Procurement Status Visibility


Understand how your suppliers are behaving by measuring their actions against your procurement plan

In today’s Supply Chain we invariably have suppliers shipping from all over the globe. In addition, with a focus on driving down the operational costs linked to warehousing product, the need is there to limit the safety stock level and keep less stock on hand.

How do you do this effectively without affecting customer service levels?

If you spend loads of effort and expense to ensure your master data is correct and up to date and, in turn, this drives the most effective and accurate procurement plan your company has ever seen but you still don’t see the results, what could be the problem?

Quite possibly it’s the supplier taking advantage of the fact that you don’t know what and when they are changing things up on you or are simply not delivering according to that plan.

The answer to this problem is to gain process-wide visibility in to procurement status and a suppliers compliance to the procurement plan at an item level. Total end-to-end transparency and visibility for your internal procurement folks, the executives and the suppliers themselves.

SOLUTION OVERVIEW

With the clever use of standard functionality provided by SAP, in the form of SAP Event Management, and vendor Electronic Data Interchange (EDI), we are able to provide this visibility to the interested parties. In addition we can ensure that each PO Line is following the procurement plan as set out and if there are any deviations then we can react to that exception to correct it, or simply just record it and use it later in vendor evaluations…

PTP Process with EDI

PTP Process with EDI

When a purchase order is generated in SAP it generates an output. We leverage this output to produce an EDI message (850 or ORDERS) to be sent to the supplier.In the EDI world we often don’t have visibility in to the status of transmission to the supplier. With this solution in place you will have full visibility outbound documents as they flow through your EDI subsystem. No more calling the EDI folks to check if the PO was sent…

This purchase order is then picked up by the supplier and they confirm that they received it. They also confirm the agreement of the PO together with any changes needed. E.g. They may change the price, quantity, delivery date or product itself. This confirmation is sent back to us in an EDI message (855 or ORDRSP) and we load it against the PO.

This is the first step in the process where we need to measure the response to the plan. We believe this to be the most important step of the entire process. It sets your purchase order up for success or failure… This is the point where you can affect change in the process if it is needed. If your supplier cannot fulfill the needs exactly as laid out in the PO then you have the opportunity to use another source, negotiate a better price or date, …

The other points in the process where you need to measure compliance to the plan is as follows:

  • When the supplier ships the product you should receive an ASN 856 EDI message with the details of the shipment
  • When you receive the products at your location, the match is made between the ASN and the actual goods received
  • When the invoice is received from the supplier it is matched against the Purchase Order and the Goods Receipt
PTP SAP EM Web UI

PTP SAP EM Web UI

 The SAP Event Management solution allows for the tracking and monitoring of all exceptions or deviations to the plan down to the Purchase Order line level.

If a supplier is continuously revising the delivery dates for your POs, this report will let you know to address the matter. If a particular carrier is always late on delivery then you can address it. If a supplier continuously overships product then you can address it. Knowledge is power…

SOLUTION BENEFITS

  • Better compliance to your procurement plan
  • Meaningful information to be used during vendor negotiations
  • Reduction in costs through more effective use of the supply chain
  • Improved customer satisfaction through end-to-end process transparency
  • No “lost” EDI Purchase Orders

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