1. Using Procurement
  2. How You Determine Supply Chain Financial Orchestration and Purchase Document Line Grouping

How You Determine Supply Chain Financial Orchestration and Purchase Document Line Grouping

When you award negotiation lines to suppliers, the awarded lines are grouped together to create one or more purchasing documents.

How these lines are grouped depends on whether a supply chain financial orchestration agreement is in effect for the line (and if so, the values for the supply chain financial orchestration agreement attributes) as well as the values for typical grouping attributes.

Global procurement is a procurement strategy wherein a central buying organization buys goods from suppliers on behalf of one more internal organization. The supplier liability is borne by the purchasing organization. The purchasing and requesting organizations settle the financial transaction among themselves. The financial route is the route in which these financial transactions are settled. This can be different from the physical route and involve one or more intermediary nodes forming part of the route. The intermediary nodes are internal organizations that aren't part of the physical supply chain transaction but are part of the financial route. How these transactions are routed among the internal nodes is specified and controlled by supply chain financial organization agreements.

Settings That Affect How Awarded Lines Are Grouped

The following attributes of an awarded line are used by the application to group lines onto purchase orders:

  • Requisitioning BU

  • Sold-to LE

  • Bill-to Location

  • Bill-to BU

  • Supplier

  • Supplier Site

  • Taxation Country

  • Document Fiscal Classification

Additionally, the set parameter Multiple Legal Entities on Order also affects line grouping. Multiple Legal Entities on Order applies at the Requisitioning BU level.

Distinguishing between Global and Local Lines.

Any line for which an supply chain financial orchestration agreement is in effect, or any line for which the Sold-to LE's primary ledger is different from the Requisitioning BU's primary ledger is considered a global procurement line. All other lines are considered local lines. (The actual line attribute which triggers an agreement is defined in the agreement API.)

Global procurement lines, the application creates a separate purchase document for each unique combination of Requisitioning BU + Sold-to LE + Bill-to Location + Bill-to BU + Supplier + Supplier Site + Taxation Country + Document Fiscal Classification.

For local procurement lines, the lines are first grouped by Requisitioning BU. Then within each Requisitioning BU, the value for the Multiple Legal Entities on Order parameter determines how the lines are grouped:

  • If the value is None, the supplier financial orchestration-related line attributes (Sold-to LE, Bill-to Location, Bill-to BU) are ignored, and the awarded lines are grouped together on the same purchase document based on the values for supplier + supplier site + taxation country + document fiscal classification.

  • If the value is Error, awarded lines are grouped together on the same purchase document based on each unique combination of Supplier + Supplier Site + Taxation Country + Document Fiscal Classification + Sold-to LE + Bill-to BU + Bill-to Location.

  • If the value is Warning, a warning message appears, and you're prompted to select a grouping option. You can select:

    • Option Yes. Create purchase documents having different Sold-to LEs. With this option, Sold-to LE, Bill-to BU, and Bill-to Location are ignored for grouping purposes.

    • Option No. Create purchase documents for each combination of Supplier + Supplier Site + Taxation Country + Document Fiscal Classification + Sold-to LE + Bill-to BU + Bill-to Location.