Understanding Global Policies and Constraints

PeopleSoft Strategic Sourcing enables you to define award constraints and set up defaulting rules so that the constraints can automatically default onto events. When awards are posted, the system checks the awards to ensure adherence to the constraints.

For example, your organization may have a policy to give a certain amount of business to minority and woman-owned businesses. This could be a global constraint that applies to all events created across all Sourcing business units. You can specify that 10 percent of all business must be awarded to minority and woman owned businesses. You can then tie the constraint to a bid factor that asks whether the bidder is qualified as a minority or woman-owned business. In some cases, more than 10 percent may be awarded to a minority or woman-owned business, based on other constraints that were defined and the bidder's actual responses. Therefore, you can track the progress throughout the year to ensure that the 10 percent objective is being met.

The system verifies the award to ensure that it adheres to the constraints. If an award violates any constraints, the user will either receive an error or a warning depending on the user's constraint permissions on the Strategic Sourcing User Preferences page.

For constraints that are tracked across events, a progress to date amount is maintained and relayed so that you can track the target goal to the actual results to date. The progress to date is based on the calendar selected during the creation of the business constraint.

By using this functionality, you can:

  • Define constraints based on global, business unit, event, and line levels.

  • Base constraints on bid factors, the number of awarded bidders, or the quantity or amount that must be awarded.

  • Associate defaulting rules to the constraints so that the constraints are automatically attached to the applicable events.

  • Add, remove, and modify constraints during event creation, analysis, and award processing.

Before using the global policies and constraint feature, you must perform the following:

  1. If you want to allow default mandatory constraints to be overridden for Strategic Sourcing events, select one of the following options in the Sourcing Constraint Permission group box on the Strategic Sourcing User Preferences page (Set Up Financials/Supply Chain/Common Definitions > User Preferences > Strategic Sourcing):

    • Event: Constraints that apply within a specific sourcing event.

    • Business Unit: Constraints that apply to all sourcing events within a business unit.

    • Global: Constraints that apply to all sourcing events across all PeopleSoft Strategic Sourcing business units.

    If you do not select any one of these options, then you cannot override mandatory constraints that default onto events and the system will enforce the mandatory constraints when posting awards. You will also not be able to change the importance of mandatory constraints or choose to ignore those constraints.

  2. Create and maintain constraints using the Sourcing Constraint Setup component (Sourcing > Create Events > Setup Event Constraints

Field or Control

Description

Status

Select Active or Inactive for the constraint. The default value upon creation is Active.

Type

Select the type of constraint that you're defining:

  • Bus Unit (business unit): Constraints that track spend across all events within the specified business unit.

  • Event: Constraints that are associated to a specific event. The constraint attributes are applied to the entire event or specific line if the constraint is associated with a line item.

  • Global: Constraints that track spend across all events for all PeopleSoft Strategic Sourcing business units to which the constraint is associated.

Note: If the constraint has a defaulting event header rule, then the spend is based on the total award amount. If the constraint has a defaulting event line rule, then the spend is based on the total award amount for the specified line.

Sourcing Objective

Select an option:

  • Target Goal: The system does not require that the target goal be met for this constraint.

  • Mandatory Goal: The system forces the mandatory goal to be met for every event containing this constraint.

Priority

Select a value to prioritize the importance of a constraint.

  • 1 - Not Important

  • 2 - Less Important

  • 3 - Important (default value)

  • 4 - Very Important

  • 5 - Critical

    Note: Mandatory constraints have a default priority of Critical.

Note: This field is used with the Target Goal value in the Priority field.

Award Constraint

Select a value of Price or Quantity. This option applies only to constraints based on bid factors. If you selected Price, the constraint is based on the awarded price. If you selected Quantity, the constraint is based on the awarded quantity.

Award Sign

Select a specific sign (such as less than, equal to, or between) to indicate the selection parameters of the award.

Value

Enter a numerical value.

Award Basis

Select Amount or Percent to indicate the basis upon which the award is to be based. This field works with constraints based on amount, bid factor, or quantity. If you selected Amount, the value specified is on the awarded amount. If you selected Percent, the value specified is on a percentage of the award.

Apply Constraint

Select Across Bidders or Per Bidder. This field is enabled only for constraints based on bid factors. If the constraint is based on amount or quantity, the constraint is always applied per bidder. If you selected Across Bidders, the constraint value is applied across all awarded bidders.