Cloud-based procurement platform, SAP Ariba, has added a new solution to its suite of sourcing applications, to enable companies to digitally procure direct materials with the same level of simplicity and speed as indirect goods and services.
Ariba Collaborative Sourcing Professional provides a single solution through which companies can drive an efficient digital source-to-contract process for direct materials.
“Direct materials sourcing carries a unique set of challenges – it is driven by production planning rather than requisitions, there are enormous variations between different industries in how it is done, it’s usually time critical, and it is executed across many different enterprise systems and processes,” said Bill McBeath, chief research officer, ChainLink Research.
“To do it well requires connecting the systems and processes that support procurement across the end-to-end process and dimensions of collaboration – from design, to planning and forecasting, execution, logistics/delivery, quality, and finally reconciliation/settlement – both internally and externally.”
Built on the Ariba Network platform, the solution integrates seamlessly with ERP and execution system to connect the people, processes and information required for procurement. While there are cost and efficiency benefits for managing spending on both direct and indirect materials from a single platform, according to SAP Ariba, the benefits of this integration include getting new products to market faster by integrating sourcing and product design teams, modelling product costings at the Bill of Material (BOM) level, tracking item costs across time, suppliers and BOMs to negotiate better savings, and speeding up sourcing and contracting with integrated master data across systems.
“Procurement has made great strides in indirect spend by leveraging technology to create a consumer-simple, yet compliant process to manage it,” said Tony Harris, general manager, direct procurement solutions, SAP Ariba. “With Ariba Collaborative Sourcing Professional, they can bring the same efficiency and simplicity to direct material categories and open the door to innovations that transform their business.”
