Sourcing Rule

Definition

Sourcing rules tell how a purchase or supply node in the supply chain is to be sourced within a certain date interval.

Uses

Sourcing rules control how a demand at a warehouse is fulfilled. This may be done through manufacturing, purchasing or distribution.

Demand from customers drives the supply chain. Sales forecasts or budgets are used as input to master demand schedules at the supply nodes.

Sourcing rules are especially useful for industries that require multi-sourcing for one item. For example, there could be a point in time when the company does not have the capacity to manufacture and wants to supply via distribution orders instead, or decides to purchase 50 percent of an item and supply the remaining 50 percent from another warehouse.

Sourcing rules contains the following information:

• From where - the node (a supplier or a warehouse) from which the sourcing should be done
• To where - the node (a warehouse) to which the sourcing should be done
• How much - the percentage of the demand that should be supplied from this node
• When - the date from which the sourcing rule is valid.

Note that the sum of the sourcing rules per combination of To node, SCP item group and From date must always be 100 percent.