Planning and Source Determination in External Procurement

Purpose

In APO, you can plan externally procured products in the same interface as products produced in-house. You can use planning tools and functions in APO, for example finite planning of products and PO quantity optimization, to help you plan critical, externally procured materials efficiently. Because you can now also work with scheduling agreements, contracts, purchasing info records, and quota arrangements in APO, you can make use of all the procurement functions in Production Planning and Detailed Scheduling.

Planning and production of externally procured products are both carried out in APO. To do this, you use the materials management component in an OLTP system (for example, an R/3 system) and the procurement functions in an APO system.

The OLTP system used in this process is an R/3 system.

Prerequisites

Process Flow

In the diagram below you can see in which systems the different functions are performed, when a product is planned that is to be externally procured with reference to a contract or purchasing info record. For information on how to plan scheduling agreements, see under Scheduling Agreement Processing Using APO and OLTP Systems.

Process for Externally Procured Products in an OLTP System and APO

 

  1. You create purchasing info records and outline agreements in the R/3 system.

You enter all scheduling agreements, contracts, and purchasing info records you want to transfer to APO in the Integration Model for the APO Core Interface (CIF). These master data are first transmitted during the initial data transfer into the APO system. Subsequent changes to these master data in the R/3 system are saved for the next transfer of changes.

  1. The APO system generates an External Procurement Relationship.

The scheduling agreements, contracts, and purchasing info records transferred by the R/3 system are created in the APO system as external procurement relationships. External procurement relationships are product-specific and are assigned to transportation lanes. Transportation lanes are automatically created in APO when you transmit data from the R/3 system. The external procurement relationship therefore contains the contractual details of the relationship between a source location (vendor or issuing plant) and a target location (plant).

For more information on external procurement relationships, see External Procurement Relationships and Processing External Procurement Relationships.
  1. You create purchase requisitions in APO.

You can create purchase requisitions manually or automatically:

Information on the external procurement relationship is also displayed in the order view. To display this information, double-click on the number of the requirement/receipt element in the product view, then select the corresponding order object under Receipts in the order tree. Choose to display the data in the external procurement relationship.

If you have defined Quota Arrangements for a product, the vendors for whom the quota arrangements have been maintained are flagged accordingly in the Supply Source Determination dialog box. The dialog box also displays other information on the quota arrangements. The system automatically highlights the vendor to which the requirements should be assigned. However, you can also select a different source of supply from the list of permitted procurement alternatives.

For more information, see Determining Sources of Supply During Interactive Planning.

If you have defined Quota Arrangements for a product, the system automatically assigns the requirements to the vendors according to these maintained quota arrangements.

For more information, see Determining Sources of Supply During Automatic Planning.
  1. Convert purchase requisitions.

If you set the conversion indicator for an order in interactive planning, the system automatically creates a purchase order against this order in the connected OLTP system.

For more information on converting orders in interactive planning, see Convert Individual Orders in Interactive Planning.

If you use mass conversion for orders, then you can either transfer or convert orders from a specific period.

During mass conversion of orders, only those orders are selected where the opening date is in the past.

The opening date is calculated as follows:

Delivery date – Planned delivery date – Opening period

If you select the Convertible orders indicator in the mass conversion function, then the system creates purchase orders in the OLTP system against all orders where the opening date is in the past.

If you select the Transferable orders indicator in the mass conversion function, then the system creates purchase requisitions in the OLTP system against all orders where the opening date is in the past.

For more information on mass conversion of orders, see Executing Mass Conversion of Orders.
  1. Purchase order is generated.

    2. If you have set the conversion indicator for a purchase requisition, then a purchase order is automatically created in the OLTP system.

    If you have not set the conversion indicator for a purchase requisition, then a purchase requisition is automatically created in the OLTP system that you must then convert into a purchase order in Purchasing.

    The purchase orders have been transferred to the APO system.

  2. Create an inbound delivery in the R/3 system.

    3. Create an inbound delivery in the R/3 system. The data from this inbound delivery are automatically transmitted to the APO system.

  3. The APO system reduces the schedule lines.

    4. The schedule lines are subtracted from the notified quantity in APO.

  4. Create a goods receipt.

    5. Create a goods receipt in the R/3 system. This goods receipt is automatically transferred to the APO system.

  5. The APO system increases the stock and reduces the schedule lines.

The inbound delivery is reduced by the goods receipt quantity in APO (if you use APO). The schedule lines are also reduced accordingly.