SAP Procurement


Supply Chain Management: SAP Procurement

Strategic and innovative procurement is at the forefront of the supply chain today. While the root of procurement is all about connections and relationships, digitalization has now streamlined the experience and visibility. There are new opportunities to master the ability to maintain the right balance between the intersections of quantity, price, and time.

Procurement Simply Defined

Procurement is a process of acquiring goods or services in the right quantity, at the right price, and at the right time. Understanding supply chains is an important step because it helps to find reliable suppliers that best fit the business requirements. Minimizing cost is a crucial aspect but it should be combined with capacity planning, quality, and delivery reliability. Some organizations are using SAP Procurement, which is one aspect of supply chain management. It involves all activities in daily business operations for obtaining goods and services. There are generally three stages in the procurement process: sourcing, purchasing, and payment.

Supply Chain Management: SAP Procurement

Strategic and innovative procurement is at the forefront of the supply chain today. While the root of procurement is all about connections and relationships, digitalization has now streamlined the experience and visibility. There are new opportunities to master the ability to maintain the right balance between the intersections of quantity, price, and time.

Procurement Simply Defined

Procurement is a process of acquiring goods or services in the right quantity, at the right price, and at the right time. Understanding supply chains is an important step because it helps to find reliable suppliers that best fit the business requirements. Minimizing cost is a crucial aspect but it should be combined with capacity planning, quality, and delivery reliability. Some organizations are using SAP Procurement, which is one aspect of supply chain management. It involves all activities in daily business operations for obtaining goods and services. There are generally three stages in the procurement process: sourcing, purchasing, and payment.

9 Steps in the Procurement Process are:

  1. Identify the goods and services needed
  2. Submit a purchase request
  3. Review and select vendors
  4. Negotiate terms and pricing
  5. Create a purchase order
  6. Receive and inspect the quality of goods
  7. Conduct three-way matching in accounts payable
  8. Approve the invoice and make payment
  9. Record keeping.

Key components work together to make the procurement process happen. They include people, process, and paperwork. Building and maintaining relationships should be a top focus for procurement professionals to gain a competitive edge. By monitoring procurement KPI’s, businesses can empower teams to analyze savings and track supplier performance in a more simplified way.

Benefits of Procurement are:

  • Higher productivity
  • Lower management expenses
  • Trusted supplier relationships.

Using intelligent technology to harmonize processes and approvals will lead to cutting costs, driving compliance, and gaining visibility for an organization. Vendor partners that can offer solutions and services for software or strengthen process efficiencies include – SAP, Reveal or Gib.

Further insights for SAPinsiders are:

  • The Future of Enterprise Procurement: Saravanan Narasimhan outlines the benefits of a digital landscape for procurement. Stressing that a successful means of digital procurement in the corporate world is through early involvement. Redefine procurement from a tactical expense to a strategic investment.
  • Streamline Procurement Processes with the Raw Material Procurement Cockpit. Kaushik Choudhury explains the raw material procurement cockpit features, which can be used by small or large businesses. It supports planners working with multiple suppliers for the same material or several materials.
  • Sneak Peak: Sustainable Procurement as an Embedded Process in Supplier Management Activities. William Newman shares how to stay ahead of the curve on sustainability by previewing these conceptual roadmaps and the expected releases of related SAP functionality.

10 results

  1. Procurement Blog -- Image

    Procurement Pivotal to Managing Disruptions Says SAP Research

    Reading time: 2 mins

    What keeps supply chain professionals up at night? According to research conducted by Regina Corso Consulting and released by SAP, 49% of supply chain professionals surveyed cited shortages and disruptions as their leading challenge, followed by sustainability (28%), and reducing costs and/or saving money (27%). While many companies have been plagued by these challenges, 90%…
  2. How does a Large Governmental Body Institute End-to-End Procurement?

    As the steward of the world’s 10th-largest economy, the Government of Canada has long been a major purchaser of goods and services of all types. For decades, its agencies worked with point-to-point systems that became too cumbersome to operate. The government recently initiated a multimillion-dollar, five-year project to build an electronic procurement system to simplify…
  3. The Future of Enterprise Procurement

    Reading time: 5 mins

    The future of procurement lies within the digital landscape. Not only do the benefits of its implementation greatly outweigh the costs, but they also result in very profitable returns. Digital procurement clearly demonstrates that it is far superior to manual procurement methods within the context of efficiency alone. Despite the rising popularity of digital procurement,…
  4. Simplify Release Strategy Decisions in Procurement with Business Rule Framework Plus (BRFplus)

    Reading time: 12 mins

    Every procurement organization has its own complex business rules and processes for purchase orders and requisitions, uniquely designed to meet their own needs. To help its customers avoid errors and risks when processing purchase orders and requisitions, the standard SAP system delivers an approval process via a release strategy concept, which companies often adapt to…
  5. Achieve Budgetary Control of Unplanned Service Procurement and Projects Using Value Limit Strategies

    Reading time: 21 mins

    Learn how to use different value limit strategies to control spending on unplanned service procurement and budgetary allocation for projects. Key Concept Value limit is a functionality within purchase requisition and purchase order (PO) documents that can be applied to set a benchmark value for a project or service procurement if the cost and possibly…...…
  6. How to Optimize Vendor Performance Appraisal with Automatic Vendor Evaluation

    Reading time: 32 mins

    Learn how automatic Vendor Evaluation in an SAP system can be implemented to optimize the appraisal of vendors’ performances and significantly reduce your supply chain risk, cut financial waste, and enhance your procurement process performance. Key Concept Use of Vendor Evaluation is sometimes not considered an important requirement during SAP system implementations, but it is…...…
  7. The Role of Finance in an End-to-End Procurement Value Chain

    Reading time: 6 mins

    The advantages of automating your procure-to-pay (P2P) network are easy to imagine, particularly when it comes to efficiency. The potential benefits go far beyond efficiency gains, however. If done correctly, an automated P2P network can provide new opportunities for spend visibility, supplier management, and collaboration. Learn why finance is taking a central role in the…
  8. An Analysis of Simplified Sourcing on SAP S/4HANA

    Reading time: 11 mins

    Learn the differences between the material requirements planning (MRP) source of supply determination in SAP ERP and the simplified sourcing logic introduced in SAP S/4HANA. Key Concept Source of determination is the process of selecting a source of supply. This process can be executed by material requirements planning (MRP) when a replenishment proposal is created…....…
  9. Digital Innovation in Sourcing and Procurement

    Reading time: 6 mins

    Supplier relationships play a major role in determining an organization’s bottom line, and when suppliers are not performing at an optimal level, businesses need to know immediately or risk losses. Procurement professionals, many of whom have to deal with an ever-increasing volume of suppliers and contracts, face a growing burden in managing these supplier relationships.…
  10. Foreign Procurement: Handling Ownership of Goods in Transit

    Reading time: 14 mins

    Learn how to handle goods in transit (GIT) during foreign procurement. The process starts with the transfer of ownership at the time of shipment handover. It goes on to storing it in a bonded warehouse at the port of entry (if necessary), and finally to posting it to the company’s material stock account at the…...…