SAP Solution Brief

SAP Business Suite Objectives Solution Benefits Quick Facts

SAP Supplier Lifecycle Management
© 2014 SAP AG or an SAP affiliate company. All rights reserved.

Get More Value with Strategic

Supplier Lifecycle Management
 Objectives Solution Benefits Quick Facts

The strategy of supplier management

The strategy of supplier management To manage a global supply base and deal with mounting regulations,
companies are moving beyond mere supplier rationalization and toward
strategic supplier management. The goal is to extract more value from
inbound value chains and reduce the risk and total cost of procurement
while increasing innovation. The SAP® Supplier Lifecycle Management
application helps you achieve this.

Companies that get more value from suppli- Strategic supplier management means over-
ers while reducing overall costs and risk have coming IT complexity and data inconsistencies
a competitive advantage. That’s why leading that can limit supplier portfolio visibility. Cen-
organizations are taking a more strategic tral visibility across disparate back-end and
approach to supplier management – to operational procurement systems is key to
maximize the value of supplier relationships providing a single source of truth to manage
by ensuring quality throughout the relation- supply-base risk and improve category-specific
ship lifecycle. This is particularly important performance. Companies must deal with hun-
for direct spend, where the quality and value dreds of weekly supplier interactions for data
of a supplier relationship can directly influ- maintenance and performance management.
ence overall company performance. They need automated processes that keep
procurement productivity high and transaction
costs low.

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 Objectives Solution Benefits Quick Facts

The transparency you need for

better supplier relationships
The transparency you need for SAP Supplier Lifecycle Management helps you Designed for simplicity, the application helps
better supplier relationships address these requirements. It empowers your make life easier for both category managers
procurement organization to manage its and the suppliers they work with every day.
Supplier onboarding and registration supply base throughout the complete supplier The system architecture helps ensure a safe
lifecycle – from initial onboarding at the begin- communication and data exchange between
Supplier qualification ning of the relationship to continuous perfor- the buy side and sell side of the application –
mance evaluations for ongoing improvements suppliers only have access to the sell side,
Supplier classification throughout the relationship. which is outside the firewall. Built-in integra-
tion with SAP Business Suite applications
Category management Encompassing the entire lifecycle of the increases transparency and improves pro-
supplier relationship (see figure on the next ductivity. And because it covers the entire
Supplier evaluation page), SAP Supplier Lifecycle Management supplier lifecycle, this application fosters a
helps you manage each supplier consistently more strategic approach to supplier manage-
Supplier development and effectively. Your procurement organiza- ment that enables you to maximize value and
tion will be able to gain visibility into and con- minimize risk.
Integration with other SAP software trol over the complete supply base to reduce
supply risk, increase supplier performance,
and maximize cost savings.

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 Objectives Solution Benefits Quick Facts

Supplier
The transparency you need for Supplier registration
better supplier relationships phase-out

Supplier onboarding and registration

Supplier qualification Supplier

Category qualification
Supplier classification Supplier management
development
Category management

Supplier evaluation
Supplier
Supplier classification
Supplier development
evaluation and portfolio
Integration with other SAP software

Integration with other SAP® solutions

Figure: Supplier relationship management

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 Objectives Solution Benefits Quick Facts

Supplier onboarding and registration

The transparency you need for SAP Supplier Lifecycle Management makes
better supplier relationships your supplier selection and onboarding pro-
cess faster and more efficient. An automated
Supplier onboarding and registration workflow helps manage the approval process
for new suppliers, and self-service functional-
Supplier qualification ity enables suppliers to register themselves.
Each supplier maintains its own company and
Supplier classification contact data, adds users as needed, uploads
attachments, and maintains all qualification
Category management requests and certificates. With integration to
your SAP Business Suite applications, this
Supplier evaluation repository represents your source of truth Use automated workflow and
for supplier data and can be distributed to
Supplier development whatever back-end systems are required.
supplier self-service to bring new
This approach relieves your procurement suppliers on board.
Integration with other SAP software team of a significant administrative burden –
freeing it to focus its energies on the job of
negotiating better deals with your suppliers.

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 Objectives Solution Benefits Quick Facts

Supplier qualification
The transparency you need for SAP Supplier Lifecycle Management stream-
better supplier relationships lines the entire supplier qualification process.
Using a library of reusable questions in multi-
Supplier onboarding and registration ple languages, you can build a questionnaire
that is suitable for the supplier under consid-
Supplier qualification eration. A category manager then triggers
the qualification process from a supplier list,
Supplier classification and the software sends the questionnaire to
the potential supplier via e-mail. Once the
Category management questionnaire is returned, the manager can
evaluate the response based on a scoring Quickly build and send
Supplier evaluation system that weighs the value of each ques- questionnaires and evaluate
tion according to its importance. Managers
Supplier development also enjoy full visibility over the qualification
suppliers based on a weighted
process to monitor progress and keep it scoring system.
Integration with other SAP software moving forward.

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 Objectives Solution Benefits Quick Facts

Supplier classification
The transparency you need for With SAP Supplier Lifecycle Management, you
better supplier relationships gain a portfolio-level view of your supplier rela-
tionships. This gives you the visibility you need
Supplier onboarding and registration to continuously determine the right mix of
suppliers to best serve your business objec-
Supplier qualification tives and reduce your overall supply risk. Using
the application, you can classify your suppliers
Supplier classification by multiple criteria – for example, categorizing
a set of suppliers with the same set of goods
Category management and services. Based on your classifications,
you can flexibly identify and search suppliers Obtain an overview of supplier
Supplier evaluation using multiple criteria. You can also store and relationships, classify and search
access time-dependent sustainability score-
Supplier development cards, structured attachments, qualification
suppliers, and assign suppliers and
results, and certificates. And with an auto- buyers to purchasing categories.
Integration with other SAP software mated workflow, you can launch a supplier
promotion process for the suppliers that
deliver the results you expect.

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 Objectives Solution Benefits Quick Facts

Category management
The transparency you need for Category management provides a holistic assigned to the purchasing categories you
better supplier relationships approach of buying goods and services. If define. Suppliers then register, choosing
applied effectively throughout an entire organi- relevant goods and services from standard
Supplier onboarding and registration zation, the results can be significantly greater product classifications such as the United
than traditional transaction-based purchasing Nations Standard Products and Services
Supplier qualification negotiations. SAP Supplier Lifecycle Manage- Code (UNSPC) or e-class, which are then
ment provides category management func- mapped in the system with your category
Supplier classification tionality along the entire supplier lifecycle. structure. You can assign registrations to
responsible buyers in your organization and
Category management The application gives you complete flexibility trigger respective workflows. Supplier qualifi-
to create a purchasing category structure cations and evaluations can be created and
Supplier evaluation that can be used in all steps of the process. executed for specific categories, and certifi-
Suppliers and category managers can be cates can be managed along this structure.
Supplier development

Integration with other SAP software

Manage the complete supplier lifecycle based on a

purchasing category structure that you define.

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 Objectives Solution Benefits Quick Facts

Supplier evaluation
The transparency you need for SAP Supplier Lifecycle Management allows
better supplier relationships you to evaluate and monitor the performance
of your suppliers. The application maintains a
Supplier onboarding and registration central library of key performance indicators,
which is updated using questionnaires for
Supplier qualification scoring suppliers in areas such as daily work
performance, contract procedures, and price
Supplier classification negotiations. Leveraging this data, you can
instantly generate reports, benchmark per-
Category management formance, and perform analysis needed to
identify valuable suppliers and manage them Continuously analyze
Supplier evaluation effectively. You can also use the application to performance and develop or
phase out underperforming suppliers or to
Supplier development develop the required capabilities for promis-
phase out suppliers based on
ing suppliers with whom you want to build their value to your business.
Integration with other SAP software ongoing relationships.

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 Objectives Solution Benefits Quick Facts

Supplier development
The transparency you need for With SAP Supplier Lifecycle Management,
better supplier relationships you can act on your insights and execute your
strategies by developing key suppliers to opti-
Supplier onboarding and registration mize performance and collaboration or to drive
co-innovation. You can collaborate with internal
Supplier qualification stakeholders as well as suppliers on activities
and projects – for example, to improve supplier
Supplier classification performance and cost, establish a strategic
partnership, or develop a new category strat-
Category management egy. Purchasers can create activities related
to categories or suppliers and assign respec-
Supplier evaluation tive tasks to stakeholders inside and outside Go from insight to action by
your organization. Documents can be attached collaborating with internal
Supplier development to tasks and automated reminders set for due
dates of assigned tasks. You can document
stakeholders and suppliers
Integration with other SAP software and access activities and tasks centrally in on development activities.
SAP Supplier Lifecycle Management to have
complete transparency on joint initiatives.

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 Objectives Solution Benefits Quick Facts

Integration with other SAP software

The transparency you need for SAP Supplier Lifecycle Management offers you stay up-to-date on all purchase orders,
better supplier relationships standard integration with the SAP Supplier service entries, and invoice payments being
Relationship Management, SAP ERP, SAP executed. With a robust view into the strategic
Supplier onboarding and registration Master Data Governance, and SAP Business and tactical aspects of your supplier relation-
Warehouse applications as well as the SAP ships, you’re able to manage relationships in a
Supplier qualification Jam social software platform to support the holistic fashion. You can leverage data from
entire supplier management process. It allows SAP Supplier Lifecycle Management and other
Supplier classification you to both understand and collaborate with software to analyze your supplier and category
internal stakeholders as well as with your sup- data and create insightful reporting. Integra-
Category management pliers, all from one application. You can view all tion with SAP Master Data Governance
relevant procurement-related transactions enables you to perform sophisticated master
Supplier evaluation associated with your suppliers – which helps data management for your suppliers.

Supplier development

Integration with other SAP software

Integration with other SAP software helps streamline
processes, internal and external collaboration, data
integrity, and meaningful analytics.

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 Objectives Solution Benefits Quick Facts

Comprehensive benefits from

comprehensive supplier management
Comprehensive benefits from With SAP Supplier Lifecycle Management,
comprehensive supplier management you can cultivate value-driven supplier rela-
tionships that encourage supplier excellence
and increase profitability. You’ll be able to
manage the complete supplier lifecycle and
deepen and enrich supplier relationships for
a competitive advantage. This helps you
reduce costs through superior supplier effec-
tiveness and performance. It also helps you Build stronger, more valuable
reduce supplier risk by providing full visibility
into supplier information that you can use
supplier relationships with SAP
to evaluate suppliers, automate key supplier Supplier Lifecycle Management.
collaboration processes, and monitor ongoing
supplier performance.

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www.sap.com Objectives Solution Benefits Quick Facts

Summary Solution
Leading companies are moving toward a •• Supplier onboarding and registration
more strategic approach to supplier manage- •• Supplier qualification
ment – one that recognizes and leverages the •• Supplier classification and portfolio
way supplier relationships impact the bottom management
line. The SAP® Supplier Lifecycle Manage- •• Category management
ment application enables strategic supplier •• Supplier evaluation and performance
management with functionality that lets you management
control the entire supplier lifecycle. The •• Integration with other SAP software for
results include lower costs, less risk, and smooth-flowing processes
more effective relationships that help drive
competitive advantage. Benefits
•• Cultivate value-driven supplier relationships
Objectives by continuously promoting suppliers based
•• Achieve a single source of truth for supplier on measured performance
information and management •• Reduce cost through automated supplier
•• Gain visibility into supplier portfolio cover- collaboration and lower administrative
age and risk management burden
•• Improve ability to collect, maintain, and •• Minimize risk with a standardized approach
evaluate supplier performance information to supplier qualification and full visibility
into supplier performance

Learn more
Contact your SAP representative today, or
visit us at www.sap.com/supplierlifecycle.

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Studio SAP | 16175enUS (14/06)
© 2014 SAP AG or an SAP affiliate company. All rights reserved.
© 2014 SAP AG or an SAP affiliate company. All rights reserved.

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