Product sourcing restrictions

In Product Sourcing Restrictions Setup, you can create and maintain restriction records that enable you to maintain the terms of your purchasing agreements. Product sourcing restrictions are typically mandated by vendors to prevent gray market conditions, which is the legal distribution of a product that is unauthorized or unintended by the manufacturer. Purchasing agreements often identify which warehouses, based on location, are authorized to purchase the product, and restrict other warehouses from purchasing directly from the vendor.

Product sourcing restrictions records prevent unauthorized warehouses from obtaining the restricted product by purchasing directly from the vendor or receiving a warehouse transfer from the authorized warehouse. You can create records that prevent the unauthorized distribution of a product, product line, or product category through a purchase order, warehouse transfer, or both.

In Distribution SX.e functions where you can creating a purchase order or warehouse transfer, the sourcing document is validated against Product Sourcing Restriction Setup records. If the key field values, such as product, product line, product category, warehouse, vendor, on the sourcing document match a restriction record and the Distribution SX.e system date is within the start and expire date range of the record, a product sourcing restriction error occurs.

Purchase orders and warehouse transfers that generate a product sourcing restriction error are not created unless an override of the restriction is allowed on both the restriction record and within the function. Allowing an override is not a sound practice because it enables purchasing agreement violations to occur. Under some circumstances, such as a temporary removal of the restrictions by the vendor, you can use an override to source the restricted product without requiring you to delete or inactivate the restriction record. If an override is allowed, you must have the authority, which can be set up in SA Administration Authorization Security Setup, or be granted authority by your supervisor, to perform the override.

Product master records are also validated against the restrictions records to prevent you from establishing an unauthorized source, a vendor or a warehouse, for the product that is in violation of vendor purchasing agreements.