Supplier Relationship Management (SRM) Features and Functions
Criteria in this knowledge base pertain to managing supplier, manufacturer, wholesaler, retailer, and customer business processes. Addressing demand management, warehouse management, international trade logistics, transportation execution, and many other issues for a complete solution, this knowledge base will support your evaluation of an SCM suite.
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Design
Best practice dictates that strategic suppliers are tied into the new product process from the very beginning--i.e. the concept, requirements, and design definition phase. SRM suites support this with things like requirements collaboration tools, component selection tools, and BOM grading.
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Sourcing
Many consider sourcing to be the heart of SRM and commodity management to be the heart of sourcing. Advanced sourcing suites are rich in analysis and decision support technology to absorb huge amounts of data quickly and make intelligent sourcing decisions. They also lay the foundation of execution through the RFx process and managing performance against contracts. Risk management is an area which spans the full lifecycle, but is most associated with the sourcing function.
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Procurement
Procurement is generally divided into MRP-driven (sometimes referred to as direct materials procurement) and requisition-driven (sometimes referred to as indirect or MRO procurement, although some long-lead-time, first-run direct materials are ordered via requisitions. This division reflects substantial differences in the two methods of procurement. Management of catalogs supports requisition-driven procurement and the sourcing processes that precede MRP-driven procurement.
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Fulfillment
The bulk of fulfillment functionality is traditionally done by ERP and related systems such as order management, WMS, and distribution management systems. As companies virtualize and suppliers become increasingly involved in the fulfillment process, some functionality is appropriate within SRM. SRM systems should support a range of modern inbound inventory management practices, such as Kanban and VMI and provide visibility into the inbound pipeline. Returns management becomes important in SRM for situations where components are being returned to and repaired or replaced by suppliers.
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Manufacturing
As with fulfillment, The bulk of manufacturing functionality is traditionally done by ERP systems. However, the important supplier-facing processes of quality and ECO management may be done outside of the ERP system as part of an SRM suite.
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Settlement
The primary SRM-related function for settlements is in reconciliation between the original order, actual received goods, and the invoice. Advanced settlement processes may also be supported, such as evaluated receipts or electronic invoice presentation and payment.
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Utilities
There are several areas that span across the lifecycle categories--they are grouped here under utilities. Specifically, you need project management tools during design, sourcing, and manufacturing. The same is true about managing BOMs and managing cost.
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Infrastructure
SRM is by nature an integrative function and requires the infrastructure to support that integration, as well as to manage the massive volume of related content, alerts, and data.
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Product Technology
This group of criteria defines the technical architecture of the product as well as the technological environment in which the product can run successfully. Criteria include product and application architecture, software usability and administration, platform and database support, application standards support, communications and protocol support and integration capabilities. Relative to the other evaluation criteria, best practice selections place a lower relative importance on the product technology criterion. This apparently lower importance is deceptive because the product technology usually houses the majority of the selecting organization's mandatory criteria, which generally include server, client, protocol and database support, application scalability, and other architectural capabilities. The definition of mandatory criteria within this set often allows the client to quickly narrow the long list of potential vendors to a short list of applicable solutions that pass muster relative to the most basic mandatory selection criteria.
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Supply Chain Management (SCM) Features and Functions
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