Supplier relationship management from IBM and SAP

The goal - Sustainable operational savings

Do you have a consolidated corporate-wide view of spending across your consumer product operations? With the supplier relationship management solution from IBM and SAP we can help you control, manage and strategically leverage procurement for sustainable operational savings.

The advantage - Don’t leave your supply-based decisions to chance

Purchased goods and services represent over 50% of sales for manufacturing companies, and a 1% reduction in this cost can generate the equivalent contribution of a 3.3% increase in sales.

Reduce unneeded inventory. Consistently acquire goods at the best available prices. Effectively manage supplier relationships. Efficiently process sourcing and procurement.

We are uniquely positioned to help you get the most value from your suppliers. To transform your supply chain—for reduced costs, increased productivity and the ability to quickly adapt to market opportunities or threats. Using leading SAP software and drawing on our proven methodologies, vast consumer product industry experience, along with innovative technologies and best practices we can help you:

• Improve supplier selection by evaluating suppliers and buying methods more effectively to develop better supply relationships.
• Gain higher compliance by enabling your suppliers to collaborate and integrate for more informed make or buy decisions.
• Reduce cost per relationship by engaging suppliers more effectively to lower the cost of goods sold for all parties.

The benefits - Our approach—successfully teaming with our clients

IBM has a track record for SAP implementations with unique distinctions.

• IBM is the only systems integrator to win the SAP Award of Excellence every year in every country it has been offered.
• We have over 3,700 successful engagements at over 6,000 sites.
• IBM has a demonstrated history of development in leading industry-based methods, tools and templates to accelerate implementation and maximize return on investment.
• We have over 13,500 staff in 60 countries with over 20 solution development sites and demonstration centers around the world.

The ROI - Long-term success

Our history of partnering with consumer product companies to transform their businesses has given us the ability to share our "lessons learned." The reality is that all suppliers are important, and managing the extended supply base is the key to sustainable savings. Supplier and supply management is the most immediate and tangible lever in:

• Achieving operational cost productivity.
• Gaining higher returns on newly deployed capital or projects.
• Providing direct and immediate value to the customer.
• Accruing direct, undiluted benefits to the bottom line.
• Passing savings directly to the customer.

Our approach enables rapid self-sufficiency. We help you determine required knowledge, establish coaching and mentoring relationships, provide formal project team training and conduct evaluations to measure the knowledge gained.

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The goal - Make and execute informed decisions on demand

Do you have consistent vendor and transactional data across your supply chain? Are your communication processes effective? Cut costs and improve profitability. Deliver value. With a collaborative and integrated framework, you can leverage technology to streamline supplier relationship management. Make informed, timely decisions and cost-effective execution of those decisions across the enterprise and with suppliers, on demand.

The advantage - We deliver on our promises

Together IBM and the former PwC Consulting have won more awards around the world than any other SAP implementation partner. We have won SAP's Award of Excellence every time it has been offered, for eight years running. And we have ranked number one in client satisfaction among SAP integrators.

As the leading integrator of business process transformation leveraging technology solutions, we use a proven, benefits-driven approach that differentiates us from the competition. We:

• Have well-researched and proven points of view about industry and business trends, including recommendations, such as the sustainable operational savings that can be gained by streamlining supplier relationships, on how consumer product companies should evolve to survive and thrive.
• Define how to effect change by integrating strategy, process, technology and operations.
• Stand behind our advice, through our actions, by providing solutions with far-reaching impact.

The benefits - Reap the rewards of collaborative supplier relations

Our solution focuses on bottom-line results—to help you reduce the costs of goods sold by reducing the cost of procurement, throughout the company. Improve supply-related efficiency and enhance the value of supplier relationships. Capitalize on strategic sourcing.

• Consolidate supplier relationships for better negotiation agreements, more control over contracts and the ability to effectively monitor performance.
• Centralize information for better access to accurate and timely data, providing insight into enterprise spend patterns, contract compliance and price opportunities.

Compress cycle times

• Automate processes such as request for proposal (RFP) and request for quotation (RFQ) cycles.
• Speed procurement execution through online approval and self-help tools.
• Gain quicker acknowledgment and response from suppliers.

Reduce process costs

• Increase compliance through reduced maverick buying.
• Reduce complexity through content consolidation.
• Increase efficiency through procurement automation.
• Reduce integration and connectivity costs with online systems.

Lower unit prices

• Consolidate information across multiple business units.
• Lower inventory-carrying costs by buying more prudently.
• Acquire better prices through competitive bidding.

The approach - A global procurement organization in the works

One of our clients, a world-leading agribusiness which provides innovative brands to grocers and the food chain, has rolled out a standardized procurement process across 4 major geographies—CH, UK, France and USA—and is moving forward, as we speak. Before turning to IBM and SAP for their supplier relationship management solution our client experienced:

• Little visibility into what their organization was buying, from whom.
• Uncoordinated, disjointed, costly processes across their organization.
• Too many suppliers, little compliance and an abundance of administration.

80% of our clients' spend is now aggregated. Their results include:

• One consistent global procurement process.
• Spend transparency across the regions, categories and budget.
• Compliance to jointly approved suppliers.
• Projected sustained savings of $UK 23 million by 2007.
• A user friendly ordering system for end users.
• A paperless procure to pay process reducing administration costs.

The financial advantage - Lower costs and faster procurement

Supplier relationship management from IBM and SAP is designed to offer significant economic benefits. We can help you:

• Lower cost of goods sold through less expensive design, parts re-use and larger volumes of fewer different parts.
• Decrease development and inventory costs by using accurate and timely inventory planning.
• Lower transaction costs by decreasing maverick spending, monitoring contract compliance and taking advantage of price opportunities.
• Enable faster and more efficient procurement with automated communication and self-service tools.

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The issues - Integrated framework with leading-edge technology

Supplier relationship management is an emerging discipline in the business world. IBM and SAP converge the processes of collaborative design, strategic sourcing and procurement into a collaborative and integrated framework. This framework integrates data across the organization to streamline communication processes so employees can make informed, timely supplier decisions.

The benchmark - Longest standing and strongest alliance

IBM has been an SAP global alliance partner since 1989.

• IBM is the only systems integrator to win the SAP Award of Excellence every year in every country it has been offered.
• We have over 3,700 successful engagements at over 6,000 sites.
• We have been recognized by SAP Senior Executives as the leader with over 70% of SAP's Fortune 500 clients.
• IBM has a demonstrated history of development in leading industry-based methods, tools and templates to accelerate implementation and help maximize return on investment.
• We have over 13,500 staff in 60 countries with over 20 solution development sites and demonstration centers around the world.
• IBM is the leading systems integrator involved in joint development of SAP industry-based solutions.

The components - An implementation created for your requirements

Let your business requirements drive your implementation priorities. Whether it's operational procurement, strategic sourcing, supplier enablement or content management, IBM Business Consulting Services can assist you in crafting an implementation plan to optimize your returns.

In addition, our middleware and hardware technologies, such as IBM WebSphere® and IBM eServer systems, have been tested to run congruently with SAP applications.
Your implementation may include:

• SAP Enterprise Buyer to streamline purchasing, address a broad range of e-procurement needs and connect to e-marketplaces.
• SAP Bidding Engine provides dynamic pricing mechanisms, such as reverse auctions and requests for quotations. A decision support tool helps identify winning suppliers and stipulate follow-up processes.
• SAP Supplier Self-Services provides hosted order and content management capabilities.
• SAP Enterprise Portal to manage enterprise data—including applications, databases, and Internet information—and deliver content based on user roles.
• SAP Advanced Planner and Optimizer—a planning and scheduling tool that enables virtual real-time decision support and network optimization across the extended supply chain.
• SAP Business Information Warehouse for enterprise-wide information capture and evaluation.
• SAP Knowledge Warehouse to create and manage an enterprise-specific knowledge base for training and documentation.

The implementation - A successful major initiative roll out

A world-leading agribusiness for grocers and the food chain, has rolled out a standardized procurement process across 4 major geographies—CH, UK, France and USA—accounting for 80% of their spend. Before turning to IBM and SAP our client had different processes for different departments, sites and geographies and was employing manual administration for purchasing.

IBM provided installation, configuration, interfaces, testing, procurement process redesign, change management, training, supplier adoption, rollout preparation and diagnostics. We implemented a central system landscape, including:

• Integration to SAP R/3 the foundation of mySAP Business Suite and leading software for enterprise resource planning.
• SAP Enterprise Business Buyer to connect to e-marketplaces, streamline purchasing, and address a broad range of e-procurement needs.
• eRFX for online strategic sourcing.
• ORBITool for an easy-to-use interface for users across all geographies.

The cost of ownership - A low risk, high benefit implementation

IBM boasts a track record of measurable results and an approach that has resulted in 99% of our implementations realizing on-time, on-budget delivery. Supplier relationship management from IBM and SAP is designed to:

• Integrate disparate data, applications, software, hardware and computing platforms to preserve legacy IT investments.
• Allow for future scalability by using standards-based products.
• Support multiple suppliers with a single IT infrastructure for ease of management and support.

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