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SAP Supplier Lifecycle Management: Filling a long pending gap in SAP SRM business suite - Part 1

With the launch of SAP Supplier life cycle management, SAP has addressed a long pending business need for a full-fledged supplier management application. This has been on the wish list of most of the procurement executives working with SAP solutions, however SAP did not have very solid offer in this area earlier.  Customers using SAP SRM, had the option of using Supplier Registration functionality which is delivered as part of Supplier collaboration solution in SAP SRM. However, Supplier Registration functionality till SAP SRM 7.0 (EHP1) was offered at a very basic level with limited functionality. It lacked critical features such as approval workflow for potential suppliers, seamless integration with backend systems, upload of attachments etc.. Due to such obvious gaps, this functionality was not much used by customers or needed extensive customization and development to get the desired functionality.

With the launch of SAP Supplier life cycle management, SAP has addressed a long pending business need for a full-fledged supplier management application. This has been on the wish list of most of the procurement executives working with SAP solutions, however SAP did not have very solid offer in this area earlier.  Customers using SAP SRM, had the option of using Supplier Registration functionality which is delivered as part of Supplier collaboration solution in SAP SRM. However, Supplier Registration functionality till SAP SRM 7.0 (EHP1) was offered at a very basic level with limited functionality. It lacked critical features such as approval workflow for potential suppliers, seamless integration with backend systems, upload of attachments etc.. Due to such obvious gaps, this functionality was not much used by customers or needed extensive customization and development to get the desired functionality.

Through another product SAP Sourcing, SAP offered a more advanced supplier management functionality than SAP SRM.  This contained approval workflows and integration of supplier performance management within supplier management application. But still it did not offer a complete holistic approach to supplier management.
However with the launch of SAP SLM, SAP has taken a giant leap in supplier management functionality and presented a complete and dedicated solution in this area. Even though in its first version SAP SLM 1.0, SAP has only come out with limited set of supplier processes, it spells of a grand vision and clear roadmap in realizing full scale supplier lifecycle management through versions 1.1 and 1.2 which would come in later part of the year.

As of SAP SLM version 1.0, following business processes are covered:

  1. Supplier Registration
  2. Supplier Qualification
  3. Supplier Portfolio Management
  4. Supplier  Order Collaboration

Supplier Qualification and Supplier Portfolio Management are two very important processes which have been significantly enhanced in comparison to earlier offerings of SAP SRM supplier management functionality.

Supplier qualification process is workflow driven and provides a much needed control in managing supplier qualification. Purchasers or Category Managers can create qualification requests either for a potential supplier or for qualified suppliers based on specific projects. Suppliers receive notification in email and respond by submitting qualification response through portal. After receiving supplier responses, Category Manager can approve the supplier status to be changed based on response review.

Supplier Portfolio management provides an advanced supplier data management platform where different dimensions of supplier data can be stored under different sections e.g.  Classification, Financial data, Qualification data etc.  Suppliers can also do self service data maintenance, which can be routed through approval workflow and gets synchronized in backend systems upon approval.

Going further, versions SAP SLM versions 1.1 and 1.2 promises even more exciting features, like supplier evaluation , content tagging and third party integration, Supplier development and Supplier phase out.

In part-2, I shall write more on that and also on deployment options for SAP SLM which would be critical factors in deciding for taking the plunge into SAP SLM.

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