| # Sources of supply: production, purchase, or distribution This topic describes how you can determine whether ERP Enterprise must cover a requirement for a plan item by manufacturing the plan item, purchase the item from external suppliers, or get the item from a warehouse in another site. Three sources of supply Enterprise Planning works with three sources of supply: Production – manufacture goods at a production facility Purchase – acquire goods from a business partner Distribution – acquire goods from elsewhere in your company or from an affiliated company You can use the following methods to determine from which source a plan item is supplied: A plan item's default supply source sourcing strategies If a plan item has a valid sourcing strategy, ERP Enterprise ignores the plan item's default supply source. Default supply source If you want a single permanent supply source, a default supply source is enough and you do not need sourcing strategies. If no valid sourcing strategy is present, ERP Enterprise checks the value of the Default Supply Source field in the Items - Planning (cprpd1100m000) session. This default supply source is independent of the value that you specified in the Item Type field in the Items - General (tcibd0501m000) session. The Default Supply Source field can have the following values: Distribution If the default supply source is Distribution, Enterprise Planning generates only planned distribution orders. Production/Purchase If the default supply source is Production/Purchase, Enterprise Planning searches the Date-Effective Item Data (tcibd0510m000) session, and uses the item type specified for the order finish date. If the default supply source is Production/Purchase and no valid date effectivity lines are present for the order finish date, ERP Enterprise falls back on item type that you defined in the Items - General (tcibd0501m000) session. You can use date-effective item data to change an item's item type from manufactured item to purchased item and vice versa on exactly defined dates. Sourcing strategy Sourcing strategies allow you to use a combination of multiple supply sources at the same time, or one after another. Example You can specify that 60% of a requirement is supplied by production orders, 30% by distribution orders and 10% by purchase orders. You can also specify that ERP Enterprise must first try to cover the requirements with production orders, and if that is not possible, use purchase orders. Suppose you want to start to manufacture a component that you used to buy from an outside supplier. Then, you can also specify that ERP Enterprise must generate purchase orders up to, for example, May 15th, and after that date generate production orders. The use of sourcing strategies If you generate a master plan or planned orders, ERP Enterprise first searches for a valid sourcing strategy in the Sourcing Strategy (cprpd7110m000) session. You can link a sourcing strategy directly to a plan item, or link the sourcing strategy indirectly, via a cluster or item group. If ERP Enterprise finds no effective sourcing strategy, ERP Enterprise uses the default supply source. For more information, refer to Sourcing strategies. Note ERP Enterprise generates a signal if you define a sourcing strategy for a plan item for which a date effectivity definition exists. Relevant sessions and fields You can set up the date effectivity in the following sessions and fields: Items - General (tcibd0501m000) Field: Item Type Items - Planning (cprpd1100m000) Field: Default Supply Source (value: Production/Purchase or Distribution) Date-Effective Item Data (tcibd0510m000) All fields Sourcing Strategy (cprpd7110m000) Fields: Production, Purchase, Distribution Related topics Supply planning Sourcing strategies To search sourcing strategies |