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SAP Business Suite for Spend Management
SAP Business Suite for Spend Management Industrial
Manufact dustrial M rial Manu ndustrial M INTERNAL ONLY
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Industrial Manufacturing Industry at a Glance
In the manufacturing sector, sourcing and procurement are pivotal for maintaining competitiveness and operational efficiency. As global supply chains face disruptions and geopolitical tensions, manufacturers must adapt by diversifying their supply bases and investing in digital technologies. The APAC region, with its emerging manufacturing hubs like Vietnam and Indonesia, is playing a crucial role in reshaping global supply chains. Embracing digital transformation, prioritizing sustainability, and building resilient supply chains are key strategies for manufacturers in 2025. By leveraging AI, automation, and data analytics, procurement teams can enhance supply chain visibility, predict disruptions, and make informed decisions. This shift towards digitalization also supports sustainability initiatives, helping manufacturers meet regulatory requirements and ensure adherence to regulations around environmental and social legislations. Effective procurement practices are essential for navigating these challenges while capitalizing on opportunities for growth and innovation in the rapidly evolving manufacturing landscape.
Opportunities
55%
55% identify cost savings as procurements primary value driver, and 78% state that cost saving is a primary driver for the increasing use of the external workforce , but only 45% have high confidence in procurements ability to manage strategic sourcing. 41% of the C-Suite identify AI as a top strategic priority for procurement, with 65% identifying AI proficiency skills as the top priority for skills development. 41% identified that its CPO who owns the AI strategy for Procurement however only 14% are highly confident in procurements team ability to leverage AI for efficiency. 44% identified Sustainability as a top organizational risk for procurement to focus on and as a result Sustainability is the top strategic priority identified by 62% of respondents and 68% identified sustainability skills as the top in demand skill for procurement in the next 18 months. However only 31% were highly confident in procurements ability to deliver organizational ESG goals. 63% identified geopolitics as a top organizational risk area for procurement to focus on, with 41% identifying supply chain reorganization as the top strategic priority for next 18 months in response. Whilst 31% of respondents were highly confident in procurements ability to manage global external risks, only 21% have high confidence in procurements ability to manage risk strategies for different categories.
41%
44%
63%
Source: Economist Impact study, The Resilient Edge – Procurement in an era of polycrisis
0.66 Days
Average Invoice Approval Cycle time
Best in Class Metrics*
Sourcing Savings Rate
Sourcing Cycle Time
15.9%
14 Days
*SAP Customer Benchmarking program
Spend Management Solutions
Industrial manufacturing companies face distinct direct-sourcing challenges. SAP Ariba Direct Materials for Automotive & Industrial Manufacturing, in SAP S4/HANA Private Cloud transforms procurement by comprehensively addressing the nuances that surround unique sourcing requirements for highly engineered products. The solution and add on capabilities enable you to create products that not only costs less to produce but are also innovative, sustainable and high quality, accelerating time to market. Accelerate complex product launches with structured, multilevel procurement project management : Align sourcing with engineering, finance, and manufacturing milestones to ensure every part is sourced on time—before production begins. Drive innovation through deep supplier collaboration : You can collaborate securely with suppliers to co-develop components, share design files, and track material sustainability—empowering early supplier involvement and better product outcomes. Optimize costs via global demand aggregation and streamlined sourcing : The solution consolidates sourcing needs across ERPs and plants. This unified demand view gives you leverage to secure volume pricing, manage commodity volatility, and renegotiate efficiently. Ensure compliance with negotiated terms, without system complexity: Unlike disjointed S2P suites that don’t integrate to ERP, SAP Ariba enforces pricing, delivery, and index-based terms natively—without duplicating master data or relying on spreadsheets to monitor compliance. Advance sustainability goals through carbon-aware sourcing decisions : As sustainability becomes a procurement mandate, our suite enables you to evaluate carbon footprint alongside cost and quality when selecting suppliers. Seamless integration with SAP ERP—unlike traditional indirect procurement solutions The solution is purpose-built with the fundamental understanding that in the automotive and industrial manufacturing sectors, direct procurement is deeply intertwined with engineering, supply chain, and operational procurement processes—all of which are embedded in the ERP system. Unlike third-party solutions such as Ivalua or Jaggaer, which lack native integration with SAP ERP, SAP Ariba shares a common data model and codebase with SAP S/4HANA. This enables a seamless user experience, real-time visibility, and unlocks new possibilities to apply AI in the most effective and scalable way.
Automate spending processes and actively manage more spend for better control, greater value, and more savings
Top Spend Categories
TRAVEL EXPENSE
RECURRING SERVICES
5%
OPERATIONAL “CATALOG” SPEND
5%
5%
TACTICAL SOURCING
5%
EXTERNAL LABOR
5%
DIRECT MATERIALS
75%
Spend Management Solutions
The SAP Business Network for Supply Chain enables Industrial Manufacturing companies to build agile, transparent, and collaborative supply ecosystems that are essential for managing the complexity, scale, and global nature of today’s manufacturing operations. 1. Real-Time Supply Chain Visibility Across Multi-Tier Networks Industrial manufacturers depend on multi-tier, global supply chains for parts, raw materials, and assemblies. SAP Business Network delivers end-to-end visibility into supply and demand—allowing manufacturers to detect disruptions early, reduce lead time variability, and increase on-time production readiness. 2. Seamless Collaboration with Suppliers and Partners The network facilitates direct, real-time collaboration with suppliers, contract manufacturers, and logistics providers. This ensures aligned production schedules, faster change order management, and reduced miscommunication—critical in engineer-to-order or just-in-sequence manufacturing environments. 3. Greater Agility in Response to Supply Chain Disruptions Whether it’s geopolitical instability, raw material shortages, or regulatory changes, industrial manufacturers need resilient supply chains. SAP Business Network supports dynamic re-planning and supplier substitution, enabling companies to quickly adapt without halting production or violating contracts. 4. Automation and Efficiency in Supply Chain Transactions The network standardizes and automates POs, ASNs, quality notifications, and invoicing—reducing manual work, cycle times, and errors across the source-to-pay process. This frees up procurement and supply chain teams to focus on value-added activities like supplier development and innovation. 5. Traceability and Compliance Across Materials and Suppliers In highly regulated industries like automotive and aerospace, traceability is non-negotiable. SAP Business Network allows manufacturers to track components, batches, and suppliers from origin to assembly—supporting regulatory compliance, warranty claims, and quality control. 6. Integrated Sustainability and ESG Performance Monitoring With increasing pressure to decarbonize and source responsibly, the network enables tracking of supplier sustainability data, Scope 3 emissions, and regulatory certifications. This allows manufacturers to make ESG-informed sourcing decisions and meet both compliance and customer demands. 7. Scalable Across Regions, Plants, and Product Lines SAP Business Network supports global supply chain operations with standardized processes and multilingual, multi-currency capabilities—making it ideal for complex organizations with hundreds of suppliers, plants, and contract manufacturing sites.
Automate spending processes and actively manage more spend for better control, greater value, and more savings
Top Spend Categories
TRAVEL EXPENSE
RECURRING SERVICES
5%
OPERATIONAL “CATALOG” SPEND
5%
5%
TACTICAL SOURCING
5%
EXTERNAL LABOR
5%
DIRECT MATERIALS
75%
Spend Management Solutions
SAP Fieldglass offers a unique value proposition for the manufacturing (Industrials light + manufacturing) by enabling greater control, compliance, and cost-efficiency in managing external labor and services—a critical need in an industry that relies heavily on contingent workers, maintenance contractors, and specialized service providers. Here's how it stands out: Optimized Workforce Management Industrial manufacturing operations frequently rely on contractors and service providers to support critical plant maintenance activities, including shutdown/turnaround operations, predictive maintenance, and specialized services. SAP Fieldglass can optimize your external workforce through a multi-channel talent strategy, providing the flexibility and agility needed to meet varying customer demands and operational requirements. Enhanced Compliance and Risk Mitigation SAP Fieldglass helps ensure compliance by automating contractor vetting, certification tracking, onboarding, and safety training validation—reducing the risk of fines, incidents, or project delays. Improved Cost Control and Visibility Fieldglass provides real-time insights into workforce spend and performance metrics, enabling better budgeting, forecasting, crew billing and contract management. SAP Fieldglass helps in granular management of rate differentials, multi-rate per assignment, allocations, tiers etc., automated via rate cards. Streamlined process SAP Fieldglass streamlines the entire process from requisition to payment, enabling faster fulfillment and better supplier management by finding the right talent at the right time and securing the right suppliers. The platform provides the ability to monitor supplier progress and work quality throughout the engagement, ensuring optimal procurement-to-pay efficiency.
Manage external workforce efficiently aligned to supply chain agility.
Top Spend Categories
TRAVEL EXPENSE
RECURRING SERVICES
5%
OPERATIONAL “CATALOG” SPEND
5%
5%
TACTICAL SOURCING
5%
EXTERNAL LABOR
5%
DIRECT MATERIALS
75%
Customers are achieving outstanding outcomes
Global leader in measurement and automation technology
saved per asset on managing initial documentation handovers. 2 hours saved searching for and organizing maintenance information each week.. 0.5 hours
Technology leader enabling a sustainable energy future
freight orders handled with integrated tools since the rollout 8,000
of confirmed carriers onboarded 48%
One of the world’s leading sensor companies
Reduction in overall lead time and elimination of non productive time 20% Reduction in the average search time for missing materials 66%
ThankYou
* Research documentation has been used from work commissioned by SAP Ariba and produced by Economist Impact
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