Introducing Source Lists SAP S/4HANA

At SAP, a source list is a record that specifies the allowed vendors (sources of supply) for a particular material within a specific plant, defining which vendors can be used to procure that material during a designated time period. Essentially, it acts as a list of approved suppliers for a given material, allowing for controlled purchasing decisions based on factors like price, delivery time, and quality.

Source determination can take place as early as the creation of the purchase requisition, where you can manually select a vendor from an existing list.

You also have the option to select the source determination checkbox in the header of the purchase requisition, allowing the system to automatically select a vendor from the list that meets your preset qualifications.

Each entry in a source list is called a source list record and includes details like the vendor code, validity period (from and to dates), and potential preferred supplier status.

Before you create a source list, consider:

• Material and plant: In each source list, you must enter the material number and the relevant plant key for each source.
• Validity period: You can define several validity periods.
• Source list requirement for plant: If a source list requirement has been defined for a plant, you must maintain the source list for each material in the plant before a material can be procured for the plant.

Depending on the period, each source list record can be assigned attributes to:

• Define a source as a fixed source.
• Block a source.
• Define a source as relevant for MRP.
• Complete source determination when using a quota arrangement.

You can also identify those sources that will be used when purchasing documents are generated during the MRP process. These vendors will be automatically assigned when the document is created.

A mandatory source list refers to a list of approved vendors or suppliers that a company is required to use when purchasing a specific material, meaning that a purchase order for that material can only be created from a vendor listed in the mandatory source list, effectively restricting procurement options to only those predefined sources within the system. You can set this requirement at the material or plant level in customizing settings.

There are two types of mandatory source lists:

• Material source list
• Plant source list

To ensure a material cannot be ordered or requested from a vendor unless a corresponding source is listed, define the material as subject to a source list requirement the material master record at the plant level.

A mandatory source list for a plant refers to a setting where users must select a vendor from a predefined list of approved sources (within the source list) when creating a purchase requisition for a material at that specific plant, meaning that procurement can only happen from vendors listed in the source list for that plant and no others.