Multi-Supplier Ordering

General Information

Use the multi-supplier ordering function when you want to split a single requirement among multiple suppliers, based on predefined percentages. Following are various examples for why this would be convenient:

Manufacturing can be started even if some suppliers do not deliver in time.
You might want to maintain business relationships with more than one supplier.
One supplier might be unable to handle a high volume requirement.

Multi-supplier ordering is only allowed for MRP (Material Requirements Planning), MS (Master Scheduling), Order Point, NLD (Next Level Demand), and manually entered purchase requisitions. This means that supplier splits are not allowed if you have an acquisition from another order. It is only possible to use this function with inventory registered and non-inventory registered purchase parts.

Overview

There is an overview where you can see how the split percentage changes over time. This window defines all suppliers along with their split percentages for each purchase part period.

Standard Multiple Quantity and Split Percentage

When a requirement is split, it is rounded up to the supplier's standard multiple quantity before it is actually ordered. The standard multiple quantity is based on the purchase unit of measure. The default value is 1.

It is possible to phase in and phase out suppliers over a period of time. The purchase part can have multiple phase-in and phase-out periods. These periods cannot overlap. For each period, there can be multiple suppliers; however, the total of the split percentage must be 100%. Thus, when a supplier is being phased out on a particular date, new suppliers may be phased in immediately.

Purchase Requisitions and Multi-Supplier Ordering

When a requisition line is created from MRP, MS, NLD or Order Point, and multiple suppliers are entered for the purchase part, the system uses the following logic:

The supplier split data is retrieved for the particular part, site, and period. The desired receipt date should be between the phase-in and phase-out date.
The system loops through each supplier. The supplier with the highest percentage has first priority for the system's execution.
The split quantity is calculated as follows: Split Qty = Std Multiple Qty * Round (Requisition Qty * Split Percentage/Std Multiple Qty).
A new purchase requisition line is created for each supplier in the supplier split basic data.

When you manually enter requisition lines, a question dialog opens and asks if the requested quantity should be split. The dialog only appears if multiple suppliers are entered for the purchase part. Answer 'Yes' if you want the requested quantity to be split according to the previously mentioned logic. If your answer is no, the line will be saved as a normal purchase requisition line.

Note: You must decide whether or not supplier split should be used when creating the requisition line. It is not possible to do this in a second place.

Examples of the Split Quantity Calculation-For External Suppliers

Example 1:

(1) Master data
Purchase part X, Std Multiple Qty = 200
External Supplier EXTSUP1, Split Percentage = 70%
External Supplier EXTSUP2, Split Percentage = 30%

(2) Transaction data
Purchase requisition, Quantity = 1200

External Supplier EXTSUP1, Order Quantity = 200 * Round (1200 * 0.7 / 200) = 800
External Supplier EXTSUP2, Order Quantity = 1200 – 800 = 400

Example 2:

(1) Master data
Purchase part Y, Std Multiple Qty = 400
External Supplier EXTSUP1, Split Percentage = 50%
External Supplier EXTSUP2, Split Percentage = 30%
External Supplier EXTSUP3, Split Percentage = 20%

(2) Transaction data
Purchase requisition, Quantity = 6000

External Supplier EXTSUP1, Order Quantity = 400 * Round (6000 * 0.5 / 400) = 3200
External Supplier EXTSUP2, Order Quantity = 400 * Round (6000 * 0.3 / 400) = 2000
External Supplier EXTSUP3, Order Quantity = 6000 – 3200 – 2000 = 800

Note that all calculations are performed in inventory unit of measure. After the order quantity is calculated, it is converted to purchase unit of measure for each supplier.

When requisitions are created by planning processes that handle distribution orders, it is important not to double source to a multi-site planned internal supplier, due to a supplier split definition. Since the multi-site planned supplier is allocated a share of the planning demand through a distribution order, the requisition is split among the other suppliers. To avoid this problem, requisitions created from planning requisitioner MS, Order Point, Next Level Demand, or MRP must use special splitting logic.

Example:

(1) Master Data

MRP Requirement: 100 pcs

Supplier Split:
Multi-site planned Internal Supplier INTSUP1, Split Percentage = 50%
External Supplier EXTSUP1, Split Percentage = 25%
External Supplier EXTSUP2, Split Percentage = 25%

(2) Transaction Data

MRP creates a distribution order for a quantity of 50 units for Internal Supplier INTSUP1

MRP creates requisition for 50 units (no supplier specified).

Purchasing must split the 50 units between External Supplier EXTSUP1 and External Supplier EXTSUP2.

Requisition Split: 25% External Supplier EXTSUP1 share + 25% External Supplier EXTSUP2 share = 50%

External Supplier EXTSUP1,Order Quantity = 25/50 * 50 units = 25 units
External Supplier EXTSUP2,Order Quantity = 25/50 * 50 units = 25 units

Supplier Schedules and Multi Supplier Ordering

When supplier schedules are created by MRP, it is important not to double source to a multi-site planned internal supplier, due to a supplier split definition. Since the multi-site planned supplier is allocated a share of the planning demand through a distribution order, the supplier schedule quantity is split among the other suppliers. To avoid this problem, schedules created from planning requisitioner MS, Order Point, Next Level Demand, or MRP must use special splitting logic.

Example:

(1) Master Data

MRP Requirement: 100 pcs

Supplier Split:
Multi-site planned Internal Supplier INTSUP1, Split Percentage = 50%
External Supplier EXTSUP1, Split Percentage = 25%
External Supplier EXTSUP2, Split Percentage = 25%

(2) Transaction Data

MRP creates a distribution order for a quantity of 50 units for Internal Supplier INTSUP1

MRP sends a supplier schedule for a quantity of 50 units (no supplier specified).

Supplier Scheduling must split the 50 units between External Supplier EXTSUP1 and External Supplier EXTSUP2.

Supplier Schedule Split: 25% External Supplier EXTSUP1 share + 25% External Supplier EXTSUP2 share = 50%

External Supplier EXTSUP1, Order Quantity = 25/50 * 50 units = 25 units
External Supplier EXTSUP2, Order Quantity = 25/50 * 50 units = 25 units