic suppliers pose a higher risk…

…with relationships that change more frequently…

…and drive the total cost of sourcing higher

THE MYTHS
Only the top 10% of the suppliers are really important Only these supplier relationships are worth being optimized

THE FACTS
The total cost of procurement increases sharply in the extended supply base (Lower compliance increases risk of supply while higher turnover hinders supplier selection) Supply-base optimization is the fastest way to lower costs and increase profits (Purchased goods and services can represent over 60% of sales for a company. A 4% reduction in this cost can create as much profit as a 10% increase in sales.)

 SAP AG 2002, mySAP SRM, Andrea Rota 3

Gas and Electric Source: Gartner Research  SAP AG 2002.30 58.676 85.665 204. $ % of Sales 64. Photo.30 34.80 47.49 Lower Impact .60 42.60 51.439 337.50 18. mySAP SRM.00 40.20 45.60 34. Andrea Rota 4 1999 Fortune 500 Sales ($ in Millions) 113. Construction Beverages Computers.477 153.800 520.961 53.740 1.831 85.800 39.00 36.629 281.Why SRM matters: Cost of Goods Compared to Revenue Industry Metals Chemicals Engineering.109.707 25.949 778.70 50. Control Equip.910 257.10 40.400 217.60 61. Forest and Paper Products Telecommunications Mining.80 Highest Impact Medium Impact 748. Electrical Equip.739 Purch. Office Equipment Motor Vehicle and Parts Electronics.426 119.20 35. Railroads Aerospace Airlines Scientific.437 184.00 33. Crude Oil Production Pharmaceuticals Food Petroleum Refining Utilities.20 42.602 102.

Andrea Rota 5 . mySAP SRM.Contents Supplier Relationship Management Introduction mySAP SRM Overview mySAP SRM Components  SAP AG 2002.

How E-Procurement Evolves into SRM mySAP E-Procurement E Spend reporting Tendering mySAP Supplier Relationship Management EVALUATE YOUR SUPPLY AND SOURCING STRATEGY Supply strategy development Supplier qualification Supplier selection Contract negotiation and management E Catalog content management ENABLE YOUR SUPPLY BASE Supplier self service Content management E Indirect procurement Direct procurement ENGAGE YOUR SUPPLY RELATIONSHIPS Operational sourcing Self service procurement Plan driven procurement Relationship monitoring  SAP AG 2002. mySAP SRM. Andrea Rota 6 .

mySAP SRM. planning.mySAP SRM: Integration & Collaboration AUTOMATION OF CROSS COMPANY PROCESSES Suppliers coll. fulfillment The Corporation Customers SCM ERP PLM CRM CRM SRM coll. design  SAP AG 2002. inventory mgmt selling payments. Andrea Rota 7 .

SRM in the Supply-Net E-Marketplace  SAP AG 2002. Andrea Rota 8 . mySAP SRM.

Andrea Rota 9 .Contents Supplier Relationship Management Introduction mySAP SRM Overview mySAP SRM Components  SAP AG 2002. mySAP SRM.

Andrea Rota 10 . Application Components Framework Services Technology Infrastructure  SAP AG 2002. The portal provides an inter-enterprise focussed view for the employees as well as an external facing portal for suppliers. mySAP SRM.Supplier Relationship Management Portal Portal PORTAL Portal functionality like Portal Customization Personalization Single Sign On is achieved by running all the SRM application components in the SAP Portal‘s Enterprise Portal.

SRM Applications are tightly integrated in the SAP Portals Enterprise Portal  SAP AG 2002. Andrea Rota 11 . mySAP SRM.

SRM Application Components Portal APPLICATION COMPONENTS SAPM SAPM SAPM SAPM SAPM Enterprise Buyer (Prof.) Dynamic Bidding Supplier Self Services Decision Support Supplier Collaboration Services Application Components Framework Services (for use in SAPM C-ROOM) Requisite eMerge 3. mySAP SRM. Andrea Rota 12 .5 Technology Infrastructure  SAP AG 2002.

KEY CAPABILITIES Indirect Procurement Employee self service procurement Workflow Sourcing Cockpit Aggregation of multiple requirements Selection of source of supply by assignment or RFQ Approved vendor list Direct Procurement (planned materials) Integration with Planning & Execution systems (e. MRP) Integration with Maintenance Systems Integration with Project Management Systems Contract Management  SAP AG 2002. Andrea Rota 13 Procurement of Services Procurement / Confirmation with Limits Integration to Supplier Portal for supplier self service . (EBP) SAPM ENTERPRISE BUYER PRO.g. enables centralized direct procurement and provides the professional purchaser with tools to make the right sourcing decisions. The procurement and sourcing system that is the central piece for any SRM solution. It empowers employees with self service procurement.SRM Component – Enterprise Buyer Pro. mySAP SRM.

Automated decision support to determine winning suppliers and stipulate follow-on processes. Helps to turn planned. unplanned and strategic demand into contracts and purchase orders.SRM Component – Dynamic Bidding SAPM DYNAMIC BIDDING Supports sourcing needs through RFP. and Reverse Auction capabilities. mySAP SRM. KEY CAPABILITIES Sourcing Capabilities RFP/RFQ Reverse Auction Flexibility Rules definition Dynamic attributes Control Distribution lists Workflow Decision Support Bid analysis Single. RFQ.and Multi-parameter matching Ranking & winner determination Monitoring Business Tracker Integration Contract creation in EBp Purchase order creation in EBp Analytics  SAP AG 2002. Andrea Rota 14 .

 SAP AG 2002. and Invoice Process without Service Entry ERS Procedure Invoice entry without PO reference Master data management Business Partners Catalog (Products and Prices) Contracts Reporting Web reports accessible to suppliers keeping them up-to-date on their transactions and performance. KEY CAPABILITIES Supplier Homepage Complete Process – Sales Order. Service Entry. mySAP SRM. This drives participation within the supplier community.SRM Component – Supplier Self Service SAPM SUPPLIER SELF SERVICE A web based application which gives suppliers access to hosted order and content management functionality. reduces costs and increases speed across the value chain. Andrea Rota 15 .

KEY CAPABILITIES Global Spend Analysis Mapping via CI (SP1) Supplier Relationship Monitoring Performance and reliability KPI Quality monitoring with eg. Analytics are flexible predefined reports based on powerful state of the art data warehouse technology (SAP BW). relationship monitoring. from data providers) Bid analysis for RFQ / Reverse Auction External Categories UNSPSC ecl@ss Procurement History Per supplier.  SAP AG 2002. mySAP SRM. strategic sourcing. requester.SRM Component – Decision Support SAPM DECISION SUPPORT SAPM Decision Support provides analytics to support all SRM processes. value and volume Spend with and without contract Expiring Contracts Sourcing Intelligence External Market Data (eg. material. cost center manager etc. R/3-QM Supplier Scorecards with SAP SEM Supplier Base analysis DUNS Number DUNS Family trees Contract Analysis Utilization in terms of time. Andrea Rota 16 Alerts . SAPM Decision Support offers a 360° approach to SRM intelligence such as supplier strategy management. global spend analysis and document level procurement process monitoring. purchaser.

Modifying. Deleting. de-duplication and reporting) Import of a master schema UNSPSC E-Class schema of a public marketplace Import content Product content Supplier Records From R/3. various catalog formats XML File upload or XML message Mapping content to schema Mapping of incoming schema categories to master schema categories Restricted value help. It acts as the staging interface helping during the schema mapping process suggesting you possible match. KEY CAPABILITIES Creation of a master schema for categorization (used for catalog searching. Andrea Rota 17 .SRM Component – Content Workbench SAPM CONTENT WORKBENCH The content workbench supports content import processes. mySAP SRM. SAPM EBP. if manual category assignment is necessary Reuse of assignemnt done previously Maintenance of schema Data storage of the schema UI for Maintenance API‘s for Adding. other ERP. and Reading („F4-Help“) Schema information  SAP AG 2002.

mySAP SRM.SRM Framework Services Portal Application Components FRAMEWORK SERVICES Framework Services Technology Infrastructure SAPM Collaborative Room SAP Business Information Warehouse Requisite Bugs Eye SAP Enterprise Portal SAPM User Management  SAP AG 2002. Andrea Rota 18 .

KEY CAPABILITIES Communication Services Threaded Discussion Calendar and Tasks Ad-hoc Notification Chat Alerts Poll Announcements Business Services Contract Services Shopping Cart Services Document Management Folder structure Document upload/ download Flexible authorization on folder and document level Document versioning Status Subscription  SAP AG 2002. to process data in the various stages of a product’s life cycle.SRM Component – Collaborative Room SAPM COLLABORATIVE ROOM The Collaborative Room is an application for collaboration projects within and outside of your company. It offers a safe environment for structured and logically connected collaboration and project data. business applications can be integrated. Andrea Rota 19 . To work quickly and professionally in a business context. mySAP SRM.

SRM Framework Services Portal Application Components Framework Services Technology Infrastructure Application integration Business partner integration Technology Infrastructure  SAP AG 2002. Andrea Rota 20 . mySAP SRM.

Corporate HQ BW EBp Cat. Andrea Rota 21 . mySAP SRM. Sierra Leone ERP R/3 XI  SAP AG 2002. SUS Portal EBP XI DB CROOM XI SAP R/3 3rd Party Canada EBP Cat.Scalable & Flexible Deployment Suppliers Web Browser Asia R/3 3rd Party 3rd Party Cat.

thank you for your interest .

Andrea Rota 23 . mySAP SRM.Back Up Slides  SAP AG 2002.

mySAP SRM for Business Process Efficiency mySAP Supplier Relationship Management EVALUATE YOUR SUPPLY AND SOURCING STRATEGY Supply strategy development Supplier qualification Supplier selection Contract negotiation and management ENABLE YOUR SUPPLY BASE Supplier self service Content management ENGAGE YOUR SUPPLY RELATIONSHIPS Operational sourcing Self service procurement Plan driven procurement Relationship monitoring  SAP AG 2002. Andrea Rota 24 . mySAP SRM.

Analysis of hidden procurement costs kicks off a “supplier de-proliferation” initiative. Ed. and redefines the sourcing strategy for that region.) SAP Business Information Warehouse SAP Collaborative Room SAP Content Integrator . Andrea Rota 25 mySAP SRM COMPONENTS SAP Enterprise Buyer (Prof. mySAP SRM.EXAMPLES An electronics manufacturer finds that certain components have become commodity – and formulates a strategy to source them locally.  SAP AG 2002. A company opens a new facility in East Asia.

A company locating different suppliers for upcoming new product developments A financial institution maintains lists of suppliers for different MRO materials. mySAP SRM. Andrea Rota 26 . SRM COMPONENTS SAP Enterprise Buyer Professional SAP Business Information Warehouse SAP Dynamic Bidding  SAP AG 2002.EXAMPLES CPG company certifies different raw material vendors.

Andrea Rota 27 . Bank aggregates paper demand to improve MRO pricing. by aggregating airline tickets to one airline. SRM COMPONENTS SAP Enterprise Buyer Professional SAP Business Information Warehouse SAP Dynamic Bidding  SAP AG 2002.EXAMPLES Consulting company reduces supplier base. mySAP SRM.

EXAMPLES A professional purchaser negotiating a long term contract with a supplier to deliver goods of a specific commodity A professional purchaser and the IT department jointly negotiating a contract for an IT service project with the IT service provider SRM COMPONENTS SAP Enterprise Buyer Professional SAP Collaborative Room SAP Business Information Warehouse  SAP AG 2002. mySAP SRM. Andrea Rota 28 .

mySAP SRM.  SAP AG 2002. Andrea Rota 29 SRM COMPONENTS SAP Enterprise Buyer Professional SAP Business Information Warehouse SAP Dynamic Bidding .EXAMPLES A professional purchaser creating a reverse auction to find a supplier for a specific non-standard engineering software not covered by the catalog. A professional purchaser manually assigning a contract to a demand for office furniture.

mySAP SRM: an Architectural view Business Units Employees Product Division 1 MM MM PM PM APO/APS APO/APS FI FI CO CO EBPro EBPro Catalogue Catalogue Business Business Warehouse Warehouse SUS SUS ERP System ERP System ERP System ERP System mySAP SRM Suppliers @ Enterprise Portal Enterprise Portal Small Suppliers @ Product Division 1 MM MM PM PM APO/APS APO/APS FI FI CO CO DAB DAB cRoom cRoom ERP System ERP System Content Content Integrator Integrator Exchange Infrastructure Suppliers 1/2/3/4/.. mySAP SRM. Andrea Rota 30 .  SAP AG 2002..