Integrating Supplier Management into Procurement Processes

Objective

After completing this lesson, you will be able to explain how SAP Ariba Supplier Management is integrated throughout the source-to-pay process.

Integrated Supplier Management

The SAP Ariba Supplier Management portfolio empowers you to strategically manage your supplier relationships, offering tools to efficiently handle supplier lifecycles, performance, and risk directly within your source-to-pay process. With SAP Ariba Supplier Lifecycle and Performance, you can seamlessly connect with suppliers, streamline onboarding, and ensure compliance through integrated workflows. Simultaneously, SAP Ariba Supplier Risk helps you identify and mitigate supply chain risks, guiding your buyers to make smarter, safer decisions before making purchases. By leveraging these solutions, you can automate supplier management, better align with procurement processes, and gain a comprehensive view of your suppliers.

Supplier Profiles in SAP Ariba

Depending on how your site is set up, you can view and manage suppliers using either the supplier profile summary or the classic supplier 360° profile.

The Supplier 360° Profile

The Summary area in the supplier 360° profile shows basic information about the supplier. The panels that you see vary depending on your site's solution package and feature enablement. In sites that include SAP Ariba Supplier Risk, the Overall supplier risk panel shows a summary of the supplier's risk exposure information. In sites that include SAP Ariba Sourcing, the Sourcing Events panel displays an overview of the sourcing events the supplier has participated in, including the number of open, pending, and completed events. In sites that include SAP Ariba Contracts, the Contracts panel shows an overview of the contracts the supplier has participated in, including the number of contracts in Published, Draft Amendment, and Expired status. If an administrator in your organization has imported diversity information for the supplier, it’s displayed in the Diversity panel and the supplier’s diversity types are shared with SAP Ariba Procurement’s guided buying capability.

The Summary area in a supplier 360° profile that includes the Overall supplier risk, Diversity, Sourcing Events, and Contracts panels.

The Supplier Profile Summary

The supplier profile summary includes different panels for specific activities and types of information. The panels you see can vary depending on your organization's solution package and feature configuration. In sites that include SAP Ariba Supplier Risk, a banner displays the supplier’s overall risk exposure. You can choose the supplier risk level to see risk exposure and level by category. Additionally, the Quick Links panel includes a link to the Risk detail area.

In sites that include SAP Ariba Sourcing, when navigating from a guided sourcing page to a supplier's profile summary, a Sourcing breadcrumb returns you to your original location in guided sourcing.

SAP Ariba Sourcing Integration

In the guided sourcing user interface, you can search for suppliers based on qualification status and risk level.

The Invite suppliers page of a sourcing event in the guided sourcing user interface includes a search filters area and a supplier list area. The search filters include Commodity Categories, Qualification Status, Organization Name, Contact First Name, Contact Last Name, and Risk Level. In the Risk Level filter, Low and Medium are selected. Seven suppliers meet the search criteria and are listed in the Suppliers area of the page.

When inviting suppliers to sourcing events, you can see their registration, qualification, and preferred statuses. You can configure event templates to define eligibility criteria for inviting suppliers to events or awarding events to them, based on their status in the supplier management process. You can also configure event templates to automatically invite preferred suppliers to events or line items based on the commodity and region specified during the event creation process.

The Suppliers area of a sourcing event in the guided sourcing user interface displays three suppliers, along with their Preferred, Registration Status, Qualification Status, and Auto-invited information. The first supplier is a preferred supplier, has a Registration Status of Invited, and a Qualification Status of Qualified. The second supplier is a preferred supplier, has a Registration Status of Invited, and a Qualification Status of Qualified. The third supplier is a preferred supplier, has a Registration Status of Registered, and a Qualification Status of Qualified. An information bubble at the top of the Suppliers area says You are automatically inviting preferred suppliers to this event. Since all three suppliers are preferred suppliers, they were auto-invited to the event.

In the guided sourcing user interface, you can view suppliers' risk level and scores in various categories.

The Suppliers area of a sourcing event in the guided sourcing user interface displays three suppliers, along with their corresponding risk level. Grove Street Inc has a Low risk level, Stratus IT has a High risk level, and Willow Supplier has a Low risk level. The overall risk level for Stratus IT is selected, which displays a window that shows the supplier's Score and Risk level for the Overall Risk, Operational, Regulatory and Legal, Environmental and Social, and Financial categories.

SAP Ariba Contracts Integration

Engagement Request Details

You can link an engagement risk assessment project to procurement contract requests and workspaces. The Engagement Request Details area in Contract Attributes shows the status and risk rating for the supplier based on the risk project.

The Engagement Request Details area in a procurement contract workspace shows a linked engagement risk assessment project. The details of the engagement request are as follows: the title is Database Software Engagement, the status is Draft, the inherent risk rating is Medium, and the number of Issues is three. There is a See Issues link next to the number of issues.

Supplier Risk Exposure

In sites with custom risk categories enabled, you can view supplier risk exposure data in contract requests and workspaces. Hovering over the Risk Score value in the Contract Attributes section opens a popup displaying the supplier's risk exposure mapped to your custom risk categories. The weights assigned to each category are based on your organization's risk exposure model.

Note

This feature does not apply to Contract Workspace (Internal) projects.
The Contract Attributes area in a contract workspace shows the supplier’s risk score. A popup displays the overall risk exposure and the risk by category.

SAP Ariba Procurement Integration

The guided buying capability uses qualification statuses to indicate qualified suppliers in buying workflows. Suppliers need to be qualified to show up as suggested suppliers when users create non-catalog requests. Additionally, when guided buying users request quotes, suppliers must be qualified to show up in the list of available suppliers.

You can direct spend towards certain suppliers by designating them as preferred suppliers. Suppliers with the highest preferred category can appear at the top of guided buying search results.

You can promote diversity through procurement within your organization by labeling suppliers with diversity types that are displayed on supplier tiles and item tiles. If your organization wants to promote diversity through procurement further, you can create a diversity program. Suppliers that belong to the program are labeled with your diversity program logo and their details include a description of your diversity program.

Guided buying users can mitigate risk when requesting non-catalog purchases or requesting a quote for an item by reviewing a risk exposure graphic showing the risk level associated with each supplier.

The Supplier area of a non-catalog request in the guided buying user interface shows two recommended suppliers: Stratus IT and C Group. Stratus IT appears before C Group. C Group's summary information shows that it is Qualified, Woman-Owned, and has Low risk exposure. Stratus It's summary information shows that it is Preferred, Minority-Owned plus two more diversity types, and has High right exposure. Stratus IT's supplier details are expanded to show Contact, Supplier diversity, and Risk exposure details. The Contact area shows two email addresses. The Supplier diversity area shows the supplier is part of the Global Sustainable Supplier program and has Minority-Owned, Woman-Owned, and Sustainable Supplier diversity factors. The supplier's risk exposure graphic shows High overall risk exposure, along with values in the four risk categories. Stratus IT has High Regulatory & legal risk exposure, Medium Environmental & social risk exposure, Medium Operational risk exposure, and High Financial risk exposure.

SAP Ariba Spend Analysis Integration

Prepackaged Reports

You can gain actionable insights from prepackaged supplier lifecycle and supplier performance management reports. Supplier lifecycle reports are designed to help you analyze suppliers and supplier management project activities in your site and examine supplier creation and onboarding activities to identify trends and bottlenecks. Supplier performance management reports are designed to help you monitor your company’s supplier performance management programs and analyze supplier performance using the metrics that you have established in that program.

The Supplier Lifecycle Reports page lists nine prepackaged reports: Modular Questionnaire Response Report, Open Supplier Registration Report, Open Supplier Requests Report, Project Approval Activity Report, Registration Questionnaire Response Report, Supplier ID Report, Supplier Management Questionnaire Response Report, Supplier Registration Project Report, and Supplier Request Project Report. The Supplier Performance Management Reports page lists nine prepackaged reports: SPM Project Report, Program Management Report, Supplier SPM Report, SPM Project List, Supplier Performance Trending Report, Supplier Recent Scorecards, Trending By Commodity, Qualitative Survey Report, and Quantitative Survey Report.

Custom Dashboard with Reports

You can build custom dashboards for quick access to the supplier onboarding, lifecycle process, and risk assessment process data that’s most important to you.

A custom dashboard titled Supplier Reports displays data from four different reports: Open Supplier Requests Report, Open Supplier Registrations Report, Supplier Risk Project Tasks Status, and Trending by Commodity. The Open Supplier Requests Report area is a table that shows one task in approval that has been open for 168 days. The Open Supplier Registrations Report area is a table that shows one Pending Approval that has been open for 172 days. The Supplier Risk Project Task Status area is a table that has three columns: Approval, To do, and Task Count. The In Progress row of the table has one Approval, two To do, and a total Task Count of five. The Complete row of the table has two Approval, zero To Do, and a total Task Count of two.

Integration with External Systems

SAP Ariba Supplier Management doesn’t just integrate with other SAP Ariba solutions, it also links to:

  • Your existing supplier data, either through bi-directional synchronization with an SAP system or limited import from other systems
  • The suppliers themselves, through self-managed data and questionnaires in SAP Business Network
  • Third-party providers of supplier risk data
A graphic depicting how SAP Ariba Supplier Lifecycle and Performance and SAP Ariba Supplier Risk connect to external systems. The boxes that represent SAP Ariba Supplier Lifecycle and Performance and SAP Ariba Supplier Risk are connected to a box that represents the SAP Ariba source-to-settle suite, which includes sourcing, contracts, buying, invoicing, and analysis capabilities. An area that represents Extension and Partner APIs, which correspond to external data sources such as financial, ratings, news, and government agencies. SAP Business Network is represented by a cloud of gray dots. Integrations to SAP ERP, on premise, and cloud solutions are represented as connecting to SAP Ariba solutions through the Managed Gateway for Spend&Network.

Summary

  • Supplier Management Tools: Automate supplier lifecycle, performance, and risk management for seamless supply chain decision-making.
  • Profile Management: Utilize supplier profiles to access comprehensive supplier information, including risk, diversity, sourcing event, and contract data.
  • Integration with SAP Ariba Solutions: Streamline sourcing, contracts, procurement, and spend analysis with integrated supplier management data in SAP Ariba systems.
  • Diversity and Risk Mitigation: Promote supplier diversity and mitigate risks through guided buying workflows and exposure graphics.
  • External System Integration: Connect supplier data with SAP systems and third-party providers for enhanced risk management and data synchronization.
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