LCM PURCHASEProfessional Demand Management, Supplier Relationship Management

and Contract Management for Procurement Organizations

LCM Purchase

Professional Demand Management, Supplier Relationship Management

and Contract Management for Procurement Organizations

Professional Supplier Relationship Management with LCM Purchase

Market and customer demands for products change with increasing speed. Purchasing departments can no longer be looked at as purely a supply function, but must approach their tasks strategically. This means that resource markets and suppliers must be developed and maintained purposefully. In economically difficult times, the pressure on price and cost optimization is constantly incre-asing. In practice, this means that new suppliers incorporated into the existing portfolio and the existing demand pool must be critically analyzed and evalua-ted.

As a component of the management of materials, procurement strategy deter-mines the distribution of the procurement of goods and services from individual suppliers over the mid-term. The controlling areas of the procurement strategy include: decisions to be made with regard to quantities, varieties, quality, prices and suppliers in consideration of the risks connected with such.

Almost all companies perform operational purchasing activities, such as the ma-nagement of supplier master data, groups of goods and the placement of orders, inventory reception and invoice processing with the help of ERP systems.

The strategically-significant components of an integrated procurement strategy are currently supported by software systems to only a very limited extent: e.g. supplier communication and sourcing, supplier evaluation, supplier classification, measures planning, controlling or contract- and process management.

Especially during difficult times, the most important tasks in procurement are to pro-actively control optimization and risk potentials. With the help of an integrated contract management and supplier management system lasting com-petitive advantages are assured in the net value added process and optimization potentials are used.

With an efficient supplier relationship management system (SRM system), sus-tainable increases in standards and improved prices can be achieved. Added va-lues arises through the combination of the total knowledge about purchasing data and its sources with important contractual information, which is made available to all participants for the management of needs and suppliers in one knowledge base.

Improve your relationships and processes with your suppliers.

An Overview of LCM PurchaseLCM Purchase supports the purchasing and con-tract management departments with important features, such as:

Demand Management, Spend Analysis• Document Management• Records and Process Management (procure-• ment record, supplier record, etc.) Contract and Supplier Controlling (e.g. analy-• sis of spending by material group orsupplier)• Supplier Communication & sourcing•

with a single piece of software that is simply without competition and safe to operate due to its well-considered web technology.

LCM Purchase is a standard software program for strategic, tactical and operational tasks in sup-porting procurement strategy.

LCM Purchase supports the purchasing orga-nization with demand management, supplier selection, supplier evaluation and supplier ma-nagement, with the treatment of procurement projects (tenders, auctions offer-comparisons, etc.), in contract creation and execution and in risk ma-nagement. In addition, in purchasing control and exchange of ERP data, e.g. with SAP and Navision, among others, LCM Purchase offers valuable proces-sing and information improvement for procurement organizations.

In addition, with its purchasing control and exchange of ERP data, e.g. with SAP or Navision, LCM Purchase offers valuable process and information improvement in the operational area of purchasing.

Contract ManagementMaterial GroupsManagement

Supplier Communication and Sourcing

Analysis and Controlling

Material Groups Management Master Supplier Data Creditors/Risk Management

Process Management

Records and Matter Management

Document Management

Supplier Evaluation

Supplier Classification

Supplier DevelopmentSpend Management & Analysis

Material Groups Evaluation

Material Groups Releases

Collaboration Management

Measures controlling

Supplier PortalRFI, RFQ, RFx

Information provided by supplier Tenders/Auctions

Supplier Balanced Scorecard

Management of the product and supplier base

Supplier Management

Figure 1: Architecture and modules of LCM Purchase

An Overview of the LCM Purchase Features

Demands ManagementMaterial Group ManagementAs part of the management of material groups, LCM Purchase offers sup-port in the following areas:

Definition and maintenance of any number of material groups• Comparison of the materials with ERP systems• Support for any number of classifications, such as eClass• Strategic classifications of the material groups (e.g. bottleneck, mandatory, • strategic or non-critical) Evaluation of suppliers in relation to material groups• Classification of suppliers in relation to material groups • Use of material groups• Volume of need of the materials groups•

Supplier ManagementRelevant information about your suppliers can be uncovered with LCM Purchase:Supplier Communication & Supplier Application

Information provided by the supplier & supplier registration• Supplier application (in relation to materials group)• Rule-based evaluation of the suppliers on the basis of the application• Supplier approval• Updating of the supplier data (portal)• Message management• Tender & offer management• Measure planning and communication•

Supplier Classification & Supplier DevelopmentClassification of suppliers in relation to material groups• Evaluation of suppliers in relation to material groups• Strategic classification of suppliers (non-critical, mandatory, strategic, • bottleneck) ABC analysis• Supplier development• Measure management• Supervision of the results• Deadline supervision• Support for the Six Sigma method (DMAICT)•

Supplier ManagementThe following aspects can be supported for your supplier management:

Effective reporting tools • Comprehensive standard reports• Ad-hoc creation of reports • Analysis of spending (Who purchased what from whom at which price?)• Measure management• Supervision of the results• Deadline supervision• Risk evaluation and management• Figure 3: Supplier Evaluation

Figure 2: Supplier Classification by Material Groups

LCM PURCHASEProfessional Demand Management, Supplier Relationship Management and

Contract Management for Procurement Organizations

Supplier communication & sourcingSupplier-provided Information and QualificationThe Supplier Information module serves to register and qualify a supplier. It contains the forms, including questions, which the suppliers can fill out online. Internally, the Purchasing department can examine the suppliers and qualify the suppliers, as needed. For additional automation, the suppliers can be qualified based on rules according to stored methods taking weightings and advantages & disadvantages into consideration.

Procurement Folder & SourcingThe Supplier Information module serves to register and qualify a supplier. It contains the forms, including questions, which the suppliers can fill out online. Internally, the Purchasing department can examine the suppliers and qualify the suppliers, as needed. For additional automation, the suppliers can be qualified based on rules according to stored methods taking weightings and advantages & disadvantages into consideration.

Contract ManagementContract Management / Contract controllingThe processing of a contract begins with the creation of the contract and flexible definition of contract properties LCM Purchase helps with this through:

Transparency: an up-to-date overview of all of the contracts with one • supplier Central management of contracts with decentralized access and mainte-• nance options Ideal development of the potential of contracts• Establishment of an early warning system (radar feature)• Clear definition of the expectation processes in the management of the • contract Association of documents and correspondence• Integrated contract management•

Information about the Objectives of a ContractDetailed information about the objectives of the contract and contract items is important for the Purchasing and Financial departments. You have, for example, a complete overview of which products and services are procured from which contractual partners at the global level. With this in-formation, purchasing advantages can be easily realized through strategic side contracts. Furthermore, suppliers who offer the same products or services can also be identified easily. You improve your negotiating positi-on through this knowledge and can conclude contracts with better terms.

Contract CreationOne component of LCM Purchase is responsible for the central guidance and management of draft contracts and templates („boilerplate“) as well as contracts. With this, you get a qualitative improvement for the creation of contracts and an increase in the efficiency of your processes.

Integration with ERP SystemsInterfaces to ERP systems, such as SAP or Navision, round out the solution. Creditor master data is directly integrated into LCM. Transaction informati-on (line item details, quantities and amounts) is available with respect to the individual contracts and products by supplier. Comparisons of expected and actual results can be pulled through contracts and orders.

Figure 4: Selection of Supplier Portfolio by Success Ratio and Risk

An Overview of the Benefits of LCM Purchase for Procurement Organizations Services LCM Purchase is the emerging standard software solution with a modular construction that covers all of the requirements for the supplier communi-cation & sourcing, needs management, supplier management and contract management areas with integrated supplier and contract management.

Transparency LCM Purchase makes all of the relevant data about inventory groups, sup-pliers and the contractual relationships associated with them available, both centrally and distributed through all clients and in multiple languages.

Process EfficiencyLCM Purchase leads to automation and optimization of the needs, supplier and contract processes in strategic purchasing.

ResultsWith LCM Purchase, you achieve more transparency, reporting improvements and a reduction of the purchase prices and the internal procurement costs. Additional optimization potentials can be imple-mented in the contract management, supplier evaluation and supplier connection areas. LCM Purchase provides extremely valuable support for the exercise of the procurement function in corporations.

Security LCM Purchase offers the highest level of security and confidentiality through a workflow-based design of permissions and user management.

Compliance LCM Purchase documents the changes to data and processes in the system and fulfils all of the requirements for the Auditing department, Sarbanes-Oxley, European Governance, GDPDU, MoReg and others.

Total Cost of Ownership (TCO) Due to the special architecture and system integration of LCM Purchase, no additional license and integration costs are due for the Supplier Commu-nication & Sourcing, Needs Management, Supplier Management, Contract Management, Document Management modules and integrated management of suppliers and contracts. Likewise, no additional licensing costs are due for integration, for example, with SAP and the Microsoft Office products. Similarly, the hardware and ongoing operational costs are quite low in comparison. The administration of the total solution is easy and simple to operate. The costs in terms of resources are likewise minimal.

General LCM Purchase distinguishes itself through the following characteristics: very powerful database design with an integrated business intelligence tool for reporting, guaranteeing data integrity, simple integration capability, multi-cli-ent capability and industry independence. LCM Purchase is easy to operate through the user-friendly graphical interface and without competition.

LCM PURCHASEProfessional Demand Management, Supplier Relationship Management and

Contract Management for Procurement Organizations

The Quality Group (TQG) is a leading supplier of integrated, standardized information and risk management systems.

The Quality Group stands for: Information and risk management through a integrated contract and risk • management system with standardized controlling and reporting functions Operational Excellence through the increase of transparency and ef-• ficiency for critical business processes Corporate Compliance through adherence to legal obligations towards • public authorities and shareholders

The Quality Group is currently represented with four locations in Germany as well as in Europe and the USA by partners. TQG gains its expertise from over 400 customer projects and 300 software installations.

Contracts and documents with legal effect are the basis of all economic activity in every company. With the product suite LCM TQG offers a stan-dard solution for the integrated use on company level based on a powerful, interface independently data base. The applications

LCM Legal• LCM Purchase• LCM Real Estate• LCM Corporate Services•

are modularly designed and applicable complementarily to ERP systems.

The Quality Group attaches great importance to the expert-based further development of its standard products. Thus, the principal input for the requi-red functions and the processes to be supported results from close coope-ration between customers, users, specialist departments and TQG product management.

For the important information exchange with the users the LCM User Group was formed. Meetings of the LCM User Group take place twice a year.

The customer forum DiALOG takes place several times a year. Our cus-tomers and all interested parties receive information on current projects, trends in the fields of Legal, Real Estate and Purchase or the latest develop-ments in compliance and information management. Representatives from industry, science and research as well as partners participate actively in these events.

The Quality Group

ContactThe Quality Group GmbHOtto-Lilienthal-Str. 3671034 BöblingenGemanyPhone: +49 7031 71482-0Fax: +49 7031 71482-33E-Mail: info@tqg.deWeb: www.tqg.de

A brief list of our LCM customers

FIHM Fonds und ImmobilienHolding München AG