This chapter covers the following topics:
Oracle Supplier Management solution consists of Supplier Lifecycle Management and Supplier Hub.
Oracle Supplier Lifecycle Management (SLM) provides an extensive set of features to support the qualification, profile management and performance assessment of suppliers as well as tools to track ongoing supplier compliance with corporate and legal requirements. Utilizing these capabilities, organizations can exercise proper control over suppliers throughout the lifecycle of their relationship with the organization; from initial discovery, through qualification and on-boarding, to ongoing maintenance and possible obsolescence.
A key factor in improving the quality of an organization’s supplier master file is to establish proper processes to formally qualify different types of prospective suppliers. Supplier Lifecycle Management enables any and all of the peculiar information required to assess a prospect to be gathered and then routed through the organization to ensure efficient review of the supplier’s credentials.
Once a supplier has been approved, SLM also enables organizations to gather feedback from key stakeholders as part of an overall supplier performance tracking process. In addition, Supplier Lifecycle Management also allows key stakeholders to identify and track critical compliance documents and attributes that need to be gathered from suppliers on a periodic basis in order for the two parties to maintain an active business relationship.
Main features of Supplier Lifecycle Management include:
One of the challenges with managing supplier information is that the pieces of information gathered about a supplier can be stored in a variety of applications and systems. This data disbursement can hamper organizations as they look to review supplier performance or to comply with audit requirements.
Supplier Lifecycle Management provides a repository for storing information from disparate sources and then enabling a 360 degree view of the data to be provided to the key business users within the organization. As well as access to basic supplier information - such as address, contact, contact points, business/diversity classification, general classification, product and services category, banking details, supplier tasks, notes, and supplier party relationships - users will be able to review qualification and on-going evaluation details for the supplier, view key documents that have been included in the supplier’s profile and check the status of deliverables that the supplier is required to provide to maintain their status within the system.
To better understand the capabilities of suppliers in key product categories, Supplier Lifecycle Management utilizes User Defined Attribute technology to allow administrators to add an unlimited range of attributes to the supplier definition and to group these into logical Profile sections. Typically, this is the sort of information stored in paper-based systems that are maintained by different departments throughout an organization. In addition to the attribute name, administrators are able to add descriptive text to help explain the purpose of the attribute.
Fine-grained access control tools allow administrators to manage which users can have access to the individual attributes in the extended set of profile details. This is particularly important when sensitive information is stored in the profile and access needs to be restricted to appropriate users either internally or at the supplier.
To assist administrators charged with managing the vendor master for their organizations, Advanced Search capabilities enable them to efficiently find and retrieve supplier records.
The Advanced Search allows any of the standard and extended profile attributes to be used as search criteria and for the results to be viewed using multiple display formats. The profile information retrieved from the search can be exported in spreadsheet format. The Advanced Search criteria and display formats can be personalized both at the administrator and business user level.
Most organizations maintain a team of administrators to deal with the flow of administrative updates from trading partners containing changes to their company profile details. To make this process more efficient, Supplier Lifecycle Management extends existing iSupplier Portal functionality to allow supplier users to be given online access to maintain a wider range of their own profile details.
The supplier user can maintain standard company profile details such as address, contacts, business/diversity classifications, products and services category, and banking details. Internal administrators can review the changes that suppliers provide before approving the changes.
Suppliers are also able to access qualification and on-going compliance information that they are required to provide to the buying organization to maintain their status in the system.
To help manage the stream of inquiries that come from supplier prospects interested in doing business with the buying organization, many companies now use their corporate websites to have potential suppliers register their interest in establishing a business relationship. This allows the organization to get key information from the supplier that can be used to qualify whether they are a suitable trading partner. Supplier Lifecycle Management provides a supplier registration feature that can be configured by business unit to gather the data elements required to assess each prospective supplier request. The registration form can be configured to include Address, Contacts, Business Classification, Product and Services category, Banking detail and any of the Extended Supplier Profile attributes. The prospective supplier can also upload attachments as part of their registration packet.
To support sophisticated and conditional qualification procedures, administrators can also establish RFI documents that allow various profile and compliance information from the prospect to be captured using a questionnaire format.
In addition to the walk-up process, buyers can pre-register and send invitations to prospective suppliers, requesting them to provide additional details for pre-qualification and approval using the self-service capability.
To support complex or lengthy supplier registration, prospective suppliers can save their draft registration request at any time, and return to it at a later date. Once a prospective supplier has registered, their request is routed through an approval hierarchy for review.
For many organizations, the processes for assessing new supplier relationships are cumbersome and inefficient. In an effort to ensure that “business gets done”, companies often support multiple channels for receiving new supplier requests and then follow a very limited or haphazard procedure to review supplier credentials. Oftentimes, this is a poorly coordinated manual process that requires tasks to be sequenced and tracked across multiple departments as credit checks are carried out, customer references called, quality standards reviewed and production facilities inspected.
Supplier Lifecycle Management leverages the Approval Management Engine to allow companies to generate customized approval flows for processing supplier requests and registrations. The details for each new supplier can be passed to multiple stakeholders across many departments within the buying organization.
Approvers are notified when they are required to review a request and can check graphically the overall approval status for a given request. As part of the approval routing, SLM includes the qualification information collected from the supplier as well as incremental feedback provided by business users assessing the request. This allows basic supplier profile and qualification details to be gathered, deliverables like Insurance certificates and Code of Conduct documents to be stored and Products and Services information to be recorded within the Qualification packet. The buying organization can apply business rules that will use the details in the request to customize the approval flow so that the appropriate approvers can look at the details.
Once a registration request has been approved or rejected, the supplier is automatically notified by email. Following approval, the qualification details provided by a supplier become part of their profile that can be updated at a later date.
Whilst there are regulatory requirements for some types of organization to keep key supplier profile elements up to date, this is also an important process for a lot of non-regulated organizations that are looking to meet Corporate Social Responsibility standards that they have set for themselves.
Supplier Lifecycle Management enables administrators to utilize the RFI tools to gather and manage supplier compliance and profile information that are required on an anniversary basis. They can define key compliance information that is required from suppliers and then store the feedback provided by the supplier into the supplier master profile record.
Companies recognize that employees who interact with suppliers can provide insightful feedback on “soft” performance metrics for the supplier. Being able to canvas opinion from these key stakeholders and then use the information to help drive an overall assessment of a supplier’s performance is a key part of any collaborative program intended to help improve supplier relationships.
Supplier Lifecycle Management enables administrators to generate internal RFI documents that can be sent to key personnel within the organization to evaluate and score specific aspects of a supplier’s overall performance. This enables stakeholders in a diverse range of departments, such as Procurement, Finance, Supply Chain, Manufacturing, Quality, Design, and Legal to combine their opinions into a rating of how well the supplier is doing. The feedback gathered about the supplier is stored in the supplier profile allowing performance trends to be tracked and risk to be effectively managed.
To assist with supplier communication, Supplier Lifecycle Management provides tools to allow notifications to be selectively communicated to a company’s supply base. Administrators enter notification information and then use search tools to generate the list of suppliers that are to receive the message.
Oracle Supplier Hub is a new application that provides a portfolio of Master Data Management tools to enable organizations to better manage their supplier master records. Built on the foundational technology used to support mastering of customer information, Supplier Hub will be used by both organizations that need to aggregate supplier data from a range of application systems and also by those running a single E-Business Suite instance.
It provides comprehensive functionality to manage supplier data: consolidating supplier information from disparate systems and business lines into one repository, cleaning and enriching data centrally, and providing the resulting "single point of truth" data as a service to consuming applications, enterprise business processes and decision support systems.
Deployment of Supplier Hub will enable organizations to have a consistent understanding of the trading partners that they use to procure the various goods and services required to support their business. This clarity is essential in order to be able to carry out effective analysis of spending patterns so that appropriate tactical and strategic decisions can be made about company procurement policies.
To enable customers to manage supplier records across their organization, Supplier Hub supports the following deployment modes:
Standalone Mode - Separate E-Business Suite Instance
This is the traditional Master Data Management deployment mode – the Supplier Hub is set up in a separate instance and vendor data from an organization’s source systems is loaded into the Hub in order to be mastered.
Integrated Mode – Existing E-Business Suite Instance
This configuration allows a customer to run the Supplier Hub functionality as part of their existing E-Business Suite R12.x transactional instance.
Note: The product is referred to as Supplier Hub Add-on for Oracle E-Business Suite when it is licensed as an option as part of an existing E-Business Suite install.
This hybrid setup is essentially an extension of the Integrated Mode in that it allows customers to run the Hub as part of their existing E-Business Suite instance and at the same time, feed it with additional supplier records from other legacy systems for the purposes of mastering the details across all of those systems.
Main features of Supplier Hub include:
Supplier Hub allows an organization to gather all of the key details they store about their vendors from across all of their heterogeneous environments and store them in a central repository. Given the wide range of information that Purchasing and Payables departments need and wish to maintain, the Hub enables buyer organizations to store data across the following range of categories:
This refers to the attributes that uniquely identify an individual supplier - primarily the supplier name and tax reference ID and number(s).
These are the attributes that are typically required to be able to do business with the supplier and so provide the more granular details about a supplier’s identity, such as location, contact and bank account information.
These are the pieces of information that identify the characteristics of the supplier, and can range from things like the corporate structure of the supplier, names of C-level officers through to the goods and services they can provide, classifications that apply to them and 3rd party credit risk information.
These are the flags and settings that are used to manage the business relationship for order collaboration, receiving, invoicing and payment between the buying organization and the supplier.
All data categories can be managed using the Integrated deployment mode. The Standalone and Mixed deployment modes support the Identity, Business and Profile category details.
To better understand the capabilities of suppliers in key product categories, and to track subjective information about how that supplier is performing, buying organizations need to be able to store a wide range of additional details in their supplier master. Typically, this is the sort of information that is gathered by different departments and stored using paper-based systems, preventing the an organization from using the details to gain a better insight into a supplier’s performance.
Supplier Hub utilizes User Defined Attribute technology that allows administrators to add an unlimited range of attributes to the supplier definition and to group these into logical Profile sections. In addition to the attribute name, administrators are able to add descriptive text to help explain the purpose of the attribute. The extended profile attributes allow disparate details to be imported from a variety of source systems or for the Hub to be used to capture and store this information centrally.
Fine-grained access control tools allow administrators to manage which users can have access to the individual attributes in the extended set of profile details. This is a key feature when sensitive information is stored in the profile and access need to be restricted to appropriate users either internally or at the supplier.
It is becoming increasingly important to a large number of organizations to be able to track classification and diversity information across their supply base in order to ensure that spending patterns can be matched to Corporate Social Responsibility goals. To allow organizations to track a wide variety of classification and diversity information about their suppliers, the Hub enables administrators to define multiple classification schemas. This information can then be used when building reports to track spending patterns.
A crucial part of supply base analysis is to understand the relationships that exist between the different suppliers that are doing business with different parts of the buying organization. This allows an organization to leverage aggregated spend information within the negotiation process with the supplier.
Supplier hierarchy management functionality within the Hub provides the ability to identify Parent and Child supplier company relationships across all of the supplier records that have been consolidated from the different systems within a company.
In addition to the basic parent and child relationship, the Hub allows business users to define an unlimited number of custom supplier relationship types and then use these to track relations between different suppliers. The custom hierarchy information can be viewed in a tree structure and can be utilized for various reporting and supplier management purposes.
Supplier Hub provides an Import Workbench to allow administrators to setup and control the process of consolidating supplier records from any spoke applications or systems running within the organization. The Import tools enable supplier Identity, Business, and Profile Details from multiple spoke/source systems to be cross-referenced. Batch Management capabilities then allow the administrator to control the loading of the imported supplier data into the Hub repository. The initial release of the Hub will support backend concurrent program import for identity, address, contacts, and general classifications.
A critical element of an administrator’s role in managing supplier data is in dealing with duplicate supplier records and establishing processes to prevent duplication in the first place.
The Data Quality Management (DQM) functionality incorporated into Supplier Hub provides features that allow an administrator to carry out systematic de-duplication and cleansing of supplier Identity, Business and Profile Details. The DQM tools have also been incorporated into the supplier creation flows that are supported by the Hub to prevent the setup of multiple records for the same supplier.
DQM provides tools to setup match rules and other data quality setups required for performing de-duplication tasks. It also provides tools for blending of the supplier records to harmonize the information about a single supplier that exists in multiple source systems. It provides tools for automatic identification of potential duplicate supplier records in the system in order that administrators and business users can take further data quality actions as required.
The Supplier Data Enrichment functionality provides features that allow organizations to enrich the profile information they are maintaining for a supplier by pulling detailed information from D&B. Information packets for a supplier(s) can be gathered during the supplier registration process and also as part of general supplier profile management. Administrators or business users are able to interactively search the D&B repository and order/purchase various D&B products to enrich the Supplier information.
One of the primary reasons for deploying Supplier Hub is to establish a single definition for each supplier and then to make sure that this representation is used across all of the systems operated across the organization.
The Supplier Data Publications feature set provides the capabilities to integrate Supplier Hub with other spoke systems. It provides the infrastructure to raise the necessary business events to trigger publication of updated supplier information and APIs that can be used by spoke systems to query and consume the updated supplier information. It also provides APIs for querying potential duplicate supplier records in the Hub and for processing the source system supplier information into the Hub.
Features available from both Supplier Lifecycle Management and Supplier Hub include:
Extended supplier profile attribute.
Setup, view, and edit extended supplier profile.
Advanced search based on extended supplier profile.
Export supplier profile into spreadsheet.
If both products are installed in the same application instance, these features are integrated seamlessly.