Approved Supplier List

All procurement organizations maintain lists that associate the items and services they buy with the companies who supply them, either formally or informally. Data stored in a controlled global repository containing relevant details about each ship-from, ship-to, and item relationships is known as an Approved Supplier List (ASL).   

This repository includes information about all ASL suppliers with their business statuses:

Approved - The supplier has demonstrated the ability to satisfy rigorous quality, cost, and delivery requirements over a sustained period.

Debarred - The supplier is temporarily or permanently disallowed on purchase orders due to performance failure, ethics violations, and so on.

New - This status may be used based on your company policy to indicate that the supplier has never placed a purchase order with the procurement organization or that your company considers this a relatively new supplier.

Each item/supplier combination must be assigned a status.  These statuses are defined by your organization based on your business needs.  When you define a status, you define a set of business rules that control whether an action is allowed or prevented.  For each status and action combination, indicate whether the action is allowed or prevented.

The four predefined actions for business rules you can associate with each status are:

PO Approval - Approval of a purchase order to a supplier

Sourcing - When sourcing planned orders, Planning should assign suppliers with this business rule set to Allowed

Schedule Confirmation - Confirmation of a schedule for a supplier

Manufacturer Link - Associates a manufacturer with a distributor in the ASL

The four actions come seeded with Oracle Applications and you cannot add new ones. Once you define a set of statuses, you can then associate a status with a supplier-commodity/item combination in the ASL.

It is not considered a status, but you can also disable an approved supplier list entry. Debarring a supplier and disabling an approved supplier list entry are very different.

Disabled - Disable the line on the ASL. This is as if the line did not exist.

Debarred - The supplier is on the ASL, but may be having quality problems so you want to prevent future business by choosing the Debar option from the list of values on the Status field.  When you want to resume purchases with the supplier, you can change the status back to Approved.

Disable example: If you have both a global and local ASL defined for a given item and you no longer want to use the local ASL you can use the disable feature to disable the local ASL, so the system ignores the entry and uses the global ASL instead.

Debar example: if you have both local and global ASL's defined for a given item and you do not change the status of the local ASL to Debarred, neither the global ASL nor the local ASL can be used.

Before going to create ASL, 1st we will create item in the item master with enable Use Approved Supplier check box at purchasing tab.Navigation: MCR INV > Items > Master Items

Create one more item

Now the above two items can valid only for ASL, if we are trying to create PO on these items for a supplier (Which is not an ASL list) system throw warning message that “Item is restricted and supplier is not an approved supplier for this item.”
Define ASL Setups

Navigation: MCR PO > Supply Base > Approved Supplier List (Master Org)

ASL is at two Levels

·         Item Level

·         Commodity Level

 

Item/Commodity

Item - Assigns a supplier to a particular item

Commodity - Assigns a supplier to a group of items belonging to a category (or commodity).

Business Type

Direct (Supplier) - Company sells their products directly to you.

Manufacturer - Company manufactures and sells through distributors.

Distributor - Company sells products made by manufacturers.  You must associate the Distributor with a Manufacturer, meaning you must define a Manufacturer before you define its Distributor.

Status

Use one of the default Statuses provided, or choose a status of your own if you defined other statuses in the Approved Supplier List Statuses window.

Review By

You can use this date to determine when a proactive business review will be performed for the supplier.

Global

Yes - This ASL entry is valid for all inventory organizations in your operating unit.

No - This ASL entry is local, that is, valid only for the organization you chose in the Organizations window when you first navigated to the Approved Supplier List window.

When multiple ASL entries exist, the following hierarchy will be used to determine which ASL will be used:

Item/Supplier/Global

Item/Supplier/Supplier Site/Global

Item/Supplier/Local

Item/Supplier/Supplier Site/Local

Item/Supplier/Global ASL's are the weakest and Item/Supplier/Supplier Site/Local ASL's are the strongest.

Note:  When Use Approved Supplier is checked for an item in the Master Items or Organization Items windows (depending on whether control of the attribute is at the Master Item level or Organization Item level), you cannot approve a source document until the supplier is in the Approved Supplier List.

ASL at Item Level:

Select the supplier and site, initially status is new, change to Approved (We can define custom supplier statuses through Supply Base à Supplier Statuses). Click on Records Details Tab, provide Yes to Global? That means the supplier will be marked as approved supplier for all operating units. If it is No, supplier will marked only for one OU.
Save the record.

Now create PO for Item MI-ASL01 for supplier MCR Supp and approve.

Navigation: MCR PO > Purchase Orders à>Purchase Orders

Enter the Po details and save the records and click on Approve.
Now PO has got approved.
ASL at Commodity Level:

ASL Header Attributes - Commodity

The status you define on a commodity-level Approved Supplier List entry (an entry for a category of items) controls sourcing at both the item and commodity levels. For example, if you debar a supplier for a specific commodity, the supplier is prevented from supplying all items within that commodity.  You do not need to debar a supplier for each item.

Note:  If you approve a supplier for a commodity and have an item-specific ASL entry, the item-specific ASL entry will take precedence over the commodity level ASL entry.

Consider the following scenarios:

Scenario 1: If A, B and C are approved suppliers at the commodity level and A and D are approved suppliers at the item level, purchase orders can be written and approved for suppliers A and D and not for suppliers B and C.

Scenario 2: If A, B and C are approved suppliers at the commodity level and there is no ASL at the item level, then A, B and C will be considered approved suppliers for any item assigned to the commodity.

Scenario 3: If A is a debarred supplier at the commodity level, even if it is an approved supplier at the item level for an item that is in the commodity, A will be considered debarred for the item.  Purchase orders cannot be approved either for the item or any item in the commodity. 

Here Commodity is nothing but Item Category, if we define ASL at commodity; all items within that (commodity) category will be covered for ASL.

We can find the commodity value for item MI-ASL01 through Item Masters > Tools > Categories.

Go to ASL navigation select type as Commodity with item MI-ASL02.

Save the record and create PO and approve the PO.

When we try to approve the PO, we will get below approval error. Reason is we have already assigned item MI-ASL01 for supplier MCR Supp at HYD site. That means ASL given at Item level will override the ASL given at Commodity.


Approved Supplier List Continuation