A customer order line can be sourced automatically or manually. Automatic sourcing is when the system uses a sourcing rule to automatically select the most suitable source to supply the customer demand. Sourcing rules are defined as basic data. The sales part must be set up to use a sourcing rule, and a sourcing rule should be connected either to the sales part alone (inventory as well as non-inventory), the sales part and customer, or the sales part and customer address.
A sourcing rule consists of a source set and sourcing objectives. The source set is a set of all sourcing alternatives. Sourcing alternatives can be external suppliers, internal suppliers, in-house manufacturing, or company inventory. The automatic sourcing will select the best alternative from this set. The best alternative will determine the supply code and when appropriate the supplier to use on the customer order line. The sourcing objectives consist of a sequence of criteria that the automatic sourcing will use when more than one sourcing alternative is suited to supply the customer order line. The following algorithm is used when the automatic sourcing selects the best sourcing alternative:
From the source set, find all sourcing alternatives that can deliver the whole sales quantity in time.
If more than one sourcing alternative is found in step 1, use the criteria in the sourcing objective to narrow down the possible alternatives.
If more than one sourcing alternative remains after step 2, pick the first alternative.
If no sourcing alternative was found in step 1, find the alternative from the source set that can deliver the whole order quantity earliest.
If more than one sourcing alternative can deliver on the same earliest possible delivery date, use the criteria in the sourcing objective to narrow down the possible alternatives.
If more than one sourcing alternative remains after step 5, pick the first alternative.
Note: If no sourcing objectives are set up to separate the sourcing alternatives the algorithm will instead use the priority when selecting the best sourcing alternative. If more than one sourcing alternatives have the same priority, the first alternative will be picked.
To create a rule you should first enter an identification and a description in the top section, then you enter the Supply Code in the Sourcing Set tab and then you enter a Sourcing Objective.
If you choose supply code you also must enter a supplier. Note that the supplier must match the supply code, e.g., the Internal Purchase Transit and Internal Purchase Direct supply codes are possible codes for internal suppliers. If this supplier is an internal supplier, a site must be connected to the supplier.
A sourcing rule with its source set and sourcing objectives will be created.