Akila Wedasinghe
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SAP Procurement Master Data
Understanding Purchase Info Record, Source List, and Quota Arrangement
Procurement Master Data in SAP
Procurement master data simplifies transactions by providing predefined information for vendor and material combinations. It enables automatic source determination and helps reduce manual efforts in procurement processes.
Purchase Info Record
Stores vendor-specific information for materials, including pricing, delivery times, and conditions.
Pricing Delivery TimeSource List
Defines which vendors are approved to supply specific materials, with validity periods.
Vendor Control Validity PeriodsQuota Arrangement
Distributes quantities among multiple sources based on percentages or quantities.
Distribution Strategic SourcingWhy Use Procurement Master Data?
Procurement master data helps to:
- Simplify transaction processing by automatically populating data
- Ensure consistent pricing and terms for materials
- Control which vendors can supply specific materials
- Strategically distribute procurement quantities
- Enable automatic source determination in MRP runs
Source Determination Priority
Highest priority in source determination
Second priority if no quota arrangement exists
Last priority in source determination
Important Note
Source determination logic differs between manual purchase requisitions and MRP-generated requisitions. The "Regular Supplier" indicator only works for manual requisitions, while "Auto Sourcing" works for MRP runs.
Purchase Info Record
A Purchase Info Record contains specific data about how a particular vendor supplies a particular material. It stores information like pricing, delivery times, and terms, which can be copied to purchase requisitions and orders.
Purchase Info Record Levels
Information gets more specific as you move down the hierarchy.
Plant-level data overrides purchase organization data.
Purchase Info Records can be created for different procurement types:
- Standard (M): For regular purchasing of materials
- Subcontracting (L): When you provide materials to vendors who process them and return the finished products
- Pipeline (R): For materials delivered through pipelines (gas, water, electricity)
- Consignment (K): When vendor's stock is stored at your location but you only pay when you withdraw it
| Field | Description | Impact |
|---|---|---|
| Planned Delivery Time | Number of days needed for delivery | Used for scheduling in purchase orders |
| Net Price | Price per unit negotiated with vendor | Automatically copied to purchase orders |
| Under/Over Delivery Tolerance | Acceptable percentage deviation in quantities | Controls goods receipt tolerances |
| Regular Supplier | Indicator for preferred vendor | Used in manual source determination |
| Auto Sourcing | Indicator for automatic source selection | Used in MRP source determination |
Example Scenario: Vendor-Specific Delivery Times
Material A has a standard delivery time of 10 days in the material master. However:
- Vendor X can deliver it in 7 days
- Vendor Y can deliver it in 12 days
Moreover, Vendor Y delivers to different plants with different timelines:
- To Plant P1: 12 days
- To Plant P2: 9 days
With Purchase Info Records, you can maintain these specific delivery times for each vendor-material-plant combination.
Regular Supplier vs. Auto Sourcing
Regular Supplier: This indicator is set in the general data of the info record. It requires configuration at the plant level to be activated. When active, it causes this vendor to be preferred when creating purchase requisitions manually.
Auto Sourcing: This is a new indicator in S/4HANA, set in the purchase organization data of the info record. It makes this vendor preferred during automatic source determination in MRP runs.
Source List
The Source List defines which vendors are approved to supply specific materials at specific plants. It includes validity periods and can identify fixed vendors.
- Vendor Control: Define which vendors can be used for procuring specific materials
- Validity Periods: Set timeframes when vendors are approved to supply materials
- Vendor Blocking: Temporarily or permanently block suppliers with quality or certification issues
- Fixed Vendor Marking: Mark vendors as "fixed" for automatic source determination
- MRP Relevance: Configure source list entries to influence vendor selection in MRP runs
Source List Activation
Enable "Source List" checkbox for material
Define vendor-material-plant combinations with validity periods
Mark as Fixed/Blocked and set MRP relevance
Example Scenario: Certification Management
A vendor supplies materials that require Halal certification. The certification expires on December 31, 2022.
To ensure compliance:
- Create a Source List entry with validity period ending on November 30, 2022 (one month before certification expiry)
- Check with the vendor about certification renewal before the period ends
- If renewed, extend the validity period in the Source List
- If not renewed, the vendor won't be available for selection after November 30, 2022
This gives a buffer period to handle any certification issues before the actual expiry date.
Important Configuration Requirements
For Source List to control vendor selection, two settings are required:
- The "Source List" checkbox must be selected in the material master (purchasing view)
- Valid Source List entries must exist for the material-vendor-plant combination
If the Source List checkbox is enabled but no valid entries exist, you won't be able to create purchase requisitions for that material.
Source List vs. Purchase Info Record
While both control vendor selection, they serve different purposes:
- Source List: Controls which vendors can supply materials (approval/control mechanism)
- Purchase Info Record: Defines how vendors supply materials (terms, conditions, pricing)
A vendor must typically have both a Source List entry and an Info Record to be selected during procurement.
Quota Arrangement
Quota Arrangement determines how purchase quantities are distributed among multiple sources (vendors, in-house production, stock transfers) for a specific material.
- Quota: The proportion or ratio assigned to each source
- Quota Rating: A calculated value that determines which vendor gets selected next
- Quota Base Quantity: A manually assigned value to adjust vendor priorities
- Allocated Quantity: The quantity already assigned to each vendor
The quota rating formula is:
The vendor with the lower quota rating gets selected first. If ratings are equal, the vendor with the higher quota is selected.
- Reduce Dependency: Avoid relying on a single supplier for critical materials
- Maintain Multiple Sources: Keep backup vendors active by giving them consistent business
- Strategic Distribution: Allocate quantities based on vendor performance, costs, or strategic importance
- Balance Internal vs. External Production: Determine when to produce internally vs. when to buy externally
Example Scenario: Strategic Multi-Vendor Approach
A company sources a critical component from two vendors:
- Vendor V1 is the primary vendor (reliable, good quality)
- Vendor V2 is maintained as a backup vendor
Using Quota Arrangement, they set:
- 90% of quantities to be sourced from Vendor V1 (Quota = 9)
- 10% of quantities to be sourced from Vendor V2 (Quota = 1)
This keeps Vendor V2 active in their supply chain so if Vendor V1 has issues (strikes, capacity constraints), Vendor V2 is ready to supply immediately.
Example Scenario: Balancing In-House vs. External Production
A company both produces a component in-house and purchases it from vendors:
- In-house production capacity: 10,000 units/month
- External vendor capacity: Unlimited
Using Quota Arrangement:
- First 10,000 units → Planned production orders (internal)
- Any additional requirement → Purchase requisitions (external)
If monthly requirement is 15,000 units:
- 10,000 units will be produced in-house
- 5,000 units will be purchased from vendors
New Vendor Induction with Quota Base Quantity
When adding a new vendor to an existing Quota Arrangement:
- The new vendor starts with zero Allocated Quantity
- This gives the new vendor an unfair advantage (lowest quota rating)
- To balance this, add a Quota Base Quantity to the new vendor
- This brings their quota rating in line with existing vendors
Quota Base Quantity is a valuable tool for adjusting vendor priorities without disturbing the distribution strategy.
Source Determination Logic
Source determination is the process of automatically selecting vendors for purchase requisitions, either created manually or generated by MRP runs.
Quota Arrangement
Highest priority in source determination. If a quota arrangement exists for a material-plant combination, the system will first check which vendor should be selected based on quotas and quota ratings.
Source List
Second priority. If no quota arrangement exists or if it doesn't determine a unique source, the system checks the Source List. "Fixed" vendors in the Source List are preferred, and blocked vendors are excluded.
Purchase Info Record
Lowest priority. If neither quota arrangement nor Source List determines a unique source, the system considers indicators in the Purchase Info Record like "Regular Supplier" or "Auto Sourcing".
Different Logic for Manual vs. MRP Requisitions
Source determination works differently for manual purchase requisitions vs. MRP-generated requisitions:
| Feature | Manual Purchase Requisition | MRP-Generated Requisition |
|---|---|---|
| Regular Supplier | Considered | Not considered |
| Auto Sourcing | Lower priority | Considered |
| Source List - Fixed Vendor | Considered | Considered if MRP-relevant |
| Quota Arrangement | Highest priority | Highest priority |
Example Scenario: Complete Sourcing Flow
Let's walk through a complete sourcing scenario:
System checks if a quota arrangement exists for material SG15 09 at plant SG15.
If it exists, it calculates quota ratings for each vendor and selects the one with the lowest rating.
If no quota arrangement exists or it doesn't determine a unique source, system checks the Source List.
It verifies:
- Valid entries exist for current date
- Source list entries are not blocked
- Any vendor is marked as "fixed"
If still no unique source is determined, system checks info records.
For manual requisitions, it prefers vendors with "Regular Supplier" indicator.
For MRP requisitions, it considers vendors with "Auto Sourcing" indicator.
If automatic determination fails to identify a unique source, the system presents a list of possible sources.
The user must then manually select the appropriate vendor.