Purchasing lets you automatically source online requisitions with purchase agreements or quotations you create. You can easily assign any item with an item number to a specific purchase agreement or quotation. Purchasing automatically assigns the name of the supplier for the purchase agreement and quotation to any requisition for this item.
To achieve automatic sourcing, use the Sourcing Rule and Sourcing Rule/Bill of Distribution Assignments windows to create sourcing rules. Optionally use the Approved Supplier List and Supplier-Item Attributes windows to specify source document information for a particular item, supplier, and site.
For requisitions, if you define a purchase agreement or quotation as the source document for your item, and define and assign sourcing rules, Purchasing provides the following sourcing information for your requisition line: Buyer, Supplier, Site, Contact, Phone, Supplier Item Number, Document Type (Blanket, Contract, or Quotation) Source Document, Source Line Number, Rate Date, Rate Type, Rate, and RFQ Required (Yes or No). Oracle Purchasing also defaults the price depending on your pricing configuration. You can later review the sourcing information in the AutoCreate Documents window before placing the requisition line onto a purchase order.
Sourcing information defaults on a requisition from existing documents in the following order of precedence:
Local blanket purchase agreement
Global blanket purchase agreement
Local contract purchase agreement
Global contract purchase agreement
Quotation
For standard purchase orders, if you define a global agreement or quotation as the source document for the item, and define and assign sourcing rules, Oracle Purchasing provides sourcing information for the purchase order line. Examples of sourcing information are: Contract, Document Type, document Number and Line, and Supplier Quotation number. Oracle Purchasing also defaults the price from the source document.
Sourcing information defaults on a purchase order from existing documents in the following order of precedence:
Local blanket purchase agreement
Global blanket purchase agreement
Quotation
A requisition with a quotation, contract purchase agreement, or global agreement as a source document becomes a standard purchase order. A requisition with a blanket purchase agreement as a source document becomes a release.
Purchasing defaults sourcing information from the purchase agreement or quotation except under the following conditions:
The document is not approved.
The purchase agreement is frozen or cancelled, or the blanket purchase agreement line is cancelled.
The document is not active.
You have copied sourcing information back to the requisition from the Supplier Item Catalog.
In the Approved Supplier List and Sourcing Rule windows, you source at an item or commodity level. That is, you provide sourcing information for a particular item at the item level, or for a category of items at the commodity level.
For inventory items, if no sourcing rule is provided at the item level in the Sourcing Rule/Bill of Distribution Assignments window, Purchasing automatically defaults the supplier or supplier site from the category-level sourcing rule if there is one.
The same is true of supplier statuses. If you debar a supplier for a specific commodity (category) in an Approved Supplier List entry, the supplier is prevented from supplying all items within that commodity. (Note: If you approve a supplier for a commodity, the item-specific status for the supplier still takes precedence.)
In the Approved Supplier List and Sourcing Rule windows, you also choose whether to exercise the sourcing information at a global or local level. A sourcing rule assigned at the global level in the Sourcing Rule / Bill of Distribution Assignments window is valid for all operating units. A global ASL entry in the Approved Supplier List window is valid for all inventory organizations in an operating unit. A local sourcing rule or ASL entry is valid only for the organization that you were in or that you chose when creating the sourcing rule or ASL entry.
Local entries take precedence over global ones. For example, if you have a global sourcing rule that says to use Supplier A for an item for all organizations in your company, and a local sourcing rule for the same item that says to use the local Supplier Z only for your organization, Purchasing defaults Supplier Z on requisitions or purchase orders created in your organization. Local entries are the default in the Approved Supplier List window.
When creating sourcing rules in the Sourcing Rule window, you must define allocation percentages. Master Scheduling/MRP uses these allocation percentages when creating planned orders, which Purchasing imports as requisitions through Requisition Import. In a group of requisitions imported from Master Scheduling/MRP, the requisitions show the percentage allocation you define. In other words, at the end of a planning period, a group of orders to those suppliers approximately equals the percentage split you defined. However, when you create an individual requisition in Purchasing, Purchasing sources to the supplier with the highest allocated percentage. The Approved Supplier List (ASL) entry for that supplier is then referenced in order to pick up source document information (from a purchase agreement or quotation), if source documents exist. If a percentage allocation is the same for some suppliers, and you have ranked the suppliers in the Sourcing Rule window, Purchasing sources to the one with the highest rank.
The Supplier-Item Attributes window lets you optionally specify the capacity of individual supplier sites to supply specific items. Supply Chain Planning allocates planned orders taking these capacity constraints into account. For example, you define and assign a sourcing rule that says an item can come from either of two suppliers this year. In the sourcing rule, you also rank the suppliers so that Planning prefers Supplier 1 over Supplier 2. However, if the capacity of Supplier 1 in the Planning Constraints tabbed region of the Supplier-Item Attributes window includes a four-day lead time, but there is a need-by date of one day, Supply Chain Planning automatically defaults Supplier 2 onto planned orders if Supplier 2 has a lead time of less than one day. (If no suppliers can meet your demand, Supply Chain Planning uses the top-ranked supplier.)
In addition to lead time, you can define receiving schedules, minimum order quantities and fixed lot multiples, capacity per day, and tolerance fences. See: Defining the Supplier/Item Attributes.
These planning constraints apply to planned orders only.
Centralized procurement enables you to extend automatic sourcing to global agreements negotiated by other business units. Automatic sourcing setup is the same but sourcing will be extended to look at global agreements matching the supplier and supplier site in other business units (operating units). This extended automatic sourcing will always evaluate purchase agreements in your operating unit first, then global agreements, and finally quotations.
Oracle Services Procurement extends automatic sourcing by always attempting to find a source document with a matching commodity and job title. This is done regardless of the setting of the PO: Automatic Document Sourcing profile or commodity entries in the Approved Supplier List.
Once you have defined your sourcing rules and bills of distribution, you must assign them to particular items and/or organizations. These assignments are grouped together in assignment sets. This is where your various sourcing strategies define a particular supply chain network.
Each assignment set to represents selection of organizations and/or items you want planned. To influence the planning process, you must include an assignment set in your plan options.
In an assignment set you can assign your sourcing rules and bills of distribution at different levels, as follows:
an item across all organizations
a single item in an inventory organization
all items in an inventory organization
categories of items
categories of items in an inventory organization
all organizations
These levels allow you to assign a replenishment rule to as many or as few items as possible. For example, a category of items could be defined as packaging material, and a sourcing rule that identifies the suppliers could be assigned.
To assign a sourcing rule or bill of distribution:
Navigate to the Sourcing Rule/Bill of Distribution Assignments window.
Enter an assignment set name and description.
Note: The assignment set name specified in the profile option MRP: Default Sourcing Assignment Set is the only one that Purchasing uses. If you want this assignment set to be used by Purchasing, update the profile option with this assignment set name, or create an assignment set that matches the profile option.
Select an Assigned To type. See: Assignments Hierarchy, Oracle Master Scheduling/MRP and Supply Chain Planning User's Guide
Note: You can assign a sourcing rule or bill of distribution to a category only if the profile option MRP: Sourcing Rule Category Set is set. See: Profile Options in Purchasing.
Enter an organization name, if the Assigned To type requires one.
Note: You cannot assign customers modelled as organizations to a global sourcing rule.
Enter an Item/Category if you selected Item or Item-Org as the Assign To type.
Enter the sourcing rule or bill of distribution as the Type.
Enter the name of the sourcing rule or bill of distribution.
To purge a sourcing rule or bill of distribution:
Select an assignment set name.
Choose Purge.