SlideShare a Scribd company logo
S&P

Control your indirect
spend with SAP SCM
2013 – Implement Procurement Event
Contents

1

Understand the Indirect Spend

2

Traditional Indirect Procurement pitfalls

3

Simplify the indirect procurement processes

4

How Technology can improve Indirect Procurement

5

Focus on Alignment between Operations, Finance and Procurement

6

Response-Ability: Delegate to focus on more strategic activities

7

Viewpoints

2
1

20
3
1

“Currently, indirect spend is recognized as a major
area for potential improvement, with up to 20% of
all purchases (by value)”
BusinessWeek

4
1

70/90
5
1

“Currently, indirect spend is recognized as a major
area for potential improvement, with up to 70/90% (by
number) of purchase orders, shipment expenses, and
invoices processed attributed to materials and services
that are not used in the finished product”

BusinessWeek

6
2

Key Challenges of Indirect Procurement

Poor

Maverick

High number of

Complexity of

Standardization

Buys

Suppliers

the Market

High
number of
Stakeholders

Poor

Fragmented
Demand

Visibility
into spending

Indirect Procurement deals with the acquisition of all those goods and services not directly involved
in the core business of the organization. This is the reason why the contribution that indirect goods
and services are able to offer to the company is very often misunderstood or underestimated.

7
Traditional Indirect Procurement pitfalls

1

Manual approvals are the major cause of long lead times in Ind. Proc.

2

No standard processes

3
4
5

Lack of visibility into contracts or contracts not in place

Lack of strategic tools for sourcing, suppliers qualification & evaluation

“Where is my money going to?”

8

2
2

“If you want to truly understand something, try to
change it.”
Kurt Lewin

9
2

Indirect Procurement vs. Direct Procurement
Process

Supply market
Number of
transactions

Number of used suppliers
Number of categories

Buying power
Number of supply chain
integration issues

Transaction
price

Other
Number of requisitioners
Maverick spend

Indirect Procurement
Business focus

Direct Procurement

Buying power
Power of procurement
department

10
3

“Problems can be complicated.
Solutions cannot.”
Implement

11
A guideline to approach Indirect Spend Management
FOLLOWING THE STAR

• SIMPLIFY the Indirect Spend and apply a category-wise
sourcing strategy and procurement process
• Provide employees with the right TECHNOLOGY which
creates a compelling purchasing experience

• ALIGN the different stakeholders involved and let them
gain a common understanding of the new processes
• Delegate, under certain conditions and rules, people giving
them the RESPONSE-ABILITY of their actions

12

3
3

Simplify!

“Simplicity is the ultimate sophistication”
Leonardo Da Vinci

13
3

Start by Categorizing products and services
Indirect materials
and services
MRO

IT

Administrative services

Travels

Telecoms

Facility management

Utilities
Marketing

Office Stuff

All products and services

Root

44 Office equipment and accessories
and supplies

Segment
Family
Class

10 Office machines and their supplies
15 Duplicating machines

Commodity
Class

01 Photocopier

31 Printer and facsimile and
photocopier supplies

Commodity

03 Toner

14
Define a purchasing channel for each category
Indirect Spend needs CONTROL that:

FLEXIBILITY is needed, when control:

• Is sufficient enough to meet the defined goals
for cost reduction

• Stops the business from operating

• Is possible to implement and is aligned with
strategic goals and objectives

• Builds up rule books just to make rules

• Establishes ineffective routines

• Provides “reasonable assurance”
• Adds value to the business

Flexibility

Control

15

3
4

Technology

“Technology does not drive change – it enables
change”

Anonymous

16
4

Traditional vs. e-Procurement process
E-Procurement

Traditional Procurement

LEADTIME REDUCED BY 67% IN TOTAL
17
4

Technology support
SPEEDING UP THE JOURNEY TOWARDS PROCUREMENT EXCELLENCE

Paperless
processes

Reduced
lead
times

Increased spend
visibility

18

Automated
checks

Reduced
transactional
costs
Examples of purchasing channels using SAP SRM
– placing a service order

4

SERVICE PROCUREMENT WITH GOODS RECEIPT

Shopping cart

Purchase Order

Service entry sheet

Goods receipt

Invoice receipt

This function is used to create purchase orders for services performed by service provider. Service entry sheet is created for each service
provided, and the consumed time can be entered in the entry sheet. Once the service entry has been confirmed, invoice can be posted.

Addressed challenges

Business benefits

• Services are often procured locally, which leads to poor
visibility in the spend. Saving opportunity not fully
captured

• Having visibility on the spend

• Maverick purchases for services and use of
unauthorised suppliers

• Providing an easy procurement system for
employees

• Manual process and long processing time of
purchasing documents

• Increase the contract compliance

• Aggregating the demand and increasing the
procurement power

19
Examples of purchasing channels with SAP SRM
– processing a contractual invoice

4

DIRECT CONTRACT REFERENCE FOR INVOICE

Incoming invoice

Contract history update
in ERP

Contract reference

Contract release
in SAP SRM

This function is used to create invoices with a direct reference to an SRM central contract. The invoice with the contract reference updates
the history of the contract in SAP ERP. A release is then created for the reference central contract in SAP SRM.

Addressed challenges

Business benefits

• Invoices for unplanned services are often posted
without reference to any purchasing document and are
therefore difficult to trace

• Better agreements for services through higher spend
visibility and lower maverick buying
• Automated processes, review and approval plus
accounting of contractual invoices

• Manual handling of recurring contractual invoices take
up unnecessary manual resources

• Consistent verification of invoice validity, amounts,
terms, etc.

• Suppliers do not invoice according to the agreed-upon
terms and conditions

20
Examples of purchasing channels with SAP SRM
– buying direct materials

4

PLAN-DRIVEN PROCUREMENT

Planning

Process purchase
requisition

Process PO

Goods receipt

Invoice receipt

This function is used to process Direct material requirements that have been generated in systems other than SAP SRM. The demand for
products can come from several different planning systems such as material requirements planning (MRP). Using SAP SRM, contract is
assigned automatically to the PO.

Addressed challenges

Business benefits

• Fragmented demand for MRO activities

• Bundle all the requirements into one request which
can be sourced by professional buyers instead of
operational purchasers

• No contract visibility

21
Examples of purchasing channels with SAP SRM
– buying indirect materials through e-Catalogues

4

PURCHASES OVER CATALOGUE

Shopping cart

Purchase order

Goods receipt

Invoice receipt

Make purchasing easy to increase compliance

22
5

Alignment

“The present contains nothing more than the past, and
what is found in the effect was already in the cause”
Henry Bergson

23
5

Alignment between operations, procurement and finance
BRIDGING THE GAP

Account Payable
Invoice posting

Ok?

Yes
Invoice posted

Invoice
queue

No

Purchasing
Correction

24

Operations
Correction
6

Response-Ability

“Technology is nothing. What’s important is that you
have a faith in people, that they’re basically good and
smart, and if you give them tools, they’ll do wonderful
things with them”
Steve Jobs

25
6

Response-ability

The key to minimise the operational and tactical tasks in purchasing department is to DELEGATE, whenever possible, tactical, non-valueadded work. This will give employees the ability to react to their needs in a faster and more flexible way leaving the procurement
department the time to focus on the above-listed strategic tasks.

Contract
negotiation and
implementation

Spend analysis

Forecasting

Supplier
development

Supplier
relationship
management
Strategic
sourcing

26
7

Viewpoints

Define KPI´s

Response-Ability
Alignment

Define clear and
measurable key
performance
indicators

Identify your
categories and
underline their
corresponding
procurement
challenges

Keep It Simple

Tailor a sourcing
strategy and a
purchasing
channel on
each category

Adopt the right
technology

Technology

27

Identify and
align all the
stakeholders
involved

Use a
phased
approach
Implement Consulting Group
Learn more about how we work with SAP Supply Chain Management
Learn more about how we work with Procurement
Go to Implement Consulting Group's main website

28

More Related Content

What's hot

Basics of Supply Chain Management
Basics of Supply Chain ManagementBasics of Supply Chain Management
Basics of Supply Chain Management
vip1233
 
Procure to pay ppt
Procure to pay pptProcure to pay ppt
Procure to pay ppt
tiffanymaetua
 
Sourcing Strategy Development
Sourcing Strategy DevelopmentSourcing Strategy Development
Sourcing Strategy Development
Jason D Barr
 
Strategic Sourcing Process
Strategic Sourcing ProcessStrategic Sourcing Process
Strategic Sourcing Process
James Martin
 
Strategic sourcing vs Category mgmt April 2017
Strategic sourcing vs Category mgmt   April 2017Strategic sourcing vs Category mgmt   April 2017
Strategic sourcing vs Category mgmt April 2017
R V Srinivas Rao Chartered FCIPS, PMP, CISCM
 
Ariba Coverage of Risk Management within the Supplier Lifecycle
Ariba Coverage of Risk Management within the Supplier LifecycleAriba Coverage of Risk Management within the Supplier Lifecycle
Ariba Coverage of Risk Management within the Supplier Lifecycle
Sean Thomson
 
Vendor Management
Vendor Management Vendor Management
Vendor Management
Mark Krebs
 
Purchasing and Procurement management
Purchasing and Procurement managementPurchasing and Procurement management
Purchasing and Procurement management
Farouk Nasser
 
AVATA S&OP / IBP Express
AVATA S&OP / IBP ExpressAVATA S&OP / IBP Express
AVATA S&OP / IBP Express
AVATA
 
Procurement Strategy by Derek Hendrikz
Procurement Strategy by Derek HendrikzProcurement Strategy by Derek Hendrikz
Procurement Strategy by Derek Hendrikz
Derek Hendrikz
 
INVENTORY OPTIMIZATION
INVENTORY OPTIMIZATIONINVENTORY OPTIMIZATION
INVENTORY OPTIMIZATION
Rajeev Sharan
 
Section 06 Procurement Process
Section 06 Procurement ProcessSection 06 Procurement Process
Section 06 Procurement Process
Avik Munshi
 
Vendor Management - An Overview (Project PPT)
Vendor Management - An Overview (Project PPT)Vendor Management - An Overview (Project PPT)
Vendor Management - An Overview (Project PPT)
Jyoti Kumari
 
Logistic and supply chain managment
Logistic and supply chain managmentLogistic and supply chain managment
Logistic and supply chain managment
Modassar Nazar
 
Procedure for purchasing, purchasing orders, and selection of suppliers
Procedure for purchasing, purchasing orders, and selection of suppliersProcedure for purchasing, purchasing orders, and selection of suppliers
Procedure for purchasing, purchasing orders, and selection of suppliers
Qusi Alqarqaz
 
Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professi...
Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professi...Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professi...
Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professi...
Bill Kohnen
 
Procurement training course -introduction to procurement
Procurement training course -introduction to procurementProcurement training course -introduction to procurement
Procurement training course -introduction to procurement
Sheila Elliott
 
Supply Chain Performance
Supply Chain PerformanceSupply Chain Performance
Supply Chain Performance
Anand Subramaniam
 
Benchmark Your Costs and Transform Your Source-to-Pay Process
Benchmark Your Costs and Transform Your Source-to-Pay ProcessBenchmark Your Costs and Transform Your Source-to-Pay Process
Benchmark Your Costs and Transform Your Source-to-Pay Process
SAP Ariba
 
Strategic Sourcing & E Procurement
Strategic Sourcing & E ProcurementStrategic Sourcing & E Procurement
Strategic Sourcing & E Procurement
Anand Subramaniam
 

What's hot (20)

Basics of Supply Chain Management
Basics of Supply Chain ManagementBasics of Supply Chain Management
Basics of Supply Chain Management
 
Procure to pay ppt
Procure to pay pptProcure to pay ppt
Procure to pay ppt
 
Sourcing Strategy Development
Sourcing Strategy DevelopmentSourcing Strategy Development
Sourcing Strategy Development
 
Strategic Sourcing Process
Strategic Sourcing ProcessStrategic Sourcing Process
Strategic Sourcing Process
 
Strategic sourcing vs Category mgmt April 2017
Strategic sourcing vs Category mgmt   April 2017Strategic sourcing vs Category mgmt   April 2017
Strategic sourcing vs Category mgmt April 2017
 
Ariba Coverage of Risk Management within the Supplier Lifecycle
Ariba Coverage of Risk Management within the Supplier LifecycleAriba Coverage of Risk Management within the Supplier Lifecycle
Ariba Coverage of Risk Management within the Supplier Lifecycle
 
Vendor Management
Vendor Management Vendor Management
Vendor Management
 
Purchasing and Procurement management
Purchasing and Procurement managementPurchasing and Procurement management
Purchasing and Procurement management
 
AVATA S&OP / IBP Express
AVATA S&OP / IBP ExpressAVATA S&OP / IBP Express
AVATA S&OP / IBP Express
 
Procurement Strategy by Derek Hendrikz
Procurement Strategy by Derek HendrikzProcurement Strategy by Derek Hendrikz
Procurement Strategy by Derek Hendrikz
 
INVENTORY OPTIMIZATION
INVENTORY OPTIMIZATIONINVENTORY OPTIMIZATION
INVENTORY OPTIMIZATION
 
Section 06 Procurement Process
Section 06 Procurement ProcessSection 06 Procurement Process
Section 06 Procurement Process
 
Vendor Management - An Overview (Project PPT)
Vendor Management - An Overview (Project PPT)Vendor Management - An Overview (Project PPT)
Vendor Management - An Overview (Project PPT)
 
Logistic and supply chain managment
Logistic and supply chain managmentLogistic and supply chain managment
Logistic and supply chain managment
 
Procedure for purchasing, purchasing orders, and selection of suppliers
Procedure for purchasing, purchasing orders, and selection of suppliersProcedure for purchasing, purchasing orders, and selection of suppliers
Procedure for purchasing, purchasing orders, and selection of suppliers
 
Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professi...
Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professi...Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professi...
Strategic Sourcing and B2B E Commerce Solutions For ASEAN Purchasing Professi...
 
Procurement training course -introduction to procurement
Procurement training course -introduction to procurementProcurement training course -introduction to procurement
Procurement training course -introduction to procurement
 
Supply Chain Performance
Supply Chain PerformanceSupply Chain Performance
Supply Chain Performance
 
Benchmark Your Costs and Transform Your Source-to-Pay Process
Benchmark Your Costs and Transform Your Source-to-Pay ProcessBenchmark Your Costs and Transform Your Source-to-Pay Process
Benchmark Your Costs and Transform Your Source-to-Pay Process
 
Strategic Sourcing & E Procurement
Strategic Sourcing & E ProcurementStrategic Sourcing & E Procurement
Strategic Sourcing & E Procurement
 

Similar to Control you indirect spend with SAP SCM

Procurement Transformation: A Story of a Learning Journey [Amsterdam]
Procurement Transformation: A Story of a Learning Journey [Amsterdam]Procurement Transformation: A Story of a Learning Journey [Amsterdam]
Procurement Transformation: A Story of a Learning Journey [Amsterdam]
SAP Ariba
 
[2019] week07 enterprise systems
[2019] week07   enterprise systems[2019] week07   enterprise systems
[2019] week07 enterprise systems
Anisah Herdiyanti
 
The Ultimate Guide To Procurement Transformation In 2023.pptx
The Ultimate Guide To Procurement Transformation In 2023.pptxThe Ultimate Guide To Procurement Transformation In 2023.pptx
The Ultimate Guide To Procurement Transformation In 2023.pptx
TYASuite Software Solutions Private limited
 
Technology Trends for Manufacturers in India
Technology Trends for Manufacturers in IndiaTechnology Trends for Manufacturers in India
Technology Trends for Manufacturers in India
Synoptek (previously Indusa)
 
Procurement of enterprise resource planning systems v6 final
Procurement of enterprise resource planning systems v6   finalProcurement of enterprise resource planning systems v6   final
Procurement of enterprise resource planning systems v6 final
Ahmad Azwadi Ameruddin CA(M)
 
Erp in logistics and supply chain
Erp in logistics and supply chainErp in logistics and supply chain
Erp in logistics and supply chain
savvyavarma
 
Project Based Industry ERP - Nfra enterprise Solution
Project Based Industry ERP - Nfra enterprise SolutionProject Based Industry ERP - Nfra enterprise Solution
Project Based Industry ERP - Nfra enterprise Solution
nfra erp
 
NAV presentation
NAV presentationNAV presentation
NAV presentation
Vishal Nandanwar
 
How P2P Fits within an Enterprise Supply Chain
How P2P Fits within an Enterprise Supply ChainHow P2P Fits within an Enterprise Supply Chain
How P2P Fits within an Enterprise Supply Chain
ScottMadden, Inc.
 
The Cloud, CPM and the CFO
The Cloud, CPM and the CFOThe Cloud, CPM and the CFO
The Cloud, CPM and the CFO
Innovation Enterprise
 
Outsourcing and Vendor management
Outsourcing and Vendor managementOutsourcing and Vendor management
Outsourcing and Vendor management
Raminder Pal Singh
 
Digital procurement assessment workshop
Digital procurement assessment workshopDigital procurement assessment workshop
Digital procurement assessment workshop
Jeff Hocking
 
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
Raffa Learning Community
 
building-analytical-roadmap.pdf
building-analytical-roadmap.pdfbuilding-analytical-roadmap.pdf
building-analytical-roadmap.pdf
ssuser6fd788
 
It services in telecom
It services in telecomIt services in telecom
It services in telecom
Sridhar Radhakrishnan
 
Software for Project Planning - Nfra professional
Software for Project Planning - Nfra professionalSoftware for Project Planning - Nfra professional
Software for Project Planning - Nfra professional
nfra erp
 
Crm implementation in insurance sector
Crm implementation in insurance sectorCrm implementation in insurance sector
Crm implementation in insurance sector
Rahul Gupta
 
Lean Manufacturing
Lean ManufacturingLean Manufacturing
Lean Manufacturing
John Glenning
 
CP Brochure Final
CP Brochure FinalCP Brochure Final
CP Brochure Final
Melissa Reider
 
Integrated Direct Procurement Made Easier with SAP and SAP Ariba Solutions
Integrated Direct Procurement Made Easier with SAP and SAP Ariba SolutionsIntegrated Direct Procurement Made Easier with SAP and SAP Ariba Solutions
Integrated Direct Procurement Made Easier with SAP and SAP Ariba Solutions
SAP Ariba
 

Similar to Control you indirect spend with SAP SCM (20)

Procurement Transformation: A Story of a Learning Journey [Amsterdam]
Procurement Transformation: A Story of a Learning Journey [Amsterdam]Procurement Transformation: A Story of a Learning Journey [Amsterdam]
Procurement Transformation: A Story of a Learning Journey [Amsterdam]
 
[2019] week07 enterprise systems
[2019] week07   enterprise systems[2019] week07   enterprise systems
[2019] week07 enterprise systems
 
The Ultimate Guide To Procurement Transformation In 2023.pptx
The Ultimate Guide To Procurement Transformation In 2023.pptxThe Ultimate Guide To Procurement Transformation In 2023.pptx
The Ultimate Guide To Procurement Transformation In 2023.pptx
 
Technology Trends for Manufacturers in India
Technology Trends for Manufacturers in IndiaTechnology Trends for Manufacturers in India
Technology Trends for Manufacturers in India
 
Procurement of enterprise resource planning systems v6 final
Procurement of enterprise resource planning systems v6   finalProcurement of enterprise resource planning systems v6   final
Procurement of enterprise resource planning systems v6 final
 
Erp in logistics and supply chain
Erp in logistics and supply chainErp in logistics and supply chain
Erp in logistics and supply chain
 
Project Based Industry ERP - Nfra enterprise Solution
Project Based Industry ERP - Nfra enterprise SolutionProject Based Industry ERP - Nfra enterprise Solution
Project Based Industry ERP - Nfra enterprise Solution
 
NAV presentation
NAV presentationNAV presentation
NAV presentation
 
How P2P Fits within an Enterprise Supply Chain
How P2P Fits within an Enterprise Supply ChainHow P2P Fits within an Enterprise Supply Chain
How P2P Fits within an Enterprise Supply Chain
 
The Cloud, CPM and the CFO
The Cloud, CPM and the CFOThe Cloud, CPM and the CFO
The Cloud, CPM and the CFO
 
Outsourcing and Vendor management
Outsourcing and Vendor managementOutsourcing and Vendor management
Outsourcing and Vendor management
 
Digital procurement assessment workshop
Digital procurement assessment workshopDigital procurement assessment workshop
Digital procurement assessment workshop
 
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
 
building-analytical-roadmap.pdf
building-analytical-roadmap.pdfbuilding-analytical-roadmap.pdf
building-analytical-roadmap.pdf
 
It services in telecom
It services in telecomIt services in telecom
It services in telecom
 
Software for Project Planning - Nfra professional
Software for Project Planning - Nfra professionalSoftware for Project Planning - Nfra professional
Software for Project Planning - Nfra professional
 
Crm implementation in insurance sector
Crm implementation in insurance sectorCrm implementation in insurance sector
Crm implementation in insurance sector
 
Lean Manufacturing
Lean ManufacturingLean Manufacturing
Lean Manufacturing
 
CP Brochure Final
CP Brochure FinalCP Brochure Final
CP Brochure Final
 
Integrated Direct Procurement Made Easier with SAP and SAP Ariba Solutions
Integrated Direct Procurement Made Easier with SAP and SAP Ariba SolutionsIntegrated Direct Procurement Made Easier with SAP and SAP Ariba Solutions
Integrated Direct Procurement Made Easier with SAP and SAP Ariba Solutions
 

More from Implement Consulting Group

The fast track to sap s:4 hana
The fast track to sap s:4 hanaThe fast track to sap s:4 hana
The fast track to sap s:4 hana
Implement Consulting Group
 
Competing on commercial capabilities
Competing on commercial capabilitiesCompeting on commercial capabilities
Competing on commercial capabilities
Implement Consulting Group
 
Turnsound diagnostics - why is your company struggling?
Turnsound diagnostics - why is your company struggling?Turnsound diagnostics - why is your company struggling?
Turnsound diagnostics - why is your company struggling?
Implement Consulting Group
 
Post covid 19 global supply chains
Post covid 19 global supply chainsPost covid 19 global supply chains
Post covid 19 global supply chains
Implement Consulting Group
 
Downsizing without losing trust
Downsizing without losing trustDownsizing without losing trust
Downsizing without losing trust
Implement Consulting Group
 
Communicating direction and purpose
Communicating direction and purposeCommunicating direction and purpose
Communicating direction and purpose
Implement Consulting Group
 
Business process automation - from onsite to online
Business process automation - from onsite to onlineBusiness process automation - from onsite to online
Business process automation - from onsite to online
Implement Consulting Group
 
The post covid 19 retail consumer
The post covid 19 retail consumerThe post covid 19 retail consumer
The post covid 19 retail consumer
Implement Consulting Group
 
Get started with e auctions
Get started with e auctionsGet started with e auctions
Get started with e auctions
Implement Consulting Group
 
Measure your carbon footprint
Measure your carbon footprintMeasure your carbon footprint
Measure your carbon footprint
Implement Consulting Group
 
The retail and online pricing game
The retail and online pricing gameThe retail and online pricing game
The retail and online pricing game
Implement Consulting Group
 
The post covid 19 healthcare landscape
The post covid 19 healthcare landscapeThe post covid 19 healthcare landscape
The post covid 19 healthcare landscape
Implement Consulting Group
 
Rethinking value propositions
Rethinking value propositionsRethinking value propositions
Rethinking value propositions
Implement Consulting Group
 
Personal energy management
Personal energy managementPersonal energy management
Personal energy management
Implement Consulting Group
 
Communicating corporate culture
Communicating corporate cultureCommunicating corporate culture
Communicating corporate culture
Implement Consulting Group
 
The psychologically safe workplace
The psychologically safe workplaceThe psychologically safe workplace
The psychologically safe workplace
Implement Consulting Group
 
The dilemma of portfolio mangement
The dilemma of portfolio mangementThe dilemma of portfolio mangement
The dilemma of portfolio mangement
Implement Consulting Group
 
Safeguard liquidity in retail part two
Safeguard liquidity in retail part twoSafeguard liquidity in retail part two
Safeguard liquidity in retail part two
Implement Consulting Group
 
Growth in turbulence
Growth in turbulenceGrowth in turbulence
Growth in turbulence
Implement Consulting Group
 
Aftermarket the hidden growth gem
Aftermarket  the hidden growth gemAftermarket  the hidden growth gem
Aftermarket the hidden growth gem
Implement Consulting Group
 

More from Implement Consulting Group (20)

The fast track to sap s:4 hana
The fast track to sap s:4 hanaThe fast track to sap s:4 hana
The fast track to sap s:4 hana
 
Competing on commercial capabilities
Competing on commercial capabilitiesCompeting on commercial capabilities
Competing on commercial capabilities
 
Turnsound diagnostics - why is your company struggling?
Turnsound diagnostics - why is your company struggling?Turnsound diagnostics - why is your company struggling?
Turnsound diagnostics - why is your company struggling?
 
Post covid 19 global supply chains
Post covid 19 global supply chainsPost covid 19 global supply chains
Post covid 19 global supply chains
 
Downsizing without losing trust
Downsizing without losing trustDownsizing without losing trust
Downsizing without losing trust
 
Communicating direction and purpose
Communicating direction and purposeCommunicating direction and purpose
Communicating direction and purpose
 
Business process automation - from onsite to online
Business process automation - from onsite to onlineBusiness process automation - from onsite to online
Business process automation - from onsite to online
 
The post covid 19 retail consumer
The post covid 19 retail consumerThe post covid 19 retail consumer
The post covid 19 retail consumer
 
Get started with e auctions
Get started with e auctionsGet started with e auctions
Get started with e auctions
 
Measure your carbon footprint
Measure your carbon footprintMeasure your carbon footprint
Measure your carbon footprint
 
The retail and online pricing game
The retail and online pricing gameThe retail and online pricing game
The retail and online pricing game
 
The post covid 19 healthcare landscape
The post covid 19 healthcare landscapeThe post covid 19 healthcare landscape
The post covid 19 healthcare landscape
 
Rethinking value propositions
Rethinking value propositionsRethinking value propositions
Rethinking value propositions
 
Personal energy management
Personal energy managementPersonal energy management
Personal energy management
 
Communicating corporate culture
Communicating corporate cultureCommunicating corporate culture
Communicating corporate culture
 
The psychologically safe workplace
The psychologically safe workplaceThe psychologically safe workplace
The psychologically safe workplace
 
The dilemma of portfolio mangement
The dilemma of portfolio mangementThe dilemma of portfolio mangement
The dilemma of portfolio mangement
 
Safeguard liquidity in retail part two
Safeguard liquidity in retail part twoSafeguard liquidity in retail part two
Safeguard liquidity in retail part two
 
Growth in turbulence
Growth in turbulenceGrowth in turbulence
Growth in turbulence
 
Aftermarket the hidden growth gem
Aftermarket  the hidden growth gemAftermarket  the hidden growth gem
Aftermarket the hidden growth gem
 

Recently uploaded

Growth Buyouts - The Dawn of the GBO (Slow Ventures)
Growth Buyouts - The  Dawn of the GBO (Slow Ventures)Growth Buyouts - The  Dawn of the GBO (Slow Ventures)
Growth Buyouts - The Dawn of the GBO (Slow Ventures)
Razin Mustafiz
 
You Get Me! Leveraging Communication Styles in Virtual Trainingpptx
You Get Me! Leveraging Communication Styles in Virtual TrainingpptxYou Get Me! Leveraging Communication Styles in Virtual Trainingpptx
You Get Me! Leveraging Communication Styles in Virtual Trainingpptx
Cynthia Clay
 
KineMaster Diamond APK v7.3.11.32200 (4K HD, No Watermark)
KineMaster Diamond APK v7.3.11.32200 (4K HD, No Watermark)KineMaster Diamond APK v7.3.11.32200 (4K HD, No Watermark)
KineMaster Diamond APK v7.3.11.32200 (4K HD, No Watermark)
APKs Pure
 
NewBase 05 July 2024 Energy News issue - 1736 by Khaled Al Awadi_compresse...
NewBase   05 July 2024  Energy News issue - 1736 by Khaled Al Awadi_compresse...NewBase   05 July 2024  Energy News issue - 1736 by Khaled Al Awadi_compresse...
NewBase 05 July 2024 Energy News issue - 1736 by Khaled Al Awadi_compresse...
Khaled Al Awadi
 
TALENT ACQUISITION AND MANAGEMENT LECTURE 2
TALENT ACQUISITION AND MANAGEMENT LECTURE 2TALENT ACQUISITION AND MANAGEMENT LECTURE 2
TALENT ACQUISITION AND MANAGEMENT LECTURE 2
projectseasy
 
Travel Tech Pitch Deck | ByeByeCity,com - Short Breaks Discovery & Booking Pl...
Travel Tech Pitch Deck | ByeByeCity,com - Short Breaks Discovery & Booking Pl...Travel Tech Pitch Deck | ByeByeCity,com - Short Breaks Discovery & Booking Pl...
Travel Tech Pitch Deck | ByeByeCity,com - Short Breaks Discovery & Booking Pl...
Rajesh Math
 
Guide to Obtaining a Money Changer License in Singapore
Guide to Obtaining a Money Changer License in SingaporeGuide to Obtaining a Money Changer License in Singapore
Guide to Obtaining a Money Changer License in Singapore
Enterslice
 
1234567891011121314151617181920212223242
12345678910111213141516171819202122232421234567891011121314151617181920212223242
1234567891011121314151617181920212223242
fauzanal343
 
Cryptocurrency KYC Policies: Comparing Binance KYC Bypass with Rivals
Cryptocurrency KYC Policies: Comparing Binance KYC Bypass with RivalsCryptocurrency KYC Policies: Comparing Binance KYC Bypass with Rivals
Cryptocurrency KYC Policies: Comparing Binance KYC Bypass with Rivals
Any kyc Account
 
Transforming the Future of Limo Services.pptx
Transforming the Future of Limo Services.pptxTransforming the Future of Limo Services.pptx
Transforming the Future of Limo Services.pptx
limocaptaincom
 
What is Venture Client for Startup entrepreneur
What is Venture Client for Startup entrepreneurWhat is Venture Client for Startup entrepreneur
What is Venture Client for Startup entrepreneur
Gokul Rangarajan
 
PAWFESSIONAL ELVA MAX.pdfAAAAAAAAAAAAAAAAAAA
PAWFESSIONAL ELVA MAX.pdfAAAAAAAAAAAAAAAAAAAPAWFESSIONAL ELVA MAX.pdfAAAAAAAAAAAAAAAAAAA
PAWFESSIONAL ELVA MAX.pdfAAAAAAAAAAAAAAAAAAA
lawrenceads01
 
Cheslyn Jacobs- TymeBank: Building Consumer Trust in Digital Banking
Cheslyn Jacobs- TymeBank: Building Consumer Trust in Digital  BankingCheslyn Jacobs- TymeBank: Building Consumer Trust in Digital  Banking
Cheslyn Jacobs- TymeBank: Building Consumer Trust in Digital Banking
itnewsafrica
 
Christmas Decorations_ A Guide to Small Christmas Trees, Candle Centerpieces,...
Christmas Decorations_ A Guide to Small Christmas Trees, Candle Centerpieces,...Christmas Decorations_ A Guide to Small Christmas Trees, Candle Centerpieces,...
Christmas Decorations_ A Guide to Small Christmas Trees, Candle Centerpieces,...
Lynch Creek Farm
 
MEA Union Budget 2024-25 Final Presentation
MEA Union Budget 2024-25 Final PresentationMEA Union Budget 2024-25 Final Presentation
MEA Union Budget 2024-25 Final Presentation
PhysicsUtu
 
Satta matka guessing Kalyan result sattamatka
Satta matka guessing Kalyan result sattamatkaSatta matka guessing Kalyan result sattamatka
Satta matka guessing Kalyan result sattamatka
➑➌➋➑➒➎➑➑➊➍
 
The-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptx
The-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptxThe-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptx
The-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptx
Jindal Global University, Sonipat Haryana 131001
 
Pricing sophistication - auto insurance telematics
Pricing sophistication - auto insurance telematicsPricing sophistication - auto insurance telematics
Pricing sophistication - auto insurance telematics
Matteo Carbone
 
Innovation Hub_ Spotlight on Toms River's Role as a Beacon for Entrepreneuria...
Innovation Hub_ Spotlight on Toms River's Role as a Beacon for Entrepreneuria...Innovation Hub_ Spotlight on Toms River's Role as a Beacon for Entrepreneuria...
Innovation Hub_ Spotlight on Toms River's Role as a Beacon for Entrepreneuria...
Philip M Caputo
 
foodgasm restaurant and Bar pune road.docx
foodgasm restaurant and Bar pune road.docxfoodgasm restaurant and Bar pune road.docx
foodgasm restaurant and Bar pune road.docx
PraghyaBhandari
 

Recently uploaded (20)

Growth Buyouts - The Dawn of the GBO (Slow Ventures)
Growth Buyouts - The  Dawn of the GBO (Slow Ventures)Growth Buyouts - The  Dawn of the GBO (Slow Ventures)
Growth Buyouts - The Dawn of the GBO (Slow Ventures)
 
You Get Me! Leveraging Communication Styles in Virtual Trainingpptx
You Get Me! Leveraging Communication Styles in Virtual TrainingpptxYou Get Me! Leveraging Communication Styles in Virtual Trainingpptx
You Get Me! Leveraging Communication Styles in Virtual Trainingpptx
 
KineMaster Diamond APK v7.3.11.32200 (4K HD, No Watermark)
KineMaster Diamond APK v7.3.11.32200 (4K HD, No Watermark)KineMaster Diamond APK v7.3.11.32200 (4K HD, No Watermark)
KineMaster Diamond APK v7.3.11.32200 (4K HD, No Watermark)
 
NewBase 05 July 2024 Energy News issue - 1736 by Khaled Al Awadi_compresse...
NewBase   05 July 2024  Energy News issue - 1736 by Khaled Al Awadi_compresse...NewBase   05 July 2024  Energy News issue - 1736 by Khaled Al Awadi_compresse...
NewBase 05 July 2024 Energy News issue - 1736 by Khaled Al Awadi_compresse...
 
TALENT ACQUISITION AND MANAGEMENT LECTURE 2
TALENT ACQUISITION AND MANAGEMENT LECTURE 2TALENT ACQUISITION AND MANAGEMENT LECTURE 2
TALENT ACQUISITION AND MANAGEMENT LECTURE 2
 
Travel Tech Pitch Deck | ByeByeCity,com - Short Breaks Discovery & Booking Pl...
Travel Tech Pitch Deck | ByeByeCity,com - Short Breaks Discovery & Booking Pl...Travel Tech Pitch Deck | ByeByeCity,com - Short Breaks Discovery & Booking Pl...
Travel Tech Pitch Deck | ByeByeCity,com - Short Breaks Discovery & Booking Pl...
 
Guide to Obtaining a Money Changer License in Singapore
Guide to Obtaining a Money Changer License in SingaporeGuide to Obtaining a Money Changer License in Singapore
Guide to Obtaining a Money Changer License in Singapore
 
1234567891011121314151617181920212223242
12345678910111213141516171819202122232421234567891011121314151617181920212223242
1234567891011121314151617181920212223242
 
Cryptocurrency KYC Policies: Comparing Binance KYC Bypass with Rivals
Cryptocurrency KYC Policies: Comparing Binance KYC Bypass with RivalsCryptocurrency KYC Policies: Comparing Binance KYC Bypass with Rivals
Cryptocurrency KYC Policies: Comparing Binance KYC Bypass with Rivals
 
Transforming the Future of Limo Services.pptx
Transforming the Future of Limo Services.pptxTransforming the Future of Limo Services.pptx
Transforming the Future of Limo Services.pptx
 
What is Venture Client for Startup entrepreneur
What is Venture Client for Startup entrepreneurWhat is Venture Client for Startup entrepreneur
What is Venture Client for Startup entrepreneur
 
PAWFESSIONAL ELVA MAX.pdfAAAAAAAAAAAAAAAAAAA
PAWFESSIONAL ELVA MAX.pdfAAAAAAAAAAAAAAAAAAAPAWFESSIONAL ELVA MAX.pdfAAAAAAAAAAAAAAAAAAA
PAWFESSIONAL ELVA MAX.pdfAAAAAAAAAAAAAAAAAAA
 
Cheslyn Jacobs- TymeBank: Building Consumer Trust in Digital Banking
Cheslyn Jacobs- TymeBank: Building Consumer Trust in Digital  BankingCheslyn Jacobs- TymeBank: Building Consumer Trust in Digital  Banking
Cheslyn Jacobs- TymeBank: Building Consumer Trust in Digital Banking
 
Christmas Decorations_ A Guide to Small Christmas Trees, Candle Centerpieces,...
Christmas Decorations_ A Guide to Small Christmas Trees, Candle Centerpieces,...Christmas Decorations_ A Guide to Small Christmas Trees, Candle Centerpieces,...
Christmas Decorations_ A Guide to Small Christmas Trees, Candle Centerpieces,...
 
MEA Union Budget 2024-25 Final Presentation
MEA Union Budget 2024-25 Final PresentationMEA Union Budget 2024-25 Final Presentation
MEA Union Budget 2024-25 Final Presentation
 
Satta matka guessing Kalyan result sattamatka
Satta matka guessing Kalyan result sattamatkaSatta matka guessing Kalyan result sattamatka
Satta matka guessing Kalyan result sattamatka
 
The-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptx
The-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptxThe-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptx
The-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptx
 
Pricing sophistication - auto insurance telematics
Pricing sophistication - auto insurance telematicsPricing sophistication - auto insurance telematics
Pricing sophistication - auto insurance telematics
 
Innovation Hub_ Spotlight on Toms River's Role as a Beacon for Entrepreneuria...
Innovation Hub_ Spotlight on Toms River's Role as a Beacon for Entrepreneuria...Innovation Hub_ Spotlight on Toms River's Role as a Beacon for Entrepreneuria...
Innovation Hub_ Spotlight on Toms River's Role as a Beacon for Entrepreneuria...
 
foodgasm restaurant and Bar pune road.docx
foodgasm restaurant and Bar pune road.docxfoodgasm restaurant and Bar pune road.docx
foodgasm restaurant and Bar pune road.docx
 

Control you indirect spend with SAP SCM

  • 1. S&P Control your indirect spend with SAP SCM 2013 – Implement Procurement Event
  • 2. Contents 1 Understand the Indirect Spend 2 Traditional Indirect Procurement pitfalls 3 Simplify the indirect procurement processes 4 How Technology can improve Indirect Procurement 5 Focus on Alignment between Operations, Finance and Procurement 6 Response-Ability: Delegate to focus on more strategic activities 7 Viewpoints 2
  • 4. 1 “Currently, indirect spend is recognized as a major area for potential improvement, with up to 20% of all purchases (by value)” BusinessWeek 4
  • 6. 1 “Currently, indirect spend is recognized as a major area for potential improvement, with up to 70/90% (by number) of purchase orders, shipment expenses, and invoices processed attributed to materials and services that are not used in the finished product” BusinessWeek 6
  • 7. 2 Key Challenges of Indirect Procurement Poor Maverick High number of Complexity of Standardization Buys Suppliers the Market High number of Stakeholders Poor Fragmented Demand Visibility into spending Indirect Procurement deals with the acquisition of all those goods and services not directly involved in the core business of the organization. This is the reason why the contribution that indirect goods and services are able to offer to the company is very often misunderstood or underestimated. 7
  • 8. Traditional Indirect Procurement pitfalls 1 Manual approvals are the major cause of long lead times in Ind. Proc. 2 No standard processes 3 4 5 Lack of visibility into contracts or contracts not in place Lack of strategic tools for sourcing, suppliers qualification & evaluation “Where is my money going to?” 8 2
  • 9. 2 “If you want to truly understand something, try to change it.” Kurt Lewin 9
  • 10. 2 Indirect Procurement vs. Direct Procurement Process Supply market Number of transactions Number of used suppliers Number of categories Buying power Number of supply chain integration issues Transaction price Other Number of requisitioners Maverick spend Indirect Procurement Business focus Direct Procurement Buying power Power of procurement department 10
  • 11. 3 “Problems can be complicated. Solutions cannot.” Implement 11
  • 12. A guideline to approach Indirect Spend Management FOLLOWING THE STAR • SIMPLIFY the Indirect Spend and apply a category-wise sourcing strategy and procurement process • Provide employees with the right TECHNOLOGY which creates a compelling purchasing experience • ALIGN the different stakeholders involved and let them gain a common understanding of the new processes • Delegate, under certain conditions and rules, people giving them the RESPONSE-ABILITY of their actions 12 3
  • 13. 3 Simplify! “Simplicity is the ultimate sophistication” Leonardo Da Vinci 13
  • 14. 3 Start by Categorizing products and services Indirect materials and services MRO IT Administrative services Travels Telecoms Facility management Utilities Marketing Office Stuff All products and services Root 44 Office equipment and accessories and supplies Segment Family Class 10 Office machines and their supplies 15 Duplicating machines Commodity Class 01 Photocopier 31 Printer and facsimile and photocopier supplies Commodity 03 Toner 14
  • 15. Define a purchasing channel for each category Indirect Spend needs CONTROL that: FLEXIBILITY is needed, when control: • Is sufficient enough to meet the defined goals for cost reduction • Stops the business from operating • Is possible to implement and is aligned with strategic goals and objectives • Builds up rule books just to make rules • Establishes ineffective routines • Provides “reasonable assurance” • Adds value to the business Flexibility Control 15 3
  • 16. 4 Technology “Technology does not drive change – it enables change” Anonymous 16
  • 17. 4 Traditional vs. e-Procurement process E-Procurement Traditional Procurement LEADTIME REDUCED BY 67% IN TOTAL 17
  • 18. 4 Technology support SPEEDING UP THE JOURNEY TOWARDS PROCUREMENT EXCELLENCE Paperless processes Reduced lead times Increased spend visibility 18 Automated checks Reduced transactional costs
  • 19. Examples of purchasing channels using SAP SRM – placing a service order 4 SERVICE PROCUREMENT WITH GOODS RECEIPT Shopping cart Purchase Order Service entry sheet Goods receipt Invoice receipt This function is used to create purchase orders for services performed by service provider. Service entry sheet is created for each service provided, and the consumed time can be entered in the entry sheet. Once the service entry has been confirmed, invoice can be posted. Addressed challenges Business benefits • Services are often procured locally, which leads to poor visibility in the spend. Saving opportunity not fully captured • Having visibility on the spend • Maverick purchases for services and use of unauthorised suppliers • Providing an easy procurement system for employees • Manual process and long processing time of purchasing documents • Increase the contract compliance • Aggregating the demand and increasing the procurement power 19
  • 20. Examples of purchasing channels with SAP SRM – processing a contractual invoice 4 DIRECT CONTRACT REFERENCE FOR INVOICE Incoming invoice Contract history update in ERP Contract reference Contract release in SAP SRM This function is used to create invoices with a direct reference to an SRM central contract. The invoice with the contract reference updates the history of the contract in SAP ERP. A release is then created for the reference central contract in SAP SRM. Addressed challenges Business benefits • Invoices for unplanned services are often posted without reference to any purchasing document and are therefore difficult to trace • Better agreements for services through higher spend visibility and lower maverick buying • Automated processes, review and approval plus accounting of contractual invoices • Manual handling of recurring contractual invoices take up unnecessary manual resources • Consistent verification of invoice validity, amounts, terms, etc. • Suppliers do not invoice according to the agreed-upon terms and conditions 20
  • 21. Examples of purchasing channels with SAP SRM – buying direct materials 4 PLAN-DRIVEN PROCUREMENT Planning Process purchase requisition Process PO Goods receipt Invoice receipt This function is used to process Direct material requirements that have been generated in systems other than SAP SRM. The demand for products can come from several different planning systems such as material requirements planning (MRP). Using SAP SRM, contract is assigned automatically to the PO. Addressed challenges Business benefits • Fragmented demand for MRO activities • Bundle all the requirements into one request which can be sourced by professional buyers instead of operational purchasers • No contract visibility 21
  • 22. Examples of purchasing channels with SAP SRM – buying indirect materials through e-Catalogues 4 PURCHASES OVER CATALOGUE Shopping cart Purchase order Goods receipt Invoice receipt Make purchasing easy to increase compliance 22
  • 23. 5 Alignment “The present contains nothing more than the past, and what is found in the effect was already in the cause” Henry Bergson 23
  • 24. 5 Alignment between operations, procurement and finance BRIDGING THE GAP Account Payable Invoice posting Ok? Yes Invoice posted Invoice queue No Purchasing Correction 24 Operations Correction
  • 25. 6 Response-Ability “Technology is nothing. What’s important is that you have a faith in people, that they’re basically good and smart, and if you give them tools, they’ll do wonderful things with them” Steve Jobs 25
  • 26. 6 Response-ability The key to minimise the operational and tactical tasks in purchasing department is to DELEGATE, whenever possible, tactical, non-valueadded work. This will give employees the ability to react to their needs in a faster and more flexible way leaving the procurement department the time to focus on the above-listed strategic tasks. Contract negotiation and implementation Spend analysis Forecasting Supplier development Supplier relationship management Strategic sourcing 26
  • 27. 7 Viewpoints Define KPI´s Response-Ability Alignment Define clear and measurable key performance indicators Identify your categories and underline their corresponding procurement challenges Keep It Simple Tailor a sourcing strategy and a purchasing channel on each category Adopt the right technology Technology 27 Identify and align all the stakeholders involved Use a phased approach
  • 28. Implement Consulting Group Learn more about how we work with SAP Supply Chain Management Learn more about how we work with Procurement Go to Implement Consulting Group's main website 28