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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
Executive Overview
Sourcing is a function with strategic importance within the broader context of
procurement. Infact it is a subset of procurement with strategic context. Sourcing sets the
stage for the entire companys purchase for direct and indirect materials, and involves
highlevel, company-wide approaches to obtaining materials and services, identifying and
evaluating potential suppliers to meet those needs, negotiating and implementing
contracts with selected suppliers, monitoring and improving ongoing supplier
relationships.
This white paper focuses on the features that sourcing provides in the Procurement
module of Oracle Applications. It lays down the road map towards implementing
sourcing and describes in detail the sourcing cycle with related setups. It also discusses
the new sourcing feature in Oracle Applications- Automatic Sourcing.
Introduction
Oracle Purchasing allows users to automatically source items from suppliers based on the
sourcing rules and purchase agreements. 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, can be implemented either to the requisition created in
iprocurement or core purchasing. The only difference lies in setup techniques. The setups
for both of the methodologies are discussed in this paper.
ASL Attributes
For each ASL entry, ASL attributes specify the Release Generation Method, purchasing
Unit of Measure, source Blanket Agreements and Catalog Quotations for automatic
reference during document creation.
Sourcing Rules
Sourcing rules define inventory replenishment method for either a single organization or
all organizations in the enterprise. They describe sourcing supply; 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.
a. Direct (Supplier): This option should be selected when the supplier sells
his products or services directly to buyer organization. Specify the
supplier and supplier site.
b. 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. Distributor: This option should be selected when the supplier sells
products made by manufacturers. A distributor needs to be associated
with manufacturer, which implies that a manufacturer should be defined in
ASL before defining its distributor.
6. Select the supplier'
s approval status. Use one of the default statuses provided.
7. Navigate to the Record Details Alternate region.
8. Select one of the following in Global:
1)
2)
Yes - This ASL entry is valid for all inventory organizations in this
Operating unit.
No - This ASL entry is local, meaning that it is valid only for the
organization chosen in the Organizations window when first
opening the Approved Supplier List window.
Note: If two ASL entries exist for the same item or commodity, one
Global entry that applies to all organizations and one local entry that
applies only to the local inventory organization, the local entry takes
precedence.
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The CREATEPO workflow performs the following checks before creating a release.
Wfstatus output for ItemType CREATEPO provides the status of these activities.
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.
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.
If all the above conditions are satisfied then it will create the release.
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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
Attribute Name
Is Automatic Creation Allowed?
Value
Y
Required
Yes
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
Required
Yes
Yes
Yes
No
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For exception reporting, run the Purchasing Interface Errors report with a source type of
'
ASR - Automatic Sourcing Rule Builder'to view the exceptions encountered during the
creation of sourcing rules and/or approved supplier list entries.
iii) Set the Profile Option MRP: Default Assignment Set to the Set in which
Sourcing Rule will get attached.
iv) Create a BPA. Ensure that the effectivity dates are specified
v) Approve the BPA. In Approval window check the checkbox Create Sourcing
Rule and select the Release Generation method
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Note: Please note that this checkbox will only be enabled when the
Profile Option PO: Allow Auto-generate Sourcing Rules is set.
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.
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vii) ASL is automatically generated with the document attached in the Attribute.
Release Generation Method has also been populated automatically.
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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.
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9. 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. To use this feature
successfully, business needs and supply chain strategy should be identified. With the
correct setups and different techniques of Sourcing outlined in this paper, you have
greater flexibility than ever before to make this feature suit your business processes.
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.
Acknowledgement
We wish to record our sincere appreciation towards:
Mike Williams, Linda Johnston, Lisa Oinonen and Starr Smelley of Procurement Team
for reviewing this paper and for making it complete with their feedback.
We are grateful to Adiraju Sastry and Chandu Tadanki for their constant encouragement
and support.
References
Oracle Purchasing User'
s Guide Release 11i (Part No.A82913-04)
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ASL-Sourcing in Procurement
November 2004
Author: Nandini basu & Rajiv Arora (CPIM)
Oracle Corporation
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Copyright 2003 Oracle Corporation
All rights reserved.
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