Sourcing rules

You can set key parameters for sourcing rules.

If you set the "Sourcing rules defined" parameter to "No", the setup of sourcing rules is irrelevant for you and can be skipped completely. Sterling Order Management System Software automatically considers all the nodes owned by the Enterprise as potential candidates for sourcing the product and selects the optimal node based on the rest of your configuration.

This section discusses sourcing rule setup and how Sterling Order Management System Software uses this configuration.

A sourcing rule can be created by specifying one or more of the following key parameters:

  • Item Classifications or Item ID
  • Geographical region of the ship-to location or ship-to node
  • Minimum available capacity
  • Fulfillment type
  • Seller organization
  • Sourcing criteria

You have the flexibility to leave any of the above parameters (except fulfillment type) as void in the sourcing rule and that implies that the sourcing rule is applicable to all values of that parameter.

For each sourcing rule, you can then specify a sequence of node or distribution group to be used for sourcing the product.

Order sourcing classification

Sterling Order Management System Software provides the flexibility to configure a custom parameter that is high in the sourcing priority ladder. For example, an enterprise may be supplying products to a number of retail stores, and one of those retail stores does not want their products to come from a warehouse that is in a foreign country or region. This could be due to the complications that come with crossing borders (duty, delays with merchandise check). It is possible, by specifying a customer name or customer attribute such as the order sourcing classification, to take this restriction into account in the sourcing logic.

Item classifications or item ID

Sterling Order Management System Software provides the flexibility to configure sourcing rules based on multiple item classifications to avoid extensive setups required at each item level. At the same time, it also provides the flexibility to specify this setup at an item level for special situations.

One approach is Sterling Order Management System Software could take is to use only a pre-defined "classification" such as product line for this setup. In different situations, you may want to create your own classifications and use them for setting up sourcing rules. For example, in a process industry dealing with steel, the classification could be the "grade of steel, whereas for a retailer it could be "product line".

To provide this flexibility, Sterling Order Management System Software enables you to pick your own item attributes that are used for setting up the sourcing rules. Your catalog organization (the Enterprise could be maintaining its own catalogs) can select the classifications that should be used for purposes of "Product sourcing". For example, your organization can choose to set up sourcing based on a product line classification. Another enterprise in the same installation could choose some other custom classification for sourcing.

Geographical region

Sterling Order Management System Software provides the flexibility to create sourcing rules based on the region to which the product is being shipped. An organization can choose the Region Schema to be used for determining the shipping region. Every ship-to address is translated to a shipping region hierarchy in the Region Schema based on its postal code. This shipping region is used to look up the correct sourcing rule. Example 1: sourcing rules and Example 2: sourcing rule region hierarchy below illustrate the usage of regions in sourcing rule determination. See Regions and region schema for a complete understanding of this function.

Procure for shipment setup

When evaluating product availability, the system considers each sourcing rule detail in the selected shipping sourcing rule. If the product is not available at the node or distribution rule with lowest sequence, the procurement sourcing rule is considered, and evaluated in the order of the sequence specified. If all procurement details have been evaluated but inventory cannot be found, the next detail in the shipping sourcing rule is considered.

Procurement sourcing rules are not supported for logical kit items.

In some situations you may want to ship a product from a particular location even when there is no product available at that location. For such situations, Sterling Order Management System Software can automatically create a transfer or purchase order for the product when it is not available at the shipping location of choice. To do so, the "Procure for shipment" flag must be set to "Yes".

An example of a situation where you would want to do this is when you want to ship a complete order out of a single node close to the final ship-to location but the desired ship node does not stock all of the items or is just a cross-dock location. You set this parameter to "Yes". Sterling Order Management System Software then sources the order to the desired ship node location and then creates a transfer order or a procurement order from other locations to this location to complete that particular order. These "chained procurement orders" act as transfer orders or could be purchase orders that are tied to the customer shipping order. The following figure illustrates a typical setup for shipment procurement.

Figure 1. Procurement distribution setup

This can be very effectively used for implementing "merge in transit" functionality. The merge location can act as the shipping node for the order. Sterling Order Management System Software creates transfer movements to the merge location based on this setup. Selection of the merge location itself can be driven out of the geographical dimension of the sourcing rules.

Apart from this being set to "Yes", the node in question should also be configured to set the "Procure for shipment allowed" flag to "Yes".

To effectively achieve the creation of transfer or procurement orders, the following must also be set up:

  • Procure for ship" sourcing rules

    These are sourcing rules set up by the procuring node. These rules are similar to the other sourcing rules discussed here. You can define multiple sourcing rules with corresponding sequences, similar to shipping sourcing rules. Each sourcing detail contains either a single node or a distribution rule (optimized based on node availability of the selling node), which enables you to consider multiple nodes for procurement. Sterling Order Management System Software looks into the inventory of the node or nodes from where you want to procure items, and if available, creates a procurement order.

  • The "Requires chained orders" flag must be set to "Yes"
  • Transfer schedule

    Though not mandatory, this schedule can be created to specify a transfer schedule between any two nodes on a "day-of-week" basis. Transit time can also be specified. This setup is used for calculating expected dates.

    Note: When calling the inventory availability API, Sterling Order Management System Software takes all of this information into account and suggests dates considering that a procurement order would be created. However, Sterling Order Management System Software does not actually create the procurement order until you use the scheduling function to schedule an order.

Minimum available capacity

Minimum available capacity percentage specifies the work capacity for each node so that, when scheduling, order fulfillment can be based on the node's capacity for that day. Additional fulfillment needs can then move to other distribution centers, or to the same distribution center on the next day, if necessary. Because sourcing rule details can be configured to include only nodes that have a certain level of capacity available, if a node does not meet the defined availability percentage, that node will not be used.

In this way, each node's workforce can be utilized effectively.

Fulfillment type

An Enterprise can define the list of valid values for fulfillment type and specify it on the order line. Sterling Order Management System Software uses the sourcing rule associated with the fulfillment type to determine the correct sourcing rule. A blank value can be specified for the fulfillment type on the order line, but it cannot be blank in the sourcing rule. If it is blank on the order line, the enterprise on the default fulfillment type of the order is used to select a sourcing rule. Sterling Order Management System Software does an exact match between the value of the parameter in the sourcing rule and the fulfillment type on the order line. Unlike other sourcing rule parameters, a blank value in this parameter does not signify that it can be used for all fulfillment types.

This control can be used to accommodate custom requirements where you need to use different sourcing locations based on parameters Sterling Order Management System Software either does not understand or does not provide control on in this release; such as customer, quantity of an order line, or order type. You can translate your requirements into different fulfillment types and thus get different sourcing rules.

Seller organization

Sterling Order Management System Software provides the flexibility to source a product differently based on the Seller organization involved in the transaction. You may model your stores as different Seller organizations and may want different sourcing based on the store from where the product was sold.