Corporate purchasing functions, like the administration of master supplier data, product groups and initiation of purchase orders, goods receipt and invoicing are handled in nearly all companies by means of ERP-Systems. The strategically important components of an integrated procurement strategy today are only supported to a limited degree by software systems. The most important tasks of a procurement, such as supplier management have to be controlled in a proactive manner in difficult time-weighted optimizing and risk management steps.
According to www.wikipedia.org Supply Management is:
"The term supply management describes the methods and processes of modern corporate or institutional buying. This may be for the purchasing of supplies for internal use referred to as indirect goods and services, purchasing raw materials for the consumption during the manufacturing process, or for the purchasing of goods for inventory to be resold as products in the distribution and retail process."
(Supply management (procurement). (2016, July 31). In Wikipedia, The Free Encyclopedia. Retrieved 08:00, August 16, 2016, from https://en.wikipedia.org/w/index.php?title=Supply_management_(procurement)&oldid=732395691)
Consistently higher standards and better prices can be obtained through an efficient supplier management function. Increased value is obtained by bundling of all information on purchase data and its reference sources. All important contract information is provided to all parties involved in order to ensure purchasing and supplier management in one information database.
With an efficient supplier relationship management system (SRM system), sustainable increases in standards and improved prices can be achieved. Added values arises through the combination of the total knowledge about purchasing data and its sources with important contractual information, which is made available to all participants for the management of needs and suppliers in one knowledge base.
The supplier application module serves to register and qualify a supplier through an Excel import. It includes forms with questionnaires to be completed online by the supplier. Suppliers are verified internally by the purchase department and a supplier qualification, as the case may be. Suppliers can also be qualified based on defined rule sets with consideration to weighting and a bonus/malus rule for further automation.
This function provides a highly automated supplier assessment feature for measuring the performance of existing suppliers. The measuring criteria can be designed and weighted freely. The assessment is based on “hard facts”, like key data on delivery and quality compliance extracted directly from the ERP system as well as “soft facts” maintained by internal departments, like purchase, logistics and quality management. Regular updates ensure the transparency and comparability of the overall supplier base and form a critical data basis for the supplier classification as well as a decision basis for supplier development activities.
This function organizes the structuring and classification of the supplier base through customizable factors, e.g. for strategic profit contribution and supply risk assessments. The material-group-related assessment per supplier returns an ABC analysis and can be used as a basis for strategic decisions accordingly.
This function includes the systematic monitoring and documentation of the supplier development as well as an automated supplier qualification feature, while also supporting the Six Sigma approach (DMAICT) in this context. The supplier development function also includes an objective and action management feature with integrated result and due date monitoring.
The LCM supplier portfolio renders a graphical presentation of the stress ratio between the profit contribution (procurement volume) and the supply risk. The portfolio serves to find potential strategic action recommendations for supplier integration.
The calculation of the profit contribution is based on the assessment of historical data regarding order volumes and required materials, product range, lifecycle, etc. The supply risk is also determined empirically in parts, determining the probability of a continuous supply by the assessed supplier.
The supplier portfolio is illustrated in a four-quadrant graphic and groups the suppliers by non-critical, level, strategic and bottleneck suppliers.