SAP SRM (Supplier Relationship Management)

Definition -What is SAP SRM (Supplier Relationship Management)?

SAP supplier relationship management (SRM) - used along with Product Lifecycle Management (PLM), Enterprise Resource Planning (ERP) and Supply Chain Management (SCM) to enable effective integration and implementation of cross-application business modules; is highly efficient and has the capability of  lowering costs and ensuring higher quality.

Supplier Relationship Management (SRM) offers one of the best means of planning and managing the various aspects and interactions of an organization with the key suppliers of raw materials, goods and services. This SAP module helps in better coordination of diverse Business Processes with vendors and other external parties, thus establishing stronger tie ups and creating the right grounds for maintaining long term relationships with the primary suppliers of the enterprise. Having its roots in B2B solutions, SAP SRM appropriately defines the various SAP components, explains the ways of building strategic supplier relationships and streamlines the relevant procure-to-pay processes.

The Benefits and Features of SAP SRM include:

• It enables an organization to negotiate on contracts, interact with suppliers, streamline the tasks of Purchasing, manage inventory/delivery and facilitate product designs.
• The SRM software is also helpful in automating and systematizing the tasks of acquiring goods and designs, reducing the errors in purchases and thereby increasing the overall efficiency of the functionalities of the inventory and supply chain systems.
• SAP SRM offers innovative and creative methods that go a long way in helping better coordination of all business processes linked with the supplies of services and goods. SRM tools are being increasingly used for automating the tasks on hand and smoothening out the processes of acquisition of product designs, goods and other materials - thus paving the path for long term beneficial relationships with all suppliers.

The Steps of a SAP SRM Integrated System:

• General planning in APO (Advanced Planner and Optimizer)/ MRP in ERP systems help in planning out the materials and their required quantity with ease. These requirements are then transferred to the EBP system. Requisitions from the Project System and SAP Plant Maintenance are some of the other possible requirements.

• If the requisitions passed to EBP (Enterprise Buyer professional) have data that is unique and complete, purchase orders are created in an automatic manner. However, if any data is missing, the organization purchasing the materials completes the missing information through Process Purchase Orders or Sourcing. The purchaser then completes the orders; designates the source of supply; and add or deletes items in his selected list.
• After the order is completed, it is automatically issued to the SAP R/3 Environment. XML serves as an upcoming medium as the data is automatically integrated in multiple supplier systems. In certain cases, the orders may be sent by e-mail, fax or in the form of hard copies.
• The goods receipts are either done in the EBP by suppliers via XML confirmations; by the employees who had requested the items; via general goods recipients; or with the help of a well conceived backend system. Thereafter, Inventory is updated at the backend.
• The invoice is then processed manually in EBP by an accountant or the supplier via an XML invoice. In most cases, this task takes place from the SAP SRM SUS or the backend system.

SAP SRM, one of the most important modules of SRM products, has been giving good performance over time. Some of the primary tasks performed by SAP SRM are:

• Forecasting and analysis of purchasing behavior.
• Working hand-in-hand with partners and that too in real time.
• Cutting down of acquisition time and overall expenses.
• Increasing employee efficiency and producing high quality products.

Read Next

• SAP SRM Course & Certification Fee
• Job Profile & Salary Package for SRM Consultant
• Qualifications and Skills requires to become a SRM Consultant