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:
- Supplier Registration
- Supplier Qualification
- Supplier Portfolio Management
- 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.
Above, I had given an overview of functionalities in SAP Supplier Lifecycle Management.
Now I am going to write briefly about architecture and various deployment options, that comes with SAP SLM version 1.0.
At a high level architecture, SAP SLM is based on SAP NW 702 platform. It is basically composed of two components - Buy Side and Sell side. Buy Side is the component, which is accessed within buying company by purchasers, category managers and other internal stakeholders. Buy side is located within the firewall of company and is available on intranet.
Sell side is accessed by suppliers for various external processes and is located outside the firewall of the company. Sell side is available on open internet for registered and potential suppliers.
Broadly following processes are executed on the two sides:
Sell Side:
Supplier self registration
Supplier data maintenance
Supplier qualification response submission
Buy Side:
Supplier registration approval
Supplier portfolio maintenance
Supplier qualification
The two components are connected via RFC connection for data exchange. There could be a little concern from security standpoint here, as RFC connections may not be encouraged via supplier systems to customer secured systems and even SAP recommends asynchronous communication using SAP PI or middleware.
SAP SLM - Buy side is connected further to a backend system, which can be an SAP SRM server or SAP ECC server. This is basically to synchronize supplier data to backend systems.
Overall, SAP SLM V1.0 can be deployed in multiple flexible variants as below:
1. Integrated Deployment:
Under this, SAP SLM is installed as an add-on to SAP SRM (Version 7.0, EHP1) server. On the sell side, SAP SLM is installed as an add-on component to SUS (Supplier self services), which is supplier collaboration solution for SAP SRM v1.0.
On the buy side, SAP SLM is installed as an add-on to SAP SRM procurement component. The backend system is SAP ECC server(>= version 6.0) in this case.
The benefit with this deployment is that, it allows 'Order collaboration' along with Supplier data management on one platform. Using Portal, both SUS and SLM can be accessed uniformly. Of course, this requires a pre installation of SAP SRM(version 701) and SUS to capitalize upon.
2. Standalone Deployment:
Under this, SAP SLM is installed as an standalone server with Buy side and sell side as two independent components. The backend in this case could be SAP SRM server (version 5.0 to 701) or SAP ECC (>= 6.0).
The benefit with this deployment is that, SAP SLM can be used with lower SRM versions like SRM 5.0.
3. Mixed deployment:
This is basically hybrid deployment, wherein either the buy side or sell side is standalone and the other component is installed as an add-on to SAP SRM (701) server. The backend system can be SAP SRM server or SAP ECC server.
This deployment variant could be useful, where either only SUS component or only SAP SRM procurement (EBP) component is used by a company. For e.g. in MM-SUS scenario, this deployment can be useful.
Finally, the decision for a deployment option would depend upon the existing landscape components and the business scenarios applicable. SAP SLM in future releases would also be provided with option of installation as an ECC add-on. So this would provide another flexible option for customers to decide upon the deployment variant.
