The Preferred Supplier feature lets you configure and manage sourcing policies for your stock codes.
A sourcing policy determines who is the preferred supplier of a stock item and helps a company stay competitive by ensuring that purchasing agreements and policies are upheld when creating requisitions and purchase orders.
A purchasing strategy benefits buyers and suppliers - suppliers have guaranteed sales, while buyers can negotiate favorable terms.
By implementing procurement policies, organizations can leverage whole-company spending potential in establishing long-term preferential agreements with suppliers. These policies could be to reduce risk associated with satisfying material demand, preferential negotiated rates, or demand planning optimization.
When an active sourcing policy for the stock code exists, the system takes this into consideration when creating purchase requisitions and purchase orders.
When an operator approves a purchase requisition, the preferred supplier is suggested according to the specifications in the sourcing policy. At the time of creating a purchase order from the requisition, the system establishes the preferred supplier from the requisition.
If a supplier, other than the preferred supplier is selected, the system displays a warning message. Depending on the authorization level assigned to the operator the change of supplier is accepted or denied.
The programs related to this feature are accessed from the Program List of the SYSPRO menu:
- Program List > Inventory
A sourcing policy determines who is the preferred supplier of a stock item. It helps a company stay competitive by ensuring that purchasing agreements and policies are upheld when creating requisitions and purchase orders.
A list of suppliers is defined in a specific sequence. Each gets a turn at being the preferred supplier (i.e. on a rotational basis).
For the first requisition of stock, the first supplier on the list becomes the preferred supplier. For the next requisition, the next supplier is assigned as the preferred supplier, and so on.
Once all suppliers on the list have been used, the first supplier on the list is re-assigned.
If a preferred supplier is overridden or skipped, they do not miss their place on the list, but are assigned as the preferred supplier for the next requisition of stock.
A threshold amount is defined as either a value (i.e. total procurement amount) or a quantity. Proportional percentages are then defined against multiple suppliers.
This means that a percentage of the total spend is allocated to each supplier on the sourcing policy. The system then selects the next preferred supplier once the allocated percentage (amount or quantity) is exhausted.
The next preferred supplier can be determined in one of two ways:
The preferred suppliers are selected in the sequence in which they were added to the list (similar to a round-robin policy) provided they have not exceeded their allocated threshold percentage. Once the threshold is reached, they are excluded.
The first supplier in the list is the preferred supplier until their allocated percentage has been depleted. Only then will the next supplier be assigned as the preferred supplier.
The Purchase Order Review program suggests requisitions using the first preferred supplier in the sequence, regardless of whether the quantity of the first suggested requisition exceeds the threshold defined against the first preferred supplier in the policy. This is because the policy is not referenced at the time the suggested list is generated.
You must close and re-open the program after creating the first purchase order from the suggested requisitions for it to use the next preferred supplier in the sequence.
- In addition, if you create a purchase order (either manually using Purchase Order Entry program or using the Purchase Order Review program) and the first order exceeds the supplier's threshold amount, then the system creates a purchase order for the quantity entered. It will check the threshold and suggest the next supplier on the policy for the next order created.
The preferred supplier is assigned based on the lowest cost defined in the PorSupStkInfo table.
The cost of all suppliers for that stock code must be calculated to the same unit of measure. In this case, the system uses the stocking UOM.
In addition, the lowest cost is converted to local currency to take account of foreign suppliers. Once this is calculated, the supplier with the lowest cost is assigned as the preferred supplier.
Although similar to the lowest cost policy, this policy also takes into account the lead-time defined in the PorSupStkInfo table.
Based on the stock requisition's due date, the system determines which supplier will be able to supply on the specified due date. Once this is determined, the supplier with the lowest cost is assigned as the preferred supplier.
A single supplier is defined for this stock code and will always be assigned as the preferred supplier.
A single supplier is defined for this stock code and will always be assigned as the preferred supplier. However, different suppliers may be defined as the preferred supplier for different warehouses.
The suppliers defined per warehouse are recorded in the InvWarehouse table.
This indicates a policy where the procurement date falls within the start/expiry date specified in that policy.
A term used for a systematic selection of a supplier through pre-determined criteria.
A deliberate policy-driven approach undertaken by an organization to consider multiple factors for supplier selection based on longer-term initiatives.
You can restrict access to the eSignature transactions within a program at operator, group, role or company level (configured using the eSignature Setup program). You can restrict access to the eSignature transactions within a program at operator, group, role or company level (configured using the Electronic Signature Configuration Setup program). Electronic Signatures provide security access, transaction logging and event triggering that gives you greater control over your system changes.
Controls the ability to override the preferred supplier for a stock code in the following programs:
Requisition Entry Maintenance
Requisition Create Purchase Orders
Purchase Order Entry
Controls the addition of new sourcing policies in the Sourcing Policy Maintenance program.
Controls the maintenance of existing sourcing policies in the Sourcing Policy Maintenance program.
Controls the deletion of sourcing policies in the Sourcing Policy Maintenance program.
Sourcing policies are captured for a certain period. Therefore, only one sourcing policy can be in force at a time (i.e. date overlapping is not allowed).
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To implement a sourcing policy and preferred supplier setup for a stock code, you need to do:
Configure the applicable stock codes to use preferred suppliers by enabling the Use preferred supplier option within the Stock Code Maintenance program.
Create the sourcing policies you require using the Sourcing Policy Maintenance program.
Configure the applicable eSignatures for specific operators, roles, groups or company-wide using the eSignature Setup program.
When adding a purchase order or requisition for a stock code against which there is an active policy, it is verified and a preferred supplier is suggested for that demand.
This preferred supplier may, however, be overridden by a different supplier if the Inv Preferred supplier overridden eSignature is allowed.
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