The operative methods, which companies use to manage their procurement processes, have changed dramatically over the past few years. The significant opportunities provided by the Digital Transformation now need to be exploited, in order to gain the biggest possible advantage from the globalisation of the supply markets. In a complex and inconsistent environment, companies nowadays need to be able to identify the best supply options in relation to reliability, quality, sustainability and costs while paying particular attention to the preliminary analysis of supplier risks. This complexity is increased even further in local markets through the legal requirements regarding purchase processes and the assignment of orders and sub-contracts.
The new SQM 3.0© (Supplier Qualification Management) for the qualification of suppliers consists of four scalable, integrated components. Thanks to the flexibility of the processes and procedures, the functional and operative requirements from numerous industrial sectors as well as the public sector can be supported optimally. SQM 3.0© provides companies with an end-to-end instrument that is based on the latest vendor management models, which were identified by Syskoplan Reply in cooperation with renowned academic research teams.
One decisive factor is the growing sensitivity of companies with regard to their social responsibility. Sustainability in all of the economic, productive, ethical, social and environmental forms necessitates new work instruments and transparency for
vendor management. This means that simply operational support is no longer sufficient. In addition to significant local
adjustments in line with legal requirements, instruments for analysing decisions in the areas of Procurement and Purchasing Management are required. This is because structured and, in relation to suppliers, standardised management is ultimately the guarantee regarding
traceability and transparency of each decision, which is made by the purchasing department of a company.
The ability to review information regarding your own – actual or potential – supplier base is an essential requirement nowadays for everyone who makes purchasing decisions. The available information must be updated with information from external databases and then assessed using objective parameters. Modern technologies, combined with models for
classification, vendor ratings and risk analyses, make this process easier and more efficient.
Since the first release, SQM 3.0© has become a
SAP-certified solution with native integration in the systems SAP ECC and SRM. It supplements the information available in companies with data from the most important external databases, which can be downloaded on a regular basis to support a consistent and comprehensive supplier risk analysis.
Modularity, scalability and integration: A comprehensive solution, which can fulfil the widest variety of business requirements. The new SQM 3.0© suite offers four scalable, integrated and separately available components:
With the help of this base component of the product, you will be able to fully manage the following phases:
The implemented model highlights numerous supplier requirements during the qualification phase - qualitative, technical as well as commercial aspects and, last but not least, also global sustainability. The buyers can also choose between two procedures for the qualification:
For the new version, SQM 3.0©, the qualification model, which was previously only based on the technical-qualitative and economic aspects of the supplier, was completely revised.
SQM 3.0© now includes a model based on the parameters of vendor management that includes a tree structure with four successive steps with an increasing amount of detail, which ensure the buyer has a complete analysis based on different categories of goods.
In the latest version, the formal analysis of supplier performance has been completely revised. Similar to the qualification model, multi-level indicators can be activated or deactivated, based on supplier characteristics, goods categories (or specialisation classes) as well as contracts to be analysed, which means more than value can be provided per supplier.
MANUAL ASSESSMENT CAMPAIGNS – supported by a guided procedure with automatic suggestions, naming of the reviewer and assignment of weightings in the assessment results.
EVENT-CONTROLLED ASSESSMENT CAMPAIGNS – automatically activated via so-called “trigger events”, which are configured during the implementation phase and can be changed later on. Real-time quantitative data mining – i.e. the quantitative, real-time processing of the data from the modules SAP QM, MM, FI and SRM as well as the conversion of this data into quantitative indicators for the assessment of supplier performance, whereby a differentiation is made based on category of goods, scope of services and the contract in question.
TARGETED, MULTI-DIMENSIONAL ASSESSMENT – of the individual suppliers or the selected clusters.
COMPARATIVE ANALYSIS OF THE SERVICES PROVIDED GUIDELINES ON USING THE RESULTS OF THE VENDOR RATING PROCEDURE – also their influence on the status of the supplier within the system, both in the “automated” and “guided” procedures.
Thanks to these functions, it is possible to manage the entire subcontracting process while ensuring compliance with the legal requirements. With these components, which are provided during the subcontracting of suppliers, the purchasing department of a company can fully monitor the approval procedure as well as the subsequent operative procedure and oblige the suppliers to use a structured workflow, which meets all of the legal requirements related to subcontracting, including the issuing of invoices to subcontractors.
This module enables the following:
These functions support the efficient management as well as control of all document requirements. This means a company, which wants to commission a subcontractor, can only issue the subcontractor request once all legally required documents have been received and recorded.
Furthermore, the subcontractor requests can also be used to follow up on the payments due for each contract. If the total for all of the amounts estimated for an individual contract exceed the approved amount, the request cannot be approved.
Furthermore, this module can be used to check whether the subcontractors have issued invoices to the suppliers (recipient of the purchase order) and whether these invoices have been paid.
The objective of this new module provided in the SQM 3.0© suite is to protect and increase the value of a company by supporting the goal of reducing supplier-related risks. This takes place through the provision of a methodical framework, which provides a comprehensive understanding of all workflows and thus supports the standardised and controlled implementation of all future activities while improving the decision-making processes as well as the planning and establishment of priorities.
The RQM component is a risk-analysis application based on the Kralijc matrix, which is able to suggest strategic and/or corrective measures in real-time, in relation to technical, commercial, administrative, economic, environmental and geopolitical criteria. RQM provides the user with a dashboard of KRIs that can provide a general or targeted overview in real-time (based on the filter combinations selected for the search), regarding the risk level in relation to one’s own procurement market.
This indicators should highlight to what extent a specific supplier, specific resource or even a specific market can be subject to certain risks, and how these risks can have an effect on the efficiency and continuity of the activities of the buyer company.
Various risk classes can be queried when accessing the profile of the supplier, whereby each risk class can be split up into different product categories:
Each class relates to one indicator, which provides the risk level as well as the effect on any possible deliveries.
The product can assign a risk indicator summary to each supplier, which is generated automatically by the system based on a summary of the individual partial risks. Furthermore, a comparative analysis of the different suppliers can be carried out by the system based on the above-mentioned RQM indicators.