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ASL-Sourcing in Procurement

An Oracle White Paper October 2004

Table of Contents

Executive Overview............................................................................................................ 3 Introduction......................................................................................................................... 3 Important Sourcing terms in Oracle Purchasing................................................................. 3 Approved Supplier List (ASL)........................................................................................ 3 ASL Attributes ................................................................................................................ 4 Global & Local ASL....................................................................................................... 4 Sourcing Rules ................................................................................................................ 4 Assign Sourcing Rules.................................................................................................... 4 Setup for Sourcing .............................................................................................................. 5 Create a Blanket Purchase Agreement........................................................................ 7 Sourcing Cycle in Core Purchasing .................................................................................. 12 Sourcing Cycle in iProcurement ....................................................................................... 13 Creating a Release from a BPA for a catalog item ....................................................... 13 Creating a Standard Purchase Order from a quotation for a Catalog Item. .................. 14 Creating a Standard Purchase Order from a Contract Purchase Order for a catalog item. ....................................................................................................................................... 15 Creating a Standard Purchase Order from a Contract Purchase Order for a Non Catalog Item ............................................................................................................................... 16 PO Create Documents Workflow in Sourcing.................................................................. 17 Advanced Features of Automatic Sourcing ...................................................................... 20 Steps to implement Automatic Sourcing ...................................................................... 21 Tables involved in Sourcing ............................................................................................. 25 Summary ........................................................................................................................... 26

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) or ' New' if you have never placed a purchase order with the supplier. negotiating and implementing contracts with selected suppliers. This white paper focuses on the features that sourcing provides in the Procurement module of Oracle Applications.Automatic Sourcing. etc. ethics violations. The business needs of Sourcing are • Automatically default supplier and pricing information onto requisition lines • Source the item from negotiated purchase agreements • Reduce manual intervention Sourcing in Oracle Applications.Executive Overview Sourcing is a function with strategic importance within the broader context of procurement. The only difference lies in setup techniques. and delivery requirements over a sustained period) to ‘Debarred’ (the supplier is temporarily/permanently disallowed on purchase orders due to performance failure. Infact it is a subset of procurement with strategic context. Important Sourcing terms in Oracle Purchasing Approved Supplier List (ASL) All procurement organizations maintain lists that associate the items and services they buy from supplier organization. company-wide approaches to obtaining materials and services. It also discusses the new sourcing feature in Oracle Applications. can be implemented either to the requisition created in iprocurement or core purchasing. and involves highlevel. identifying and evaluating potential suppliers to meet those needs. Sourcing sets the stage for the entire company’s purchase for direct and indirect materials. is known as an Approved Supplier List (ASL). monitoring and improving ongoing supplier relationships. This repository includes information about all suppliers with business statuses ranging from ‘Approved’ (the supplier has demonstrated the ability to satisfy rigorous quality. The setups for both of the methodologies are discussed in this paper. cost. 3 . Data stored in a global repository containing relevant details about each item/supplier/supplier site relationship. It lays down the road map towards implementing sourcing and describes in detail the sourcing cycle with related setups. Introduction Oracle Purchasing allows users to automatically source items from suppliers based on the sourcing rules and purchase agreements.

Sourcing Rules Sourcing rules define inventory replenishment method for either a single organization or all organizations in the enterprise. purchasing Unit of Measure. In an assignment set. ASL attributes specify the Release Generation Method. Local ASL entries are specific to a single Inventory Organization. Assign Sourcing Rules Sourcing rule must be assigned to a particular item and/or organization. These assignments are grouped together in assignment sets. for any organization. they answer the question “where do I get part A from?” User defines rankings and % allocation for replenishment sources in the form of Sourcing Rules.ASL Attributes For each ASL entry. sourcing can be assigned at different levels. This is where various sourcing strategies define a particular supply chain network. Global & Local ASL Global ASL entries are valid for all Inventory Organizations. They describe sourcing supply. source Blanket Agreements and Catalog Quotations for automatic reference during document creation. as follows: · · · · · An item across all organizations A single item in an inventory organization A category of items across all organizations A category of items in an inventory organization All organizations 4 .

Define items. Assign Item to Inventory organization 5 . An important prerequisite for Sourcing is that items and suppliers should be defined.Setup for Sourcing Sourcing setups in Oracle Applications is accomplished using the series of steps described below.

Create suppliers and supplier sites in the Suppliers window. 6 .

In the Organizations window that appears. An ASL can be created for either of the following a. 3. Item . Commodity . 2.assigns a supplier to a particular item. Navigate to the Approved Supplier List window as follows: Navigation: Supply Base Management -> Approved Supplier List.assigns a supplier to a group of items belonging to a category (or commodity). 4. b. One of the following Business type can be selected: 7 .Steps to implement sourcing are Create a Blanket Purchase Agreement Defining the Approved Supplier list To define the Approved Supplier List (ASL) 1. Select an item or commodity. choose the ship-to organization for which to define Approved Supplier List (ASL) entries. 5. This will be the owning organization.

8 . Distributor: This option should be selected when the supplier sells products made by manufacturers.This ASL entry is local.a. A distributor needs to be associated with manufacturer. which implies that a manufacturer should be defined in ASL before defining its distributor. 8. Navigate to the Record Details Alternate region. Specify the supplier and supplier site. Direct (Supplier): This option should be selected when the supplier sells his products or services directly to buyer organization. 6. Select the supplier' s approval status. 7. Source document information can be specified in the Supplier-Item Attributes window.This ASL entry is valid for all inventory organizations in this Operating unit. Note: If two ASL entries exist for the same item or commodity. the local entry takes precedence. Select one of the following in Global: 1) 2) Yes . one Global entry that applies to all organizations and one local entry that applies only to the local inventory organization. Use one of the default statuses provided. Manufacturer: This option should be selected when the supplier does not sell his product/services directly to the procuring organization but sells it through distributors c. meaning that it is valid only for the organization chosen in the Organizations window when first opening the Approved Supplier List window. No . b.

2. Enter a unique Seq (Sequence) Number. “Create Release Program” is used to create release in this case. One of the following attribute groupings can be selected from the Alternate region: a. 3. then the document with sequence number 1 will be picked up irrespective of whether it is a Blanket or Quotation. If this is the case then a Standard PO is created instead of a Blanket Release) 9 . A requisition with a blanket purchase agreement as a source document can be created into a release (unless the ASL is setup for this item as a Cosigned Inventory item. b) Automatic Release: Automatically generates approved releases. “Create Release Program” is used to create releases in this case. but requires a separate step for approval. if there are two documents specified in ASL having sequence number 1 and 2.To define the supplier and commodity/item attributes: 1.e. NOTE: If Requisition Line(s) are for a one-time item then the Release Generation Method is not considered and the requisition is a candidate for Automatic creation by the CREATEPO workflow. Following Document types can be selected: --Blanket --Quotation A requisition with a quotation as a source document can be created into a standard purchase order. Navigate to the Supplier-Item Attributes window by choosing the Attributes button in the Approved Supplier List window. This Occurs in the workflow (CREATEPO) after the workflow has verified that the Requisition has the required information for automatic release creation 4. Choose the Purchasing UOM. Sourcing picks up the document as per the sequence. c) Release Using AutoCreate: Release is created by the workflow and “Create Release Program” is not required. Choose the Release Generation Method from the following options: a) Automatic Release/Review: Automatically generates releases. This choice is not available if encumbrance is turned on. b. i.

Choose a Line Number. are displayed. Indicate whether this sourcing rule is used for all organizations (global) or a single organization (local). Enter an allocation percentage 100% 10 . otherwise. enter an organization name. The Status and Effective Dates for the document. d. Enter effective dates. but entering an end date is optional. A start date is mandatory. the current organization will be the receiving organization. Choose a Document Number. 4.c. Navigate to the Sourcing Rule window. if any. Enter a unique Sourcing Rule name. 3. If the sourcing rule is local. Define a sourcing Rule To define a sourcing rule: 1. 5. 2.

5. Enter the name of the sourcing rule. Note: The assignment specified in profile option MRP: Default Sourcing Assignment Set is the only one used by Purchasing during the sourcing process 3. 6. Navigate to the Sourcing Rule/Bill of Distribution Assignments window. 4.To assign a sourcing rule: 1. Enter the sourcing rule as the Type. Enter an Item/Category if the selection for the Assign To Type is Item or Item-Org. 2. 11 . Enter an assignment set name and description. Save the form.

5. The Supplier and Supplier Site defaulted from the Sourcing Rule. 4.Sourcing Cycle in Core Purchasing 1. 6. Navigate to Source Details Alternate region. The Blanket Purchase Agreement. Create a requisition for the Item for which the Sourcing Rule and Approved Supplier List has been created. is now attached to the Requisition. Approve the requisition. 3. which was specified in the ASL. Run the Workflow Background Process with the following parameters 12 . 2.

i) Create one item. which should be web enabled. iii) Extract item. iii) Creating a standard purchase order from a contract purchase order for a catalog item. If it is set to yes it will be sent to the Background and this step is required Sourcing Cycle in iProcurement Sourcing can also be used in iProcurement. Following types of documents can be created in iProcurement with the help of Sourcing i) Creating a release from a BPA for a catalog item. If this is set to No then the Create Documents workflow will be done in online mode. If “Send PO autocreation to Background” is set to No then this step is not required.) 13 . Item List Price should be specified in Item Master in Purchasing tabbed region. which is determined by the value of Requisition Approavl workflow item attribute = “Send PO Autocreation to Background” is set to No. v) Create a requisition in iProcurement for this item.ItemType: PO Requisition Approval Process Deferred: Yes Process Stuck: No Process Timeout: No This step is not required if using the Create Documents workflow in Online Mode. BPA and ASL in iProcurement Note: Following points to be taken care of while extraction. Item should be attached to a category. Owning Org of ASL should be same as the Inventory Organization specified in Financial System Parameters. iv) Search for the item in iProcurement. vii) Run the workflow background process (if Release Generation Method in ASL is “Release using Autocreate”and if the Requisition Approval Workflow item attribute “Send PO Autocreation to Background” is set to yes. ii) Create one BPA and ASL for that item and attach the BPA to the ASL for this item. Category should be extracted before Item. iv) Creating a standard purchase order from a contract purchase order for a non catalog item. vi) Approve the requisition. Creating a Release from a BPA for a catalog item Following steps should be followed in order to create a release from a BPA for a catalog item. ii) Creating a standard purchase order from a quotation for a catalog item.

Does Req Line Have Enough Information To Create Document? Does The Req Line Have Valid Supplier Information? Does the Req Line Reference a Valid Blanket or Quotation? Also it validates the Source document extracted for that item and the Release Generation Method from the extracted ASL. Wfstatus output for ItemType CREATEPO provides the status of these activities. Attach the quotation in ASL iii) Extract item. Following steps should be followed in order to create a Standard PO from a Quotation for a catalog item. Wfstatus output for ItemType CREATEPO provides the status of these activities. If the Requisition Line(s) are for a one time item then the Release Generation Method is not considered and the Requisition is a candidate for automatic creation by the CREATEPO workflow. Does Req Line Have Enough Information To Create Document? Does The Req Line Have Valid Supplier Information? Does the Req Line Reference a Valid Blanket or Quotation? Also it validates the Source document extracted for that item.The CREATEPO workflow performs the following checks before creating a release. vii) Run the workflow background process. i) Create one item ii) Create one quotation and ASL for that item.If “Send PO Autocreation to Background” is set to No then this stepsis not required The CREATEPO workflow performs the following checks before creating a release. Creating a Standard Purchase Order from a quotation for a Catalog Item. If all the above conditions are satisfied then it will create the release. If all these conditions are satisfied then it will create the Standard PO. Quotation and ASL in iProcurement iv) Search for the item in iProcurement v) Create a requisition in iProcurement for this item vi) Approve the requisition. NOTE: If the Requisition Approval Worlflow item Attribute “Send PO Autocreation to Background” is set to Yes. 14 .

Creating a Standard Purchase Order from a Contract Purchase Order for a catalog item. Wfstatus output for ItemType CREATEPO provides the status of these activities. iv) Search for the item in iProcurement. NOTE: If the Requisition Approval Worlflow item Attribute “Send PO Autocreation to Background” is set to Yes. v) Create a requisition in iProcurement for this item vi) Approve the requisition. i) Create one item ii) Create one contract purchase oder and ASL for that item. vii) Run the workflow background process.If “Send PO Autocreation to Background” is set to No then this stepsis not required The CREATEPO workflow performs the following checks before creating a release. iii) Extract item and ASL in iProcurement. Does Req Line Have Enough Information To Create Document? Does The Req Line Have Valid Supplier Information? Does the Req Line Reference a Valid Blanket or Quotation? (Which will be No in this case) Should Contract be used to AutoCreate Doc? (Which will be yes and will come from workflow attribute) Does Contract Info Exist in ReqLine? (It is No because contract is not extracted) Is Contract Required on the ReqLine? (This needs to be set in workflow attribute as No) Does Contract Exist and Allow Creation from Contract? (Yes because contract is there in core purchasing) Now as it gets the details from the source document in core purchasing it will create a standard Purchase order. 15 . Contract is not specified in ASL.

If “Send PO Autocreation to Background” is set to No then this stepsis not required The CREATEPO workflow performs the following checks before creating a release. Does Req Line Have Enough Information To Create Document? Does The Req Line Have Valid Supplier Information? (As given during Requisition creation) Does the Req Line Reference a Valid Blanket or Quotation? (Will not be there in this case) Should Contract be used to AutoCreate Doc? (Workflow attribute) Does Contract Info Exist in ReqLine? (No as Contract PO is not extracted) Is Contract Required on the ReqLine? (Workflow attribute) Should Non-Catalog Request AutoSource From Contract? (Workflow attribute) Does Contract Exist and Allow Creation from Contract? (Yes as it is there in Core purchasing) 16 . NOTE: If the Requisition Approval Worlflow item Attribute “Send PO Autocreation to Background” is set to Yes.Creating a Standard Purchase Order from a Contract Purchase Order for a Non Catalog Item i) Create one contract purchase order in core purchasing ii) Create one non catalog requisition in iprocurement iii) Specify the supplier and site (should be same as in the contract purchase order iv) Approve the requisitionRun the workflow background process. Wfstatus output for ItemType CREATEPO provides the status of these activities.

PO Create Documents Workflow in Sourcing The PO Create Documents Workflow is used in Sourcing to create the releases from BPAs and standard purchase orders from Quotations automatically. 2. 4. Double Click on the attribute ‘Is Automatic Creation Allowed?’ Specify the Value as ‘Y’ 17 . Follow the below steps in order to configure the PO Create Documents Workflow 1. The wft file involved is poxwfatc. 3.wft. Expand Attributes. Open the Workflow file in Workflow Builder.

Following attributes need to be set for A) Generating Release from a BPA in Sourcing Sr No 1 2 3 Attribute Name Is Automatic Creation Allowed? Should Workflow Create The Release? Is Automatic Approval Allowed? Value Y Y Y Required Yes Yes Optional If the Attribute ‘Is Automatic Approval Allowed’ is set to Y then releases that are created will be automatically submitted for approval. If the Buyer does not have authority the Release will be forwarded in an IN PROCESS status to the next approver in the Buyer` s Approval Hierarchy. Whether the Release is approved automatically or not depends on if Buyer that defaults on the Release has approval authority at the time of Release creation. B) Generating Standard Purchase Orders from Quotation Sr No 1 Attribute Name Is Automatic Creation Allowed? Value Y Required Yes C) Generating Standard Purchase Order from a Contract Purchase Order in iProcurement Sr No 1 2 3 4 Attribute Name Is Automatic Creation Allowed? Should Contract be used to autocreate Doc? Should non-catalog requests be auto sourced from contract? Is Contract Required on Requisition Line? (This is an optional item attribute – it can be setup to Yes or No and the system can still create PO` s from Requisitions that have contracts steup Value Y Y Y N Required Yes Yes Yes No 18 .

The attribute SEND_CREATEPO_TO_BACKGROUND should be set to Y if the PO Autocreation has to be sent to Background. 19 .

The blanket effective period do not overlap multiple effective periods in the Sourcing Rule. once the Blanket Agreement is approved. The Blanket purchase order Start and End Dates are not null. If the value is set to "Create and Update". Note: If the Archival mode being used for Blanket Agreements is "Archive on Print". The default value is ' None' . 3. The sourcing rule is not assigned to any other item. Note: The new Sourcing Rules will be assigned at the Item Level and will be added to the assignment set that is specified in the profile option "MRP: Default Sourcing Rule Assignment set". This process will update existing Sourcing rules only if all of the following are true: 1. If the value is set to "Create only" then the "Enable Automatic Sourcing" checkbox and the "Release Generation Method" field are visible and can be updated on the Approval window. then the "Enable Automatic Sourcing" Checkbox. this feature cannot be used and the new fields and checkboxes would not be visible in the Approval window. If the update requires extension of any existing effective period in the Sourcing Rule. 2. The ASL will be created as a Global ASL. the "Update Sourcing Rule and ASL Entries" checkbox and the "Release Generation Method" field are visible and can be updated on the Approval window.Advanced Features of Automatic Sourcing Oracle Purchasing enables the automatic creation of Sourcing Rules. there can be only one Supplier/Site for that effective period and must match the supplier/site on the blanket purchase order. Sourcing Rule Name Prefix can be customized. Sourcing Rule Assignments and Approved Supplier List entries during Blanket Agreement approval submission. User must select "Archive on Approve" to use this feature. 2. The process will try to create or update Approved Supplier List entries even if Sourcing Rule creation/update failed for the Blanket Agreement line item. 20 . The default value is "PURCH". 4. the profile option value needs to be set to either "Create Only" or "Create and Update". 1) A new Profile Option "PO: Allow Auto-generate Sourcing Rules and ASL" has been introduced. The prefix value is read from the activity attribute "PO Sourcing Rule Name Prefix" in PO Approval Workflow. The system automatically creates the relevant entries. In order to activate this feature.

For exception reporting. ii) Set the Profile Option PO: Allow Auto-generate Sourcing Rules iii) Set the Profile Option MRP: Default Assignment Set to the Set in which Sourcing Rule will get attached.Automatic Sourcing Rule Builder' to view the exceptions encountered during the creation of sourcing rules and/or approved supplier list entries. In Approval window check the checkbox Create Sourcing Rule and select the Release Generation method 21 . iv) Create a BPA. Ensure that the effectivity dates are specified v) Approve the BPA. Steps to implement Automatic Sourcing i) Create an Item. run the Purchasing Interface Errors report with a source type of ' ASR .

vi) Run the Workflow Background Process for item type = PO Approval ( even if the sytem is setup to use PO approval in online mode this background process must be run to create or update the ASL / Sourcing Rules for the data on the Blanket Purchase Order submitted for approval.Note: Please note that this checkbox will only be enabled when the Profile Option PO: Allow Auto-generate Sourcing Rules is set. 22 .

23 . Release Generation Method has also been populated automatically.vii) ASL is automatically generated with the document attached in the Attribute.

24 .viii) Sourcing Rule is also generated and attached to the assignment set specified in Profile Option MRP: Default Assignment Set. ix) The Sourcing Rule will show the same Supplier/Supplier Site with 100% allocation and same effectivity dates as that of BPA.

2. 25 . 5. MRP_SR_ASSIGNMENTS MRP_SR_ASSIGNMENTS stores the assignment of sourcing rules or bills of distribution to items. 3. 4. MRP_ASSIGNMENT_SETS MRP_ASSIGNMENT_SETS stores information about Sourcing Assignment Sets. PO_ASL_STATUS_RULES PO_ASL_STATUS_RULES stores the business rules associated with each defined ASL status. a supplier. and approval/certification status. organizations. The Assign Sourcing Rules Form populates this table. distributor.Tables involved in Sourcing 1. This information is maintained separately to allow each organization to define its own attributes. even if using a Global ASL entry for the supplier/item relationship and approval status. blanket agreements. MRP_SOURCING_RULES MRP_SOURCING_RULES stores sourcing rule names and descriptions. 6. and catalog quotations associated with particular suppliers and items in PO_APPROVED_SUPPLIER_LIST. The Define Sourcing Rule form populates this table. or at the global level. or manufacturer. 7. PO_ASL_DOCUMENTS PO_ASL_DOCUMENTS stores sourcing references to supply agreements. 8. PO_ASL_STATUSES PO_ASL_STATUSES stores the user-defined approval/certification statuses for the ASLs. The Define Assignment Sets form populates this table. PO_APPROVED_SUPPLIER_LIST PO_APPROVED_SUPPLIER_LIST stores the relationship between an item or commodity. ship-to organizations. PO_ASL_ATTRIBUTES PO_ASL_ATTRIBUTES stores all information for the supplier/item/organization relationship defined in PO_APPROVED_SUPPLIER_LIST. category.

9. We are grateful to Adiraju Sastry and Chandu Tadanki for their constant encouragement and support. Lisa Oinonen and Starr Smelley of Procurement Team for reviewing this paper and for making it complete with their feedback.A82913-04) 26 . By implementing this sourcing functionality employer will give full access to the users and free up the purchasing department to concentrate on securing the best deals for the organization. PO_ASL_ATTRIBUTES_VAL_V (view) PO_ASL_ATTRIBUTES_VAL_V is a view used by the Create Documents workflow that is created from table PO_ASL_ATTRIBUTES and table PO_APPROVED_SUPPLIER_LIST Summary Purchasing provides great flexibility in implementing Sourcing. business needs and supply chain strategy should be identified. Linda Johnston. References Oracle Purchasing User' s Guide Release 11i (Part No. With the correct setups and different techniques of Sourcing outlined in this paper. Acknowledgement We wish to record our sincere appreciation towards: Mike Williams. you have greater flexibility than ever before to make this feature suit your business processes. To use this feature successfully.

S.7200 www.506.7000 Fax: +1. Worldwide Inquiries: Phone: +1.com Oracle is a registered trademark of Oracle Corporation.650. 27 . All other product and service names mentioned may be trademarks of their respective owners. CA 94065 U. Various product and service names referenced herein may be trademarks of Oracle Corporation.ASL-Sourcing in Procurement November 2004 Author: Nandini basu & Rajiv Arora (CPIM) Oracle Corporation World Headquarters 500 Oracle Parkway Redwood Shores.A.650. Copyright © 2003 Oracle Corporation All rights reserved.506.oracle.