Source list benefits

A good way of tightening authorization in your procurement organization is using mandatory source lists. In a previous post I explained how you can use source list in a central procurement organization together with MRP. Setting source list as a requirement for procurement you block any Purchase Order from being created if  the material/vendor combination is not known to the source list for the purchasing organization, purchasing group and, or plant. This is excellent if rogue buying (i.e. buying without taking advantage of negotiated company discounts) in SAP is an issue in your company. This is how you implement mandatory source lists in your organization:

1) The easiest way to turn source list into a mandatory requirement is to set this in customizing per plant. Go to IMG > Materials Management  > Purchasing > Source List > Define source List at Plant Level. In this transaction set the indicator for the plant that is going to be moved under the tighter procurement regime.

Define source list requirement at plant level

Define source list requirement at plant level

Alternatively, you can set the source list requirement in the material master’s Purchasing tab. The advantage of this is that you only put certain materials under tight procurement rules.

Material Master - Purchasing tab

Material Master - Purchasing tab

[tip]Especially if the procurement department closed a very cost-saving contract for a common (raw) material, you really want operations to call-off from this contract and avoid procurement from any other source than this particular vendor. This is where you really can use the source list requirement for the specific material.[/tip]

2) Now it is important that all inforecords and contracts are up-to-date: update inforecords and contracts where you can and remove any obsolete ones. This is not a one time exercise: when using mandatory source lists it is an absolute condition that inforecords, contracts and subsequently the source list itself is up-to-date at all times. Outdated and incorrect source lists will lead to frustration where purchase orders cannot be created and procurement lead time will increase. Embed this new responsibility properly to a master data person in the procurement department.

3) Now that all inforecords and contracts are up-to-date you can mass create source lists using transaction ME05. In the opening screen of the transaction enter the data for the materials for which you wish to create a source list (If you have multiple sources for a material do not set the MRP indicator. Only one source with MRP indicator makes sense.). No worries, no actual source lists are created when you execute the execution button (F8).  Actual creation of source lists is done when you save in the next screen of the report results. When you are in the report overview you also set a fixed or blocked vendor by selecting lines and using the menu.

Generate source list

Generate source list

If you are not happy running a mass transaction you can still use ME01 for material-by-material source list creation.

4) Last thing is to check that authorization for end-users is tight enough. Users should only be able to procure for their own purchasing organization, purchasing group and plant. If this is not the case, you run the risk of material being procured from the correct vendor but by the wrong people. Taking care of the above steps should make your organization rogue-buying proof from a SAP perspective. Unfortunately SAP cannot prevent users from printing their own Purchase Orders in MS Word and faxing this to the vendor or ordering on-line.


6 thoughts on “Source list benefits

  1. Nazeer


    I have a query on a specific business scenario where I am not getting help from any resource. The scenario is as follows:
    My clients wants to have multiple source lists lines for a particular material with MRP relevance ‘2’. These source list items are different Purchasing Scheduling Agreements (PSA) with account assignment M, which pertains to customer scheduling agreements (CSA). The idea is that whenever there are schedules lines written in the CSA, the demand created should be translated into the corresponding PSA when MRP is run.
    I want to know if this is possible. In my prototype I am not able to create schedule lines in PSA.

    1. Kowboy Post author

      Nazeer, three things that come to mind: 1) make sure that you have only one valid source for MRP in the source list. and 2) make sure that you run MRP with ‘Delivery Schedule’ parameter set to 3. and 3) your procurement key should be set to F ‘External procurement’ with special procurement key 20. Regards, Kowboy

  2. Nazeer

    Dear Kowboy,
    I have been able to make the scenario work in SAP. The problem was with the choice of item category in the CSA which was not picking up the correct line item category. Thanks for your inputs anyway.

  3. Share

    We have been having an issue with MRP generated purchase reqs. The vendor from the source list is correct (fixed vendor) in the purchase req, but the info record is not getting assigned and therefore the purchase price from the info record is not in the purchase req. Only one valid info record exists for the material/plant/vendor combination in our system, so I am not sure why it is not getting assigned properly.

  4. VIJAY


    we have two purchase organizations assigned to one plant.
    we want procure same material from single vendor from two purchase organizations in different volumes.

    Material : A
    vendor : B
    Plant :0001
    Purchase organizations : PRG1 & PRG2.
    my requirement : 1000 nos procurement for material “A” into plant “0001” from vendor “B”
    But from PRG1 : 300 nos & from PRG2 : 700 nos.

    Expected result :
    delivery schedules created on PRG1 are 300 & on PRG2 are 700 nos.

    how to achieve this through source list.

    1. Gary

      Hi Vijay, try using the Quota Arrangement (MEQ1), it is one level deeper than source list. This may solve your problem.


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