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mySAP SRM

Thomas DepewegSAP AG, Product Management SRM

Supplier Relationship Management

SAP AG 2002, mySAP SRM, Andrea Rota 2

Supplier Relationship Management Motivation

Contents

mySAP SRM Overview

mySAP SRM Components


Supplier Relationship Management

The bulk of yourspend is with a fewkey suppliers

…and drive the totalcost of sourcinghigher

…with relationshipsthat change morefrequently…

But non-strategicsuppliers pose ahigher risk…

THE MYTHSOnly the top 10% of the suppliers are really importantOnly these supplier relationships are worth being optimized

THE FACTSThe total cost of procurement increases sharply in the extended supply base(Lower compliance increases risk of supply while higher turnover hinders supplierselection)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.)


Why SRM matters: Cost of Goods Compared to Revenue

18,49337,707Utilities, Gas and Electric

LowerImpact

25,50748,439Petroleum Refining

33,80217,739Food

34,00204,400Pharmaceuticals

34,3053,665Mining, Crude Oil Production

35,60520,961Telecommunications

36,2085,800Forest and Paper Products

40,0039,676Scientific, Photo, Control Equip.

Medium

Impact

40,00119,800Airlines

42,10184,426Aerospace

42,20102,437Railroads

45,60778,602Electronics, Electrical Equip.

47,201,109,949Motor Vehicle and Parts

50,80281,740Computers, Office Equipment

51,7085,629Beverages

58,60153,831Engineering, Construction

61,30257,477Chemicals

Highest

Impact

64,60113,910Metals

Industry 1999 Fortune 500Sales ($ in Millions)

Purch. $% of Sales

Source: Gartner Research


Supplier Relationship Management Introduction

Contents

mySAP SRM Overview



How E-Procurement Evolves into SRM

mySAP Supplier Relationship ManagementmySAP E-Procurement

E

Spend reporting

Tendering

E

Catalog content management

E

Indirect procurementDirect procurement

EVALUATEYOUR SUPPLY AND SOURCING STRATEGYSupply strategy developmentSupplier qualificationSupplier selectionContract negotiation and management

ENABLEYOUR SUPPLY BASESupplier self serviceContent management

ENGAGEYOUR SUPPLY RELATIONSHIPSOperational sourcingSelf service procurementPlan driven procurementRelationship monitoring


mySAP SRM: Integration & Collaboration

SCM

ERP

PLM

CRM

Suppliersse

lling

coll. design

coll. planning,inventory mgmt

paym

ents

,fu

lfillm

ent

CustomersThe Corporation

CRM SRM

AUTOMATION OF CROSS COMPANY PROCESSES


E-Marketplace

SRM in the Supply-Net


Supplier Relationship Management Introduction

Contents

mySAP SRM Overview



Supplier Relationship Management Portal

PORTALPortal functionality like

Portal Customization Personalization Single Sign On

is achieved by running all the SRM application components in the SAP Portal‘s Enterprise Portal.

The portal provides an inter-enterprisefocussed view for the employees as wellas an external facing portal for suppliers.

Portal

Framework Services

Application Components

Technology Infrastructure


SRM Applications are tightly integrated in the SAPPortals Enterprise Portal


SRM Application Components

APPLICATION COMPONENTSSAPM Enterprise Buyer (Prof.) SAPM Dynamic Bidding SAPM Supplier Self Services SAPM Decision SupportSAPM Supplier Collaboration Services (for use in SAPM C-ROOM)Requisite eMerge 3.5

Portal

Framework Services




SRM Component – Enterprise Buyer Pro. (EBP)

Indirect ProcurementEmployee self service procurementWorkflow

Direct Procurement (planned materials)Integration with Planning & Execution systems(e.g. MRP)Integration with Maintenance SystemsIntegration with Project Management Systems

Contract Management

Sourcing CockpitAggregation of multiple requirementsSelection of source of supply by assignmentor RFQApproved vendor list

Procurement of ServicesProcurement / Confirmation with LimitsIntegration to Supplier Portal for supplier selfservice

SAPM ENTERPRISE BUYER PRO.SAPM ENTERPRISE BUYER PRO.SAPM ENTERPRISE BUYER PRO.SAPM ENTERPRISE BUYER PRO.

The procurement and sourcing systemthat is the central piece for any SRMsolution. It empowers employees withself service procurement, enablescentralized direct procurement andprovides the professional purchaser withtools to make the right sourcingdecisions.

KEYKEYKEYKEY CAPABILITIESCAPABILITIESCAPABILITIESCAPABILITIES


SRM Component – Dynamic Bidding

Decision SupportBid analysisSingle- and Multi-parameter matchingRanking & winner determination

MonitoringBusiness Tracker

IntegrationContract creation in EBpPurchase order creation in EBpAnalytics

SAPM DYNAMICSAPM DYNAMICSAPM DYNAMICSAPM DYNAMIC BIDDINGBIDDINGBIDDINGBIDDING

KEYKEYKEYKEY CAPABILITIESCAPABILITIESCAPABILITIESCAPABILITIES Sourcing Capabilities

RFP/RFQReverse Auction

FlexibilityRules definitionDynamic attributes

ControlDistribution listsWorkflow

Supports sourcing needs through RFP,RFQ, and Reverse Auction capabilities.Helps to turn planned, unplanned andstrategic demand into contracts andpurchase orders. Automated decisionsupport to determine winning suppliersand stipulate follow-on processes.


SRM Component – Supplier Self Service

Supplier HomepageComplete Process – Sales Order, Service Entry,and InvoiceProcess without Service EntryERS ProcedureInvoice entry without PO reference

ReportingWeb reports accessible to suppliers keeping themup-to-date on their transactions and performance.

Master data managementBusiness PartnersCatalog (Products and Prices)Contracts

SAPM SAPM SAPM SAPM SUPPLIER SELF SERVICESUPPLIER SELF SERVICESUPPLIER SELF SERVICESUPPLIER SELF SERVICE

A web based application which givessuppliers access to hosted order andcontent management functionality.This drives participation within thesupplier community, reduces costs andincreases speed across the value chain.



SRM Component – Decision Support

Global Spend AnalysisMapping via CI (SP1)

Supplier Base analysisDUNS NumberDUNS Family trees

Sourcing IntelligenceExternal Market Data (eg. from data providers)Bid analysis for RFQ / Reverse Auction

Procurement HistoryPer supplier, material, requester, purchaser, cost centermanager etc.

Supplier Relationship MonitoringPerformance and reliability KPIQuality monitoring with eg. R/3-QMSupplier Scorecards with SAP SEM

Contract AnalysisUtilization in terms of time, value and volumeSpend with and without contractExpiring Contracts

External CategoriesUNSPSCecl@ss

Alerts

SAPM DECISION SUPPORTSAPM DECISION SUPPORTSAPM DECISION SUPPORTSAPM DECISION SUPPORTSAPM Decision Support provides analytics tosupport all SRM processes. Analytics areflexible predefined reports based on powerfulstate of the art data warehouse technology(SAP BW).SAPM Decision Support offers a 360°approach to SRM intelligence such as supplierstrategy management, strategic sourcing,relationship monitoring, global spend analysisand document level procurement processmonitoring.



SRM Component – Content Workbench

SAPM CONTENT WORKBENCHSAPM CONTENT WORKBENCHSAPM CONTENT WORKBENCHSAPM CONTENT WORKBENCH

The content workbench supports contentimport processes. It acts as the staginginterface helping during the schemamapping process suggesting youpossible match.

KEYKEYKEYKEY CAPABILITIESCAPABILITIESCAPABILITIESCAPABILITIES Import content

Product contentSupplier RecordsFrom R/3, other ERP, SAPM EBP, various catalogformatsXML File upload or XML message

Mapping content to schemaMapping of incoming schema categories to masterschema categoriesRestricted value help, if manual category assignmentis necessaryReuse of assignemnt done previously

Creation of a master schema for categorization(used for catalog searching, de-duplication and reporting)

Import of a master schemaUNSPSCE-Classschema of a public marketplace

Maintenance of schemaData storage of the schemaUI for MaintenanceAPI‘s for Adding, Deleting, Modifying, and Reading („F4-Help“)Schema information


SRM Framework Services

FRAMEWORK SERVICES SAPM Collaborative RoomSAP Business Information WarehouseRequisite Bugs EyeSAP Enterprise PortalSAPM User Management

Portal

Framework Services




SRM Component – Collaborative Room

Communication ServicesThreaded DiscussionCalendar and TasksAd-hoc NotificationChatAlertsPollAnnouncements

Business ServicesContract ServicesShopping Cart ServicesDocument Management

Folder structureDocument upload/ downloadFlexible authorization on folder anddocument levelDocument versioningStatusSubscription

SAPM SAPM SAPM SAPM COLLABORATIVE ROOMCOLLABORATIVE ROOMCOLLABORATIVE ROOMCOLLABORATIVE ROOMThe Collaborative Room is an applicationfor collaboration projects within and out-side of your company. It offers a safeenvironment for structured and logicallyconnected collaboration and project data.To work quickly and professionally in abusiness context, to process data in thevarious stages of a product’s life cycle,business applications can be integrated.



SRM Framework Services

Technology InfrastructureApplication integrationBusiness partner integration

Portal

Framework Services




Scalable & Flexible Deployment

Suppliers

WebBrowser

SAPR/3

3rd Party

BW

C-ROOM

SUS

Corporate HQ

EBp DB

Cat.

XI

R/3

3rd

Party

3rd

PartyXI

EBP

Cat.

Asia

Canada

R/3

EBP

XICat.

ERP

SierraLeone

Portal

thank youfor your interest


Back Up Slides


mySAP SRM for Business Process Efficiency

mySAP Supplier Relationship Management

EVALUATEYOUR SUPPLY AND SOURCING STRATEGYSupply strategy developmentSupplier qualificationSupplier selectionContract negotiation and management

ENABLEYOUR SUPPLY BASESupplier self serviceContent management

ENGAGEYOUR SUPPLY RELATIONSHIPSOperational sourcingSelf service procurementPlan driven procurementRelationship monitoring


mySAP SRM COMPONENTSAn electronics manufacturer finds thatcertain components have becomecommodity – and formulates a strategy tosource them locally.A company opens a new facility in East Asia,and redefines the sourcing strategy for thatregion.Analysis of hidden procurement costs kicksoff a “supplier de-proliferation” initiative.

EXAMPLESSAP Enterprise Buyer (Prof. Ed.)SAP Business Information WarehouseSAP Collaborative RoomSAP Content Integrator


SRM COMPONENTSCPG company certifies different rawmaterial vendors.A company locating different suppliers forupcoming new product developmentsA financial institution maintains lists ofsuppliers for different MRO materials.

EXAMPLESSAP Enterprise Buyer ProfessionalSAP Business Information WarehouseSAP Dynamic Bidding


SRM COMPONENTSConsulting company reduces supplier base,by aggregating airline tickets to one airline.Bank aggregates paper demand to improveMRO pricing.



SRM COMPONENTSA professional purchaser negotiating along term contract with a supplier todeliver goods of a specific commodityA professional purchaser and the ITdepartment jointly negotiating a contractfor an IT service project with the IT serviceprovider

EXAMPLESSAP Enterprise Buyer ProfessionalSAP Collaborative RoomSAP Business Information Warehouse


SRM COMPONENTSA professional purchaser creating areverse auction to find a supplier for aspecific non-standard engineering softwarenot covered by the catalog.A professional purchaser manuallyassigning a contract to a demand for officefurniture.



mySAP SRM: an Architectural view

Suppliers1/2/3/4/...

ERP SystemERP System

Business Units

BusinessWarehouseBusiness

WarehouseCatalogueCatalogue

Enterprise PortalEnterprise Portal

EBProEBPro

ContentIntegratorContent

IntegratorcRoomcRoom

SUSSUS

DABDAB

Exchange Infrastructure

Small Suppliers

mySAP SRM Suppliers


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ProductDivision 1

APO/APSAPO/APS

FIFI

COCO

MMMM

PMPM

ProductDivision 1

APO/APSAPO/APS

FIFI

COCO

MMMM

PMPM

Employees

@

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