SAP Ariba Product Sourcing: Streamlining Direct Material Procurement

In the intricate world of manufacturing, effectively managing the sourcing and procurement of direct materials is paramount for efficiency, cost control, and seamless production. SAP Ariba Product Sourcing is designed to revolutionize this process, offering a powerful suite of tools specifically geared toward direct material sourcing. Let’s explore what it offers.

What is SAP Ariba Product Sourcing?

SAP Ariba Product Sourcing is a module within the larger SAP Ariba Strategic Sourcing Suite. It focuses on the unique challenges of sourcing raw materials and components used directly in manufacturing. It goes beyond traditional sourcing solutions with features tailored for handling Bills of Materials (BOMs), complex cost calculations, and deep integration with product lifecycle management (PLM) systems.

Key Features and Benefits

• BOM Management: Ariba Product Sourcing lets you import and manage BOMs directly from your PLM system. This ensures data consistency and enables accurate cost roll-ups, where you can see the total potential cost of a manufactured product based on the prices of its components.
• Cost Analysis: The platform allows you to track material prices over time and get insights into historical trends. This data will enable you to negotiate better prices with suppliers, identify cost-saving opportunities, and make smarter budgeting decisions.
• BOM Comparison: Easily compare BOMs side-by-side to pinpoint price discrepancies between different versions or iterations of your product. This lets you track how design changes impact overall costs.
• Collaborative Sourcing: Create sourcing events directly from BOMs. Invite relevant suppliers, gather bids, and track responses all within the platform, streamlining the bidding process.
• Integration Power: Ariba Product Sourcing seamlessly integrates with your PLM, ERP, and other procurement systems. This minimizes manual data entry errors and ensures all systems work together.

Why Choose SAP Ariba Product Sourcing?

1. Improved Cost Management: The in-depth cost analysis abilities help you identify savings opportunities, get better deals from suppliers, and make data-driven decisions that impact your bottom line.
2. Faster Source-to-Contract Cycles: By streamlining the process from BOM import to awarding contracts, Ariba Product Sourcing accelerates your procurement timelines and keeps production schedules moving.
3. Enhanced Collaboration: The platform promotes collaboration between internal stakeholders (engineering, procurement) and enables efficient supplier communication, leading to better-informed sourcing choices.
4. Data-Driven Decision Making: With historical material pricing data, BOM analysis, and detailed sourcing metrics, you gain the insights to make intelligent, strategic procurement decisions.

Who Needs SAP Ariba Product Sourcing?

Ariba Product Sourcing is beneficial for any manufacturer dealing with complex BOMs and direct material procurement, particularly those in industries such as:

• Automotive
• Electronics
• Industrial Machinery
• Aerospace

Getting Started

If you’re using SAP Ariba Sourcing solutions, you might already have access to Product Sourcing. Consult your SAP Ariba representative or solution expert to learn more about implementing this module.