Source of Supply
Definition
Master data object that maps the procurement of a product.
Use
A source of supply defines how or where a product is procured. When a procurement proposal is created, the source of supply to be used is determined automatically or interactively. The system uses this source to create the procurement proposal.
A distinction should be made between the procurement types external procurement and in-house production. In the location product master, using the procurement type, you define whether a product is produced in-house or procured externally, or whether both are permitted. There are specific source of supply types for each procurement type:
· External procurement in SAP APO includes both the stock transfer of a product from another location in which the product is produced or stored, and the purchase order at an external supplier. Sources of supply are transportation lanes or external procurement relationships.
Using a source of supply for external procurement, the system creates a scheduling agreement schedule line for an SAP APO scheduling agreement, a stock transfer, or a purchase requisition, depending on the type of source. In an external procurement relationship, the purchase requisition refers to an OLTP scheduling agreement, to a contract, or to an info record.
When the relevant data is transferred from SAP R/3, the SAP APO system automatically creates sources of supply for external procurement, as follows:
¡ The system generates external procurement relationships and transportation lanes for scheduling agreements, contracts, and purchasing info records.
¡ When the SAP R/3 material master is transferred, the system generates transportation lanes for products for which external procurement is defined as the procurement type and stock transfer as the special procurement type in the material master. You should be aware of the following: If transportation lanes exist, which were generated from purchasing data or created manually, the system does not take account of the transportation lanes, which were generated from the special procurement type, during source determination.
· In in-house production, you procure a product by producing it. Sources of supply for in-house production are production process models, iPPE access objects, or runtime objects. iPPE access objects and runtime objects are not relevant to SNP and CTM. Using a source of supply for in-house production, the system creates a planned order.
When the relevant data is transferred from SAP R/3, the SAP APO system automatically creates PP/DS production process models, iPPE access objects, or PP/DS runtime objects. You can generate SNP production process models automatically from PP/DS production process models.
A special case
of in-house production is
production in another
location. Here, production
does not take place in the location for which you execute planning but in a
production location that differs from the planning location. You can achieve this by using a source of
supply with different planning and production locations. In this scenario, you do not map the stock transfer
of the product from the production location to the planning location in SAP
APO. Therefore, no transportation lanes are involved.
Alternative Sources of Supply
In SAP APO, it is possible to define various alternative sources of supply for a product, from which a source of supply is selected according to specific criteria in automatic or interactive planning. A product can be produced in-house and, if there are production bottlenecks, be procured from an external supplier, or transferred from another production location. It may also make sense to work with different sources of supply with the same procurement type. For example, you can use different PPMs to map the various expensive options for manufacturing a product in in-house production. The most cost-effective option should generally be favored here, but if there are capacity bottlenecks, it may be necessary to take the next more expensive alternative option. In other cases, it may be that you want to procure the same product with different quota arrangements from different suppliers. The source of supply to be used is selected in source determination.
Prioritization of Sources of Supply
In a source of supply, you can use the following data to define the priority with which source determination should use the source of supply:
· The procurement priority that should be used with the source of supply
· The costs incurred if the source of supply is used for procurement
Moreover, you can define quota arrangements in which you specify the proportions used to procure a product from different sources of supply.
You should be aware that the application determines which data is relevant for selecting a source of supply. For example, optimization in Supply Network Planning (SNP) only selects sources of supply based on costs and does not take account of the procurement priority or the quota arrangements. The SNP heuristic either evaluates quota arrangements or procurement priorities. As a rule, all criteria as well as on-time delivery are relevant to Production Planning and Detailed Scheduling (PP/DS).
Validity Data
Generally, the system may only use a source of supply for a procurement proposal if the source of supply is valid with regard to both time and quantity. You define the relevant data in the source of supply.
See also
·
External
Procurement in PP/DS