PeopleSoft Enterprise Order Management 9.1 PeopleBook

Setting Up Alternate Sources of Supply

This chapter provides overviews of alternate sources of supply and discusses how to create alternate sources of supply arbitration plans and rules.

Understanding Alternate Sources of Supply

In addition to using our standard distribution network or default inventory business unit for fulfillment, you can go outside the network for supply and even create new supply documents such as requisitions, purchase orders, interunit transfers, or production orders.

Note. You create requisitions using the Requisition Loader Process. In order to create requisitions and purchase orders, PeopleSoft Purchasing must be installed.

On the Order Management Business Unit, select the availability option (previously named Availability Check Flag) for sourcing. Values are:

None: If you are using a distribution network on the customer or PeopleSoft Order Management Business Unit, the highest priority PeopleSoft Inventory Business Unit from the distribution network defaults to the sales order schedule regardless of item availability. If you are not using distribution networks, the Inventory Business Unit that is defined on the Order Management Business Unit defaults to the sales order schedule. This option corresponds to having the Availability Check Flag cleared in prior releases.
Network: Defaults the highest priority PeopleSoft Inventory Business Unit in the distribution network that has the quantity available to satisfy the quantity scheduled on the sales order. This option corresponds to having the Availability Check Flag selected in prior releases.
Manual: Defaults the highest priority PeopleSoft Inventory Business Unit in the distribution network that has the quantity available to satisfy the quantity scheduled on the sales order. You can override the default by using the Alternate Sources of Supply page on the sales order. This will search alternate sources of supply and display other sources that are available based on the arbitration plan and rules that are defined.
Automatic: Defaults the highest priority PeopleSoft Inventory Business Unit from alternate sources of supply. You can override the default by using the Alternate Sources of Supply page on the sales order. This will search alternate sources of supply again and display other sources that are available based on the arbitration plans and rules that are defined.

The PeopleSoft Inventory Business Unit or Distribution Network defaults to the Source Type field on the sales order based on the Availability Option. If the setting is Manual or Automatic, the CSR can use the alternate sources of supply page.

Alternate Sourcing Example

In this example, you are shipping to a customer in Northern California. You define the arbitration plan so that the system will first fetch from distribution networks in the United States northwestern states and then from your West coast warehouses. These warehouses are sorted by the priority you define for each inventory business unit on the sourcing formula. If the item is not available in any of these warehouses, you expand the search for the item to your major warehouses in the continental United States. These warehouses are sorted by the quantity available in each warehouse from the highest quantity available to the lowest.

Before you set up the arbitration plan and rules, set up a global region code "USAREGION" and product group "ALLPROD."

Create an arbitration plan "WEST" to define which fields of the sales order should be considered when searching for sources of supply and to define the order in which the sources of supply should be displayed to the CSR.
1. The first arbitration plan sequence is defined by ship-to customer ID. Select ship-to customer ID from the list of Rule Keys on the Key Fields page.
2. Select "Arbitration Plan Sequence" as the arbitration plan sort option on the Arbitration Plan page. The system will sort all matching sourcing rules first by arbitration plan sequence (the keys by which you chose to search for supply sources).
3. In this example, we will have two sequences. Select "Top Priority Break First" as the arbitration decision for sequence one. The system will sort all the sourcing rules that match the ship-to customer by the priority defined on the sourcing rule formula.
4. Create a second arbitration plan sequence. Select "Region Code" and "Product Group" from the rule keys link to define the second sequence. The system will match the sales order ship-to customer ID and the sales order product ID to the alternate sourcing regions and product groups you have defined and match against the new sourcing rules you define.
5. Select "Quantity Available Descending" as the arbitration decision on the Arbitration Plan page. The system will sort all the sourcing rules that match these key fields by the quantity available with the highest quantity displayed first.
6. Save the arbitration plan.
Create a sourcing rule "WESTRULE."
1. Select the sequence with Ship to Customer from the Rule Keys page.
2. Select "1006" as the value for the Ship To Customer.
3. Click the Define Sources of Supply Formulas button and add distribution networks "USA-1" and "USA-2" for the Northwest region.
4. Save the rule.
Create a second sourcing rule "USARULE" defined for the continental United States containing your largest warehouses that have the resources to ship products to anywhere in the world.
1. Select the sequence with Product Group and Region Code from the Rule Keys page.
2. Select "ALLPROD" as the value for the Product Group and "USAREGION" as the value for the Region Code.
3. Click the Define Sources of Supply Formulas button and add inventory business units "US010, US008," and "US005" for the United States warehouses.
4. Save the rule.

The alternate sourcing results during order entry for sales orders created with ship-to customer ID 1006 will be:

Inventory Business Units from the distribution networks defined for "WESTRULE" sorted by priority.
Then Inventory Business Units defined for "USARULE" sorted by the quantity available for the item with the highest quantity available getting highest priority.

Note. If the item you are sourcing is not stocked in an Inventory Business Unit (either in the distribution network or defined on directly on the sourcing formula), the Inventory Business Unit will not display in the sales order Alternate Sourcing page.

Alternate Sources of Supply Prerequisites

Before the system can consider alternate sources of supply arbitration plans and rules, you must complete these steps:

If you are planning to use customer group, product group, or region code as keys, establish these groups with the alternate sources of supply type.
(Optional) Add the Sourcing arbitration plan on the Order Management Business Unit Shipping and Returns page.

Note. If this option is not set up, the default arbitration plan is used.
Select the Availability Option on the Order Management Business Unit Order Entry Features page (Manual or Automatic).
Establish feature function security to enable the user access to the alternate sources of supply page.
Set up user security from the Order Pegging menu in Inventory to view supply for purchase orders, requisitions, interunit transfers, and production orders.
If you are planning to allow the CSR to perform interunit transfers within the sales order, set the:
1. (Required) Establish Interunit Transfer Accounting from the Cost Accounting menu to establish ownership of material in-transit between the source business unit in the grid on the Alternate Sources of Supply page and destination business unit which is the ship from business unit on the schedule. Without this setup, the interunit transfer source of supply in the arbitration plan formulas will not be displayed in the alternate sources of supply results grid. If the user changes the result and causes a source to become interunit transfer, the same validation would occur on Accept.
2. (Optional) Establish Transfer Attributes or Transfer Attribute Defaults from the Define Items and Attributes menu. The system first checks the transfer attributes on the business unit item setup. If they are not found, it checks the Transfer Attributes Defaults for the business unit.
3. Authorize the CSR to run the OM_ITEM_COPY_INV Component Interface to create an item at the business unit level if it does not exist in the destination business unit when a purchase order, requisition, and MSR with a Direct Receipt Disposition is created. The Business Unit/Item copy is established on the Inventory Definition Business Unit Options page. There are two options: Copy from source item and Copy from IBU template.
If you plan to use the sourcing option to create a new purchase order, production order or new requisition:
1. Set up the PO Loader Defaults and the Requisition Loader Defaults in Purchasing.
2. Establish a default buyer ID on the Overrides and Options page of the Po Loader Defaults and Requisition Loader Defaults page in the Procurement Options menu.
3. Purchase Order Authorizations must be set up for the CSR on the Purchase Order Authorizations page for the Procurement user preferences. The CSR can be associated with one or more buyers. If a buyer is added to the Purchase Order Authorizations page, they must also have the ability to add and update purchase orders.
4. Authorize the CSR to run the PO_EXPRESS Component Interface so that the CSR has the permission to add or update purchase orders.
5. Authorize the CSR to run the SF_PRDN_ID_MAINT component interface.
(Optional) Establish chunking parameters on the installation options Order Management page to improve performance.

Creating Alternate Sources of Supply Arbitration Plans and Rules

This section provides an overview of setting up alternate sources of supply arbitration plans and rules and discusses how to:

Establish arbitration plans for alternate sources of supply.
Identify key fields for alternate sources of supply.
Create alternate sources of supply rules.
Select alternate sources of supply rule keys.
Establish alternate sources of supply details.

Understanding Setting Up Alternate Sources of Supply Arbitration Plans and Rules

To define alternate sources of supply arbitration plans and rules, use the Sources of Supply components.

Perform these steps to set up the arbitration plans, rules, and formulas for the alternate sources of supply:

Establish the arbitration plans on the Arbitration Plan page. The arbitration plan defines which sourcing rules will be considered and the order in which they will be applied when determining valid sources of supply.
1. Use the Arbitration Plan page to define the arbitration plan.
2. Select the key fields of the sales order that will be used to match the sourcing rules.
3. Define the sort order of the alternate sources of supply result set.
Define the rules. The sourcing rules define the values of the sales order that must match in order for the sourcing formulas to be considered.
1. Select the key fields of the sales order that you defined on the arbitration plan and define the values of the sales order that must match
2. Set up the formulas for alternate sources of supply on the Sources of Supply Formulas page. The formulas are the supply source options defined with priorities and effective and obsolete dates.

Pages Used to Create Alternate Sources of Supply Arbitration Plans and Rules

Page Name	Definition Name	Navigation	Usage
Arbitration Plan	TRFT_RULE_CD	Set Up Financials/Supply Chain, Common Definitions, Fulfillment Definitions, Sources of Supply, Arbitration Plan	Establish arbitration plans for alternate sources of supply. The arbitration plan determines which sales order fields to consider and determines the sequence in which the system searches for and applies sourcing rules that match the sales order to establish alternate sources of supply.
Key Fields	TRFT_KEY_FLD_SEC	Click the Rule Keys link on the Arbitration Plan page.	Identify the key fields of the sales order that are to be considered when determining a match for the arbitration rule.
Alternate Sources of Supply Rule Entry	TRFT_SET	Set Up Financials/Supply Chain, Common Definitions, Fulfillment Definitions, Sources of Supply, Rule Entry	Set up values for the fields that you selected on the Arbitration Plan page. Define the values of the key fields which you defined on the arbitration plan sequence that must match the transaction in order for the sourcing formulas to be considered alternate sources of supply.
Select Key Fields	TRFT_RL_SEQ_SEC	Click the Select Key Fields link on the Alternate Sources of Supply Rule Entry page.	Select an arbitration plan rule sequence to set up the values for each key field.
Sources of Supply Formulas	TRFT_SRC_BREAK	Click the Define Sources of Supply Formulas link on the Alternate Sources of Supply Rule Entry page.	Establish formulas for alternate sources of supply. The sourcing formula is the supply source option returned by alternate sources of supply processing.

Establishing Arbitration Plans for Alternate Sources of Supply

Access the Arbitration Plan page (Set Up Financials/Supply Chain, Common Definitions, Fulfillment Definitions, Sources of Supply, Arbitration Plan).

Sort Option By

Select from the available options to sort the supply source options during order entry:

By Arbitration Plan Sequence: This option is the default.

By Quantity Available Ascending:

By Quantity Available Descending:

Default

Select to establish a default arbitration plan. After you select this check box and save the default arbitration plan, the check box no longer appears on this page for other arbitration plans. The system uses the default plan when a sourcing arbitration plan is not defined on the People Order Management Business Unit.

Sequence

Displays the sequence number that is automatically generated by the system. You can change this number provided that you do not select a number that has already been used. The sequence number is used to determine the order in which the system searches the supply source rules.

Arbitration Decision

Select from the options to identify a way to break a tie if multiple supply source rules are a match for the same arbitration plan sequence. This situation could happen, for example, if the arbitration plan sequence is defined for the key field product group, and a product belongs to multiple product groups. The system could return multiple supply source rule "hits" for the same arbitration plan sequence. Values are:

Quantity Available Ascending: This option gives a higher priority to the supply source rule with supply source formulas that have quantity available greater then zero. It is sorted in ascending order.

Quantity Available Descending: This option gives a higher priority to the supply source rule with supply source formulas that have quantity available greater then zero. It is sorted in descending order. This option is the default if none other is selected.

Top Priority Break First: This option gives a higher priority to the supply source rule that has the highest priority formula defined on the Sources of Supply page.

Rule Keys

Click to access the Select Key Fields page, where you can select the combination of elements that determines a match between the sales order schedule and a supply source rule. The keys that you select appear in the Key Set group box.

Note. The link is active until you add key fields to the arbitration plan.

Identifying Key Fields for Alternate Sources of Supply

Access the Key Fields page (click the Rule Keys link on the Arbitration Plan page).

Select any number of fields from the available options. These key fields define which fields of the sales order will be used to match the supply source rules. Each group of key fields on each arbitration plan sequence is considered as a unit or group when matching the supply source rules to the order schedule.

The key fields available for selection on the arbitration plan are:

Customer group
Item Id
Order Management Business Unit
Product Id
Product group
Region code
Shipping priority code
Ship to customer
Sold to customer
Source code

Creating Alternate Sources of Supply Rules

Access the Alternate Sources of Supply Rule Entry page (Set Up Financials/Supply Chain, Common Definitions, Fulfillment Definitions, Sources of Supply, Rule Entry).

The alternate sources of supply rule is used to define the values of the sales order key fields that must match in order for the supply source formulas to be considered during order entry.

Note. At least one arbitration plan must be set up before you can create a rule.

Note. If you are adding a new rule, you will first be directed to the Select Key Fields page to select the key field or group of key fields that will be used to define the rule.

Copy Rule	To copy from an existing rule to create a new rule. In Add mode, click the button after adding a rule sequence and Rule ID. The field is no longer available for entry after you copy a rule,
Select Key Fields	Click to access the Select Key Fields page. Then, select an arbitration plan sequence (a key field or group of key fields) in order to establish the supply source rule to define the values for each key field. Once the key field or group of key fields is selected, you can add the value for each key field in the Key Fields group box.
Value	Assign values for the fields that you selected on the Select Key Fields page. These values are used by the sourcing engine during order entry time to compare the source rule to the sales order values. If the fields match, the supply source formulas attached to the source rule are considered valid supply source options for the sales order.
Define Sources of Supply Formulas	Click to access the Sources of Supply Formulas page.

Selecting Alternate Sources of Supply Rule Keys

Access the Select Key Fields page (click the Select Key Fields button on the Alternate Sources of Supply Rule Entry page).

Select

Select the sequence that contains the database elements that you want to use to define the rule. The system brings the fields you selected fields back to the main page in preparation for you to enter a value for each field.

Establishing Alternate Sources of Supply Details

Access the Sources of Supply Formulas page (click the Define Sources of Supply Formulas button on the Alternate Sources of Supply Rule Entry page).

Priority

To sort results in the order of the priority on the order entry Alternate Sources of Supply page.

Start Date, End Date

The beginning and end dates for when this supply source is valid. Enter the dates for the details. You can enter overlapping dates.

Status

Select either an Active or Inactive status. Only active formulas are considered valid supply source options during order entry.

Source Type

Select the sources of supply that you want to be considered during order entry. You can have multiple values of each source type for different dispositions. For example, you may decide to have New Purchase Order for a Direct Ship and a Direct Receipt. Values are:

Inventory Business Unit: Source from within a single Inventory Business Unit.

Distribution Network: Inventory Business Unit sources from within the distribution network. This entry will result in all valid inventory business units in the distribution network being displayed on the alternate sources of supply page at order entry time.

New Purchase Order: Source from a new purchase order.

New Requisition: Source from a new requisition.

New Production Order: Source from a new production order.

Disposition

Select where you want the goods shipped.

Direct Receipt: Ship from the vendor or warehouse to a warehouse.

Direct Ship: Ship from the vendor or warehouse to a customer.

Source Value

The available options depend on your selection in the Source Type field. This field is required for Inventory Business Unit and Distribution Network source types.

For the Inventory Business Unit source, this is the business unit that is defined as the source. For distribution networks, this is the distribution network where all the Inventory Business Units are valid sources. For New Purchase Order or New Requisition, the value refers to the vendor ID. If this field has a value, it defaults to the Alternate Sources of Supply page on the sales order. The user is allowed to select other valid vendors there if Feature Security is defined to allow the field to be changed. For New Production Order source, the source value indicates the Inventory Business Units where the source will be produced/sourced.

Note. For either direct receipt distribution network or inventory business unit source type, if there is no valid interunit transfer accounting option between the inventory source business unit (defined as "Source Value") and the destination business unit (the Ship From Business Unit on Sales Order Schedule), then this supply is skipped.

Note. If you want to create an interunit transfer (MSR), select either Inventory Business Unit or Distribution Network in the Source Type field and Direct Receipt in the Disposition field.

If you want to create something that is shipped directly to your customer from the vendor (drop ship), select either New Requisition or New Purchase Order in the Source Type field and Direct Ship in the Disposition field.

If you create an interunit transfer for a item that is not currently defined in the destination business unit, the system will automatically create an item definition in the destination business unit prior to creating the interunit transfer. The system will use either the source business unit item definition as the item template to copy or it will use a pre-defined item template. This item source definition is defined on the Inventory business unit transfer item copy options.

If you need to create a direct receipt requisition or purchase order for an item, that item must be defined as a stocked item, even if you typically do not stock that item, and it is not currently defined in any Inventory warehouse. If the item is defined as a stocked item, the system can automatically create the Inventory business unit item definition based on the template item ID defined on the Inventory business unit transfer item copy options. This prepares the destination business unit to receive the item.

Sort Option By	Select from the available options to sort the supply source options during order entry: By Arbitration Plan Sequence: This option is the default. By Quantity Available Ascending: By Quantity Available Descending:
Default	Select to establish a default arbitration plan. After you select this check box and save the default arbitration plan, the check box no longer appears on this page for other arbitration plans. The system uses the default plan when a sourcing arbitration plan is not defined on the People Order Management Business Unit.
Sequence	Displays the sequence number that is automatically generated by the system. You can change this number provided that you do not select a number that has already been used. The sequence number is used to determine the order in which the system searches the supply source rules.
Arbitration Decision	Select from the options to identify a way to break a tie if multiple supply source rules are a match for the same arbitration plan sequence. This situation could happen, for example, if the arbitration plan sequence is defined for the key field product group, and a product belongs to multiple product groups. The system could return multiple supply source rule "hits" for the same arbitration plan sequence. Values are: Quantity Available Ascending: This option gives a higher priority to the supply source rule with supply source formulas that have quantity available greater then zero. It is sorted in ascending order. Quantity Available Descending: This option gives a higher priority to the supply source rule with supply source formulas that have quantity available greater then zero. It is sorted in descending order. This option is the default if none other is selected. Top Priority Break First: This option gives a higher priority to the supply source rule that has the highest priority formula defined on the Sources of Supply page.
Rule Keys	Click to access the Select Key Fields page, where you can select the combination of elements that determines a match between the sales order schedule and a supply source rule. The keys that you select appear in the Key Set group box. Note. The link is active until you add key fields to the arbitration plan.

Priority	To sort results in the order of the priority on the order entry Alternate Sources of Supply page.
Start Date, End Date	The beginning and end dates for when this supply source is valid. Enter the dates for the details. You can enter overlapping dates.
Status	Select either an Active or Inactive status. Only active formulas are considered valid supply source options during order entry.
Source Type	Select the sources of supply that you want to be considered during order entry. You can have multiple values of each source type for different dispositions. For example, you may decide to have New Purchase Order for a Direct Ship and a Direct Receipt. Values are: Inventory Business Unit: Source from within a single Inventory Business Unit. Distribution Network: Inventory Business Unit sources from within the distribution network. This entry will result in all valid inventory business units in the distribution network being displayed on the alternate sources of supply page at order entry time. New Purchase Order: Source from a new purchase order. New Requisition: Source from a new requisition. New Production Order: Source from a new production order.
Disposition	Select where you want the goods shipped. Direct Receipt: Ship from the vendor or warehouse to a warehouse. Direct Ship: Ship from the vendor or warehouse to a customer.
Source Value	The available options depend on your selection in the Source Type field. This field is required for Inventory Business Unit and Distribution Network source types. For the Inventory Business Unit source, this is the business unit that is defined as the source. For distribution networks, this is the distribution network where all the Inventory Business Units are valid sources. For New Purchase Order or New Requisition, the value refers to the vendor ID. If this field has a value, it defaults to the Alternate Sources of Supply page on the sales order. The user is allowed to select other valid vendors there if Feature Security is defined to allow the field to be changed. For New Production Order source, the source value indicates the Inventory Business Units where the source will be produced/sourced. Note. For either direct receipt distribution network or inventory business unit source type, if there is no valid interunit transfer accounting option between the inventory source business unit (defined as "Source Value") and the destination business unit (the Ship From Business Unit on Sales Order Schedule), then this supply is skipped.