Defining SAP Ariba Strategic Sourcing Components

Objective

After completing this lesson, you will be able to define the components of the SAP Ariba Strategic Sourcing Suite.

SAP Ariba Strategic Sourcing Suite Overview

SAP Ariba Strategic Sourcing bundle

SAP Ariba Strategic Sourcing Suite is a single, integrated solution that covers the end-to-end, source-to-contract process for indirect, services, capital equipment, and direct spend categories. It integrates sourcing, contracting, and supplier information and performance management and supports a closed-loop, digital, and source-to-contract process for direct and indirect materials. The SAP Ariba Strategic Sourcing Suite includes the following applications:

  • SAP Ariba Sourcing
  • SAP Ariba Contracts
  • SAP Ariba Supplier Lifecycle and Performance Management (SLP)

Note

The direct material sourcing capability is a set of features of the SAP Ariba Sourcing application. Depending on the context, it is called direct material sourcing, direct spend sourcing or product sourcing. The capability is only available for SAP Ariba Strategic Sourcing Suite clients and not standalone Ariba Sourcing customers. This set of features should not be confused with the SAP Product Sourcing solution.

Strategic Sourcing Suite Capabilities

  • Process efficiency across all spend categories
  • Increased spend under management
  • Contract compliance through ERP integration
  • Faster sourcing and contracting with integrated master data across systems
  • Increased visibility into total landed costs
  • Greater pricing and forecasting visibility
  • Improved supplier selection and lower risk
An infographic related to SAP Sourcing and Contracts Solution is displayed.

SAP Ariba Strategic Sourcing Suite facilitated tasks

SAP Ariba Strategic Sourcing Suite enables you to perform the following tasks:

  • Source services, indirect and direct materials using one solution.
  • Operationalize the strategic sourcing of direct materials by providing an end-to-end process that integrates your sourcing, contracting, and supplier management processes.
  • Monitor your supply base to ensure suppliers meet compliance requirements.
  • Source directly from a bill of material (BOM) and integrate with your PLM and SAP S/4HANA systems.
  • Upload a BOM from your PLM systems and source directly from the BOM. All items from the BOM will have pricing and assigned suppliers.
  • Source items from complex BOMs while integrating with your ERP system. This ensures your purchase orders are generated directly from those contracted terms.
  • Ensure selection of authorized suppliers is compliant with regulatory requirements.
  • View the supplier qualification criteria at a detailed level.
  • Export pricing information to an external system. This can then be used to create purchasing information records (PIRs) or analytical reports.

SAP Ariba Strategic Sourcing Suite extends the functionality of SAP Ariba's industry-leading sourcing solutions into managing the more advanced requirements of product sourcing. The result is a single, closed loop, source-to-contract solution for managing sourcing and suppliers across all spend categories.

SAP Ariba Strategic Sourcing Suite integrates with enterprise resource planning (ERP), PLM, and material master (MM) solutions from SAP. This integration enables you to get products to market faster by integrating sourcing and product design teams. You can also model product costing for complex, multilevel BOMs. This helps you understand the final product costs and negotiate better savings, while managing suppliers at the item or plant level to enhance supplier qualification and performance.

SAP Ariba Sourcing Capabilities

Main features of SAP Ariba Sourcing

  • Electronic, template-based support for RFIs, RFPs, RFQs, and auctions
  • Integrated project, workflow, and document management
  • Dynamic, real-time event views; integrated reporting; and decision analysis of multiple "what if" scenarios

Benefits

  • Improved visibility for all stakeholders into event status
  • Increased process efficiency
  • Reduced cycle times

Key capabilities include:

  • Auction support, including a variety of types, such as reverse, index, forward, Dutch, Japanese, and total cost, with rules to drive the best market results
  • Comprehensive automated and team scoring features with comparison reporting
  • Sourcing support desk, sourcing advice, and guidance by expert SAP Ariba personnel
  • Constraint-based optimization based on price, total cost, score, or question response, supplier profile, allocations, and volumes; optimize across matrices, tiers, and bundled bids
  • Perform cost breakdowns
The Bid Comparison Report is displayed.

Direct Sourcing Capabilities

SAP Ariba Sourcing, when enabled part of the Strategic Sourcing Suite allows for additional features for the sourcing of direct materials.

SAP Ariba Strategic Sourcing Suite includes a new layer of innovations to support the sourcing of direct materials. As shown in the figure, this layer includes a product sourcing functionality.

This product sourcing functionality enables product costing and sourcing activities throughout the lifecycle, facilitating collaboration with trading partners:

  • Co-ordinate with suppliers on new products
  • Drive spend reduction across your enterprise

It provides companies with a better understanding of costs by removing the walls between engineering, sourcing and supplier by exposing materials and components of a BOM in an early stage to the supplier. This capability is essential during the new product development process, facilitates cost breakdowns and it increases the speed to get products quicker to market and stay in cost control.

The Ariba Direct Material Sourcing process flow is displayed.

The direct sourcing capabilities provide separate offerings for the following industries:

  • Process Industry - Product sourcing with a material
  • Discrete Industry - Product sourcing with a Bill of Materials (BOM) and material
  • Retail Industry - Retail sourcing with an article

SAP Ariba Contracts Capabilities

SAP Ariba Contracts Features

  • Contract authoring, review, and approval with integrated reporting and e-signature support
  • Contracts created from sourcing projects with easy management of addendums and supporting documents
  • Link to supplier engagement risk assessments
  • System alerts as contracts near expiration

Benefits

  • Real-time visibility into all contracts, their status, and supporting documents
  • Faster contract execution
The Overview tab of the Contract with Ariba Education Supplier screen is displayed.

SAP Ariba Lifecycle and Performance Capabilities

SAP Ariba Lifecycle and Performance Features

  • Process support for the entire supplier management lifecycle
  • Assess and qualify suppliers at the item, plant, or location level
  • Quickly identify and assess new sources of supply
  • Automated, standard reports for a 360-degree view across all spend management activities
  • Automated alerts for when out-of-threshold scores occur

Benefits

  • A single portal for suppliers to register and collaborate with buyers
  • Buyers able to issue open quote requests for access to more qualified suppliers

Note

The portal provides one location for supplier information, certificates, and profile management. Supplier performance can also be tracked over time so as to identify any need for improvement.
The Summary tab of the Wicked Widget Company is displayed.

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