Sourcing Rules

Sourcing rule is used for approved supplier list to determine how much percentage of order can be shared among the suppliers on priority basis (Allocation and Rank for Supplier). Sourcing rule that defaults a supplier and optionally a supplier site, contact and phone number on your requisition. Sourcing defaults can dramatically increase operational efficiency.

They can:

·         Automatically allocate planned orders across different suppliers using percentage splits

·         Define global or local rules for individual items and entire commodities

·         Maintain sourcing details at supplier and site

·         Define effective dates for each rule

·         Assign sourcing rules at different levels using an assignment set

·         Classify and rank multiple sources

Sourcing rules define for an organization or a group of organizations replenishment sources that can be applied to specific items.  With sourcing rules that are made up of multiple suppliers, you can assign allocation percentages to each supplier and rank the suppliers if the percentages are equal.
Create Sourcing Rules
 
Enter an allocation percentage for each shipping organization.  Allocation percentage includes the number of planned orders issued over the specified planning horizon.  Your total allocation may not exceed 100% for each rank.  If the allocation percentage for all shipping organizations included within a range of effectivity dates equals 100, Planning Active is checked.  If planning is not active for the sourcing rule, the planning process will not use the rule.

For requisitions submitted in Purchasing, the percentage allocations are completely ignored.  To determine which supplier is defaulted onto the requisition, Purchasing chooses the supplier with the highest percentage regardless of the rank.  When two suppliers share the same percentage and that percentage is higher than any other supplier, the rank determines which supplier defaults onto the requisition.

Supplier catalogs are loaded into iProcurement with sourcing information included.  If the catalog is external, a specific supplier or marketplace hosts the items so they are already linked to a supplier. Here types are two types

Transfer From: Used to transfer items from one Inventory organization to another inventory organization.

Buy From: Used to buy items from suppliers.

Navigation: MCR PO > Supply Base > Sourcing Rules

Create Sourcing Rule Assignment

 
Assign the Rule to One of Six Levels

Item/inventory organization combination: Used to assign the sourcing rule for an item to a specific organization.

Item: Used to assign the sourcing rule to a specific item.

Category/inventory organization combination: Used to assign the sourcing rule for a particular category to a specific organization.

Category: Used to assign the sourcing rule for a specific category

Inventory organization: Used to assign the sourcing rule for a particular Inventory Organization.

Global: It is a global sourcing rule.
Using the MRP: Default Sourcing Assignment Set profile option in the Profile Options window at the Site level.  The assignment set you specify in this profile option is automatically assigned to every MPS, MRP and DRP in the organization.  You can override this default when you define the material plan options, but only in Supply Chain Planning.
Note:  For Purchasing to use the sourcing rule, the sourcing rule must be added to the assignment set specified by the MRP: Default Sourcing Assignment Set profile option.  If users add sourcing rules to any other assignment set, Purchasing will not pick them up.  This is the primary reason some customers can’t get their POs and requisitions to source automatically.
Navigation: MCR PO > Supply Base > Assign Sourcing Rules

Or we can assign sourcing rule to seeded assignment set called Supplier Scheduling. Query for Supplier Scheduling add new record as below.

We need to set the profile option MRP: Default Sourcing Assignment Set to determine Assign Sourcing Rule for sourcing rule (MCR-SR).

Sys Admin > Profile > System

By default the profile option is set to Supplier Scheduling.

When we are using our own Assignment set (MCR Assignment Set) we need to set for it like below.

Important Sourcing Profile Options

PO: Automatic Document Sourcing

Setting this profile option to Yes means that Purchasing automatically searches for the most current blanket purchase agreement or quotation for an item-supplier combination, and defaults the information from this document onto a newly created document line. If you set this profile option to Yes, you do not have to specify source documents in the Approved Supplier List. Setting this profile option to No means that Purchasing defaults sourcing information onto a newly created requisition or purchase order line only from those documents you have specified in the Approved Supplier List.  This method is useful if you prefer to maintain and update the Approved Supplier List with documents that you choose.

PO: Allow Auto–generate Sourcing Rules

Create Only indicates whether the buyer can create new sourcing rules, sourcing assignments, and approved supplier list entries while approving a blanket purchase agreement. Create and Update enables the buyer to update sourcing rules and assignments as well as create new sourcing rules. The default is None.

PO: Price Tolerance (%) for Catalog Updates

A value in this profile option specifies the maximum percentage increase allowed to an item's price when your supplier sends updated price/sales catalog information through the Purchasing Documents Open Interface.  This profile option affects only those documents imported through the Purchasing Documents Open Interface.  If the tolerance is exceeded, the buyer receives a notification and can accept or reject the price increase in the Exceeded Price Tolerances window.

MRP: Default Sourcing Assignment Set

Using the MRP: Default Sourcing Assignment Set profile option in the Profile Options window, define a default assignment set for all plans for a site.  The assignment set you specify in this profile option is automatically assigned to every MPS, MRP and DRP in the organization.  You can override this default when you define the material plan options, but only in Supply Chain Planning. Sourcing in Purchasing will not work correctly if this profile is not set to the assignment used to assign the Purchasing sourcing rules.

MRP: Sourcing Rule Category Set

If you are using sourcing rules in Purchasing, this profile needs to be set to the name of the default category set used by Purchasing as indicated in the Default Category Sets window.  Otherwise, you will not be able to display Category and Category-Organization assignments in the Sourcing Rule / Bill of Distribution Assignments window.