SAP Supplier Relationship Management

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SAP has a product that allows a company to manage its relationships with its vendors more successfully. The SAP Supplier Relationship Management (SRM) application can connect a company with its supply base which allows multiple levels of suppliers, partners, and manufacturers to work together, while you reduce the cost of goods sold. There are a number of functions that are found in the SAP SRM application including procure to pay, catalog management, and supplier evaluation.

Procure to Pay

This function is used to enforce procure to pay best practices that will reduce procurement costs. This is achieved by improving supplier communications, streamlining procurement operations, and improving cost management. In this function, it is possible to cut process costs and speed cycle times by automating procurement and leveraging workflow. You can also improve supplier relationships by assisting electronic transactions and collaboration. Companies can use the procure to pay data to create strategies with vendors.

Catalog Management

This function is used to manage the catalogs that are supplied by the vendors and used by a company's staff to purchase items. The catalog data has to be synchronized with the SAP master data and the data should be checked for quality to ensure that it is correct for users. The catalog data should be maintained so that the data can be cleaned, loaded, aggregated, and in a position where the data can be searchable. The catalog function in SAP SRM also provides companies with the ability to add images to the catalogs they use as well as internet and print publishing.

Operational Sourcing

This function allows a company to look across the enterprise to gain visibility even when a company is using a variety of purchasing solutions. The functionality gives the purchasing department a view of the demand for goods across the company, even non-SAP applications so that they can combine the total spend and improve the negotiation process with vendors. The purchasing department can work with the data in the application to co-operate with vendors to improve overall savings.

Contract Management

Centralized contracts with vendors allow a company to use their total spend across a number of locations to help negotiate better prices. The SAP SRM application gives a purchasing department the tools to track the spend and ensure that employees are purchasing the correct items for the prices negotiated with the vendor.

Self Service Procurement

This functionality gives employees of a company the opportunity to purchase items they need from vendors via an internet portal. This allows employees who do not normally purchase items, to be able to purchase items through the catalogs that are available to them. By developing a set of business rules for the employees, they can purchase items which can trigger an approval workflow so the items are received in a timely fashion.


The SAP SRM application contains operational reporting that allows a company to monitor purchasing activities, measure contract compliance, and review organization-wide spending and sourcing needs. The reports can use data from the SAP SRM, and SAP ERP systems.

Current Release

The current release of the SAP Supplier Relationship Management is version 7.0, which was released in 2009. The first SAP e-procurement solution was offered in 1999, and over the years, the solution has grown from a Web-based catalog requisitioning solution aimed at operational excellence to the solution today that offers complete supply management. SAP SRM is based on a number of best practices that come from proven business and industry expertise. It also provides a wide range of pre-configured business scenarios that companies can quickly implement and benefit from with improved efficiency in their business processes.