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 deselected 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.
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.
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.
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).
In this example, youl 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.
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.
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.
Save the arbitration plan.
Create a sourcing rule "WESTRULE."
Select the sequence with Ship to Customer from the Rule Keys page.
Select "1006" as the value for the Ship To Customer.
Click the Define Sources of Supply Formulas button and add distribution networks "USA-1" and "USA-2" for the Northwest region.
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.
Select the sequence with Product Group and Region Code from the Rule Keys page.
Select "ALLPROD" as the value for the Product Group and "USAREGION" as the value for the Region Code.
Click the Define Sources of Supply Formulas button and add inventory business units "US010, US008," and "US005" for the United States warehouses.
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.