A description of the product SAP® Supplier Relationship Management (SAP SRM)

A system to support purchasing processes in a modern organization

 

Take advantage of the opportunity to quickly and effortlessly implement effective uniform processes which will fully correspond with all of your purchasing needs and requirements.

Implementing SAP SRM will ensure the following:

• effective expenditure management,
• transparency of purchasing processes,
• uniformity and standardization of purchasing processes,
• consolidation of purchasing requests,
• monitoring of the purchasing process- from the initial purchase request to the invoice disposal,
• controlling the selection of suppliers,
• equal conditions for negotiating with suppliers,
• contract management,
• electronic communication with suppliers,
• process and system support of purchases.

With the help of SAP SRM for operational purchases, which integrates purchasing processes and is ready to actively work with results from strategic purchasing processes, the following benefits will be provided to you:

• automated and optimized: processes, purchase of materials, and services,
• support of electronic approval,
• control of budget spending in real time,
• effective cost management with respect to the approved budget,
• decentralization of the input of purchase requirements,
• an integrating environment for processing order requests,
• the option for employees to use the SAP SRM
  mobile application for field work,
• support of electronic communication with suppliers.

Streamline the process of searching for and selecting suppliers, increase the added value of purchasing activities, and achieve the transparency of purchasing expenses with the help of SAP SRM to ensure a functional and strategic purchasing process.

Rationalize processes and your daily agenda for operating purchases. Choose a solution with long-term promise, ensuring further development. Take advantage of solutions which are aimed at supporting professional buyers,  which offer so-called “Best Practices”- highly recommended procedures.

SAP SRM in strategic purchasing allows for:

• active management of strategic initiatives,
• electronic requests for quotations  (RFQ),
• listing electronic auctions,
• listing electronic auctions (English/Dutch types),
• evaluation of offers,
• management of negotiation processes and closing contracts with suppliers,
• central management of supplier contracts,
• evaluating suppliers,
• registration of suppliers,
• analytical reporting.

 

User Interface

SAP SRM provides an intuitive and user-friendly environment that is accessible via the web interface. The user interface enables personalization based on individual work load or work tasks, which significantly contributes to the increase of work efficiency.

Request Process

The possibility to use the SAP SRM system from a web environment makes the request process much easier. Every employee has the opportunity to create purchase requests- in the SAP SRM system it is indicated as the shopping cart. A purchase request can be defined by the employee by selecting items from master records. He can even use a description of the request via free text. One of the favourite options among users is selecting items from the supply catalog. Searching for and ordering the requested items is made easy thanks to catalogs, as well as functions for comparing products and services. Supplier catalogs are used primarily for ordering overhead materials and services and office supplies. The shopping carts created from the supplier catalogs provide complete information and enable the automatic process of creating orders without the need to be checked by the purchasing department. Utilizing supplier catalogs reduces the administrative burdens of the purchasing department, allowing for more room for strategic activity.

Shopping carts are approved based on thecompany’s own regulations.

Creating an Order

SAP SRM can receive purchase requests Even from other SAP/nonSAP systems. (These are usually production requests.) SAP SRM provides the opportunity to group purchasing requirements from various sources (the shopping cart created in SAP SRM, purchase requests from other systems). The centralization of processing purchase requests for any type of commodity provides the buyers with a unified environment. This eliminates the necessity to work with multiple systems. While creating his order, the buyer has tools for searching for and comparing resource consumption (supplier/contract) at his disposal. He can thus select a supplier according to the listed supplier/contract  prices or with the help of tools which support strategic purchasing, and select a new supplier (auction). A general characteristic of purchasing documents is their recorded versions and the support of approval of created documents or modified versions, as per the company’s competence and regulations.

Receiving goods/services

 After obtaining goods or services, the buyer confirms the order in SAP SRM.

Supplier selection

The process of selecting a supplier is initiated by various events, such as contract termination with the existing supplier, expiration of the current contract, or the need to purchase new products. Using the quantitative and qualitative parameters for selecting a supplier, it is possible to create a competition or electronic auction.

The subsequent process of evaluating suppliers will take into account the required parameters and will suggest a winning offer based on the required criteria.

Candidate selection can also be aimed exclusively towards those who have all of the necessary requirements. An auction can be made for these selected suppliers in order to obtain an optimal offer.

Electronic auctions allow for auctions of English and Dutch types (ascending and  descending). The candidate selection is finalized by selecting the winning supplier who signs a contract with the company.

Contract Management

SAP SRM supports the central management of supplier contracts from the beginning until their termination. Monitoring contracts and their method of use significantly decreases the cost of items purchased outside of the contract.Central administration of contracts significantly aids in the lowering of purchased items, and allows for the utilization of volume discounts. A direct result of utilizing and centralizing supplier contracts is the reduction of the amount of time needed to submit orders. The buyer has up-to-date information regarding the state of his contract. The buyer is informed in the case that the contract is about to be overspent, so that they can modify the contract or make any other necessary changes. New contract negotiations are based on demand management.

Evaluating Suppliers

SAP SRM offers tools for evaluating suppliers. This allows for individual suppliers to be assessed, as well as for the monitoring of their development, including comparing suppliers to each other.

The goal of evaluating suppliers is to ensure:

• the selection of reliable suppliers
  who provide high quality service and products with sufficient capacity,
• identifying and eliminating sources of hidden costs,
• eliminating costs associated with irregularities in delivery,
• motivation for suppliers to improve their performance, the parameters include:
• level of service quality
• correct quantities
• timely delivery
• price of the product
• willingness to share sensitive information
• certificates and other qualifications
• flexible response to unexpected changes
  in the order
• willingness to expand range of goods based on buyer’s needs
• quick response in case of emergency, problems or special requests

 

SAP SRM offers

• Fully integrated payment solution processes (Procure-to-Pay).
• Optimizing strategies for selecting suppliers-helps companies streamline and optimize their supplier base. Companies can improve the quality of their supplies and lower potential risks in the supply process thanks to better access to information about the suppliers‘ performance
• Reduces the process cycle- automates the long cycle of requests for proposal- RFP and requests for quotation- RFQ.
• Reduces process costs- computerization and
  automation of operational purchase processes, exponentially
  lowers transaction costs.
• Reduces total costs of ownership (TCO)- enables you to reduce the cost of ownership of the system. Any future functionality will be delivered in the form of Enhanced Packs and will thus ensure the flexible implementation of functionalities according to the customer’s needs
• Optimizing contracts- provides expanded functionality for contract management.
• The contract management process is fully integrated into the purchasing process and allows for the creation and maintenance of one global contract as a source of consumption within the SAP SRM and SAP ERP systems. This approach not only increases efficiency, but also eliminates the risk of purchasing from obsolete contracts.
• Efficient purchasing- gives more control over activities connected with listing electronic
  competitions and auctions. The application contains extended functionality in listing
  competitions, which allows for an easier comparison of offers. More efficient cost management includes live auctions, wherein the final price becomes the market price. The main benefit is accurate and transparent processes.