Support for Multi-sourcing Fungible Goods

This feature enables you to have multiple suppliers for an item and to prorate the usage in GTM. For example, you may have multiple suppliers of a component part to ensure you have sufficient quantity of supply or to have resiliency of your supply chain when facing unexpected factors. Some trade agreements provide allowances for handling this situation. One way to handle this is to calculate the amount of input sources in the prior year and then allocate that percentage to an item origin in GTM.

NOTE: GTM is not performing the calculation regarding how much is sourced from each location. In GTM, you can specify the percentage sourced for your suppliers based on your analysis so that it can be used during the Value of Originating Material and Value of Non-originating Material calculations for a trade agreement.

The following configuration is required to take advantage of this feature:

  • Mark the 'Allow Prorate on Multi-Sourcing' checkbox on the Trade Agreement to indicate the trade agreement supports multi-sourcing for fungible goods
  • Add the Percentage Sourced to your Item Origins

NOTE: This enhancement applies to the lowest level component of a bill of material only.

Configure Trade Agreement to Support Multi-Sourcing

If a trade agreement supports multi-sourcing of fungible goods, mark the 'Allow Prorate on Multi-Sourcing' checkbox on the Trade Agreement.

Trade Agreement - Allow Prorate on Multi-Sourcing Checkbox

Trade Agreement - Allow Prorate on Multi-Sourcing Checkbox

Add Percentage Sourced to Item Origins

For the item origins associated with the item, specify the percentage sourced. For example, your company manufactures perfume using essential oils from various suppliers. Supplier A provides 30% of the orange-scented essential oil while Supplier B provides 70%. An item origin needs to be created for each of these suppliers including Inventory Organization, Partner (Supplier), and Percentage Sourced. The percentage sourced must equal 100% across all item origins for GTM to perform the calculation.

Item Origin with Percentage Sourced

Item Origin with Percentage Sourced

When you run the Qualify for Trade Agreement action, GTM uses the percentage sourced to prorate the usage of suppliers during the qualification calculation. On the qualification report, you'll see a line for each supplier.

Qualification Report with Percentage Sourced

Qualification Report with Percentage Sourced

This improves qualification under trade agreements when components are sourced from multi-suppliers, potentially allowing more finished goods to qualify and received preferential duty treatment.

Steps to Enable

The following configuration is required to take advantage of this feature:

  • Mark the 'Allow Prorate on Multi-Sourcing' checkbox on the Trade Agreement to indicate the trade agreement supports multi-sourcing for fungible goods
  • Add the Percentage Sourced to your Item Origins

Tips And Considerations

The multi-sourced component is considered as non-originating if:

  • Percentage Sourced is not populated for all item origins
  • Percentage Sourced across all item origins does not equal 100%
  • Inventory Organization does not match for all item origins with the multi-sourced component