This document discusses sourcing setup in Oracle Purchasing. It defines key sourcing terms like Approved Supplier List (ASL), ASL attributes, and sourcing rules. It provides steps for setting up a blanket purchase agreement and defining the ASL. This includes creating ASL entries at the item or commodity level, specifying business type, approval status, and global/local flags. Source document information like purchasing UOM and release generation method can be set in supplier-item attributes. Sourcing rules must then be assigned to items/organizations to define the supply chain network.

1. ASL-Sourcing in Procurement
An Oracle White Paper
October 2004

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Table of Contents
Executive Overview............................................................................................................ 3
Introduction......................................................................................................................... 3
Important Sourcing terms in Oracle Purchasing................................................................. 3
Approved Supplier List (ASL)........................................................................................ 3
ASL Attributes................................................................................................................ 4
Global & Local ASL....................................................................................................... 4
Sourcing Rules................................................................................................................ 4
Assign Sourcing Rules.................................................................................................... 4
Setup for Sourcing .............................................................................................................. 5
Create a Blanket Purchase Agreement........................................................................ 7
Sourcing Cycle in Core Purchasing.................................................................................. 12
Sourcing Cycle in iProcurement ....................................................................................... 13
Creating a Release from a BPA for a catalog item ....................................................... 13
Creating a Standard Purchase Order from a quotation for a Catalog Item................... 14
Creating a Standard Purchase Order from a Contract Purchase Order for a catalog item.
....................................................................................................................................... 15
Creating a Standard Purchase Order from a Contract Purchase Order for a Non Catalog
Item ............................................................................................................................... 16
PO Create Documents Workflow in Sourcing.................................................................. 17
Advanced Features of Automatic Sourcing...................................................................... 20
Steps to implement Automatic Sourcing ...................................................................... 21
Tables involved in Sourcing ............................................................................................. 25
Summary........................................................................................................................... 26

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Executive Overview
Sourcing is a function with strategic importance within the broader context of
procurement. Infact it is a subset of procurement with strategic context. Sourcing sets the
stage for the entire company’s purchase for direct and indirect materials, and involves
highlevel, company-wide approaches to obtaining materials and services, identifying and
evaluating potential suppliers to meet those needs, negotiating and implementing
contracts with selected suppliers, monitoring and improving ongoing supplier
relationships.
This white paper focuses on the features that sourcing provides in the Procurement
module of Oracle Applications. It lays down the road map towards implementing
sourcing and describes in detail the sourcing cycle with related setups. It also discusses
the new sourcing feature in Oracle Applications- Automatic Sourcing.
Introduction
Oracle Purchasing allows users to automatically source items from suppliers based on the
sourcing rules and purchase agreements. The business needs of Sourcing are
• Automatically default supplier and pricing information onto requisition lines
• Source the item from negotiated purchase agreements
• Reduce manual intervention
Sourcing in Oracle Applications, can be implemented either to the requisition created in
iprocurement or core purchasing. The only difference lies in setup techniques. The setups
for both of the methodologies are discussed in this paper.
Important Sourcing terms in Oracle Purchasing
Approved Supplier List (ASL)
All procurement organizations maintain lists that associate the items and services they
buy from supplier organization. Data stored in a global repository containing relevant
details about each item/supplier/supplier site relationship, is known as an Approved
Supplier List (ASL). This repository includes information about all suppliers with
business statuses ranging from ‘Approved’ (the supplier has demonstrated the ability to
satisfy rigorous quality, cost, and delivery requirements over a sustained period) to
‘Debarred’ (the supplier is temporarily/permanently disallowed on purchase orders due to
performance failure, ethics violations, etc.) or 'New' if you have never placed a purchase
order with the supplier.

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ASL Attributes
For each ASL entry, ASL attributes specify the Release Generation Method, purchasing
Unit of Measure, source Blanket Agreements and Catalog Quotations for automatic
reference during document creation.
Global & Local ASL
Global ASL entries are valid for all Inventory Organizations. Local ASL entries are
specific to a single Inventory Organization.
Sourcing Rules
Sourcing rules define inventory replenishment method for either a single organization or
all organizations in the enterprise. They describe sourcing supply; for any organization,
they answer the question “where do I get part A from?” User defines rankings and %
allocation for replenishment sources in the form of Sourcing Rules.
Assign Sourcing Rules
Sourcing rule must be assigned to a particular item and/or organization. These
assignments are grouped together in assignment sets. This is where various sourcing
strategies define a particular supply chain network. In an assignment set, sourcing can be
assigned at different levels, as follows:
· An item across all organizations
· A single item in an inventory organization
· A category of items across all organizations
· A category of items in an inventory organization
· All organizations

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Setup for Sourcing
Sourcing setups in Oracle Applications is accomplished using the series of steps
described below. An important prerequisite for Sourcing is that items and suppliers
should be defined.
Define items.
Assign Item to Inventory organization

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Create suppliers and supplier sites in the Suppliers window.

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Steps to implement sourcing are
Create a Blanket Purchase Agreement
Defining the Approved Supplier list
To define the Approved Supplier List (ASL)
1. Navigate to the Approved Supplier List window as follows:
Navigation: Supply Base Management -> Approved Supplier List.
2. In the Organizations window that appears, choose the ship-to organization
for which to define Approved Supplier List (ASL) entries. This will be the
owning organization.
3. An ASL can be created for either of the following
a. Item - assigns a supplier to a particular item.
b. Commodity - assigns a supplier to a group of items belonging to a
category (or commodity).
4. Select an item or commodity.
5. One of the following Business type can be selected:

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a. Direct (Supplier): This option should be selected when the supplier sells
his products or services directly to buyer organization. Specify the
supplier and supplier site.
b. Manufacturer: This option should be selected when the supplier does not
sell his product/services directly to the procuring organization but sells it
through distributors
c. Distributor: This option should be selected when the supplier sells
products made by manufacturers. A distributor needs to be associated
with manufacturer, which implies that a manufacturer should be defined in
ASL before defining its distributor.
6. Select the supplier's approval status. Use one of the default statuses provided.
7. Navigate to the Record Details Alternate region.
8. Select one of the following in Global:
1) Yes - This ASL entry is valid for all inventory organizations in this
Operating unit.
2) No - This ASL entry is local, meaning that it is valid only for the
organization chosen in the Organizations window when first
opening the Approved Supplier List window.
Note: If two ASL entries exist for the same item or commodity, one
Global entry that applies to all organizations and one local entry that
applies only to the local inventory organization, the local entry takes
precedence.
Source document information can be specified in the Supplier-Item Attributes window.

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To define the supplier and commodity/item attributes:
1. Navigate to the Supplier-Item Attributes window by choosing the
Attributes button in the Approved Supplier List window.
2. Choose the Purchasing UOM.
3. Choose the Release Generation Method from the following options:
a) Automatic Release/Review: Automatically generates releases, but
requires a separate step for approval. “Create Release Program” is used to
create releases in this case.
b) Automatic Release: Automatically generates approved releases. This
choice is not available if encumbrance is turned on. “Create Release
Program” is used to create release in this case.
c) Release Using AutoCreate: Release is created by the workflow and
“Create Release Program” is not required.
NOTE: If Requisition Line(s) are for a one-time item then the Release
Generation Method is not considered and the requisition is a candidate for
Automatic creation by the CREATEPO workflow. This Occurs in the
workflow (CREATEPO) after the workflow has verified that the
Requisition has the required information for automatic release creation
4. One of the following attribute groupings can be selected from the
Alternate region:
a. Enter a unique Seq (Sequence) Number. Sourcing picks up the
document as per the sequence, i.e. if there are two documents specified in
ASL having sequence number 1 and 2, then the document with sequence
number 1 will be picked up irrespective of whether it is a Blanket or
Quotation.
b. Following Document types can be selected:
--Blanket
--Quotation
A requisition with a quotation as a source document can be created into a
standard purchase order. A requisition with a blanket purchase agreement as a
source document can be created into a release (unless the ASL is setup for this
item as a Cosigned Inventory item. If this is the case then a Standard PO is
created instead of a Blanket Release)

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c. Choose a Document Number.
d. Choose a Line Number. The Status and Effective Dates for the
document, if any, are displayed.
Define a sourcing Rule
To define a sourcing rule:
1. Navigate to the Sourcing Rule window.
2. Enter a unique Sourcing Rule name.
3. Indicate whether this sourcing rule is used for all organizations (global)
or a single organization (local).
If the sourcing rule is local, enter an organization name; otherwise, the
current organization will be the receiving organization.
4. Enter effective dates. A start date is mandatory, but entering an end date
is optional.
5. Enter an allocation percentage 100%

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To assign a sourcing rule:
1. Navigate to the Sourcing Rule/Bill of Distribution Assignments window.
2. Enter an assignment set name and description.
Note: The assignment specified in profile option MRP: Default Sourcing
Assignment Set is the only one used by Purchasing during the sourcing process
3. Enter an Item/Category if the selection for the Assign To Type is Item or Item-Org.
4. Enter the sourcing rule as the Type.
5. Enter the name of the sourcing rule.
6. Save the form.

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Sourcing Cycle in Core Purchasing
1. Create a requisition for the Item for which the Sourcing Rule and Approved
Supplier List has been created.
2. The Supplier and Supplier Site defaulted from the Sourcing Rule.
3. Navigate to Source Details Alternate region.
4. The Blanket Purchase Agreement, which was specified in the ASL, is now
attached to the Requisition.
5. Approve the requisition.
6. Run the Workflow Background Process with the following parameters

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ItemType: PO Requisition Approval
Process Deferred: Yes
Process Stuck: No
Process Timeout: No
This step is not required if using the Create Documents workflow in Online
Mode, which is determined by the value of Requisition Approavl workflow
item attribute = “Send PO Autocreation to Background” is set to No. If this is set
to No then the Create Documents workflow will be done in online mode. If it is
set to yes it will be sent to the Background and this step is required
Sourcing Cycle in iProcurement
Sourcing can also be used in iProcurement. Following types of documents can be created
in iProcurement with the help of Sourcing
i) Creating a release from a BPA for a catalog item.
ii) Creating a standard purchase order from a quotation for a catalog item.
iii) Creating a standard purchase order from a contract purchase order for a catalog
item.
iv) Creating a standard purchase order from a contract purchase order for a non
catalog item.
Creating a Release from a BPA for a catalog item
Following steps should be followed in order to create a release from a BPA for a
catalog item.
i) Create one item.
ii) Create one BPA and ASL for that item and attach the BPA to the ASL for this
item.
iii) Extract item, BPA and ASL in iProcurement
Note: Following points to be taken care of while extraction.
Item List Price should be specified in Item Master in Purchasing tabbed region.
Item should be attached to a category, which should be web enabled.
Category should be extracted before Item.
Owning Org of ASL should be same as the Inventory Organization specified in Financial
System Parameters.
iv) Search for the item in iProcurement.
v) Create a requisition in iProcurement for this item.
vi) Approve the requisition.
vii) Run the workflow background process (if Release Generation Method in ASL
is “Release using Autocreate”and if the Requisition Approval Workflow item
attribute “Send PO Autocreation to Background” is set to yes. If “Send PO
autocreation to Background” is set to No then this step is not required.)

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The CREATEPO workflow performs the following checks before creating a release.
Wfstatus output for ItemType CREATEPO provides the status of these activities.
Does Req Line Have Enough Information To Create Document?
Does The Req Line Have Valid Supplier Information?
Does the Req Line Reference a Valid Blanket or Quotation?
Also it validates the Source document extracted for that item and the Release
Generation Method from the extracted ASL.
If the Requisition Line(s) are for a one time item then the Release Generation Method
is not considered and the Requisition is a candidate for automatic creation by the
CREATEPO workflow.
If all the above conditions are satisfied then it will create the release.
Creating a Standard Purchase Order from a quotation for a Catalog Item.
Following steps should be followed in order to create a Standard PO from a Quotation
for a catalog item.
i) Create one item
ii) Create one quotation and ASL for that item. Attach the quotation in ASL
iii) Extract item, Quotation and ASL in iProcurement
iv) Search for the item in iProcurement
v) Create a requisition in iProcurement for this item
vi) Approve the requisition.
vii) Run the workflow background process.
NOTE: If the Requisition Approval Worlflow item Attribute “Send PO
Autocreation to Background” is set to Yes.If “Send PO Autocreation to
Background” is set to No then this stepsis not required
The CREATEPO workflow performs the following checks before creating a release.
Wfstatus output for ItemType CREATEPO provides the status of these activities.
Does Req Line Have Enough Information To Create Document?
Does The Req Line Have Valid Supplier Information?
Does the Req Line Reference a Valid Blanket or Quotation?
Also it validates the Source document extracted for that item. If all these conditions are
satisfied then it will create the Standard PO.

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Creating a Standard Purchase Order from a Contract Purchase Order for
a catalog item.
i) Create one item
ii) Create one contract purchase oder and ASL for that item. Contract is not
specified in ASL.
iii) Extract item and ASL in iProcurement.
iv) Search for the item in iProcurement.
v) Create a requisition in iProcurement for this item
vi) Approve the requisition.
vii) Run the workflow background process.
NOTE: If the Requisition Approval Worlflow item Attribute “Send PO
Autocreation to Background” is set to Yes.If “Send PO Autocreation to
Background” is set to No then this stepsis not required
The CREATEPO workflow performs the following checks before creating a release.
Wfstatus output for ItemType CREATEPO provides the status of these activities.
Does Req Line Have Enough Information To Create Document?
Does The Req Line Have Valid Supplier Information?
Does the Req Line Reference a Valid Blanket or Quotation? (Which will be No in
this case)
Should Contract be used to AutoCreate Doc? (Which will be yes and will come
from workflow attribute)
Does Contract Info Exist in ReqLine? (It is No because contract is not extracted)
Is Contract Required on the ReqLine? (This needs to be set in workflow attribute as
No)
Does Contract Exist and Allow Creation from Contract? (Yes because contract is
there in core purchasing)
Now as it gets the details from the source document in core purchasing it will create a
standard Purchase order.

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Creating a Standard Purchase Order from a Contract Purchase Order for
a Non Catalog Item
i) Create one contract purchase order in core purchasing
ii) Create one non catalog requisition in iprocurement
iii) Specify the supplier and site (should be same as in the contract purchase order
iv) Approve the requisitionRun the workflow background process.
NOTE: If the Requisition Approval Worlflow item Attribute “Send PO Autocreation
to Background” is set to Yes.If “Send PO Autocreation to Background” is set to No
then this stepsis not required
The CREATEPO workflow performs the following checks before creating a release.
Wfstatus output for ItemType CREATEPO provides the status of these activities.
Does Req Line Have Enough Information To Create Document?
Does The Req Line Have Valid Supplier Information? (As given during Requisition
creation)
Does the Req Line Reference a Valid Blanket or Quotation? (Will not be there in
this case)
Should Contract be used to AutoCreate Doc? (Workflow attribute)
Does Contract Info Exist in ReqLine? (No as Contract PO is not extracted)
Is Contract Required on the ReqLine? (Workflow attribute)
Should Non-Catalog Request AutoSource From Contract? (Workflow attribute)
Does Contract Exist and Allow Creation from Contract? (Yes as it is there in Core
purchasing)

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PO Create Documents Workflow in Sourcing
The PO Create Documents Workflow is used in Sourcing to create the releases from
BPAs and standard purchase orders from Quotations automatically.
The wft file involved is poxwfatc.wft. Follow the below steps in order to configure the
PO Create Documents Workflow
1. Open the Workflow file in Workflow Builder.
2. Expand Attributes.
3. Double Click on the attribute ‘Is Automatic Creation Allowed?’
4. Specify the Value as ‘Y’

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Following attributes need to be set for
A) Generating Release from a BPA in Sourcing
Sr No Attribute Name Value Required
1 Is Automatic Creation Allowed? Y Yes
2 Should Workflow Create The Release? Y Yes
3 Is Automatic Approval Allowed? Y Optional
If the Attribute ‘Is Automatic Approval Allowed’ is set to Y then releases that
are created will be automatically submitted for approval. Whether the Release is
approved automatically or not depends on if Buyer that defaults on the Release
has approval authority at the time of Release creation. If the Buyer does not
have authority the Release will be forwarded in an IN PROCESS status to the
next approver in the Buyer`s Approval Hierarchy.
B) Generating Standard Purchase Orders from Quotation
Sr No Attribute Name Value Required
1 Is Automatic Creation Allowed? Y Yes
C) Generating Standard Purchase Order from a Contract Purchase Order in
iProcurement
Sr No Attribute Name Value Required
1 Is Automatic Creation Allowed? Y Yes
2 Should Contract be used to autocreate
Doc?
Y Yes
3 Should non-catalog requests be auto
sourced from contract?
Y Yes
4 Is Contract Required on Requisition
Line? (This is an optional item
attribute – it can be setup to Yes or No
and the system can still create PO`s
from Requisitions that have contracts
steup
N No

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The attribute SEND_CREATEPO_TO_BACKGROUND should be set to Y if the
PO Autocreation has to be sent to Background.

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Advanced Features of Automatic Sourcing
Oracle Purchasing enables the automatic creation of Sourcing Rules, Sourcing Rule
Assignments and Approved Supplier List entries during Blanket Agreement approval
submission. The system automatically creates the relevant entries, once the Blanket
Agreement is approved.
1) A new Profile Option "PO: Allow Auto-generate Sourcing Rules and ASL" has been
introduced. The default value is 'None'. In order to activate this feature, the profile option
value needs to be set to either "Create Only" or "Create and Update".
If the value is set to "Create only" then the "Enable Automatic Sourcing" checkbox and
the "Release Generation Method" field are visible and can be updated on the Approval
window.
If the value is set to "Create and Update", then the "Enable Automatic Sourcing"
Checkbox, the "Update Sourcing Rule and ASL Entries" checkbox and the "Release
Generation Method" field are visible and can be updated on the Approval window.
Note: If the Archival mode being used for Blanket Agreements is "Archive on Print", this
feature cannot be used and the new fields and checkboxes would not be visible in the
Approval window. User must select "Archive on Approve" to use this feature.
2. Sourcing Rule Name Prefix can be customized. The prefix value is read from the
activity attribute "PO Sourcing Rule Name Prefix" in PO Approval Workflow. The
default value is "PURCH".
Note: The new Sourcing Rules will be assigned at the Item Level and will be added to the
assignment set that is specified in the profile option "MRP: Default Sourcing Rule
Assignment set". The ASL will be created as a Global ASL.
This process will update existing Sourcing rules only if all of the following are true:
1. The sourcing rule is not assigned to any other item.
2. The Blanket purchase order Start and End Dates are not null.
3. If the update requires extension of any existing effective period in the Sourcing Rule,
there can be only one Supplier/Site for that effective period and must match the
supplier/site on the blanket purchase order.
4. The blanket effective period do not overlap multiple effective periods in the Sourcing
Rule.
The process will try to create or update Approved Supplier List entries even if Sourcing
Rule creation/update failed for the Blanket Agreement line item.

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For exception reporting, run the Purchasing Interface Errors report with a source type of
'ASR - Automatic Sourcing Rule Builder' to view the exceptions encountered during the
creation of sourcing rules and/or approved supplier list entries.
Steps to implement Automatic Sourcing
i) Create an Item.
ii) Set the Profile Option PO: Allow Auto-generate Sourcing Rules
iii) Set the Profile Option MRP: Default Assignment Set to the Set in which
Sourcing Rule will get attached.
iv) Create a BPA. Ensure that the effectivity dates are specified
v) Approve the BPA. In Approval window check the checkbox Create Sourcing
Rule and select the Release Generation method

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Note: Please note that this checkbox will only be enabled when the
Profile Option PO: Allow Auto-generate Sourcing Rules is set.
vi) Run the Workflow Background Process for item type = PO Approval ( even if
the sytem is setup to use PO approval in online mode this background process
must be run to create or update the ASL / Sourcing Rules for the data on the
Blanket Purchase Order submitted for approval.

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vii) ASL is automatically generated with the document attached in the Attribute.
Release Generation Method has also been populated automatically.

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viii) Sourcing Rule is also generated and attached to the assignment set specified in
Profile Option MRP: Default Assignment Set.
ix) The Sourcing Rule will show the same Supplier/Supplier Site with 100% allocation
and same effectivity dates as that of BPA.

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Tables involved in Sourcing
1. PO_APPROVED_SUPPLIER_LIST
PO_APPROVED_SUPPLIER_LIST stores the relationship between an item or
commodity; a supplier, distributor, or manufacturer; ship-to
organizations; and approval/certification status.
2. PO_ASL_ATTRIBUTES
PO_ASL_ATTRIBUTES stores all information for the
supplier/item/organization relationship defined in
PO_APPROVED_SUPPLIER_LIST. This information
is maintained separately to allow each organization to define its own
attributes, even if using a Global ASL entry for the supplier/item
relationship and approval status.
3. PO_ASL_DOCUMENTS
PO_ASL_DOCUMENTS stores sourcing references to supply agreements,
blanket agreements, and catalog quotations associated with particular
suppliers and items in PO_APPROVED_SUPPLIER_LIST.
4. PO_ASL_STATUSES
PO_ASL_STATUSES stores the user-defined approval/certification statuses for
the ASLs.
5. PO_ASL_STATUS_RULES
PO_ASL_STATUS_RULES stores the business rules associated with each
defined ASL status.
6. MRP_SOURCING_RULES
MRP_SOURCING_RULES stores sourcing rule names and descriptions. The
Define Sourcing Rule form populates this table.
7. MRP_ASSIGNMENT_SETS
MRP_ASSIGNMENT_SETS stores information about Sourcing Assignment Sets.
The Define Assignment Sets form populates this table.
8. MRP_SR_ASSIGNMENTS
MRP_SR_ASSIGNMENTS stores the assignment of sourcing rules
or bills of distribution to items, organizations, category, or
at the global level. The Assign Sourcing Rules Form populates this table.

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9. PO_ASL_ATTRIBUTES_VAL_V (view)
PO_ASL_ATTRIBUTES_VAL_V is a view used by the Create Documents
workflow that is created from table PO_ASL_ATTRIBUTES and table
PO_APPROVED_SUPPLIER_LIST
Summary
Purchasing provides great flexibility in implementing Sourcing. To use this feature
successfully, business needs and supply chain strategy should be identified. With the
correct setups and different techniques of Sourcing outlined in this paper, you have
greater flexibility than ever before to make this feature suit your business processes.
By implementing this sourcing functionality employer will give full access to the users
and free up the purchasing department to concentrate on securing the best deals for the
organization.
Acknowledgement
We wish to record our sincere appreciation towards:
Mike Williams, Linda Johnston, Lisa Oinonen and Starr Smelley of Procurement Team
for reviewing this paper and for making it complete with their feedback.
We are grateful to Adiraju Sastry and Chandu Tadanki for their constant encouragement
and support.
References
Oracle Purchasing User's Guide Release 11i (Part No.A82913-04)

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ASL-Sourcing in Procurement
November 2004
Author: Nandini basu & Rajiv Arora (CPIM)
Oracle Corporation
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