Understanding Pegging

Pegging links demand to incoming supply. You can create a peg chain between a supply transaction and a demand transaction from either side. Demand transactions can peg to supply transactions and, conversely, supply transactions can peg to demand transactions. A peg prevents the incoming supply from being reserved, or allocated to another demand transaction.

Sources of supply include:

  • Requisitions and purchase orders from PeopleSoft Purchasing

  • Incoming interunit transfers into the inventory business unit from another inventory business unit

  • The primary outputs of Production IDs from PeopleSoft Manufacturing

Sources of demand include:

  • Materials stock requests in PeopleSoft Inventory

  • Outgoing interunit transfers from the inventory business unit to another inventory business unit

  • Sales orders from PeopleSoft Order Management

  • Work orders from PeopleSoft Maintenance Management

Note:

You cannot create a peg to stock that has been received and putaway in the inventory business unit.

There are two types of pegs:

  • A soft peg links an outgoing order to the quantity included in an incoming supply. A soft pegged supply can be pegged to one or many demands. A soft pegged demand can be pegged to one or many supply orders. When a soft peg is changed or canceled, the peg is changed but the other side of the peg (that is, the incoming supply or outgoing demand) is not changed. A notification is sent using the Message Dashboard. For example, a sales order for 10 units is soft pegged to an incoming purchase order with 2,000 units. Later, the customer service representative changes the sales order quantity from 10 units to 2 units. When the sales order is altered, the system changes the peg but the incoming supply (in this case the purchase order) is not changed. A notification is sent to the buyer (on the PO) informing them that a change in the demand pegged to the PO has taken place. Soft pegs are useful when items are in short supply and you want to peg higher priority customer orders to specific supply.

  • A hard peg is created when a sales order (demand) creates a new purchase order, requisition, or interunit transfer to fulfill it. A hard pegged supply/demand can only be pegged to a single demand/supply. All other orders would be considered soft pegs and result in notifications only upon changes. When a hard peg is changed or canceled, not only is the peg changed, but also the incoming supply is changed. For example, a sales order for 10 units is hard pegged to an incoming purchase order with 10 units. If the sales order is changed to 4 units, then the purchase order is changed to 4 units. Hard pegs are useful for make-to-order items or special products.

    Note:

    A change to a hard-pegged supply transaction does not update the demand transaction.

To create, change, or cancel a peg chain, you can:

  • Access the Pegging Workbench where you can link demand to supply or supply to demand. The Pegging Workbench can be accessed directly through the menu or by a link located on other components in PeopleSoft Inventory, and then Order Management, and then Manufacturing, and then Purchasing, and then and Maintenance Management.

  • Create pegs from the Alternate Sources of Supply page in PeopleSoft Order Management.

  • Create pegs from the Maintain Requisitions or Maintain Purchase Orders components in PeopleSoft Purchasing for work orders with non-inventory items and description-only items.

Information about peg chains can be viewed and monitored using the:

  • Pegging Inquiry page where you can view the pegging information without changing it.

  • Pegging Exception report to review problems in pegging due to changes in dates, quantities, or canceled orders; for example, the supply date is later than the demand ship date.