Objective
Category managers develop a cost structure that offers insights into the various cost components, their distribution, and the drivers associated with a specific purchasing category.
In this video, Alex explains the value of managing cost structure:
The cost structure can be defined in several ways:
Regardless of the method selected, the cost values will be displayed in a Waterfall chart.
A category manager has the flexibility to add or remove components from the cost structure and can manually enter decimal values to define the percentage for each cost component along with related notes. SAP Ariba Category Management includes Labor, Material, Processing, Logistics, and Overhead as initial components. If additional components are needed, please contact your category manager administrator for further configuration.
To use Beroe, a third-party market intelligence provider, the category manager should enter the card and select Add Data from Provider.
They can choose a Market Intelligence Report that includes cost components to establish a cost structure. Note that the SAP Ariba Category Management solution requires its own dedicated Beroe license.
Similar to the Category Segmentation card, category managers can utilize generative AI to create Cost Structure content if AI is enabled. They can click the Generate button and then select Edit to make any manual adjustments.
Additionally, users can add a cost structure document from the toolkit, which contains previously created cost structures for future use. To do this, search for the name for the document, select the category and region, and once the cost structure is located, click it to create the cost structure document in the toolkit. This document can be reused in various strategy and plan documents.
If needed, users can easily replace or clear the current cost structure document from their strategy and plan documents. If the cost structure document in the toolkit is changed, users can review it and decide whether to accept it. To replace or clear the content of the Cost Structure card at any time, select the ellipsis in the top right corner of the card.
In this lesson, we explore how category managers develop a cost structure to understand the various cost components, their distribution, and the drivers within a purchasing category. The cost structure can be defined using multiple methods:
Regardless of the chosen method, the cost values are displayed in a Waterfall chart. Category managers can add or remove components from the cost structure and manually enter decimal values to define the percentage for each component, along with any related notes. Initial components in SAP Ariba Category Management include Labor, Material, Processing, Logistics, and Overhead. For additional components, contact the category manager administrator.
To use Beroe, a third-party market intelligence provider, category managers enter the card, select Add Data from Provider, and choose a Market Intelligence Report to establish a cost structure. Note that the SAP Ariba Category Management solution requires a dedicated Beroe license.
With generative AI enabled, category managers can create Cost Structure content similarly to the Category Segmentation card. They click the Generate button and then Edit to make any manual adjustments.
Users can also add a cost structure document from the toolkit, which contains previously created cost structures for future use. To do this, search for the document name, select the category and region, and click on the cost structure to create the document in the toolkit.
Finally, users can replace or clear the current cost structure document from strategy and plan documents. If the cost structure document in the toolkit is changed, users can review and decide whether to accept the changes. To replace or clear the content of the Cost Structure card, select the ellipsis in the top right corner.