SAPedia

A series of mini-lessons about SAP terminology and the SCEIS project

Supplier Relationship Management (SRM)

Version: SRM Server 4.0 (EBP 5.0)

SRM (SAP Supplier Relationship Management) provides the State of SC with the functionality to coordinate its business processes with key suppliers to make them more effective and to gain long-term benefits from all vendor relationships.

With SAP SRM, the State can examine and forecast purchasing behavior, shorten procurement cycles, and work with its partners in real time (this last feature is not in scope for Phase 1).

SRM User Interface

The user interface for the mySAP Supplier Relationship Management solution is Web-based. Navigation is intuitive and is similar in form to other Internet applications that anybody may have used to purchase goods and services.

Features & Functions

The SRM application is built on the technology platform of SAP NetWeaver, SAP NetWeaver is the best way to integrate SAP and non SAP solutions (it supports both), enabling multiple levels of suppliers, partners, and manufacturers to work together on the following core supply processes:

Sourcing - Adding value in the Complete purchasing cycle by automating sourcing functions, such as:
     -- Category management (access to spend categories, best practices and knowledge)
     -- Supplier qualification
     -- Supplier negotiation
     -- Contract management
Per SCEIS scope, only Supplier Negotiation (auction, reverse auction and awarding) will be processed using SRM.
Procurement - Execute the operational activities of procurement, including:
     -- Requisitioning
     -- Ordering
     -- Receiving
     -- Invoicing
The last three tasks will be executed in the ECC system (see Classic Scenario below).
Supplier enablement - Link suppliers to your purchasing processes via SAP Supplier Network or through the supplier portal or other means (not in scope for Phase 1).

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Deployment Scenario

Two Deployment scenarios have been compared for implementation for SCEIS. The recommendation is to implement the “Classic” scenario.

SRM Classic Scenario

The shopping cart is created and approved in SRM. The remainder of the procurement process takes place in the backend ECC system. Therefore all follow-on documents, such as the purchase requisition, purchase order, goods receipt and invoice, are located in Materials Management (MM).

Extended Classic Scenario/decoupled is not in scope for SCEIS.

Master Data: Vendor Master, Material Master, HR Organizational Structure (for Workflow approval)

SAP Organizational Structure: Plant, Storage Location, Purchasing Organization, Purchasing Group

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State of SC “to be” business process:

The SCEIS procurement process will begin with the creation of a shopping cart. This is done by anyone needing to procure goods or services, who has the SRM security and the SCEIS authority to do so.

Upon creation of the shopping cart, the approval workflow is kicked off. The first step is a funds availability check in ECC (the central business system). If the funds are not available, the workflow notifies the cart originator and stops processing. If funds are available, workflow continues with the approval process, based upon various dollar value limits assigned to the shopper.

Managers may approve or disapprove a requisition, and will be able to make changes to the shopping cart.

Upon approval, a shopping cart for contract items will create a purchase requisition in the ECC back-end System, which will encumber funds at that point.

A non-contract shopping cart will also create a purchase requisition in the ECC back-end. Funds will then be encumbered for the requisition. A non-contract shopping cart will be routed to a Purchaser after the requisition has been created.

The Purchaser will begin the bid process. An invitation to bid or a public bid will be executed to attain the best price for the items being procured, according to State's requirement.

Purchase Orders, Goods Receipts and Invoice Receipts will be processed in the ECC system.

Project Team