Contract & Supplier Management

Contract & Supplier Management

P2P

MD04; ME33L; ME38

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, I'm Martin, and in this video we will focus on how to take advantage of SAP's schedule agreements. Now the reality is most people don't even know much about schedule agreements let alone that there are three different types. When used properly it can really help streamline procurement procedures, provide the suppliers of the forecast and ensure we get the resources and services we need when we need them. So Kristie, how about you tell us about these three types of scheduling agreements? Sure Martin. SAP, as you mentioned, offers three unique types of scheduling agreements, each offers powerful features when used correctly. And in this demonstration I'm going to focus on three key things. First of all, the types of scheduling agreements and their key differentiators. Second, the minimum setup that is required to work well with MRP. And third, a few of the key features that make scheduling agreements so useful to a buyer or planner. Scheduling agreements can be so helpful to us where we have suppliers that are delivering to us on a regular basis and we're able to accumulate their purchases all into one outline agreement. It allows us to set targets and it allows us to control things like our firm, slushy and free zones, and be able to communicate effectively with the suppliers about what each of those means. So today I want to walk you through just the very basic definition of the three different types of scheduling agreements that are available to us in SAP and where to find them, and so we're going to go under logistics in our menu path, and then we're going to go down to materials management, and then as you likely have guessed, we're going to go into the purchasing section, and then within that you'll see this section called outline agreement. Now outline agreements come in a couple of different forms, we have contracts which may be in the form of quantity or value contracts, and then we also have our scheduling agreements, and much like our purchase orders this is supported by list displays and reporting that's associated with it. Now within scheduling agreements though we have a couple of different types of scheduling agreements. We have our scheduling agreements that are related to stock transfer scheduling agreements, so moving from one facility to another, and those are going to be our LUs. And then we have scheduling agreements that are associated with our suppliers, and those are going to be our LPs and our LPAs. And so I'm just going to come in here and I want to show you the difference between the two. So let's go ahead and look at this one first, so this is an LP and an LP if you're first getting started, and maybe you've tried this going across facilities, so you've got some LU scheduling agreements where you're moving product back and forth and now you want to try something new. The next level up from that for dealing with your external suppliers would be your LPs and these are scheduling agreements without release, and I'll show you the difference in a moment, but it's a very basic outline agreement, so you can see here we have material and we have a target quantity and then associated with that, populated by MRP is going to be our delivery schedule, so that's what we'd actually be sending to the supplier instead of an actual purchase order, and I'll show you what that looks like here. And come in here and click on this delivery schedule and you can see we've got different line items that are due on different days. So it looks very familiar to us in terms of what we would see for replenishment across time. Now the awesome thing about this versus a purchase order is that if I have to come in and do some maintenance or if there's an adjustment that needs to be made, I'm doing an expedite request and I need to realign my dates, I can actually come in here to the whole delivery schedule for this particular material. I can do that from MD04 from the delivery schedule ME38 itself and I can actually come in and make all the adjustments that I need to write from one screen rather than having to open up discreet purchase orders and the other thing it allows me to actually share information with the supplier if I want to give them things that go further out, and let me show that to you here. So I'm going to come in here, I'm going to click on this item details or additional data button, and I can see here I have some new fields that I don't have on my purchase order, and that is this firm trade off zone. So I have what is essentially a firm zone, fully committed, supplier is either approved to manufacturer or approved to ship, depending on how you define it internally and with your suppliers. I have a trade off zone, which might mean that they are approved to manufacturer but not yet approved to ship or it may be that they are approved to position themselves to be able to produce, so we've got some gray goods commitment. And then we have the free zone, which is really just our overall forecast sharing of information with them. And then we can also control what MRP is going to do in terms of reacting and responding to this. There are no releases that are required for this in terms of actually generating a release to the supplier, of course you can still have your purchasing related releases in terms of your spend you may send this through, but this is just an ongoing document that is regularly updating and you're setting your controls in terms of what MRP is able to update versus what it is that you would like to update and control. Not a lot of history in terms of the changes in the delivery schedule that's driven by demand. Certainly changes that we're making to our data is tracked but when we have quantity changes to the delivery schedule generated by MRP that's not going to be tracked here. And so as soon as we update, then we're just controlling and scheduling our output to the supplier. Now, an LPA is a little bit different, we actually get some difference in the way that we're going to control that information and so let's take a look at that and you'll see the difference immediately. This is great when you need a little bit more control, you want to be able to see exactly what you have released to the supplier. You're generating a release and official release to them, you're choosing how that release is happening, when it is happening, and then you're tracking the changes. So you've got your current quantity and your previous quantity and all of that information is going to be held for you historically. And when we go in here and we look at the same thing, so we're going to go into the additional data, you're going to see we have a few different fields here, and I'm just going to go down a little, and this is the big guy here. We have this thing called a creation profile and we also have a just in time indicator, so we can actually generate a release for them to ship against, and then we can provide them with a separate document, a separate output that is their forecast. And in here we're able to actually control a lot of different things and we could talk for a very long time about this, but some of my favorite things are the aggregation horizon, so we can choose that over a certain period of time, they're going to see daily aggregation and then after that they might go to something like a weekly or a monthly. So you can see just in time delivery schedule, we are sending them the information in daily buckets. In the forecast delivery scheduled and based on the time horizon, we're actually starting to aggregate that up, and we can also do things like incorporate planning calendars. We've got tolerances in here that will allow us to control the way that we're receiving against those goods, and then we also have the ability to control when these things are generated. So we can control how often and even what day of the week and how we're actually sending that information through to the supplier, so this is very helpful. So think about it as LUs internal use, moving from one facility to another, they have their own separate set of transaction codes. LPs and LPAs depend on the amount of specificity and tracking and the way that you want to send that information to the suppliers. And then especially if you are working with a kanban environment or you're trying to get very specific in terms of like milk runs and those kinds of things from your suppliers, then this can be really helpful and LPA is very helpful in having that additional control. Again, we could talk for hours on this but hopefully that gives you just a little bit of information to wet your appetite and know that there are different types of documents to meet your different needs. So in summary, we have covered how three types of scheduling agreements will allow our buyers and planners. To efficiently track their spend MRP to do the heavy lifting so we don't have to do that manual maintenance. And being able to manage through different kinds of scenarios with different scheduling agreement types. Thank you Kristie. I mean obviously using this feature helps to optimally manage suppliers and increase our procurement performance. So if you want to learn more about how to get the most out of your SAP system please check all the other videos we have and if you can't find an answer to your question please submit a suggestion.

Contract & Supplier Management

P2P

MD04; ME01; ME33K

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Martin here, and in this video we will focus on how to take advantage of SAP's contract consumption management capabilities. Contract consumption management features gives organizations a centralized, automated system for managing contracts, making it simpler to track and keep track of how much of the goods and services promised in those contracts are actually being consumed. Kristie, how about you tell us a bit about contract consumption management? I'd love to Martin. Contract consumption management is a powerful feature when used correctly and in this demonstration I'm going to focus on three key things. First, how consumption is tracked versus target and where we can see how we are tracking to that target. Second, how we connect our purchases to the contract, or essentially call off from the contract volume. And third, the importance of validity periods and managing our spend versus contract, especially if we have guaranteed particular volumes to the supplier and may need to renegotiate based on the rate of pull. Sometimes we get the volumes wrong versus how the demand will actually fall. It happens, but contracts can help us to proactively manage that and negotiate a positive outcome for ourselves and our strategic partners. All right let's go in and take a look at how we manage the consumption against a quantity contract. So we know we have two different kinds of contracts that we can issue. We can have target values or target quantities. In either case we're able to see the consumption or how much of that contract that we have used and so I'm going to go in here and just grab one contract and you'll see that this is , ME33K is going to be your transaction code to go in and take a look at this and I've got a particular contract in mind I'm just going to go ahead and pop in. This one's a really simple one, so it should be good for us to take a look at and review what's going on and you'll see here we've got our agreement number and then we can see the agreement type and if you ever forget, you can always click on this and then click on this little dropdown and it's going to let you see the description for which kind of contract you're dealing with. So your MK's or your quantity contracts, your WK's are your value contracts. So this is allowing us to accumulate history so that we can compare that with our terms and our conditions and our effectivity dates as we're going across time okay? And so I'm going to go ahead and close that and you're going to see here we've got the material and the short description, a target quantity, our pricing information, our material group, our plant and storage location and then if we also have some additional text related to this that maybe outlines our terms and conditions, we would be able to see that information here and then if we go up to our header level, we're also going to see the effectivity period for this so you can see this particular contract expires in May. Right now we're in the middle of February, okay so this has been good it was initiated right after Thanksgiving, so at the end of November, it's good until the end of February and then I can go in and actually look at my terms and conditions and other pieces, if I had a release strategy attached to it I could also go in and take a look at the release strategy that's associated with it. So that I know exactly what's been happening with this particular contract. So I'm just going to go back out here and come in and look at the item level and I can come in here and I can actually see the history and that's what we're most interested in today. So if I click on this, I can see that from this particular contract I now have placed 3 purchase orders and of my total target quantity of 5,000 pieces, I have released 1,137 pieces so far. So that's my 500, my 537, and my 100. That tells me that I still have remaining balance on this contract of 3,863 pieces. Now, what that remaining balance means to you is different business to business. Now, if we've committed to pulling that much from the supplier because we're on allocation over a particular period of time, a contract is a great way for us to guarantee that purchase in the background so we know how we're tracking to it, what we've promised or committed to the supplier and then we're able to negotiate based on how our demand is actually pulling. Or if we are over consuming the contract and we're beyond the effectivity target value or effectivity time period, then we know that we also need to go in and renegotiate or reupdate that information. Okay, we also know that we can maintain discreet pricing and planning parameters in the contract so that is good for a particular effectivity period and that the contract ties directly to the source list. So if you want your purchase orders to be connected to your contract, you want them to call off, you need to have them in your source list, so then you want them to be MRP relevant. You can see there's been several contracts over time for this item, all with their own unique effectivity period and all with their own unique terms and conditions. This is the most recent and it's relevant for MRP and it's also our fixed source so we know that every time a purchase requisition is generated, it's going to be attached to this source and when we convert that into a purchase order, the purchase order is going to show up in that consumption history for the contract and then we're able to see that information when we go into this release documentation or the notes here, so we can see how we're performing versus contract. The other thing you can do is you can pull this into a list display and be able to evaluate many different contracts at the same time and once you're in here you can also navigate into the individual purchasing documents if there's ever anything that you need to review. Okay and it'll show you the order dates versus the contract effectivity period and you're able to review that consumption of the contract over time and be able to make adjustments or renegotiate as appropriate. So in summary, we have covered. How contract consumption management allows a buyer to have visibility of the purchase versus target or in some cases commitment. Link our purchases to the contract based on the effectivity period or the validity. And manage one of those contracts at a time or use a complete list display to review information for a buyer's portfolio or area of responsibility. Wow, that's a lot Kristie. Thank you. Using this feature improves contract management, cost management, and supplier collaboration. Nice. So if you want to learn more about how to get the most out of your SAP system, please check out our other videos and if you can't find a video to answer your burning question, please submit a suggestion.

Contract & Supplier Management

P2P

MD04; ME01; ME33K

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin, and in this video we will focus on how to take advantage of SAP's purchasing contract types. A very underutilized feature when used effectively outline agreements can give organizations real-time access to contract information, such as terms, conditions, and obligations. Empowering them to make better educated sourcing decisions. Kristie, tell us a little bit more about what SAP calls outline agreements. Sure Martin. Contracts, which are part of outline agreements, break down into two main categories and we're going to take a look at both today. Contracts are a very effective strategic sourcing tool available to us in SAP when correctly utilized. They are part of this family of features called outline agreements and they offer not only tracking but also a great deal of flexibility and automation when they reflect our sourcing strategy. In this demonstration I'm going to focus on three key things. What the two primary contract types are and the kinds of scenarios that fit each. Where we maintain key data in the contract and the importance of differentiating where it matters. For example if you have a pre-negotiated price, specific lead times or specific terms. How to invoke the contract into the planning process via the use of the source list. Okay let's talk a little bit about contracts and the different kinds of contracts that are available in SAP. And today we're talking specifically around procurement contracts so we're going to go into the logistics segment of our SAP menu, down to materials management, into purchasing. What we're looking for here is something called outline agreements. So there are a couple of different kinds of outline agreements available to us in SAP, you can see them listed here. There are contracts and then there are scheduling agreements. Today we're going to talk about contracts and within contracts there are two different kinds. The first is a value contract and the second is a quantity contract. So our value contracts are going to be used when we have terms and conditions that are based on a certain dollar of spend. More commonly these are going to be used for things like services or purchase orders that are not related to specific material numbers or specific projects that we're going through for capital expenditures and those kinds of things. Our quantity contracts are going to be anytime that we can associate a particular volume with a material and we want to be able to track that volume over time. Now there will be a second video that we'll talk about contract consumption and monitoring how that is going. But we're going to talk today a little bit more around the setup and the tieback to the material planning process. So let's go in here to change, I have one that's set up just as a basic shell and the first thing I want to talk about is the agreement type, which is that value or volume. So if you look here, this is an MK, which is a quantity contract. Our other option is the WK, which is a value contract, and I'll show you the difference between the maintenance for both. So if I go to the header here, you can see here this contract has a validity period, that is very important. We want to make sure that our contracts have a specific validity period that governs how we're tracking that spend versus the terms and conditions that have been negotiated. This contract can be used for internal purposes only if you prefer. It can also be used to be shared with your suppliers if you would like. But there's nothing that says that this has to be sent out to the supplier, it can be used to govern your own internal terms and conditions based on what you have negotiated. Now, if this was our value contract, it would be required that we entered in a target value here so that we have something to track against and this is meant to represent what we have agreed to with the supplier. You'll notice here that these fields are open for adjustment, so we are able to adjust for specific terms of payment that are associated with this contract only, as well as any specific terms in for prices, price scales, planned delivery time, special requirements in terms of shelf life, those kinds of things. You can see here, we can actually modify this based on what is going on from our negotiation standpoint. So if we've negotiated special terms and conditions we're able to do that from here. Okay so there's a lot that we can maintain in here in order to get the specific requirements for what we've negotiated in terms of our deal. So this particular contract is good for now until the end of August, so August 25th. I'm going to go ahead and back out of here and I can actually navigate over from here to our source list which is the next thing that we need to maintain if we want this to show up for MRP. Now this will only allow us to display and if I want to do a quick check to see if this contract has been added, I can see that it has not been. So what I want to do is actually go in and maintain this. So I can enter my information in manually or I can click on generate. I'm going to go ahead and generate the records, and what it's done for me is it's gone out and looked and it picked up the agreement number so it knows the contract. I want to make that my fixed source of supply, so that means that it's going to look to the contract and know that is the requirement and I'm going to go ahead and hit a one to make it MRP relevant. The other thing I'm going to do is I'm just going to adjust the second entry so that this is good at the end of the contract validity period because I'm going to continue to use this source, I just have temporary terms and conditions that are associated with this contract. Now at the end of the contract, if this wasn't the correct source, then I would leave the record exactly as it is now. That way everything after the contract end period would not have a source assigned. In this case I've been purchasing from the supplier for some time, I know I'm going to continue to purchase from them, I have a purchase info record in place that goes beyond the validity period of the contract, this is just special terms and conditions, so I'm going to go ahead and actually add my secondary source as well. So that when MRP is running, when that contract ends, it's just going to seamlessly pick up the source and continue running with it. But again, if that wasn't the case and it was just for the contract validity period, or if I wanted to see that I needed to renew, I would not enter in fixed or MRP one for that second record. I would go ahead and let it expire at the end of August, I would see I didn't have a supplier assigned and I would need to go in and deal with that as an exception. And I'll go ahead and hit save here. No changes were made. Very good. Now I'm going to go into MD04 and I'm going to look at the planning for this material. Because we set up the contract and we made it a valid source and we made an MRP relevant, I can now go out and run MRP. I'm going to go ahead and do that, and for the sake of being able to demonstrate this today, I'll make my purchase requisitions go all the way out. Okay? And that's done. I'm go back, I'm going to hit refresh. See those planned orders they've changed to purchase requisitions. Now I'm going to put on the vendor button so I can see I am assigned all the way out through the entire planning horizon because I made not only the contract relevant but that supplier relevant in general. But I can see my contract's reference now on my purchase requisition. So I'm going to go in and take a look. I'll show you on my source's supply. Here is my contract number. So when I convert this purchase requisition into a purchase order, it's going to carry the contract association through, and that purchase order spend will be attached to the contract so I can track many purchase orders versus one contract document and see the history as we go and that way I know if we're ahead or behind and I can adjust. Now, if I look at this purchase requisition that is out in September, what I'm going to see is that the contract is not associated with this document because it's beyond the validity period of the contract. So MRP is going to track that for us and those effectivity periods become very important for us to be able to track our volume performance or our value performance versus that contract. So that's a basic look at how contracts work in SAP. So in summary, we have covered how contracts allow the business to. Bring the product of their negotiations and strategic sourcing strategy into SAP by using either a quantity or a value contract. Drive specific terms and conditions, pre-negotiated master data and other information into that contract. And, reference the contract automatically by setting the source list up and reviewing the results of MRP. Wow. Thanks Kristie. Using this feature can really help improve contract management spend visibility, compliance, and supplier collaboration. So if you want to learn more about how to get the most out of your SAP system, please check out our other videos and if you have a question that's unanswered, please submit it below.

Contract & Supplier Management

DM; P2P

MD04; ME57; ME21N; ME01

Hello and welcome future supply chain experts. Martin here. And today we're going to explore how we can tap into the untapped potential of your SAP system. Okay, so let's get started. In this video, we're going to explore how to resolve a common exception in the procurement process, dealing with the requisition that has no source assignment, and where possible, resolving it for the longterm. Peyton, why don't you tell us more about this particular issue and explain to us about how to resolve these exceptions in source determination. Definitely, Martin. This is a good example of if you know, you know, how great it is to be able to use automatic source determination. So step one, we're going to go in and see how we can easily tell if we're getting a source assigned in the MRP run. Then, we're going to look at the results of the tool that will tell us if we're missing sources. Show how to assign a source manually, and then remind everyone about a key underpinning to source determination, the source list. Be the right kind of lazy and fix it once. So it works the next many times. Let's go in and take a look. Now let's dive in to finding whether or not a source has been assigned for a particular material, and also a little bit about source determination in general. So I've got a test material here, which is GTS-1400-710, and I'm going to look at it in the MD04 view to take a look at how you might be able to see if a source is assigned for a material from that view. So if we hit enter it will bring us here to this lovely demand picture. And if we hit the vendor button, now I have two columns with the vendor number and the vendor name that tells me that this is the source that's designated for this particular material. And in this case, I have a quota arrangement set up for this material, and so it's giving me the sources based on that quota arrangement and based on any outline agreements I may have assigned in the source list. However, if I look at this material, same material but dash 705, and I hit my vendor button, It tells me there's no vendor and that's because we haven't assigned a source for this material and designated it as fixed in the system. So how do we work with materials that may not have a source assigned? We can do that using the ME57 and so I'll go to the ME57 transaction. I have my purchasing group which is 002. My scope of list is A. The plant for me is 1,000. Those are the items I need in order to see those unassigned purchase requisitions under my buyer code. I can also run it by release date, so I can make sure that I put in, I only want to see things that are due for release today and before, and I'll execute that. So you can see here the GTS-1400-705 is on my ME57, it needs to be ordered, in order to assign it to a supplier, I can hit this assign manually button after I check the checkbox right here. And so that's what we'll do. And we want to put in our vendor number here. For me, it's going to be 2007. It asks me if the delivery date can be met because the delivery date is in the past. We can fix that in a minute. And it pulls in that info record for me, and I hit assign source of supply, go to my Assignments, and there's my without outline agreement, the 2007, I can double click on that. I've got Order Type NB, and hit enter, and now it brings me here, and I'm able to highlight the Open Requisition, hit the adopt button and now I have a purchase order for the requisition with the supplier assigned through the manual assignment in ME57. But if I know I'm going to order it from supplier 2007 every time, then I can use the source list in order to make sure that next time the source is assigned and I don't have to do a manual assignment over and over again when I know that I'm going to order it from 2007. And the way that we do that is we go to ME01 which is Maintain the Source List. My material is already in here from the previous transaction, and the plan is correct. Source lists are plant specific, so you'll have to put that plan in down there with your material. I'll hit enter, and I can see here that no source has ever been assigned for this particular material and so I'm going to do that now to save myself time in the future for the next time this material comes up. And so I'm going to put in today's date as the valid from date to make sure that I'm checking on my suppliers and evaluating how suppliers are doing, I'm going to let the end date be 12/31/2024, I'm going to put in my vendor, my purchase org, and I'll hit enter there. I can tell it here if I want that to be the fixed vendor every time that this comes up for order, and I do. And the way that I make it MRP relevant is by putting a 1 here, you can see the drop down, makes it relevant to MRP and gives me purchase reqs. And once I save that, the next time the system generates a purchase requisition for this part, it will automatically assign it to vendor 2007 through source determination. And so here we've looked at how we can go into MD04, we can see if a vendor has been assigned to a particular material just by using the vendor button. We can go into ME57 to do that manual assignment for things that we need to order that don't have a supplier designated and then to prevent having to do that again in the future, when we can, we can go into the source list, designate that vendor as the source, make it relevant to MRP and now we've saved ourselves time in the future. So all, in summary. Today we took a look at how to monitor for purchase requisitions with no source assigned. Then we reminded everyone of how the source list supports efficient flow of sourcing information and how we can use this to avoid Groundhog's Day when the next purchase requisition comes out. The last thing I'll mention today is that source assignment can happen even in a multi source environment. For more on that, check out our videos on quota arrangements. Thanks, Peyton. That was great. I think in the moment, it often feels fast as you just fix it manually. We're in a time crunch and we just want to get it done. But by fixing the underlying master data, assuming there's a rule we can apply, we can save time to prevent this error in the long run. Thanks again for sharing. Hey folks, if you want to know more about this particular topic, master data, lead times, etc, please check out our video catalog. And of course, if you have a specific question, feel free to ask the chatbot.

Contract & Supplier Management

IBP; P2P

MD04; WPDTC

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi Martin here, and in this video we will focus on how to take advantage of SAP's lead time management capability. When used correctly, lead time management helps organization manage the lead times it takes to complete procurement and supply chain activities. From ordering raw materials to delivering finished goods to customers. So Kristie, tell us how to make the most out of SAP's lead time management. I've got some great tips and tricks for you Martin. Lead time management is a powerful feature when used correctly and in this demonstration I am going to focus on three key things, which are all around how we review the quality of our lead time master data. Number one, how we can use weighted plan delivery time calculations to see if our master data is consistent. Number two, how weighted plan delivery time calculation provides us with lead time performance information. And number three, the prereqs for being able to get quality information out of this very powerful transaction. Lead time performance management with WPDTC, waited plan delivery time calculation. So this transaction comes with the Surgeon General's warning. It is very powerful and with great power comes great responsibility and the reason why this transaction is so powerful is, first of all, the quality of the information that it provides is very dependent on how well our processes are organized and second of all, from this transaction, you can actually update your master data. And so we want to be very careful with that and make sure that we understand the values that we're seeing and we believe them and we're updating the correct information before we actually just turn folks loose to try to use this and to apply the information that they're seeing here. Okay, so that's your surgeon General's warning. So what does this show us? So you can see here we have the master data information on the left hand side so the info record that it's using for the comparison, the purchase organization and the purchase, and the plant, the supplier, and then the material. And then over a little bit further we have our plan delivery time that's maintained in that info recorder, the plan delivery time that's sitting in the material master. So there are some reasons why these might be different but we should know what those reasons are, so if we have multiple sources of supply, we have a plan delivery time with a particular effectivity period, we have a situation where the supplier has one particular plan delivery time that they're obligated to but we need to do something more conservative in planning. Those kinds of things but they should be very purposeful if they are different from one another. We have multiple sources of supply that are managed by quota arrangements so we get the right assignment through the planned delivery time in the info record and the info record's going to be the most important place we're maintaining that. Next door to that is the planned delivery time maintained at the vendor level, so in our vendor master. This is where we would have the same plan delivery time for all the materials coming from that particular supplier. And then lastly, is the calculated plan delivery time, that is the difference between when the purchase order is placed and when the goods are received. So this is the real supplier performance as the system would see it, or how they've been performing from the date of PO issue to the date of goods receipt. So this assumes a few things. This assumes that we are placing our purchase orders on the release date, so neither too early nor too late, that purchase requisition gets converted into the purchase order, the purchase order gets released to the supplier. So we maintain our flexibility for as long as possible before we're fully committed to that PO, and we're making sure that we are honoring the stated lead times from that supplier so making it very fair for them to be able to give us our product on time. It assumes that we are receiving goods in, in a timely fashion. So those are real time and accurate ,and it assumes that when we are asking the supplier to expedite we're giving them less than lead time that we are having that conversation with our suppliers as well, so it's a fair evaluation. And you can see here, this is always the hard part is we have to go through and say okay, what is actually happening is 42 days, what we are seeing in the info record of the material master so what we are using for MRP is 11. That means that there's a pretty significant variation in what the supplier has been actually delivering to us and this is going to be over a period of time, so in this case it was about a six month evaluation. This is really important because we are making promises that we want to keep both to manufacturing, to our sister plants, to our customers based on this lead time information so all of our planning is done here. Sometimes it's the opposite though, in this case down here we are planning for 35 days but they're delivering in 24. So is there an opportunity there to be able to reward the supplier for that, adjust the lead time, et cetera? Because if the supplier is able to perform in less without, major expedites, but they're able to accommodate that they're outstripping their performance, then we want to make sure that we're accounting for that because that's less inventory that we have to hold or buffer in order to make sure that we're in a position to promise. Okay. Very, very important stuff. So we can actually dive into the details here by hitting expand and this will go in and it will pull up the individual information for each of these records. So you can see here, let me scroll down just a little bit for you, get some records. You can see here that for this particular material, so 1066127, we've got all of these different purchase orders that have come in and it's calculating for us the number of days between the PO date and then the goods receipt date. Okay and it's going to give us that information as our calculated planned delivery time because that's the reality of what's happening. And so we can use that information then to go in and update our lead time records if appropriate. We can use that information to detect any process and efficiencies so when we're issuing purchase orders, on time, are we receiving goods on time? Are there any communication breakdowns that are occurring? It allows us also to even think about different master data parameters. So let's say that part of the reason the supplier is always off is because they deliver to us consistently every Wednesday, so can we use a planning calendar to set up for that kind of delivery? So understanding the variation and then working to resolve it or update our master data accordingly. Okay, very important. And then we want to just look for the overall consistency of our master data as we look across that info record and the material master and the vendor record if we've got things maintained in all three. Now, one word of caution, I talked a little bit about some reasons why the material master and the purchase info record might be different. One of those is going to be relevant for MRP. So if the purchase info record is not relevant for MRP, then it's the material master. The word of caution here is that MRP is going to plan according to that value. So let's say, for example, here's a good example, the material master says 9, the purchase info record says 12. When that purchase requisition gets converted into a purchase order, we're going to get a surprise if we're using the material master to plan, because what will happen is that purchase requisition, when it gets converted into a purchase order, is going to adopt the information and the purchase info record, and it's going to add 3 days to that plan delivery time. So this is really important to make sure that we have the right source of information flagged as relevant to MRP and we would do this in the source list. So if we don't have that, then the worry is that when we go to convert it into a purchase order we could see that change. But lead time performance management, super important, get in here regularly, review how your data, so what you believe is happening, looks compared to what is actually happening. Scrub for outliers, understand root cause, but then go in and update your records accordingly, based on negotiated lead times with the supplier and conversations with them around their performance. WPDTC will help you with your lead time management. So in summary, we have covered how lead time management will allow you to. Review the consistency of information across the different data maintenance points in SAP. Compare planned lead times to actual performance. And reconcile records for improved planning and performance. This is a powerful transaction and with great power comes great responsibility. Yeah, thanks Kristie. Truly a mouthful that transaction. So using this feature however, does improve the accuracy of delivery dates, resource planning, and inventory optimization. So once again, if you're looking for more information on this particular transaction or other features in SAP, please feel free to check out our video catalog and if you have a question, please submit it below.

Contract & Supplier Management

P2P; PM

ME39; ME41; ME42

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, my name is Martin, and in this video we are going to focus on how to take advantage of SAP's request for quotes or proposals capability. The RFQ process in SAP allows the buyer to solicit bids from multiple suppliers and centralize that data collection right in SAP. It's a widely underutilized feature that when use correctly promotes flow through the procurement process and allows us to make strides in strategically managing our spend. Kristie, tell us more about this underutilized feature called RFQ. I would love to tell you more. Request for quotes or proposals is a powerful feature when used correctly and in this demonstration I'm going to focus on just three things. First, where this highly underutilized feature lives in SAP. Second, the basic structure of the process. And third, the advantages via integration of facilitating this process directly in SAP. All right, let's talk request for quotes in SAP. So a lot of us are not using this functionality, in fact very rarely do we see people going out and doing RFQ's. They may be doing it for some things around large commercial projects, capital buys, services sometimes. But even then, it's really lightly used and almost never do we actually see people using this for things that are actually inventory materials. And so I want to go through today and highlight what this actually looks like and some of the capabilities, and I'll tell you if you're in S/4 and you have Fiori, there's a lot of additional, cool stuff in that they've really reorganized how the data flow works in terms of how it's presented to you and when you try to do things like go in and rank your suppliers and do comparisons, you've got a lot of nice analytical features in the way that that's going to present information to you and how you actually select which supplier you want to award. So you have that to look forward to and we will do a video specifically on that to give you more of the flavor there. But I did want to just mention it because it gets, it gets pretty cool. I'm going to click on materials management here and go into purchasing, so then this is all going to be pretty familiar to us. So we've got our purchase orders information, we've got our purchase requisitions and our outline agreements, all those transaction codes down below that, hopefully we're using all three. Down below that we have our RFQ or quotation information. So I'm going to go ahead and open that up, this is where we do all of the RFQ and quotation work. And you'll see here we have two different folders, so, request for quotation is the actual RFQ and that process flow quotation is actually working through and managing those results as they're coming back in from the suppliers and being able to do that comparison and ranking so that you can make a decision on who you would like to award to. And it's really nice that you can compare multiple suppliers directly in SAP so you can make that determination. But let's go into the request for quota and I'll come in here and I'll show you what the beginning screen looks like for creation but then I'm going to actually go in and show you one that has already been started, so you can get an idea of what it looks like once you've got it going. So first of all, RFQ type it's going to be AN, it's going to be standard for you, language key is EN so if you want to present this in English, or you can set another language key just like you would on a purchase order, so that you're getting that translation if necessary. You've got your RFQ date, so the date that you're actually going to issue the RFQ, and then the quotation deadline. So when they need to have it back. If you have an internal reference for the RFQ number and you've allowed for that in your configuration, you can enter it. Otherwise, the system is just going to generate that document number for you, just like it would for a purchase requisition or purchase order. Mandatory, you're going to need to enter your purchase organization and your purchasing group, and then down below if you'd like to default any information in across all the line items on this request for quotation, you can enter these in and that will go ahead and add them appropriately for you. Now what's most exciting though, and where I really wanted to draw your attention is this. So first of all, if you have something where you are periodically quoting, so you need to send an RFQ out, and then you've got reasons why you need to quote that on a periodic basis, once a quarter, biannually annually, every 24 months, whatever the case may be, you can actually copy a prior RFQ and bring that over all the information so that you can send it out. If you're sending RFQs out to separate suppliers and you want to be able to copy and send a unique document to each supplier, you can do that here. The other thing that you can do is if you have a purchase requisition that's been submitted into your procurement department, and you need to convert that into an RFQ, you can do that and it will inherit all the information that's already been entered into the purchase requisition that's relevant for the quotation process. And then lastly, and I think is very exciting is you're able to actually do this from an outline agreement. So let's say that you have a contract or a scheduling agreement that is up for renewal, it's coming to the end of its validity period, you can go out and quote it by copying in a lot of that information directly into the RFQ. So that's super nice and that really helps that periodic flow and I think also if you're looking for a use case, for me, if I'm thinking about some of the challenges of working through those documents that should have very clear validity periods, this is one of the ways to help accommodate that whenever it is that we need to go out and we want to rebid or want to create a more competitive environment and go across a couple of different suupliers. So let me back out here and what we're going to do is we're actually going to go in now and take a look at one that is in flight and go in here, and I just want to give you a little bit of a better idea of what the bones look like once you're inside. So you'll see it looks very similar to a number of our other purchasing documents. So requisitions or even setting up the header level or item level of your scheduling agreements before you get into the delivery schedule. So you'll maintain a item category of appropriate, your material number if it is a material, and then if not, your free text will go into the short text field, which will be the description for what it is that you're looking for. You'll maintain your quantity and your unit of measure, your anticipated delivery date, and then any other information around material groups, plant storage, locations, or text, so you can maintain and attach different texts and information here to make it easy for your suppliers to understand what it is that they're quoting and actually go through the quotation process. And from here we can actually go in and start to look at a few other things. So you can attach a release strategy, so you want to prepare your quotation, but then you would actually like to have somebody review it before it goes out. You're able to invoke that release strategy here. You can come in here and you can actually set up the details around this item. So you've got your RFQ quantity. If you had different deadlines across the different items on the RFQ, you can set those up here, and then you can also set up any reminders to remind your suppliers of when this is due so that you're sending that information out to them on a regular basis. If your supplier has their own material number, you can maintain that reference here, and then if it's attached to a particular quotation or line item, you can also enter that information. In addition, you also have additional data, and so this is where you can maintain anything that is specific to how this item should be delivered to you. So something like planned delivery time, if you have specifics around weights and dims that might be helpful for the supplier, you can maintain that here as well as anything around any type of incoterms or any other things that you would want to negotiate in terms of how they're going to perceive this. And as you're tracking through your entire process end to end from RFQ all the way through the actual procurement cycle with final procurement document, then you can also maintain other information here that would help with that. So if you're maintaining the same batch number for example, and you want that to flow all the way through and you have a specific batch that's required, you can maintain that information. In addition to that, you can also associate a delivery schedule with your RFQ. So you're able to go in and and set that up across time. Now, generally speaking, you're not going to do that you're more than likely going to let MRP go ahead and provide that but if your supplier needs to see a rough forecast for what those volumes look like across time, in order to be able to produce that quote for you so you can see how the volume is broken down, then you have that capability. Most of the time you're going to be doing something like a validity period with an overall target quantity but in the cases where you have special commodity types or special services rendered where you need to be able to see that information in more detail, you are able to maintain that here. Okay, now lastly, and the one other thing I wanted to show you is just if we come in and we look at the kinds of selection you have in terms of ranking for being able to review your results, you can actually bring in results from several different suppliers and we'll go into the quotation segment here, and you can come in here to do price comparison and that is going to be under ME49, that's going to be the transaction code, and you can see here, you can bring in specific quotation numbers, you can bring in a collective RFQ if you've got multiple out there that you're trying to combine together, and you're able to come in and decide how you would like to see that ranking occur. So you can go through and review the different options so you can come in and take a look at what you want to include. So if you've got discounts or delivery costs, if you need to do any type of price calculation or determination in order to be able to see that landed cost, you're able to do that, and then it will come up with a simple ranking list and you can make your selection to be able to award that to your supplier. So very helpful in terms of being able to search and bring that information in and go through the process and we'll do another video around what it looks like to do that comparison in Fiori so that you can see how this process has continued to evolve and some of the new tools that are available. So, RFQ is very useful and you can see that they can fully integrate into your process if you think about your periodic reviews, trying to create that competitive environment without having to come up with a new document, being able to copy over, being able to reference contracts or outline agreements in order to be able to send those bids out and then be able to compare multiple suppliers to determine how you'd like to place that volume. So in summary, we have covered how requests for quotes or proposals allows you to be able to. Send requests and consolidate responses from suppliers all under one central document. Move from the RFQ stage through purchase and treat this as an integrated function positioned for pull. And lastly, supports reporting that is ripe for evaluation, especially when it comes to monitoring and managing supplier performance and figuring out how we can best set our partners up for success. Thanks Kristie. Using this feature automates and streamlines the procurement process, reducing the time and effort required to manage the process manually. Getting our procurement cycle started on the right foot pays dividends back to the organization over time. If you want to learn more about this feature and other features in SAP please feel free to check out our video log and of course if you have any specific questions or comments, please submit then below.

Contract & Supplier Management

P2P; PM

MC$G

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi Martin here, and in this video I want to focus on how to take advantage of SAP's spend analysis capabilities. When use correctly spend analysis can provide organizations with a comprehensive view of the spending patterns and enables identifying opportunities of cost savings as well as process improvements. This is one of the strategic capabilities available in SAP that helps us rise above the individual transactions and hone in on those opportunities. Kristie, how would you take us through a demo on this? You bet you Martin. Spend analysis is a powerful feature when you use correctly and in this demonstration we're going to focus on three primary things. First, we'll dive into spend analysis and explore some of the key figures that are available. Second, we'll take a look at how you use spend analysis tool to dice and slice and create tops list based on different characteristics. And lastly, we'll explore how spend analysis can help us to identify anomalies that's close and near and dear to my heart. All right, so one of the best ways that we can enable our sourcing strategy is to be able to go in and do some spend analysis and I think a lot of folks don't even know that this is here. So this is MC$G and it is my favorite transaction for going through and evaluating our spend with our suppliers, and you can see that this is a report that has a lot of different information in it. So in this case, we have it sorted by supplier. We are seeing our purchase order value over a period of time, so this is our last six months, this is the value of purchase orders that we've placed with each of these suppliers. It has our goods receipt value so this is how much we have received from those suppliers during those same six months and then it has our invoice amount, so it will have how much we have been invoiced over the last six months. And so depending on your terms and your lead time, you will see differences here because it's based on what of those activities has occurred over the last six months. One of my favorite things about the spend analysis is it also helps us to catch anomalies. So when we take this down to the material level, which I'll show you in just a moment, we can evaluate our purchase order price versus our invoice price. Now again, terms will cause some variation here but let's say that you've just gone through and you've done a quarterly or yearly update on your pricing and you want to make sure that you don't have any pricing issues. Maybe you've made a fat finger and you've added an additional zero, it happens all the time. You can catch that in your purchase order price, so you'll see something that is really outside the normal, you'll see it in your roll up of your purchase order value. So when you know that you've had a recent price change, you can use this to help you to detect anomalies and how that pricing has been loaded. The other thing that you can do, because there's lots and lots of key figures available to you, is you can come in here and you can see how you're progressing in terms of how you're using the more strategic pieces of the procurement suite. So contracts, quota arrangements, scheduling agreements, requests for proposals or quotations, all have entries here, and you can pull those in to see how you're using them, what the number of occurrences are during that same time period and evaluate how those particular pieces are getting adopted. So we can see here we have 39 contract items and I'm going to sort that in descending order, and so I can see which suppliers have contracts that'll let me see the suppliers. I can then go in and I can explore, I can drill in to see from here, I can explore what is going on from a material standpoint or material group, plant purchase organization or month. So I can see the month that those were issued in or the materials that they were issued against and that allows me to explore a little bit more of what's happening. And probably most important is just being able to do the general spend analysis. I'm going to back out here. These are our suppliers, I'm going to sort this by purchase order value, so the suppliers that we've had the most activity with are going to come up to the and then I can even go in here and do a tops list. So the top, however many. So I need to select the key figure I'm looking for, click on the top number, and I could do my top 10 or my top 20, and I can start to really take a look and see how my spend is spreading. Especially when we talk about doing something like material group, that'll let you see how effective your material group classifications are, think about grouping and prioritization and being able to get that signal, that's really important. One other important call out here is that you also want to take a look and see what's going on in terms of your free spend. So I'm going to go in here and just come in again. I'll show you what this looks like from the very beginning. You'll notice that this is coming in at the material level and you can see here that I have 5.5 million of my 16 million over the period of evaluation has no material number associated with it. So that's a free text PO so it's largely untracked spend, so as much as we can, we want to classify this. So the next level down for that would be to drill into that particular spend category. So watch the 5.5 million when I do this, I'm going to click on it and I'm going to say, okay, tell me the split out by material group. So you can see now I'm looking at just that 5.5 million dollars and I can see the split by material group. So I'm going to go ahead and again and sort and descending order, and I can start to see if I've got good buckets here that will allow me to get a signal in terms of being able to evaluate in my spend. And then I can come in here and I can drill in further to see what suppliers were involved. I'm going to do that and here's all my suppliers. Now again, I can sort descending order and I can run a tops list if I wanted to, bring that up to the top, and now I want to look at it by month. Now this is free text, a lot of times these purchase orders are for services and there's just one big PO but we'll see what we get here so I can drill down again. Again, I might be looking for anomalies or how my spend is flowing going by month. Okay, and now I can sort this in ascending order and I can start to chart this across time, so I can come in here to assign series graphic and I could actually look at my PO versus my goods receipt versus my invoice just to kind of see how everything is tracking and look at this across time. And then I can look for how those things are stacking up or where I have terms, I would expect to see some differences and I can start to see how the flow of my invoice that has been issued versus my goods receipt versus my purchase orders are lining up. So it really need to be able to do that and map it and start to get some signal out of the spend. We could spend hours talking about this, there's so much fun stuff in here that's really helpful to the process, but this is your spend analysis report an MC$G and lots of good stuff for you here in terms of being able to evaluate how that spend is slowing and also to detect anomalies in the process as you go. So in summary, we have covered how spend analysis allows you to. Be able to evaluate spend and trends over time. Detect anomalies and spend patterns, pricing and terms. And evaluate how we're doing with making smart use of RFQ's, quota arrangements and outline agreements. All really important stuff. Thanks Kristie. Through spend analysis we have an amazing ability to surface opportunities to manage our spend, refine our strategy, and ensure that our buyers have the tools they need to be successful day to day. So if you'd like to learn more about other features and functions in SAP please feel free to check out our other videos and of course if you have any further suggestions feel free to submit them below.

Contract & Supplier Management

P2P

MD04; ME22N

Howdy supply chain enthusiasts, Martin here. And today we're on a mission to uncover hidden value in your SAP system. So buckle up and let's get started. In this video, we're going to discuss one of the most valuable communication and collaboration tools that SAP has to offer. Supplier Confirmations Order Acknowledgement. Kelly, I know this is a hot topic. Please tell us more about this and why specifically is it so important? You bet, Martin. This is a key capability in SAP that is often underutilized. but can really change the game in the quality of the information that supports MRP and ATP, and it does not have to be difficult to set up or maintain. You're probably getting a lot of this information already. In today's demo, we're going to highlight. How this first step in supplier provided confirmations, the order acknowledgement, allows us to know that the message has been received. Passes the baton to the supplier to provide updates if the situation changes on their end. And allows SAP to stay informed of those changes. Let's go in and take a look. I love this topic because it is all about creating visibility and getting everyone, including SAP, on the same page so we can plan well, make smart decisions, and manage exceptions. Communication is key and the order acknowledgement is the first past communication with the supplier. The first thing we want to do is determine what kind of confirmation we would expect to see from our supplier. We would set that rule with the confirmation control key. This is master data that can be set in several different records in SAP and it tells us what kind of confirmation steps we expect to take a PO through before receiving the goods. You can see here, we're in the stock requirements list. Right from this screen, I can see that we have a few PO lines that look different from the others. Do you see this reference here to a shipping notification? This PO has changed status because there is a confirmation from the supplier. Let's go in and take a look at that. Here's the PO in question and it's automatically taken us to the line item we were just looking at. You can see here that there is a tab called confirmations. In this tab, we can see the confirmation control key. This is going to tell us what the types of confirmations are that we expect to see as the PO lives out. It might be expected to receive an acknowledgement from the supplier that they have the PO in hand and will deliver as requested. Or, on a different date than requested. In which case, we might get the exception message, so we're alerted that the date provided does not align with the current needs. That's great! Then we can have that conversation if needed. The supplier may confirm but may need to break the shipment into two different dates. We can handle that right from the confirmation as well and we don't have to go in and create new lines on the PO. We have a need and they've provided a delivery schedule. Sometimes, especially on longer lead time POs, something will happen either on our end or the supplier's end, and they may need to confirm back a change to their prior commitment. Even if this is bad news, we want to know about it, and our exception monitoring will help us know the size of the problem or if the change is going to be okay. Over time, the back and forth with the supplier may become richer and you may choose other types of communication requirements like advanced shipment notifications. That's very helpful for knowing where the supplier is in the process. So you can know what options you have when you need to request the supplier's increase on an order, decrease an order, speed the delivery up, or slow the delivery down. If it's already on its way, that's a very different conversation than if it's not even due to leave the building for two weeks. Knowing where we are in the process and when we expect those communications to happen is key. We then have another level of collaboration that helps us to know if we're ahead or behind, or if the message was simply not received. So how do you get started? Select suppliers that you are regularly engaged with and who are sending you this type of information today, even if it's via email. The information can get into the SAP through manual maintenance. It sounds like a lot, but if you're regularly maintaining dates anyways, this may work for you. You could use an upload tool and some basic SAP list reporting to create an easy way to communicate your order book to your suppliers. Allow them to send it back and then upload it. Or, there are standard EDI protocols that can be used if your supplier uses EDI or a portal. Start small for big gains and just keep growing over time. So let's bring this home with a few key takeaways. The use of confirmations and specifically order acknowledgements supports collaboration. Through two way communication. And creates the visibility for MRP controller, MRP, and ATP. Back to you, Martin. Cool stuff. Thank you, Kelly. Getting this communication out of your email and into the system is a fantastic step forward in supporting the speed and the quality of data necessary to compete in today's market. So, thank you. So folks, if you're curious about this and other related topics, please check out our video catalog. And of course, if you have a burning question or suggestion, please submit it below.

Contract & Supplier Management

IBP; P2P

MC$8

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, I'm Martin, and in this video we're going to focus on how to take advantage of SAP's supplier in full reliability capability. So when used correctly supplier in full reliability reports will help an organization improve supplier performance by monitoring the reliability of their suppliers delivery quantity commitment. This is all about in full portion of the on-time in full KPI. So Kristie, tell me more. For sure Martin. Supplier in full reliability is a powerful feature when it's used correctly. We often focus on the on time, but neglect the in full. In this demonstration we're going to focus on three things. How this reporting tool is set up to reflect the rules of the business for quantity thresholds. How we can control and define the period of evaluation and drill down to look at trends versus outliers. And where it may be helpful to look at our delivery tolerances to help reduce noise and then focus on our areas of improvement when the quantity deviations are truly meaningful. So there's a variety of ways that we can look at our supplier performance in SAP and we're going to be exploring a number of those in our upcoming videos. But this one is really focused around the in full component of on time and in full. So if you think about it from the standpoint of is the supplier reliable in terms of how they are delivering the quantities that we are requesting from them? So in this report, there's a number of key figures that are available to us. So you'll see here we have our suppliers going down the left hand side of the screen, and then over here we have these key figures. These are our quantity variances, and these are defined at the purchase organization level. So you'll set your quantity tolerances there, and then as you are receiving against the purchase order, it's going to go ahead and start bucketing those for you, and so the middle one is typically your exact quantity. So in this case we set up our tolerances to be 10% under or 10% over. So if the supplier is within that, then it's going to show up for us in this middle column here. That's the good column. Next to that, if we move to the left, this means that they are under-delivering, and in this case it's 10 to 20%, and then over further to the left is the next category, which is under-delivering by 20 or more percent. Same thing over here to the right, now they're over-delivering by 10 to 20% and we're over-delivering by more than 20%. So the other thing that this does is it helps us to really fine tune our tolerances and our tolerances really should be done by different commodity types. So as you're working through and you understand what the agreements are with your suppliers, but also looking at the industry information so you know what the typical under and over delivery tolerances are by commodity, that can really help. And why is this important? Because you do not want to get that phone call every time the purchase order hits the receiving doc that they're delayed in receiving it in because of a quantity variance that falls within standard. However, you absolutely do want that call if it's something that needs to be caught at the dock and so you can have the conversation with the supplier. So we want to alert on the things that are important and differentiate where it matters and not on the things that are within the acceptable tolerance range. It also reduces the lifting on the purchase order to go in and close out. So let's do a little something here. Let's go ahead and sort this, I'm going to sort in descending order, so this is going to bring to the top the highest number where we have been really under-delivering on our purchase orders. And then I can start to drill in and see what's happening. So this is at the supplier level right now. So what happened with the supplier that they had 93 occurrences. I can then drill down either by material group, by plant or purchase organization, by the supplier's country of origin, which could be really important or by month. And so I'm going to go ahead and break this out by month, we're looking at about a six month range here, and I could see, oh, all of this, every single one of those occurrences, something happened specifically in September. And then I could drill in here to see what materials or material groups were involved and go in here and grab the materials. And I can see it was all on one particular material. So now I have some information where I can go through and either go, oh yeah, that thing happened in September I am aware of what happened that's been resolved, we haven't had any recurrences, that's good, I'm checking to make sure that it's staying steady. Or it's been happening a lot, I've got several occurrences spanning several different months or several different materials. Now I want to go in and have a conversation with the supplier. The other thing that's great about this report is that it flows to your buyer negotiation sheet, which is really helpful for having those periodic meetings with your suppliers to talk about on time and in full performance, price performance, all of those different things. So very helpful, and you can look at that both from a supplier perspective as well as a material perspective. We'll take a look at our on time portion of this in another demo, so make sure you keep an eye out for that and I hope this was helpful. So, in summary we have covered how supplier in full reliability allows you to be able to. Have productive conversations with your suppliers on their performance and opportunities for improvement. What can we do to support their success? How do we know where we may need to take action to protect against variability and volatility? And lastly, the capabilities to drill down to evaluate outliers versus ongoing trends that really need addressing. Thanks Kristie. It sounds like it's all about communication and collaboration. If we can identify where we're struggling we can work together to improve, I love that. Okay, so if you'd like to hear more about this feature and other features in SAP please feel free to check out our other videos and if you have a specific video request feel free to submit it below.

Contract & Supplier Management

IBP; P2P

MC$6

The best way to learn is by doing. Welcome to the video service that unlocks and reveals the hidden value in your SAP system. Hi, I am Martin, and in this video we're going to focus on how to take advantage of SAP's supplier on-time delivery capability. So when used correctly, supplier on-time delivery reliability can help organizations track supply performance and collaborate effectively to improve that performance. This is evaluating the on-time portion of the on-time in full KPI and is so critical to an organization's success in planning effectively with their suppliers. Okay, so Kristie, I know this is a KPI that's near and dear to your heart, tell us more. I'd love to Martin. Supplier on time delivery reliability is a powerful feature when you use correctly, and in this demonstration we're going to focus on three key things. First, how we can set up meaningful thresholds that drive performance improvements. Second, the intelligence that comes from drilling down or evaluating trends across time. And third, how to open conversations with our suppliers to collaborate for improvement. There are a variety of ways for us to track our supplier performance in SAP, and this is one of the reports that will help us with that. So if you think about supplier performance for on time and in full, this is the on time report to help us understand what is happening. So this is MC$6, is the report that you would be after and you can come in here and you can run it by a variety of different selection criteria, by country of origin, by supplier, purchase organization, or plant, and then for a date range. And what it's going to produce for you is this little grid that lets you know how these suppliers are performing over that period of time, based on the delivery date tolerances that you've defined. And so once you've defined your delivery date tolerances and you're starting to receive information into these buckets, then you can rename these columns to reflect that. So I can tell you that this middle column here is typically what you would consider to be on time with whatever tolerances that you have set up, and then this might be a certain number of days early, and then beyond that. So let's say that this was 3 days early and then this was anything greater than 5 days early. Same thing over here, 3 days late, anything greater than 5 days late, and you're able to start to drill down and see what is happening. So let's take, for example, let's grab some of our suppliers that have been struggling with being a little bit late and I'm going to sort this in descending order so it pops everything up to the top, and I can come in here and actually start to drill down and see what's happening. So this particular supplier you'll see is actually a little all over the place, right? So they're very little in terms of being on time, but they've got quite a bit on both of the outer ranges. So then you can start to think through what could help that supplier to be able to improve their performance. The other thing that it will help us to do is evaluate our lead time performance and see if there are any adjustments that we need to make. So it's very important for us to be able to hold our suppliers accountable to their stated lead time, but it's also very important for us to plan according to the reality of when it is that they're going to deliver. So we'll have some other conversations around how to accomplish that in terms of your master data but what we can do right here is we can actually drill down and see where this problem is occurring. So I can go for this particular supplier and say, okay, how did they look across the month? Was there one particular month that they were struggling with or were there several, drill down by month, okay and so I can see the spread here. So really no deliveries yet this month and then if I look at the periods of evaluation spanning back across time, there are definitely some months that had more challenges than others. So the majority, for example, of the lates that fell into that mid-range happened in September of 2022, so something may have happened there. The other thing we can do is use this to help make sure that our processes are going well on the dock, that we're receiving things in, in a timely fashion, that our goods receipt information is accurate, real time and up to date, and that we're judging our suppliers fairly in terms of what we set out and expectations for them. So if I was curious what happened in the month of September, I could even go into this month and then I could drill down a little bit more. So when every time you're drilling down, you're looking a little further, a little deeper into that particular drawer, and I could go into material or I could go into supplier country of origin. I could even go in just by material group and start to work my way through what is actually happening. So just out of curiosity, let's see how many materials were involved in this. I'll choose material and let it roll and then I can see, oh, there was one particular material where we were having issues and that's going to explain the majority of it. So now I can think about what happened, understand if that was an outlier or an isolated incident, and then really focus on the trends. So things that are recurring month over a month, or where there's a variety of materials that are involved to see how we can help that supplier to be able to improve their performance. This will also flow through to your buyer negotiation sheet, which is great for periodic review in terms of on time and in full performance, as well as price performance, and you can look at that both from a supplier and a material level. So really good and helpful information to have when you're having those periodic meetings with your suppliers. So in summary, we have covered how supplier on time delivery reliability allows us to. Improve performance through collaboration. Identify where intervening measures are needed or necess. And define what on time means to our organization. There are so many tools out there for supplier scorecarding. The value of this analytical tool is that it's available right here in SAP anytime we wish to look at it, and by populating these structures with the definitions that are meaningful for our particular business and enables another valuable tool, the buyer negotiation sheet. Thank you Kristie. Using this feature opens a door for productive collaboration with our suppliers. Through this collaboration, we get miles closer to aligning our plans, schedules, and actual delivery. That's harmony for everyone. If you'd like to know more about this particular topic and another one that Kristie mentioned around buy negotiation sheets, there are many videos on this. Please feel free to go check out our video catalog and if you have any other suggestions feel free to submit them below.