Sourcing Rule in Oracle Purchasing

Sourcing rule is used to automatically replenish materials in an organization or business.
Sourcing rules determine the movement of materials between organizations in a global enterprise; these organizations include the suppliers and the materials include those items made at the manufacturing organizations.

Profile Options

• MRP:Default Sourcing Assignment Set (set the value of the assignment set where you have added your item) 
• PO: Automatic Document Sourcing (Yes) 
• PO: Allow Auto-generate Sourcing Rules (CREATE AND UPDATE) 
• PO: Allow Autocreation of Oracle Sourcing Documents (Yes)
• MSC: ATP Allocation Method (User-Defined Allocation Percentage)

Define an Item

Noted Attributes:

• Select any Inventory Planning method
• Select the item Make or Buy
• Enter a List price
• Enter a default Buyer (this will help to assign a buyer during planning and in the requisition) 

Define Supplier and Supplier Sites

You can define supplier and supplier sites as required

Purchasing –> Supply Base –> Suppliers

Defining Sourcing Rule

Purchasing -> Supply Base -> Sourcing Rule

Notes:

• You can use this rule across all orgs by Selecting All Orgs
• If you want to use in specific org, the select the Org

Shipping organization type is 3 types

• Buy From: Buying from a supplier
• Transfer From: If you want to transfer the item from another organization in your business
• Make At: This is for making the item in the selected organization

Allocation percentage: This is to identify how much % of the amount will be sourced from which org. This is helpful when you want to maintain multiple sources and want to split the sourcing amount between different sources, so you can split that by allocation%.
Master Scheduling/MRP uses these allocation percentages when creating planned orders, which Purchasing imports as requisitions through Requisition Import. In a group of requisitions imported from Master Scheduling/MRP, those requisitions show the percentage allocation you define. In other words, at the end of a planning period, orders–as a group–to those suppliers approximately equal the percentage split you defined. However, when you create a requisition in Purchasing, Purchasing sources to the supplier with the highest allocated percentage. The Approved Supplier List (ASL) entry for that supplier is then referenced in order to pick up source document information (from a blanket purchase agreement or catalog quotation), if source documents exist

Allocation Rank: To select the sequence in which sources will be identified during planning

Sourcing Rule Assign set, add the item for the sourcing rule

Once sourcing rules are defined, now time to assign the rule to Item or organization as you need

Purchasing à Supply Base à Assign Sourcing Rules

Here you can assign the sourcing rules at 4 different levels

• Item 
• Item-Organization
• Organization
• Global

Add the supplier to Approved Supplied List

This is optional, if you have checked ASL in Item attribute

Purchasing à Supply Base à Approved Supplier List

Run Min Max planning for the item

Inventory à Planning à Min-Max Planning

Submit the request for the item and make sure restock parameter selected as Yes

Then run requisition Import

This will create the Purchase Requisition and in turn submit the Create Releases Program which will in turn create the Purchase Order

Internal Requisition to Internal Sales Order

Creation Of Item

Create an Item and assign that to both the source and destination organization

Attributes

• Purchased
• Purchasable
• Internal Order Enabled
• Shippable
• OE transactable

Creation of Internal Requisition

Now go ahead and create and Internal Requisition

Go to Purchasing Responsibility

Requisitions -> Requisitions

Note: You should have been defined as an employee/ buyer to create a requisition

1. Type should be Internal Requisition
2. Enter the item in Lines Tab
3. Enter Quantity
4. Enter Need By Date
5. Select the Destination Organization
6. Destination Location
7. Select Source Organization

Click on Save, It will generate the Requisition Number. Note down the requisition number
Now need to Approve the Requisition
If you want to approve this requisition, then you should have required approval authority.
Lets do the required setup
Go to Human Resources (if Installed) responsibility
People -> Enter and Maintain

else in purchasing
Go to Setup -> Personnel -> Employees
Find the employee (if not created already, select new and create one)

Select Assignment

Here assign a Job

Now lets go and check whether this Job has Requisition Approval authority or not

For this, navigate to Purchasing responsibility

Setup -> Approvals ->Approval Assignments

In this form, select the Job which you have assigned to the employee

Now you can see which all document types are authorized to approve

Make sure Approve Internal Requisitions is entered here

If you can’t see this, then add the value

Make sure the Approval Group which you are assigning here that has the approval limit authorization with in which your IR amount comes

As in this case

Here the limit is max $50,000 and our IR amount is only $100

Now Go back to the requisition and approve the same

Query the requisition and click on the approve button

Make sure Submit for Approval selected (it should be by default) then click on OK

Wait for few min as the background process will check and clear the Approval workflow

And re-query the IR again

If Workflow Background Process not scheduled, you can go ahead and manually submit

Now again requery the IR from requisition summary form

You will see the IR is approved

Creation of Internal Order

Next step is to Run the Create Internal Order concurrent program which will interface the data to Order management for creating internal order

Go to View -> Requests -> Submit a new request -> Single Request

Select Create Internal Orders and submit

Once the program is completed, check the log file,

It means the data transferred to Order Entry

Now lets go to Order Management and import the data to create the Internal Order

Navigate to Order Management responsibility

Go to Orders, Returns -> Import Orders -> Order Import Requests

Now enter the below parameters

1. Source as Internal
2. Select your IR number in Order Reference field

Then Click Ok and Submit.

This will spawn another child order import program

Now go ahead and query your Internal order which is just created by importing the data in order organizer form

Orders, Returns -> Order Organizer

Give today’s date to refine

Select the source as Internal and give the IR number in the Order Source Reference

Now Click on Open.

Your internal order is ready