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Supplier Relationship Management (SAPSRM): Build stronger Supplier Relationshipswith the SAP Supplier Lifecycle ManagementSolution- Overview

Posted by Tridip Chakraborthy Dec 19, 2011The Supplier On-boarding exercise is pursued as one of the last steps of any Supplier RelationshipManagement project that I have ever been a part of.There is a reason behind this and the biggest one being stake-holder priority, Suppliers asstake-holders are considered to be outside the eco-system, hence with an assumption that,everything will work, even if rolled out in the last phases of an implementationDo you reallythink so?In the traditional approach would be to keep this as the last link in the project, but thats thereason, projects in the past have either failed, or scope crept or evenprocrastinatedgo-lives.This blog is an overview of many to follow on specific topics around the functionalities offered bySAP Supplier Lifecycle Managementso stay tuned

1.0 Back-groundManaging a Supplier Lifecycle from inception to Phase-out has been the most challenging aspect for theProcurement and the Strategic Sourcing function of an enterprise, though most folks do it in their own way,there is a best practice to help strategize a Supplier Management process that is best in class, scalable and atthe same time highly visible and compliant.Before deep-diving into the SAP Supplier Lifecycle management solution and understanding what it brings tothe table, we must ask ourselves some challenging questions from our past/current experiences. Most successstories rest on their laurels for having operated on a well crafted Supplier Management program that hashelped them gain greater visibility into their Supplier base, therefore enhancing their Supplier Relationships..

2.0 There are a lot of reasons that I have witnessedfirst hand as a Supplier Relationship Manager aroundSupplier Management1) Unable to craft a well designed on-boarding sequence that has a user-friendly UI for SupplierQualification.2) Electronic collaboration going back and forth during the Registration, Qualification : Evaluation phase fornew suppliers.3) Unable to craft workflows during the qualification process to help evaluate the supplier and help qualifyfor the enterprise supply base.

Supplier Relationship Management (SAP SRM): Build stronger Supplier Relationships with the SAP SupplierLifecycle Management Solution- Overview


4) Old Registration templates did not focus on Sustainability and Carbon Footprint of the supplier during thequalification process.5) Unable to leverage from the template capabilities inside the ROS (Registration of Supplier) feature insideSAP SRM.6) Unable to create a supplier portfolio story-line during the on-boarding process.7) Unable to Phase-out a supplier while managing the supplier-lifecycle.8) Poor Supplier Performance Management capability.9) Poor Supplier Visibility.

3.0 So the pain areas are clustered around 4 areas,longer the bar, larger the pain(Ex SAP SRM or SAP ECC), most of the times, its primarily ECC that is the system of record.Also, if you were a veteran user like me of the ROS (Registration of Supplier) functionality in SRM, youwould have definitely encountered teething issues with the format of the questionnaire and replication issueincluding many other known issues that affect the process real-time and has cascading effects downstream onthe entire supplychain.Though the Supplier Registration and Qualification functionality addresses most of the need, from a usabilityand scalability point, had some pitfalls, that have been address with top priorityThere is a straight forward answer to these long standing issues and that is The SAP Supplier LifecycleManagement solution.



It addresses all the nuances of Supplier On-boarding and also goes the extra mile with features like theSupplier Collaboration for category management leveraging SAP StreamWork, Supplier Risk and PortfolioManagement including a new twist called Supplier Phase-out that has a logical conclusion to the lifecycle ofmanaging a supplier in the eco-system.Let us visit the various elements of the solution and what it has in store for Purchasers, Sourcing & Contractmanagement professionals and also Category Managers.

4.0 How does the SAP Supplier Lifecycle Managementoffering look from the inside?

Key FeaturesSupplier on-boarding and registration Use automated workflow and supplier self-service tobring new suppliers on boardSupplier qualification Quickly build and send questionnaires, and evaluate suppliers basedon a weighted scoring systemSupplier portfolio management Obtain an overview of supplier relationships, classifysuppliers , and manage the promotion process with built-in workflowIntegration with supplier order collaboration Gain visibility into strategic and transactionalinformation from a single source that integrates with existing systemsSupplier performance management Continuously analyze performance and develop orphase out suppliers based on their value to your business



5.0 We are not asking you to re-invent the wheelNote, if you have already invested in processes that help manage Supplier qualification, portfolio managementor even supplier visibility, you can leverage your platform by using SAP Supplier Lifecycle management

6.0 What more can you do with it yourpossible optionsa) Clean Slate: If you do not have a process for Supplier Lifecycle management, then deploy SAP SLC as aPlatform level application, meaning make it a hub and perform all the pre-qualification, portfolio and analysisusing it and when the master data is ready to be consumed, simply syndicate it to your back-end systems likeSAP ECC or even SAP SRM based on whichever system is the system of recordb) Already performing Supplier Qualification in SAP SRM and have ECC in the landscape, see how aglobal process can be crafted with SAP Supplier Lifecycle ManagementLeverage from the features like Supplier Collaboration, ease to use UI for buy and sell-side, high endquestionnaire support, Supplier Portfolio Management, Supplier Phase-out with the following deploymentoptions over SAP SRM and SAP ECC, check the following

Buy-Side deployment option



Sell-side deployment option

7.0 Which enterprise user will benefit from this? - CPO (Chief Procurement Officer) - Category Manager - Strategic Purchaser

8.0 What are some of the best practice process flows inmanaging the Supplier Lifecycle?The 3 main enterprise users that would make most of the Supplier Lifecycle Management solution1) CPO (Chief Procurement Officer)2) Category Manager3) Strategic Buyer



View the Schematic below to understand the End to End ProcessOrchestration using SAP Supplier Lifecycle Management, from the



Interested Party (new supplier) all the way until we make it an ApprovedERP Vendor

9.0 The Sequels to this blogWe are not stopping with this blog, we know, you want the entire storyline as we evolve with the solution in thedays to come, so below we have crafted our sequels and will blog on the topic on a periodic basis. - How to handle Supplier Registration and Supplier Qualification with the SAP Supplier LifeCycle managementsolution - How to handle Supplier Portfolio with the SAP Supplier LifeCycle management solution - Improve your sustainability with the Supplier Order Collaboration Integration feature offered by SAP SupplierLifeycycle Management - Deeper insight into Supplier Performance management with the SAP Supplier LifeCycle managementsolution - How to Phase Out a Supplier with the SAP Supplier LifeCycle management solution - Category Management and Supplier Collaboration using SAP StreamWork to take Supplier Relationships tothe next level in the P2P enterprise

10.0 SAP Procurement : The Social OutreachAnd as always, heres leaving you on a sign-off note to be tuned in Socially into our SAPProcurement timeline



Please follow @SAP_Procurement on twitter for the latest trends from the SAP Procurement portfolio ofsolutions, you can also follow my handle @tridipchakra for a dope of procurement xChanges in the SAP world(articles, blogs, whitepapers).Focused hash-tags for SAP Procurement: #SRMRDS #SupplierInfoNet #SAPSRM #SAPSourcing#SAPCLM #procurement #SAPSLM and there will be more in the making.

1188 Views Tags: supplier_relationship_management

Tridip Chakraborthy in response to Xin Lei Zhai on page 8Apr 5, 2012 6:41 AMthanks a lot for your feedback, am sure you've rated it :-)

Xin Lei ZhaiApr 5, 2012 6:38 AMExcellent article to help us understand SAP SLC!

PARAG PARAGDec 19, 2011 1:19 PMGood content on strategic direction of SLM... Thanks

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