¶ Basic Sourcing and Purchasing Processes in SAP SRM
SAP Supplier Relationship Management (SRM) is a powerful tool designed to streamline and enhance procurement activities by enabling organizations to manage their sourcing and purchasing processes efficiently. At the core of SAP SRM are the basic sourcing and purchasing processes that help businesses optimize supplier collaboration, improve compliance, and reduce procurement cycle times.
This article provides an overview of the fundamental sourcing and purchasing processes in SAP SRM, explaining how they contribute to efficient procurement and how SAP SRM supports these workflows.
¶ Overview of Sourcing and Purchasing Processes
Procurement in SAP SRM is typically divided into two major areas:
- Sourcing Processes: Activities related to identifying, selecting, and negotiating with suppliers.
- Purchasing Processes: Activities involved in the ordering, approval, and receipt of goods or services.
Both processes are interlinked, ensuring smooth procurement from supplier selection to payment.
Sourcing is the process of finding suppliers and negotiating terms to meet business needs effectively and cost-efficiently.
- Requirement Definition: Business users specify the goods or services they need.
- Supplier Identification: Searching for suitable suppliers within the supplier catalog or external markets.
- Request for Quotation (RFQ): Issuing RFQs to multiple suppliers to gather pricing and delivery terms.
- Quotation Comparison: Evaluating received quotes based on price, quality, delivery time, and other criteria.
- Supplier Selection: Choosing the best supplier based on evaluation results.
- Contract Creation: Establishing purchasing agreements or contracts that outline terms and conditions for procurement.
- Supplier Catalog Management: Provides access to supplier catalogs with product details and prices.
- RFQ and Quotation Management: Automates RFQ creation, distribution, and response collection.
- Bid Analysis: Tools to compare supplier bids systematically.
- Contract Management: Enables creation and management of outline agreements and purchasing contracts.
Purchasing is the execution phase of procurement where purchase orders are created, approved, and managed until goods or services are received and invoiced.
- Purchase Requisition Creation: Users create requisitions indicating what to buy.
- Purchase Order Creation: Based on approved requisitions or contracts, purchase orders are generated and sent to suppliers.
- Approval Workflow: Purchase orders undergo approval according to organizational policies.
- Order Acknowledgment: Suppliers confirm receipt and acceptance of purchase orders.
- Goods Receipt: Verification and recording of delivered goods or services.
- Invoice Verification and Payment: Supplier invoices are matched against purchase orders and goods receipts before payment processing.
- Shopping Cart: Users create and submit purchase requisitions in the form of shopping carts.
- Workflow-Driven Approvals: Supports multi-level approval workflows for purchase requests and orders.
- Purchase Order Management: Automates PO creation and dispatch to suppliers via electronic or print formats.
- Integration with ERP: Seamless integration with SAP ERP systems ensures accurate goods receipt and invoice processing.
- Reporting and Monitoring: Provides transparency into procurement status and spending.
¶ Benefits of Using SAP SRM for Sourcing and Purchasing
- Increased Efficiency: Automation reduces manual tasks and speeds up procurement cycles.
- Better Supplier Collaboration: Improved communication and negotiation with suppliers.
- Cost Savings: Competitive bidding and contract management help optimize procurement costs.
- Compliance and Control: Enforced approval workflows and audit trails ensure policy adherence.
- Improved Transparency: Real-time tracking of procurement activities enhances decision-making.
The basic sourcing and purchasing processes form the backbone of effective procurement management in SAP SRM. By leveraging SAP SRM’s comprehensive tools and workflows, organizations can optimize their supplier interactions, streamline purchasing activities, and achieve greater control over procurement expenditures.
Understanding these fundamental processes is essential for anyone involved in SAP SRM implementation or operation, ensuring that procurement runs smoothly and delivers maximum business value.