Source allocation therefore plays a pivotal role in your procurement process. After you have determined short- and mid-term requirements, which have then been converted to purchase requisitions using material requirements planning (MRP), you must specify to which vendors you want to issue purchase orders for covering your requirements. The source allocation helps you select the optimal vendors. By storing company and personal preferences as selection criteria in the AFS System, you can use them to automatically assign purchase requisitions to vendors. After the assignment, the vendor is written as the Fixed vendor in the purchase requisition.

In addition to company and personal preferences, the AFS system considers AFS quotas, political restrictions on the import of goods from a third country, and restrictions due to the capacity situations of your vendors.

The AFS source allocation is not a supplement to the R/3 standard vendor ranking. Rather, it must be treated as an independent vendor evaluation and vendor selection tool. The source allocation does, however, use some evaluation criteria of the R/3 standard vendor evaluation, as well as information from the R/3 standard Logistics Information System (LIS).

You can use the source allocation in the dialog and as background processing. It is usually better to use the background processing because any number of purchase requisitions as well as a large number of vendors are checked, sorted, and assigned during a simulation run. With background processing you avoid having a negative effect on the performance of your SAP system during your day-to-day activities.