An Analysis of Simplified Sourcing on SAP S/4HANA

  • by Caetano Almeida, Senior Support Engineer, SAP
  • August 29, 2016
Learn the differences between the material requirements planning (MRP) source of supply determination in SAP ERP and the simplified sourcing logic introduced in SAP S/4HANA.
Learning Objectives
After reading this article, you'll learn:
  • How the source determination works in SAP ERP
  • The differences between the source determination on the SAP ERP and the simplified sourcing in SAP S/4HANA
  • The source determination for external procurement in SAP S/4HANA using Info Records, quota arrangements, contracts, and scheduling agreements
  • The source determination for internal procurement in SAP S/4HANA

Key Concept
Source of determination is the process of selecting a source of supply. This process can be executed by material requirements planning (MRP) when a replenishment proposal is created. This logic was simplified in SAP S/4HANA.

One of the key aspects behind the SAP S/4HANA design is the simplification. This concept is present in S/4HANA, from simplified data models to the removal of outdated functionalities.

The simplification concept was also applied in the material requirements planning (MRP) source of determination, and this scenario was completely redesigned in S/4HANA. This new source determination in S/4HANA is called simplified sourcing. I analyze the differences between the source determination in the SAP ERP and the simplified sourcing in SAP S/4HANA. I also explain how to implement the simplified sourcing for both external and internal procurement.

Source Determination in SAP ERP

Before getting into the actual simplified sourcing in SAP S/4HANA, you first need to understand how the source determination happens in SAP ERP.

The logic behind the source of determination during the material requirements planning (MRP) run is basically the same in SAP ERP since the R/3 release 4.6. The simplest way to set up the source determination in SAP ERP for external requirements consists of two steps:

  1. Create an Info Record for a specific material and vendor combination
  2. Create a source list for a material, specifying which source of supply should be used by MRP

To create the source list, execute transaction code ME01. This action displays the screen in Figure 1. In Figure 1, a specific field called Source List Usage in Materials Planning (MRP) (the field highlighted in Figure 1) is used to determine that a specific source of supply should be used by MRP. When the value of this field is set to 1 - Record relevant to MRP, this source of supply is considered valid by MRP.


Figure 1
Source list with a source of supply valid for MRP

Note
In Figure 1, the short text of the highlighted field is MRP, but the long text is Source List Usage in Materials Planning.

Caetano Almeida

Caetano Almeida is a computer engineer with an MBA in IT management. He has more than nine years of experience in production planning, with the last six years working at SAP Support, where he supports SAP customers and writes documentation and correction notes.

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