Impacts of sourcing models

Review the information on various sourcing models, and how Sterling Order Management System Software handles each one of them.

So far, sourcing discussions have been related to system determination of the sourcing location and expected dates for determining product availability. Depending on the sourcing model used for sourcing the product, however:

  • Inventory may need to be looked up in a different manner
  • Shipping notifications may need to be handled differently
  • Inventory supply and demand updates may need to be done differently

The following section discusses the sourcing models and how they are handled:

Sourcing model A

If you ship from stock in one of the locations owned by your organization (or the same legal entity or node marked as "3PL location"), Sterling Order Management System Software handles inventory lookup, shipping notification, and inventory updates as follows:

  • Inventory lookup
    • The inventory organization of seller is searched for availability
  • Shipping instruction notification
    • Shipping instruction is done through an Order release
  • Inventory updates
    • Controlled through the status movement of the order

Sourcing model B

If you drop ship from a partner. (Shipping location belongs to a different legal entity and not marked as "3PL location"), Sterling Order Management System Software handles inventory lookup, shipping notification, and inventory updates as follows:

The partner organization (vendor) requires a purchase order.

  • Inventory lookup
    • If inventory information from the partner is available:
      • The inventory organization of seller is searched for availability if the partner's inventory organization is the same as the seller.
      • If the partner organization keeps inventory externally, a user exit is called to get the inventory information.
      • Note that if the partner organization keeps inventory within Sterling Order Management System Software as part of another inventory organization that inventory is NOT accessible.
    • If inventory information from the partner is NOT available:
  • Shipping instruction notification
    • A "drop ship" chained order is created. This chained order is created in "created" status. Notification can be send to the vendor based on the order that was created at an appropriate step in the pipeline.
  • Inventory updates
    • All buyer supply updates are controlled through the parent order only.
    • Seller supply and demand updates are done from parent order.
  • The partner organization does not require a separate purchase order

Note that the only inventory model supported for this type of organization is "Inventory maintained as part of Sterling Order Management System Software".

  • Inventory lookup
    • Inventory is searched in the inventory organization of seller.
  • Shipping instruction notification
    • Shipping instruction is done through an Order release.
  • Inventory updates
    • Controlled through the status movement of the order

Sourcing model C

If you procure inventory from a partner and ship from your own location, Sterling Order Management System Software handles inventory lookup, shipping notification, and inventory updates as follows:

  • Inventory lookup
    • If inventory information from partner is available:
      • Inventory is searched in the inventory organization of the seller if the partner's inventory organization is the same as the seller.
      • If the partner organization keeps inventory externally, a user exit is called to get the inventory information.
      • Note that if the partner organization keeps inventory within Sterling Order Management System Software as part of another inventory organization that inventory is NOT accessible.
    • If inventory information from the partner is NOT available:
      • No inventory checks are done.

For calculations of shipping dates, see Procurement purchase order. Sterling Order Management System Software includes the transit time between the procurement location and shipping location to calculate the final ship date. Sterling Order Management System Software also takes into consideration the receiving calendar and receipt processing time for the final shipping node.

  • Shipping instruction notification
    • A "procure to ship" chained order is created immediately at the time of scheduling the order. This chained order is created in "reserved" status.
    • Notification can be send to the vendor based on the order that was created at an appropriate step in the pipeline. A separate release process could be configured that can control notification times through the "advance notification days" setting.
  • Inventory updates
    • Inventory updates are done on both orders for both the buyer and the supplier. If the partner organization does not maintain any inventory information, the seller inventory updates for the procurement orders are not be carried out.

Sourcing model D

If you procure inventory from another location owned by you and ship from another owned location, Sterling Order Management System Software handles inventory lookup, shipping notification, and inventory updates as follows:

  • Inventory Lookup
    • Inventory is searched in the inventory organization of the seller.

For calculations of shipping dates, please see Procurement transfer order. Sterling Order Management System Software includes the transit time between the procurement location and shipping location to calculate the final ship date.

  • Shipping instruction notification
    • A "procure to ship" chained order is created immediately at the time of scheduling the order. This chained order is created in "reserved" status. The document type to be used for this chained order is controlled through a separate document type configuration and, by default, set to 'Transfer order'.
    • Notification can be sent to the node based on the order that was created at an appropriate step in the pipeline. A separate release process should be configured that can control notification times through the "advance notification days" setting.
  • Inventory updates
    • Inventory updates are done on both orders for both the buyer and the supplier.