The Supplier On-boarding exercise is pursued as one of the last steps of any Supplier Relationship Management project that I have ever been a part of.
There is a reason behind this and the biggest one being stake-holder priority, “Suppliers” as stake-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 implementation…Do you really think so?
In the traditional approach would be to keep this as the last link in the project, but that’s the reason, projects in the past have either failed, or scope crept or even procrastinated go-lives.
This blog is an overview of many to follow on specific topics around the functionalities offered by SAP Supplier Lifecycle Management…so stay tuned
Managing a Supplier Lifecycle from inception to Phase-out has been the most challenging aspect for the Procurement 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 at the same time highly visible and compliant.
Before deep-diving into the SAP Supplier Lifecycle management solution and understanding what it brings to the table, we must ask ourselves some challenging questions from our past/current experiences. Most success stories rest on their laurels for having operated on a well crafted Supplier Management program that has helped them gain greater visibility into their Supplier base, therefore enhancing their Supplier Relationships..
2.0 There are a lot of reasons that I have witnessed first hand as a Supplier Relationship Manager around Supplier Management
1) Unable to craft a well designed on-boarding sequence that has a user-friendly UI for Supplier Qualification.
2) Electronic collaboration going back and forth during the Registration, Qualification : Evaluation phase for new suppliers.
3) Unable to craft workflows during the qualification process to help evaluate the supplier and help qualify for the enterprise supply base.
4) Old Registration templates did not focus on Sustainability and Carbon Footprint of the supplier during the qualification process.
5) Unable to leverage from the template capabilities inside the ROS (Registration of Supplier) feature inside SAP 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, you would have definitely encountered teething issues with the format of the questionnaire and replication issue including many other known issues that affect the process real-time and has cascading effects downstream on the entire supplychain.
Though the Supplier Registration and Qualification functionality addresses most of the need, from a usability and scalability point, had some pitfalls, that have been address with top priority
There is a straight forward answer to these long standing issues and that is “The SAP Supplier Lifecycle Management” solution.
It addresses all the nuances of Supplier On-boarding and also goes the extra mile with features like the Supplier Collaboration for category management leveraging SAP StreamWork, Supplier Risk and Portfolio Management including a new twist called Supplier Phase-out that has a logical conclusion to the lifecycle of managing a supplier in the eco-system.
Let us visit the various elements of the solution and what it has in store for Purchasers, Sourcing & Contract management professionals and also Category Managers.
4.0 How does the SAP Supplier Lifecycle Management offering look from the inside?
· Supplier on-boarding and registration – Use automated workflow and supplier self-service to bring new suppliers on board
· Supplier qualification – Quickly build and send questionnaires, and evaluate suppliers based on a weighted scoring system
· Supplier portfolio management – Obtain an overview of supplier relationships, classify suppliers , and manage the promotion process with built-in workflow
· Integration with supplier order collaboration – Gain visibility into strategic and transactional information from a single source that integrates with existing systems
· Supplier performance management – Continuously analyze performance and develop or phase out suppliers based on their value to your business
5.0 We are not asking you to re-invent the wheel
Note, if you have already invested in processes that help manage Supplier qualification, portfolio management or even supplier visibility, you can leverage your platform by using SAP Supplier Lifecycle management
6.0 What more can you do with it – your possible options
a) Clean Slate: If you do not have a process for Supplier Lifecycle management, then deploy SAP SLC as a Platform level application, meaning make it a hub and perform all the pre-qualification, portfolio and analysis using it and when the master data is ready to be consumed, simply syndicate it to your back-end systems like SAP ECC or even SAP SRM based on whichever system is the system of record
b) Already performing Supplier Qualification in SAP SRM and have ECC in the landscape, see how a global process can be crafted with SAP Supplier Lifecycle Management
Leverage from the features like Supplier Collaboration, ease to use UI for buy and sell-side, high end questionnaire support, Supplier Portfolio Management, Supplier Phase-out with the following deployment options 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 in managing the Supplier Lifecycle?
The 3 main enterprise users that would make most of the Supplier Lifecycle Management solution
1) CPO (Chief Procurement Officer)
2) Category Manager
3) Strategic Buyer
View the Schematic below to understand the End to End Process Orchestration using SAP Supplier Lifecycle Management, from the Interested Party (new supplier) all the way until we make it an Approved ERP Vendor
9.0 The Sequels to this blog
We are not stopping with this blog, we know, you want the entire storyline as we evolve with the solution in the days 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 management solution
– 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 Supplier Lifeycycle Management
– Deeper insight into Supplier Performance management with the SAP Supplier LifeCycle management solution
– 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 to the next level in the P2P enterprise
10.0 SAP Procurement : The Social Outreach
And as always, here’s leaving you on a sign-off note to be tuned in Socially into our SAP Procurement timeline
Please follow @SAP_Procurement on twitter for the latest trends from the SAP Procurement portfolio of solutions, 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.