With respect to new procurement transactions, you initially wish to fall back on data that is already available in the system. Issuing a one-time purchase order or determining a new source through the more time-consuming process of requesting and processing quotations are functions that will often only take place after you have discovered that there is no suitable source for a certain material or service in the system.
As a rule, a productive system will contain a large number of vendors and outline purchase agreements representing external sources of supply (external procurement), as well as plants belonging to your firm representing internal sources of supply (internal procurement).
The source determination facility helps you to find the most suitable source for a certain requirement from the large volume of data that is available, i.e. it suggests a suitable outline agreement or vendor for ordering purposes.
The following objects represent the basic data upon which the source determination process for requisitions and purchase orders depends:
Existing outline agreements represent possible sources for a material. If a requisition is assigned to an outline agreement, the system can generate a contract release order or scheduling agreement delivery schedule on the basis of the terms and conditions of the outline agreement.
If a purchasing info record exists for the requested material, it can also serve as a possible source of supply. The prices and conditions in the info record are suggested when you create a purchase order referencing the assigned requisition.
A plant belonging to your firm can also represent a possible source of supply in connection with a purchase requisition.
If a plant has been assigned as the source of supply, the requirement is covered by an internal procurement transaction. In this case, a stock transport order (for a stock transfer involving transport over a longer-distance) is created. For further information, see Stock Transport Order Without SD Delivery.
The quota arrangement specifies the portion of the total requirement of a material that is to be assigned to a specific source over a certain period. If quota arrangements exist in the system, they exert an influence in determining precisely which source (perhaps out of several possible ones) is assigned to a purchase requisition.
In the source list, you specify which source of supply is valid for a certain period. You can define a preferred source of a material (for example, a vendor) as "fixed". The system will then suggest precisely this source even if other possible sources exist. See Source List .
The system determines the source of supply of a requested material on the basis of the following factors (in the order shown):
The system first determines whether a quota arrangement within whose validity period the delivery date in the requisition falls exists for the material.
If a quota arrangement exists, the system determines the vendor from whom the material is to be procured according to the quotas assigned to the vendors and then suggests the source.
If no source can be determined this way, the system checks the source list.
The system determines whether an entry in the source list within whose validity period the delivery date of the requisition falls exists for the material. The source in question may be a fixed vendor or an outline agreement (contract or scheduling agreement).
If the source list contains a unique source, the requisition is assigned to that source.
If several sources are found, a box appears for selection purposes.
If no source could be determined, the existing outline agreements and info records are examined.
Outline agreement and info record
The system searches for contracts, scheduling agreements, and info records for the material and suggests these.
(If info records with more than one purchasing organization exist, all info records of the purchasing organization(s) that is/are responsible for procurement for the requesting plant are also suggested.)
If several outline agreements and perhaps info records exist, all possible sources are offered for selection in a box.
When an info record is found, the following two additional checks are carried out:
Check of supply region
The system checks whether a certain supply region is specified in the associated vendor master record. If so, the system checks whether the plant in the purchase requisition belongs to this region. If not, the info record is discarded as a possible source.
Check of regular vendor
The system checks whether a regular vendor has been specified for the material (that is, a vendor valid for the entire corporate group, or client). If this is the case, and it has been specified in Customizing that the regular vendor takes precedence, the info record for this vendor will be preferred as the source.
Source Determination in the Background:
If you carry out the source determination process online and the system finds several possible sources, a box appears with the sourcing suggestions. From these, you can choose and assign one source.
If you carry out the source determination process in the background, the system must determine a uniquesource to enable a purchase order to subsequently be generated automatically.
If several sources are found in the third step, the system gives the outline agreement precedence over the info record in order to arrive at a unique source.
If two outline agreements are found, the system checks whether one of them is with a regular vendor. If so, this agreement is assigned as the unique source. If not, the system does not assign a source at all. The source must then be assigned manually.