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<ManualTopic ID="/baanerp/cp/onlinemanual/000158" xml:lang="en">
   <Header>
      <Title>Sourcing strategies</Title>
      <Keyword type="header" order="d1e165312">
         <Level1>Selecting supply sources</Level1>
      </Keyword>
      <Keyword type="header" order="d1e165315">
         <Level1>Supply sources</Level1>
         <Level2>selecting</Level2>
      </Keyword>
      <Keyword type="header" order="d1e165320">
         <Level1>Sourcing strategy</Level1>
      </Keyword>
   </Header>
   <AimSection>
      <Paragraph>This topic contains an overview of the functionality of sourcing
		strategies.</Paragraph>
   </AimSection>
   <GeneralSection>
      <SectionTitle>Three sources of supply</SectionTitle>
      <List>
         <ListIntro>
            <GUIRef href="" role="manual" Update="No">Enterprise Planning</GUIRef> works with
		  three sources of supply:</ListIntro>
         <ListItem>
            <GUIRef href="/baanerp/cp/domains/rpd.act.sour#manufacture" role="option">Production</GUIRef> – manufacture goods at a production
		  facility</ListItem>
         <ListItem>
            <GUIRef href="/baanerp/cp/domains/rpd.act.sour#purchase" role="option">Purchase</GUIRef> – acquire goods from a business partner</ListItem>
         <ListItem>
            <GUIRef href="/baanerp/cp/domains/rpd.act.sour#distribution" role="option">Distribution</GUIRef> – acquire goods from elsewhere in your
		  company or from an <Link href="/baanerp/tc/glossary/glossary#AffiliCompan_tc" role="glossary">affiliated company</Link>
         </ListItem>
      </List>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Default supply source</SectionTitle>
      <Paragraph>Per item you can define
		a default supply source in the <GUIRef href="/baanerp/cp/rpd/cprpd1100m000" role="session">Items - Planning (cprpd1100m000)</GUIRef> session. If you want to use one permanent supply
		source, this is enough. This default supply source is independent of the value
		that you specified in the <GUIRef href="/baanerp/tc/ibd/tcibd0101s000#tcibd001.kitm" role="manual">Item Type</GUIRef> field in
		the <GUIRef href="/baanerp/tc/ibd/tcibd0501m000" role="session">Items - General (tcibd0501m000)</GUIRef> session.</Paragraph>
      <Note>
         <SectionTitle>Note</SectionTitle>
         <Paragraph>Sourcing strategies
		  have priority over the default supply source. If an applicable sourcing
		  strategy exists, <GUIRef href="" role="manual" Update="No">Enterprise Planning</GUIRef> uses the
		  sourcing strategy, and ignores the default source.</Paragraph>
      </Note>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Sourcing strategy</SectionTitle>
      <Paragraph>If you want to use more than one source of supply, or deviate
		from the default source in one particular scenario, you must define a <Link href="/baanerp/cp/glossary/glossary#000104" role="glossary">sourcing strategy</Link> for the item involved.</Paragraph>
      <Paragraph>You can define sourcing strategies in the <GUIRef href="/baanerp/cp/rpd/cprpd7110m000" role="session">Sourcing Strategy (cprpd7110m000)</GUIRef> session.</Paragraph>
      <GeneralSection>
         <SectionTitle>Scenario and validity period</SectionTitle>
         <Paragraph>A sourcing strategy is valid for a particular <Link href="/baanerp/cp/glossary/glossary#000007" role="glossary">scenario</Link>.</Paragraph>
         <Paragraph>A sourcing strategy is valid for a particular time period. You
		  can enter an effective date and an expiry date for a source strategy to
		  determine for which time period the sourcing strategy is valid.</Paragraph>
      </GeneralSection>
      <GeneralSection>
         <SectionTitle>Sourcing strategies for clusters and item
		  groups</SectionTitle>
         <Paragraph>You can link a sourcing strategy directly to a <Link href="/baanerp/ti/glossary/glossary#PlanItems_ti" role="glossary">plan item</Link> or link the sourcing strategy indirectly, via a <Link href="/baanerp/cp/glossary/glossary#000315" role="glossary">cluster</Link> or <Link href="/baanerp/tc/glossary/glossary#000007" role="glossary">item group</Link>.</Paragraph>
         <Paragraph>For more information, refer to <Link href="/baanerp/cp/onlinemanual/000057" role="manual">To search sourcing strategies</Link>
         </Paragraph>
      </GeneralSection>
      <GeneralSection>
         <SectionTitle>Unit effectivity</SectionTitle>
         <Paragraph>In addition, you can define a unit effective <Link href="/baanerp/cp/glossary/glossary#000104" role="glossary">sourcing strategy</Link>, which means that you link an <Link href="/baanerp/tc/glossary/glossary#000308" role="glossary" Update="No">exception</Link> the sourcing strategy. In this way,
		  you can model (small) deviations from a standard sourcing strategy for a
		  specific period.</Paragraph>
         <Paragraph>For more information about unit effectivity, see <Link href="/baanerp/cp/onlinemanual/000308" role="manual">Unit effectivity in Enterprise Planning</Link>.</Paragraph>
      </GeneralSection>
      <GeneralSection>
         <SectionTitle>Source allocation rule</SectionTitle>
         <List>
            <ListIntro>When you define a sourcing strategy, you must choose between
			 the following:</ListIntro>
            <ListItem>
               <GUIRef href="/baanerp/cp/domains/com.soal#percentage" role="option">Percentage</GUIRef>
            </ListItem>
            <ListItem>
               <GUIRef href="/baanerp/cp/domains/com.soal#priority" role="option">Priority</GUIRef>
            </ListItem>
         </List>
         <GeneralSection>
            <SectionTitle>Source allocation rule: Percentage</SectionTitle>
            <Paragraph>If the source
			 allocation rule is <GUIRef href="/baanerp/cp/domains/com.soal#percentage" role="option">Percentage</GUIRef>, you define
			 the percentage for each source in the <GUIRef href="/baanerp/cp/rpd/cprpd7110m000" role="session">Sourcing Strategy (cprpd7110m000)</GUIRef> session.</Paragraph>
            <Paragraph>In <Link href="/baanerp/cp/glossary/glossary#000059" role="glossary">master-based planning</Link>, LN distributes the <Link href="/baanerp/cp/glossary/glossary#000073" role="glossary">supply plan</Link> according to these percentages for each plan period.</Paragraph>
            <Paragraph>In <Link href="/baanerp/cp/glossary/glossary#000060" role="glossary">order-based planning</Link>, the percentages can be used in two ways:</Paragraph>
            <List>
               <ListItem>If you select the <GUIRef href="/baanerp/cp/rrp/cprrp1210m000#f.multi.sources" role="field">Allow Multiple Sources per Req.</GUIRef> check box in the <GUIRef href="/baanerp/cp/rrp/cprrp1210m000" role="session">Generate Order Planning (cprrp1210m000)</GUIRef> session or the <GUIRef href="/baanerp/cp/rrp/cprrp1220m000" role="session">Generate Order Planning (Item) (cprrp1220m000)</GUIRef> session, LN uses the percentages
				to divide a single requirement over the various sources.</ListItem>
               <ListItem>If you clear the <GUIRef href="/baanerp/cp/rrp/cprrp1210m000#f.multi.sources" role="field">Allow Multiple Sources per Req.</GUIRef> check box, LN tries to approximate
				the percentages as closely as possible, but assigns each requirement to one
				source. In other words, LN does not split planned orders.</ListItem>
            </List>
            <Paragraph>For more information about source allocation in order
			 planning, refer to <Link href="/baanerp/cp/onlinemanual/000347" role="manual">Example: source allocation in order planning</Link>.</Paragraph>
         </GeneralSection>
         <GeneralSection ID="A">
            <SectionTitle>Source allocation rule: Priority</SectionTitle>
            <Paragraph>If the source allocation rule is <GUIRef href="/baanerp/cp/domains/com.soal#priority" role="option">Priority</GUIRef>, you define the priority for each source. The
			 priority source-allocation rule only applies to order planning. In master
			 planning, a priority source-allocation rule is interpreted as a <GUIRef href="/baanerp/cp/domains/com.soal#percentage" role="option">Percentage</GUIRef> source-allocation rule.</Paragraph>
            <Paragraph>For more information about sourcing allocation rule <GUIRef href="/baanerp/cp/domains/com.soal#priority" role="option">Priority</GUIRef>, refer to online manual topic <Link href="/baanerp/cp/onlinemanual/000347" role="manual">Example: source allocation in order planning</Link>.</Paragraph>
            <Note>
               <SectionTitle>Note</SectionTitle>
               <Paragraph>If LN has first attempted to cover a requirement
				by selecting the source <GUIRef href="/baanerp/cp/domains/rpd.act.sour#purchase" role="option">Purchase</GUIRef>, and this source cannot fulfill the requirement,
				the next step depends on the question whether the plan item's supplier is a <Emphasis>single-source</Emphasis> supplier.</Paragraph>
               <List>
                  <ListIntro>The behavior depends on the <GUIRef href="/baanerp/td/ipu/tdipu0110m000#tdipu010.pref" role="manual">Preferred</GUIRef> field in the <GUIRef href="/baanerp/td/ipu/tdipu0110m000" role="session">Items - Purchase Business Partner (tdipu0110m000)</GUIRef> session:</ListIntro>
                  <ListItemHead>
                     <GUIRef href="/baanerp/td/ipu/tdipu0110m000#tdipu010.pref" role="manual">Preferred</GUIRef> is set to <GUIRef href="/baanerp/td/domains/ipu.pref#fixed" role="option">Single Source</GUIRef>
                  </ListItemHead>
                  <ListItem>If the supplier cannot fulfill the required demand, LN uses the
				  lower-priority supply sources ( <GUIRef href="/baanerp/cp/domains/rpd.act.sour#manufacture" role="option">Production</GUIRef> or <GUIRef href="/baanerp/cp/domains/rpd.act.sour#distribution" role="option">Distribution</GUIRef>) from the sourcing strategy.</ListItem>
                  <ListItemHead>
                     <GUIRef href="/baanerp/td/ipu/tdipu0110m000#tdipu010.pref" role="manual">Preferred</GUIRef> is set to <GUIRef href="/baanerp/td/domains/ipu.pref#preferred" role="option">Preferred</GUIRef>
                  </ListItemHead>
                  <ListItem>If the supplier cannot fulfill the required demand, LN generates a <Link href="/baanerp/cp/glossary/glossary#000047" role="glossary">planned production order</Link> with an empty supplier
				  field.</ListItem>
               </List>
            </Note>
         </GeneralSection>
      </GeneralSection>
      <GeneralSection ID="minimum_and_maximum_volume">
         <SectionTitle>Minimum and maximum volume</SectionTitle>
         <Paragraph>Per supply source you can define minimum and maximum volumes,
		  and specify the time period for which these limits apply.</Paragraph>
         <Paragraph>If the order volume for a specific source exceeds the maximum
		  volume (within the specified time period), LN can move part of the
		  volume to another source.</Paragraph>
         <Paragraph>If the order volume for a specific source drops below the
		  minimum volume, LN can
		  use a larger part from the required quantity to generate planned orders for
		  that source. As a result, the total ordered quantity for other sources will be
		  reduced.</Paragraph>
         <Note>
            <SectionTitle>Note</SectionTitle>
            <Paragraph>Do not confuse the minimum volume fields with the <Link href="/baanerp/ti/glossary/glossary#MinimuOrderQ_ti" role="glossary">minimum order quantity</Link> defined in the item data. LN does not create
			 orders for more than the required quantity, even if the order volume falls
			 below the minimum volume.</Paragraph>
         </Note>
      </GeneralSection>
   </GeneralSection>
   <RelatedTopics>
      <SectionTitle>Related topics</SectionTitle>
      <RelTopic>
         <Link href="/baanerp/cp/onlinemanual/000046" role="manual">Allocation rule: historic percentage</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/cp/onlinemanual/000347" role="manual">Example: source allocation in order planning</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/cp/onlinemanual/000057" role="manual">To search sourcing strategies</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/cp/onlinemanual/000159" role="manual">To select external suppliers</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/cp/onlinemanual/000160" role="manual">To select internal suppliers</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/cp/onlinemanual/000040" role="manual">To generate planned orders (RRP run)</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>