MM / P2Parchitect

MM Source Determination Part 4: Architecting Source Determination for Global Templates

Key takeaway

Design source determination for many plants and companies: central contracts and reference purchasing organizations, plant-independent vs plant-specific info records, source list policy by category, quotas for strategic multi-sourcing, integration with sourcing tools and MRP, and migration of sources.

Explanation

📌 KEY POINTS
✅ Category-based policy: which categories need contracts, source lists or quotas.
✅ Central contracts (with reference purchasing orgs) serve many plants; local sources for local buys.
✅ Plant-independent info records reduce maintenance where prices are the same.
✅ Sourcing awards (e.g. Ariba) must feed contracts, info records and source lists.
⚠️ Mandatory source lists everywhere create maintenance overload — use them where control is needed.

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▶ WHERE WE ARE
Part 3 covered quotas. Now template architecture.

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▶ 1. POLICY BY CATEGORY

Strategic: central contracts + quotas.
Direct materials: source lists mandatory.
Indirect: catalogs/contracts, no source lists.

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▶ 2. CENTRAL AGREEMENTS

Contracts at central purchasing org; release orders from local orgs.

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▶ 3. INFO RECORD DESIGN

Plant-specific vs plant-independent.

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▶ 4. INTEGRATION

Sourcing tools → agreements; MRP relevance.

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▶ 5. MIGRATION

Clean sources, validity, blocked suppliers; generate lists from agreements.

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▶ STEP BY STEP

Classify categories and define policies.
Design agreement and info record structure.
Define integration and migration steps.

✅ CHECKPOINT: each category has a documented source rule and owner.

Code example

ABAP Code

===== STEP 1: policy =====Direct strategic: central contract + quota + mandatory source listDirect standard: info records + source listIndirect: catalogs / contracts, no source list ===== STEP 2: structure =====Central POrg 0001 contracts → local POrgs via reference | plant-independent info records where prices equal ===== STEP 3: migration =====Legacy sources → cleanse (expired/blocked) → load agreements → ME05 source lists → validate

Real project scenario

A multinational consolidating five regional systems migrated all legacy source lists, including expired and conflicting entries. POs failed or picked wrong suppliers. The architecture was reset: category policies, central contracts, generated source lists from valid agreements only — reducing source list records by 60%.

Common mistakes

Migrating all legacy sources.
Mandatory lists everywhere.
No category policy.
Awards not integrated.
Duplicate info records per plant.

Best practices

Define category policies.
Centralize agreements.
Generate lists from valid agreements.
Integrate sourcing awards.
Use plant-independent info records.

Interview angle

Questions: "How would you design source determination globally?", "Plant-specific vs plant-independent info records?", "How do you migrate sources?"
Strong answer: category policies, central contracts and reference orgs, info record design, integration with sourcing and MRP, clean migration.

Practice this lesson

Quick check

1. For which categories are mandatory source lists typically most useful?

2. When are plant-independent info records useful?

3. Consolidating five regional systems, a team plans to migrate all legacy source lists. What is better?

Interview questions

1. A client integrating Ariba with S/4HANA is using a make-to-order production scenario where Ariba-sourced components trigger PP requisitions. During go-live, purchase requisitions generated by MRP for these PP-driven components are not flowing correctly to Ariba for sourcing. What integration points would you investigate?

Answer it in your own words first, then compare.

2. After migrating source lists to S/4HANA as part of a procurement transformation, buyers report that certain materials configured for automatic source determination are failing to find a valid source during requisition conversion, even though the source list appears populated correctly. What would you check?