The sourcing process in SAP S/4HANA Procurement involves identifying, evaluating, and selecting suppliers to fulfill the organization's procurement needs. It includes activities such as supplier qualification, bid management, negotiation, and contract management.
The following video details the process steps for sourcing in SAP S/4HANA Procurement.
Video Summary
- Supplier identification: Identify potential suppliers based on the organization's procurement requirements, such as product specifications, quantity, and delivery timelines.
- Supplier qualification: Evaluate potential suppliers based on criteria such as financial stability, quality standards, and compliance with regulations.
- Request for quotation or bid management: Prepare and distribute RFQs to potential suppliers, outlining the organization's procurement requirements and inviting them to submit proposals.
- Supplier evaluation and selection: Evaluate supplier proposals based on criteria such as price, quality, and delivery capabilities, and select the most suitable suppliers.
- Negotiation: Negotiate with selected suppliers to finalize pricing, terms, and conditions for the procurement of goods or services.
- Contract management: Create and manage contracts with selected suppliers, ensuring that all parties agree to the terms and conditions of the procurement agreement.
- Supplier relationship management: Establish ongoing relationships with selected suppliers to ensure the successful fulfillment of procurement needs and maintain a positive supplier partnership.
By following these sourcing process steps, organizations can effectively identify and select suppliers to meet their procurement requirements while ensuring compliance with company policies and industry standards.
Key Features of Sourcing in SAP S/4HANA
- Centralized procurement: SAP S/4HANA Procurement allows for the centralization of procurement processes, improving visibility and control over purchasing activities across the organization.
- Integration with suppliers: The system enables seamless integration with suppliers, facilitating electronic procurement processes and real-time collaboration with the supply chain.
- Dynamic purchasing: SAP S/4HANA Procurement supports dynamic purchasing scenarios, allowing for the creation of flexible purchasing contracts and agreements based on changing business requirements.
- Real-time analytics: The solution provides real-time analytics and reporting capabilities, allowing procurement professionals to make data-driven decisions and optimize procurement processes.
- Supplier relationship management: SAP S/4HANA Procurement includes robust supplier relationship management features, enabling organizations to manage supplier performance and relationships effectively.
- Procurement optimization: The system offers tools and functionality for procurement optimization, helping organizations streamline sourcing processes, reduce costs, and improve efficiency.
- Compliance management: SAP S/4HANA Procurement includes features for compliance management, ensuring that procurement activities adhere to relevant regulations and internal policies.
- Mobile procurement: The solution supports mobile procurement capabilities, enabling users to initiate and track procurement activities on the go, improving flexibility and accessibility.
Innovation in Sourcing with SAP S/4HANA
In SAP ECC 6.0, a request for quotation (RFQ) required a supplier to be specified. Additionally, only one supplier quotation could be entered per RFQ. This approach did not support various sourcing integration scenarios, such as SAP Ariba Sourcing or the Spot Buy capability of SAP Ariba.
In contrast, SAP S/4HANA offers improved flexibility. For example, you can send an RFQ via an SAP Fiori app to an external sourcing platform without specifying a supplier. Furthermore, SAP S/4HANA allows you to receive and manage multiple supplier quotations for a single RFQ.