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Supplier Relationship Management
Business Example Effectiveness of procurement processes can
have a large influence on cost within a company
IDES wants to relieve the strain placed on purchasing by more closely integrating suppliers in procurement transactions
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Managing Costs for Continuous Profitability Materials and services received from suppliers are so
important But when reducing procurement costs, the company
treats suppliers as adversary Collaboration with suppliers is far more profitable that
pressuring suppliers for marginal cost reductions
Need a way to effectively manage the entire supply base in a way that streamlines procurement and souring processes, maintains supply quality, and increases profits, supplier collaboration, and innovation
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mySAP SRM
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Managing Costs for Continuous Profitability (cont’d)
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Business Benefits
Improved sourcing strategy Rationalization and optimization of the supply base Better access to data on supplier performance Improved quality of supply and reduced risk
Compressed cycle times Automation of request-for-proposal (RFP) and request-
for-quotation (RFQ) cycles Faster procurement execution through online approval Faster acknowledgement and response from suppliers
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Business Benefits (cont’d)
Reduced process costs Increased compliance through reduced maverick buying Reduced complexity through content consolidation Increased efficiency through procurement automation
Lower unit prices Demand consolidation across multiple business units Lower inventory carrying costs Better prices through competitive bidding
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Strategic Purchasing and Sourcing
A process of Developing a sound supply strategy Executing the strategy by finding qualified sources to
fulfill supply needs, negotiate purchase agreements, manage contracts, and evaluate supplier performance
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Strategic Purchasing and Sourcing (cont’d)
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Strategic Purchasing and Sourcing (cont’d) Supply Strategy Development
Develop supply strategies that fit the needs of business units and are in line with overall corporate goals
The strategy provides specific details, e.g. recommended suppliers, length and type of contract, local or global suppliers
Spend Analysis Improve visibility into global spend and supply-base data by
mapping and cleansing commodity and vendor information and distributing it to internet systems electronic catalogs, and data warehouses
Supplier Selection Minimize purchase risk, improve system-base monitoring,
and more easily assess supplier performance
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Strategic Purchasing and Sourcing (cont’d)
Contract Management Centralized contract management ensures compliance with
negotiated terms and conditions Different purchasing departments in business units can reuse
preexisting contracts for specific product categories throughout the company
Catalog Management Create and manage a unified e-commerce catalog,
using tools that import data from external sources, maintain consistent schemes, and index items for faster search capabilities
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Operational Procurement
Process of buying direct materials and services (those used in production) or indirect material and services (those used in maintenance, repair, and operations)
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Operational Procurement (cont’d)
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Operational Procurement
Self-Service procurement Use web-based shopping cart that enforces compliance
with corporate purchasing policies to enable employees to procure materials
Plan-Driven Procurement Streamline and automate the procurement of materials
used in core business processes by integrate purchasing with any supply chain management system
Service procurement Reduce administration and processing costs associated
with procuring a wide range of services, e.g. consulting and contract labor
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Supplier Collaboration
Use web to provide a cost-effective way for suppliers to connect to a number of processes among the supplier relationship life cycle
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Supplier Collaboration (cont’d)
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Supplier Collaboration (cont’d)
Supplier registration Purchaser has access to supplier-managed information
for better sourcing decisions Order collaboration
Provide supplier access to internal order management systems for processing orders and delivery schedules, managing invoices, and updating specifications electronically
Design collaboration Permit employees from partners to share relevant
product and project information to shorten product development cycles and keep supporting and detailed information within enterprise
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Supplier Collaboration (cont’d)
Collaborative replenishment Enable supplier to access to customer inventory data
and make them responsible for maintaining inventory level
Reduce cost and increase overall velocity and accuracy of the supply network
Supplier connectivity Connect with suppliers of different sizes and capabilities
using XML-based document exchange
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Integration
Require mySAP SRM, SAP ECC, Also require SAP Exchange Infrastructure (SAP XI)
delivered as part of SAP Netweaver For connectivity and sending XML-based messages
Purchasers and users work in SAP SRM through a web browser. Then the POs created are then posted in the ERP back end for follow-up processes
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Integration (cont’d)
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Product Life Cycle Management
Business Example IDES must respond quickly to market and
customer demands within a heterogeneous corporate system landscape.
Intracompany mapping allow management to track changes within process departments
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Product Life Cycle Management
Product life cycle: product development, procurement, production through to service
The aim of PLM is to support the entire product life cycle
PLM allows an organization to quickly react to changes according to market and customer demands
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mySAP PLM
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Product Life Cycle Management (cont’d)
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Benefits of mySAP PLM
Reduce cost Effective cost control in projects Minimizing maintenance costs of a piece of equipment Collaborate with partners at early stages to keep down the cost
of changes Increase productivity
Pooling information and sharing it with partners and customers Quickly introducing new products to the market Increase customer satisfaction – involve with customers at early
stages of product development Integrated solutions
Product development, quality management, asset management, maintenance, and service management
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Key Functional Areas of mySAP PLM
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Program and Project Management (cont’d) Successful project management: planning, controlling, and
executing the essential project elements in accordance with the aims of the project Rely on determining all processes necessary for the project and the
ability to represent these in the form of a structure and process
Project System Makes available basic data, standard structures, and templates that
assist in the creation of plans for different projects
The project is structured in the project system either by Using the project structure plan (PSP) or Operations that can be linked to a network plan through
relationships
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Program and Project Management
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Project Management Structure
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Program and Project Management (cont’d) Project Planning Board provides a graphical interface for
planning and controlling projects efficiently Plan, check, and change schedules Plan, schedule, and check resources Determine and assign work Compare capacities Calculate costs
The central element of the project planning board is Gantt chart Used to carry out work on the project
Costs, resources, and schedules have to be monitored closely so that you can identify any deviation from the project plan at an early stage
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Program and Project Management (cont’d) cProjects (SAP Collaborative Project
Management) Handle the entire range of project activities, from
concept and planning through execution and the closing of a project, covering all project types, from development to service projects.
Enable companies to comply with industry standards by implementing project methodologies e.g. advanced product quality planning (APQP)
cProjects uses cFolders to offer tightly integrated scenarios to jointly work on documents and tasks with external partners
Share information with partners
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cProjects and Project System
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Life-Cycle Data Management
Life-cycle data management is process engineering and logistics data within a company and across company boundaries
Staff need up-to-date and relevant information to complete day-to-day tasks
mySAP PLM offers the entire spectrum of tools for evaluating and distributing product and project data
Manage specifications, BOMs, routing and resource data, project structures, technical documentation
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Life-Cycle Data Management (cont’d)
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Life-Cycle Data Management (cont’d)
Document Management Manage how to store and make use of data in various
formats e.g. paper, audio, or visual media Recipe Management
Facilitate daily management of R&D departments, supports efficient knowledge-sharing, and leaves time or more creative and experimental work
Integration mySAP PLM CAD and conversion interface makes
design data available to employees outside the design process at an early stage
At the same time, designers have access to the most up-to-date product data
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Life-Cycle Data Management (cont’d)
Change and Configuration Management Give flexibility to design change processes and ensures that
changes are an integral part of operational processes Product quality is constant in every phase of product’s life cycle
Product Structure Management Product structure browser is the central navigation tool in the
product structure. It provides: The material master Documents Bills of materials (BOM) Routings Information from classification
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Life-Cycle Collaboration
Collaboration lends itself naturally to an exchange environment by permitting employees from different trading partners to effectively share relevant product and project information
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Life-Cycle Collaboration (cont’d)
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Life-Cycle Collaboration (cont’d)
Design Collaboration cFolders enable SAP customers to communicate with
their partners and suppliers over back-end objects (e.g. documents, materials, and BOMs in SAP PLM) without exposing their ERP system to them
Partners and suppliers can change objects and back-end users can integrate changes from cFolders to the ERP system
Collaborative Project Management cProjects
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Life-Cycle Collaboration (cont’d)
Quality Management A comprehensive solution that meets all quality
management needs throughout the product life cycle and along the supply chain
Offer a wide range of integrated functions, collaborative services, and mobile solutions to ensure and manage the quality of products and services
Support not only inspection and processing, but also prevention and continuous process improvement through collaboration
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Quality Management
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Quality Management
Quality Engineering Offers a number of proper quality tools and implement
appropriate quality planning strategies Quality Assurance and Control
Involve inspections at all stages, continuous monitoring, and intervening quickly to deal with unexpected events
Quality Improvement Provides necessary tools to improve the quality of
products though prevention, efficient problem management and evaluations
Audit Management Support audit processes, from planning through audit
execution and valuation to the evaluation phase