What is source allocation in SAP IS-AFS-MM - Materials Management?

SAP Term: source allocation

• Component: IS-AFS-MM

• Component Name: Materials Management

• Description: Analyzing tool that supports the evaluation and selection of the appropriate vendors for your purchase orders for materials. The source allocation uses different selection criteria for this, such as personal and company preferences, import restrictions from a third country, or the capacity situation of the respective vendors. After the optimum vendors have been found, they are written in the purchase requisitions as fixed vendors.

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• Key Concepts: 
  Source allocation is a process in SAP Materials Management (MM) that allows you to assign a source of supply to a material requirement. This process helps you to determine the most suitable source of supply for a given material requirement. It also helps you to optimize the procurement process by ensuring that the right source of supply is chosen for each material requirement. 
  
  How to use it: 
  In order to use source allocation in SAP MM, you must first define the sources of supply that are available for a given material requirement. This can be done by creating a source list in the system. Once the sources of supply have been defined, you can then assign them to the material requirement using the source allocation process. This process will allow you to select the most suitable source of supply for each material requirement. 
  
  Tips & Tricks: 
  When using source allocation in SAP MM, it is important to ensure that all sources of supply are accurately defined in the system. This will ensure that the most suitable source of supply is chosen for each material requirement. Additionally, it is important to regularly review and update the sources of supply in order to ensure that they remain up-to-date and relevant. 
  
  Related Information: 
  Source allocation is closely related to other processes in SAP MM such as vendor selection and contract management. It is important to understand how these processes interact with each other in order to ensure that the most suitable source of supply is chosen for each material requirement. Additionally, it is important to understand how these processes can be used together in order to optimize the procurement process.