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Set Up and Deploy the Right Sourcing Strategy for Complex Products with mySAP PLM and mySAP SRM Peter Szincsák SAP

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Page 1: C Folders - Configuration

Set Up and Deploy the Right Sourcing Strategy for Complex Products with mySAP PLM and mySAP SRMPeter SzincsákSAP

Page 2: C Folders - Configuration

Sourcing of Complex ProductsmySAP PLM cFolders and Strategic SourcingmySAP PLM cFolders and Operational ProcurementmySAP PLM cFolders and Supplier PortalWrap-up

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© SAP AG 2006, 3

Development partners Design consortium

Customer

Customer-driven design

Dealer

Service provider

Integration

Supplier

Sub-contractor

HQ

Plant

Plant

Service integration

Execution consortium

Decentralized production

and sourcing

It’s All About Connectivity

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Customer Needs

A car manufacturer searching for a supplier to provide a specific part, e.g., a bumper

A construction company collaborating with a subcontractor to build a specific part of a building, e.g., the roof

A power plant construction company searching for a turbine supplier

Strategiccontract

Bid evaluation

Request for

quotation

Biddingscenario

Designcollaboration

Purchaseorder

The sourcing of engineered materials requires efficient collaboration between buyer and supplier

Bidding scenario and design collaborations are highly integrated, simultaneous processes

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Value Proposition

Optimize product costs in the early design stage by blending engineering’s ideas with sourcing’s up-to-date information

Increase process efficiency and shorten time-to-market with better communication between engineering and purchasing

Accelerate the development and delivery of new products

Make the right deals with the right companies

“Companies waste enormous resources due to a lack of tight integration between product development and strategic sourcing.”

“PLM+SRM: A Marriage Made in Heaven” By John Moore June 27, 2002 ARC Insights 2002-27E

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Customer Pain Points

SAP Supplier Relationship Management (SRM) provides the tools toassess the capability levels of suppliers and to choose the bestsuppliers for supply needs

However, this is easier said than done. Customers struggle with the following:

Non-harmonized dataLack of visibility of data, which is spread through various systemsSupply base managementManaging suppliers through their entire lifecycle; supplier status visibilityThe means for suppliers to efficiently collaborate on RFQ biddingAlternatives for access to RFQs and bidsBid award process being based on price aloneInsufficient criteria for determining the ideal source of supplyLimited use of auctionsAuctions that did not consider other cost factors

Underlined pain points are especially valid for complex goods

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Value Proposition of mySAP SRM Sourcing

A fully integrated eSourcing solution can bring insight and discipline to sourcing practices far beyond RFx (request for quotation/information/proposal) and auctioning

Key Capabilities Include:

Global spend analysis

Built-in performance and knowledge management

Collaborative RFx and real-time reverse auction

Contract integration and compliance monitoring

Design, planning, and global trade integration

Integration with eProcurement

Strategic road-map focus: Category management, governance, risk management

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Sourcing of Complex ProductsmySAP PLM cFolders and Strategic SourcingmySAP PLM cFolders and Operational ProcurementmySAP PLM cFolders and Supplier PortalWrap-up

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Strategic Sourcing with mySAP SRM: Supplier Negotiation

SupplierQualification

SupplierNegotiation

CategoryManagement

ContractManagement

Contract Development

Contract Execution

Contract Monitoring

EventPreparation

Request for Quotation

Reverse Auction

Bid Evaluation& Awarding

Demand & Market Analysis

SpecificationDevelopment

SupplierIdentification

SupplierEvaluation

ApprovedVendor List

ProgramManagement

Spend & OpportunityAnalysis

SupplierDevelopment

PurchasingControlling

DataImprovement

PurchasingPlanning

PurchasingGovernance

RiskManagement

Procurement OfficePlanning

StrategyDevelopment

SupplierEnablement

DocumentExchange

SupplierNetwork

SupplierPortal

SupplierCollaboration

SO

UR

CIN

G

Receiving

Requisitioning

OrderManagement

FinancialSettlement

Replenishment Acknowledgement &Delivery

Quality Assessment

ReturnsHandling

Invoice Verification

Evaluated Receipt Settlement

Invoice Payment

Source of SupplyAssignment

RestrictionValidation

Order Generation & Tracking

Requirement Definition

Requisition Approval

RequisitionAnalysis

PR

OC

UR

EM

EN

T

Supplier negotiation is a key value-generation component of SRM(mySAP PLM cFolders is integrated into my SAP SRM Supplier Negotiation)

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Supplier Negotiation

Enables companies to thoroughly assess new suppliers and measure the performance of existing suppliers

Key Business Objectives of Supplier NegotiationSupplier rationalization and prequalification

Efficient supplier selection process (including technical design evaluation by engineering)

Contract creation

mySAP SRM

Create Demand Create RFQ Create

BidEvaluate

BidFollow-On Processes

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Value Proposition of Supplier Negotiation

The Pressure comes from:Supply base management

Supplier collaboration

Award based on a combination of price and non-price

The Opportunity lies in:Supplier evaluation and status visibilityCollaboration tools integrated into eRFXAdvanced bid evaluation with factored cost bidding and weighting and scoring

mySAP SRM Supplier Negotiation is the only solution that:Maximizes supplier and buyer communication with internal and external collaboration throughout the negotiation process Speeds up the competitive bidding process through real-time auction monitoring and bidding Simplifies global sourcing by integrating demand requirements and contracts in multiple backend ERP systemsShortens supply cycle time Reduces process costsMinimizes procurement costs through integration with purchasing and negotiated contracts

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Positioning – Basic Functionality

Event PreparationProject managementUnstructured online collaboration

Request for QuotationMulti-round processingOnline and offline RFQ and bid maintenanceOpen catalog integrationBid attributesWeighting and scoringLottingRFQ versioningBidding in alternative currenciesSurrogate bidding

Reverse (Live) AuctionReal-time auction monitoring and biddingOnline and offline auction maintenanceEtc.

Bid Evaluation and AwardAnalyze responsesWeighted score analysisAwardingContract and PO integration

mySAP SRM Supplier Negotiation provides …

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Positioning – Integrated Solution

Integrated into procurement process in back endReceive requirement from back end

Create follow-on documents in back end

Suppliers enter bids online

Invite new suppliers via standardized interface

Access historical data in SAP Business Information Warehouse (SAP BI)

Vendor evaluation

Bidding history

Track savings

Support design collaboration via Collaboration Folders (cFolders) integration

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Feature andrequirements

planning

Feature andrequirements

planning

StrategicsourcingStrategicsourcing

Supplier/ contractsSupplier/ contracts

Product structuringprocess planning

Product structuringprocess planning

S R M

POEnterprise

buyer

POEnterprise

buyer

P L M

Bidding Engine

Design collaboration

Design collaboration

Plant maintenance/project system

Plant maintenance/project system

Operationalsourcing

Operationalsourcing

MROProcurement:

SRM/PLM Integration Points

SRManalytics

SRManalytics

Engineered goods and services sourcing

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Sourcing Process Triggers Collaboration

Purchaser creates bid invitation in SAP bidding engine

Purchaser creates collaboration in cFolders (mySAP PLM) and invites engineers to add product specifications within cFolders

Purchaser assigns suppliers to bid invitation and sends out invitation

Suppliers automatically receive email with link to SAP bidding engine

Suppliers can access the product specifications in cFolders directly via link in bid invitation

When putting together a bid, private supplier areas where technical product information can be stored are automatically created in cFolders

Both engineers and purchasers review and evaluate bids

Engineering Purchasing Suppliers

Receive demand

Add technical data

Create RFQ and assign suppliers

Create a collaboration, add

data

Issue RFQ

Review information. A supplier area is

automatically created

Evaluate the bids from a technical

point of view

Evaluate the bid from a

commercial point of view

Create contract or Purchase Order

Submit bid

Enter price and add technical information

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What is cFolders?

cFolders is the Web-based SAP PLM collaboration platform, and it extends SAP PLM to enable users to work on design and development projects in virtual teams within cross-enterprise processes

cFolders can be used throughout sourcing as container for complex technical specifications in addition to a simple attachment

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Add/Assign Collaboration to Bid Invitation

cFolders collaboration can be created from SAP Bidding Engine

Existing cFolders collaboration can be assigned to bid invitation

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Public Area is Container for Product Specification

Data can be added to SAP cFolders directly from PC’shard disk or from mySAP PLM back-end system

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Bidder Receives Bid Invitation with Collaboration

Bidder can access specification through link

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Public Area within cFolders

Public area as read-only for all bidders

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Private Area for Bidders within cFolders

Private area with editing permission

Store technical product documentation

Redline drawings

Add documentation

Change buyer specifications

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Incoming Bids

Buyer accesses private area of each supplier

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Buyer Can See All Private Areas

Unlike the bidder, who can see only their own private area and the public area, the buyer has access to all areas

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Private Area within cFolders

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cFolders – In a Nutshell

Structured collaboration on:Documents, CAD assemblies, data sheets, materials, BOM, technical assets, manufacturer part numbers, product variant structures, andcustom-defined (generic) objects

Sophisticated authorization concept for access control

Integrated visualization and redlining/markup tool for 2D/3D object viewing

BOM comparison and extraction

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cFolders – In a Nutshell (cont.)

Integration to SAP PLM (DMS, …) and SRM (Strategic Sourcing, …)

Search functionality (Search in file content supported)

Notification and status management for process control

Support of distributed content server architecture

Large file handling via FTP

mySAP PLM cFolders is a vertical collaboration applicationthat enables users to work on design and development projects in virtual teams with external business partners

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Documents – Digital Signature

Usage within the integrated scenario with SAP Bidding Engine

Usage with cFolders standalone

Supported formats:ASCII (.txt)HTMLPDFXML

Digital Signature according to standard PKCS#7

https://[cFolderSystem]/...

CollaborationFolders

Database

Create document

222

Store555

Digitally sign document333

Create cFoldersCollaboration project

111

Extension available on customer project base. Contacts:mailto:[email protected] (Expert Consultant DigSig)mailto:[email protected] (SRM Consulting Director)

444Verify

Verificationand display666

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cFolders and SRM Server installed on same machine (Sketch of Possible System Landscape). More information will be available in Solution Manager. Look for SRM Business Process: Processing Collaborative Bidding Events Using cFolders.

Backend Systems(DMS on SAP R/3 or ECC, ...)

New Features with cFolders 4.00

Internet Intranet

Supplier SalesEngineer

Supplier SalesEngineer

cFolders and Bidding Engine

(running on SRM Server)

cFolders and Bidding Engine

(running on SRM Server)

PurchaserPurchaser

DesignEngineersDesign

Engineers

Submitbid

Add technical documents

Assign/create collaboration and create bid invitation

The installation of cFolders 4.00 on SRM Server 5.5 (SRM 5.0) was validated and released to customers

Significantly lower TCO

Since common hardware and user management can be used when using cFolders as container for technical specifications for bidding events

Add technical documents

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New Features with cFolders 4.00 (cont.)

Business Partner (Organizations) in cFolders In addition to users and user groups

Import of SRM Business Partner Data possible

Business-Partner-related search planned for cFolders 5.00

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mySAP PLM Application Map 2005SA

P NetW

eaver

Product and project portfolio management

Idea management and concept development Project planning Time and resource

management Project execution Strategic portfolio management

Life-cycle process support

Product development

Development collaboration and strategic sourcing

Prototyping and production

ramp-up

Hand over to sales, service, and maintenance

Quality engineering and

improvementProduct costing

Life-cycle data management

Document management

Product master and structure management

Specification and recipe management

Service and maintenance structure

management

Change and configuration management

Corporate services Audit management Hazardous tracking/product stewardship

Dangerous goods/waste management Workers health and safety

On the mySAP PLM Application Map 2005, cFolders belongs to the business process development collaboration

The business process development collaboration focuses on cross-company collaboration on product data (technical documents and product structure information) during product development and sourcing

cFolders (development collaboration) and Strategic Sourcing form a so-called process group on the mySAP PLM Application Map. This underlines the importance of the integration between mySAP PLM and mySAP SRM in the area of sourcing.

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Business Benefits

For mySAP PLM customers:

Tight integration with mySAP SRM sourcing capabilities

Engineering collaboration on technical specifications can be extended towards RFP and RFQ processes

For mySAP SRM customers:

Tight integration with mySAP PLM design collaboration capabilities providing:

Access to engineering objects within cFolders

Backend integration of materials, BOMs, and documents into mySAP PLM system

Markup and redlining capabilities for 2D/3D drawings

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Sourcing of Complex ProductsmySAP PLM cFolders and Strategic SourcingmySAP PLM cFolders and Operational ProcurementmySAP PLM cFolders and Supplier PortalWrap-up

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Operational Procurement

Relationship Between Sourcing and Operational Procurement

PO/GR/IV

Vendor Catalog Contract

Determine Source of

Supply

Strategic Sourcing

Category Management

Vendor Evaluation

RFQ/Auction

Demand Aggregation

Spend Analysis

Requisition

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Definition of Operational Procurement

Operational procurement covers the purchase of goods and services for indirect (maintenance, repair, and operations) and direct (production) materials – even though they have very distinct requirements and processes

With mySAP SRM, the process is decentralized, but the purchasing organization centrally creates the controls that manage the process, roles, and sourcing objectives

mySAP SRM integrates operational procurement with planning, maintenance, project, and order-processing systems to requisition and source materials for key business processes

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Solution Map for mySAP Supplier Relationship Management (mySAP SRM)

SupplierEnablement

DocumentExchange

SupplierNetwork

SupplierPortal

SupplierCollaboration

Receiving

Requisitioning

OrderManagement

FinancialSettlement

Replenishment Acknowledgement andDelivery

Quality Assessment

ReturnsHandling

Invoice Verification

Evaluated Receipt Settlement

Invoice Payment

Source of SupplyAssignment

RestrictionValidation

Order Generation and Tracking

Requirement Definition

Requisition Approval

RequisitionAnalysis

PR

OC

UR

EM

EN

T

SupplierQualification

SupplierNegotiation

CategoryManagement

ContractManagement

Contract Development

Contract Execution

Contract Monitoring

EventPreparation

Request for Quotation

Reverse Auction

Bid Evaluationand Awarding

Demand and Market Analysis

SpecificationDevelopment

SupplierIdentification

SupplierEvaluation

ApprovedVendor List

ProgramManagement

Spend and OpportunityAnalysis

SupplierDevelopment

PurchasingControlling

DataImprovement

PurchasingPlanning

PurchasingGovernance

RiskManagement

Procurement OfficePlanning

StrategyDevelopment

SO

UR

CIN

G

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Engineering Process Triggers Purchasing

Engineer creates collaboration in cFolders and uploads technical product information of the product to be purchased

Engineer creates requisition from cFolders

Purchaser receives unassigned requisition in sourcing cockpit, including a link to the respective cFolders collaboration

Purchaser triggersThe creation of an RFQ

The creation of PO or contract

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cFolders Integration into Operational Procurement

Integrates operational procurement with a system containing the detailed technical specification of complex direct materials

This allows you to have the technical documentation always at hand when negotiating contracts, creating new purchase orders, or triggering a bid invitation

Demandand requisition

Assign

Order

Contracts

Assign source of supply

Consolidate demands

Spend, Scorecard, and Supplier Info. Winning Bids

cFolders system

(Engineering)

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Creation of Shopping Cart from cFolders

Engineering can create shopping cart from cFolders

The shopping cart has a reference to the respective cFolders collaboration 25.10.2004 18:29:28

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Creation of Shopping Cart from cFolders (cont.)

Shopping cart can be transformed to:

PO

Contract

Bid Invitation

cFolders collaboration can be used as “another type” of attachment for PO, contract, and bid invitation

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Engineering Generates Requisition – Creation of RFQ

Engineering Purchasing Suppliers

Create a collaboration, add

data

Trigger creation of requirement, add information for

purchasing

Receive unassigned requisition

Complete RFQ

Publish RFQ

Review product specification in public area in

cFolders

Create bid in bidding engine

Trigger creation of RFQ

(alternatively PO, contract)

Receive email with link to RFQ

In the bidding engine, a purchaser adds relevant purchasing information (requester, delivery address, and so on)

Purchaser selects suppliers and publishes RFQ

Suppliers automatically receive email with link to RFQ in SAP bidding engine

Suppliers can access the product specifications in cFolders (public area) directly via a link in the bid invitation

When creating a bid, private supplier areas where technical product information can be stored are automatically created in cFolders

Suppliers enter pricing information in bidding engine

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Engineering Generates Requisition – Creation of RFQ (cont.)

Engineering Purchasing Suppliers

A supplier area is automatically created

in cFolders

Evaluate technical

specification in cFolders

Evaluate bids in bidding engine

Determine winner

Submit bid

Add technical specification in

cFolders

Notify winner

Create PO or contract

Enter price in bidding engine

Suppliers enter technical specification in cFolders

Suppliers submit bid

Bids are evaluatedPurchasers in bidding engine

Engineers in cFolders

Purchaser determines and notifies winner

Purchaser creates PO or contract

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Purchaser adds relevant purchasing information (requester, delivery address, accounting information, and so on) to PO or contract

Purchaser selects supplier

Purchaser issues PO or contract

Supplier receives PO or contract

Supplier can access the product specifications in cFolders (public area) directly via a link in PO or contract

Supplier may add technical specification in cFolders

Engineers review specification in supplier area

Engineering Generates Requisition – Creation of Purchase Order or Contract

Engineering Purchasing Supplier

Create a collaboration, add

data

Trigger creation of requirement, add information for

purchasing

Receive unassigned requisition

Select supplier

Complete PO or contract

Issue PO or contract

Review product specification in public area in

cFolders

Trigger creation of PO or contract

(alternatively RFQ)

Receive PO or contract

Evaluate technical

specification in cFolders

Add technical specification in

cFolders

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mySAP PLMcFolders

mySAP PLMcFolders

Technical View: Sketch of Possible System Landscape –Operational Purchasing

Internet Intranet

SalesEngineerSales

Engineer

mySAPSRM

mySAPSRM

PurchaserPurchaser

Add Technical

documents

ITSITS

Submitbid

Createbid invitation

CreateShopping

Cart

SAP routerSAP

router

DesignEngineersDesign

Engineers

Add Technical

documentsBack-end Systems

(DMS, BOM Processing, CAD Desktop, iPPE

on SAP R/3 or ECC, ...)

Page 44: C Folders - Configuration

Sourcing of Complex ProductsmySAP PLM cFolders and Strategic SourcingmySAP PLM cFolders and Operational ProcurementmySAP PLM cFolders and Supplier PortalWrap-up

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Enabling Collaboration to ALL Suppliers is KEY

SUPPLIERS

Expand your value proposition by linking any kind of suppliers via appropriate and cost-effective channels

Web Browser

Web Browser

SA

P

N

etW

ea

ver

SCMCollab. Replenish.

PLMCollab. Design

ERPFulfillmentS

RM

Ord

er

Co

lla

b.

SupplierConnectivity

2

CRM SystemCRM

System

Low-volumesuppliers

High-volumesuppliers

BUYER

SupplierPortal

1

BrowserEDI/XML

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Design Sourcing Planning Procure-ment

Fulfill-ment

Supplier selection (RFx and auctions)

Contract negotiation

Relationship monitoring

Collaborative engineering and design

Order collaboration

Releaseprocessing

Invoicing and dispute resolution

Buyer

Design Selling Planning Ordermgt/Billing

Fulfill-ment

Improved effectiveness through cooperation and communication along the entire supplier relationship lifecycle

Supplier

Demand and inventory visibility

Supplier managed inventory (SMI)

ASN processing

Packaging andPrinting

Labeling

Effective Processes Behind Supplier Collaboration

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Customers Using cFolders

Usage together with mySAP SRM:

Usage of competitive scenario for technical RFI:

Page 48: C Folders - Configuration

Sourcing of Complex ProductsmySAP PLM cFolders and Strategic SourcingmySAP PLM cFolders and Operational ProcurementmySAP PLM cFolders and Supplier PortalWrap-up

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Further Information on cFolders Integration into SRM

Configuration Information is stored in SAP Solution Manager

Necessary Input for Solution Manager:

Process name: Organizational Area Procurement Processing Collaborative Bid Events Using SAP cFolders

Configuration Element: mySAP SRM 5.0 Basic Settings for Strategic Sourcing Integration with Other Components Make Settings for mySAP PLM cFolders

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Resources

Presentation at SAP Insider PLM 2006:Introduction to SAP cFolders for collaborative product design

cFolders on SAP service marketplace:http://service.sap.com/cFolders

cFolders 3.00 Overview presentation:http://service.sap.com/~sapidb/011000358700002976192003E.ppt

cFolders 3.10 Delta presentation:http://service.sap.com/~sapidb/011000358700002024392004E.pdf

Information on cFolders 3.10 on help.sap.com:http://help.sap.com/saphelp_cproject31/helpdata/en/00/e8c80ae8fc3842b5bedf5d67879dae/frameset.htm

Information on cFolders 4.00 on help.sap.com:

1. Help on cFolders application: http://help.sap.com/saphelp_ppm400/helpdata/en/00/e8c80ae8fc3842b5bedf5d67879dae/frameset.htm2. Help on portal integration of cFolders (BP PPMDC 4.0): http://help.sap.com/saphelp_xrpm40/helpdata/en/dd/9d9f42ac47c56ae10000000a155106/frameset.htm

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Resources (cont.)

cFolders 3.10 configuration information:http://service.sap.com/plm-inst using cProject Suite 3.10 Configuration Guide Collaboration Folders Master Guide - SAP cProjectSuite 3.10

cFolders 4.00 configuration information:Configuration Information is stored in SAP Solution Manager - Necessary Input for Solution Manager: Process name: Organizational Area Product Development and Introduction Development Collaboration Configuration Element: mySAP PLM SAP cProject Suite 4.00 Basic Settings for cFolders

http://service.sap.com/plm-inst using cProject Suite 4.00 Master Guide - Project and Portfolio Management

SAP Online Knowledge Product (OKP) for cFolders:

http://service.sap.com/okp OKP Information Request

OCP20S - SAP cProject Suite 2.0OCP30S - SAP cProject Suite 3.0OCP31S - SAP cProject Suite 3.1

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Product Roadmap

Ramp-Up mySAP SRM 5.0 and mySAP PLM cFolders 4.00*Started in October 2005

Default Release mySAP SRM 5.0 and mySAP PLM cFolders 3.10Since December 2004

* cFolders 4.00 Ramp-Up is part of mySAP ERP 2005 Ramp-Up(cFolders is referred to as “Process Development Collaboration”)

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7 Key Points to Take Home

The integrated usage of mySAP SRM and mySAP PLM cFolders also supports the sourcing of complex goods

cFolders can be used as a container for technical specifications for bidding events during supplier negotiation

The competitive scenario of cFolders, with its private supplier areas, is tailored for use in bidding events

cFolders integration to PLM functionality in R/3 4.6C, R/3 Enterprise, ECC 5.0 (mySAP ERP 2004), and ECC 6.0 (mySAP ERP 2005) is available out-of-the-box and allows the usage of PLM-related information in bidding events

The viewer integrated into cFolders offers visualization capabilities that facilitate 2D and 3D visualization, redline/markup

cFolders 4.00 can be installed on top of SRM 5.0 (SRM Server 5.5)

The usage of cFolders is included in mySAP SRM’s Strategic Sourcing option license*

*License information is subject to change without prior notice, and is in no way binding upon SAP

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Your Turn!

[email protected]

Peter Szincsák

Q&A

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