What is a Source List?
The Source List identifies preferred sources of supply for certain materials. If the Source List has been properly maintained, it will identify both the source of a material and the period of time in which you can order the material from the source.
Creating Source List
Use Transaction ME01. Enter the Material Number and the Plant Data. Enter source list records, validity period, a period of time material is procurable, Vendor Number, responsible Purchasing Organization (or a number of the Agreement or Contract), PPL (if the material can be procured from another plant), Fixed Source (?), MRP control. Also, a check should be done to see whether any source list records overlap. To do so, choose Source List –> Check.
Process of Source List Determination
Following is the order of priority to search the source.
- Quota arrangement – Quota arrangement helps to automatically identify the vendor and allocate the quantities to the vendor
- Source List
- Purchasing Info record/outline agreement – It is created for the combination of material, vendor and purchase organization.
How to Determine the Source?
The purpose of the source determination process is to automatically assign a source of supply to a purchase requisition. If the requester has set the Source Determination indicator in the requisition header, the system searches for the possible source of supply for all the items of the requisition. If the system finds several valid sources for an item, the decision process can be supported by a price simulation or by reference to data from the vendor evaluation facility.
To have the system assign a single unique source during the automatic source determination process, a source list and/or a quota arrangement can be made use of.
In the source list, it is required to specify which source of supply is valid for a certain period of time. It is also possible to specify a preferred source as fixed for a certain period in the source list. In automatic source determination, the system will then suggest just this source, even if other potential sources exists.
With the aid of a quota arrangement, it is feasible to have material requirements arising over a certain period divided up among different sources on the basis of quotas. Quota arrangements determine which source of supply (maybe from among several possible ones) is automatically assigned to a purchase requisition.
Learn more about source list in this training document.