Reviewing Sourcing Projects and Events

The sourcing of direct materials comes with its own specific terminology, which may vary according to industry or business process the company is following. The table below highlights the main concepts you will encounter when using the product sourcing functionality in SAP Ariba.

As mentioned previously, SAP Ariba leverages sourcing functionality to cover needs for both direct and indirect materials. For the sourcing of direct materials, customers can leverage all functionality they used for their indirect materials. This means that all project types and sourcing event types can be used for both direct and indirect materials. Keep in mind that specific rules pertaining to direct material processes will have to be set up by administrators in templates and events.

Full sourcing projects are workspaces that enable the user to manage complex sourcing processes with a lot of stages and associated documents. They include support for process management, document storage, tasks, a message board, and a project team. Full sourcing projects are used to manage one or more sourcing events, such as:

• Request for Information (RFI) events
• Request for Proposal (RFP) events
• Auctions
• Forward auctions

They can be created from any available template, including templates the customer has created to manage different business processes or types of events. It is best practice for company to have a separate set of templates for product sourcing needs.

The full sourcing process includes:

• A certain number of business tasks that must be completed, including the collaboration within the team (review task) and approval process through usage of the approval tasks. You can also specify what tasks must be completed, who is responsible for completing a task, and by when a task must be completed.
• Team members who participate in procurement activities. Multiple users can work on the same documents or events with defined roles and processes.

The full sourcing project provides an environment for team collaboration that can bring a geographically distributed team together to one spend management context.

You can get quote pricing by creating sourcing projects and events directly from BOMs, BOM parts, or from the list of materials you manage. For example, a sourcing manager may want to run an RFP event or auction based on their list of materials. SAP Ariba does not restrict or limit the types of sourcing events which you can create from the Product Sourcing dashboard.

You can collect pricing for BOMs and materials with a total quantity based on BOM quantity, across all BOMs.

When you create sourcing projects via the Product Sourcing dashboard, SAP Ariba automatically transfers historic prices, quantity, supplier specific prices, and terms with supplier specific values to the sourcing project. SAP Ariba also automatically adds AML suppliers as invited suppliers in the sourcing project. You can also search for additional materials and add those materials to sourcing events.

You can accept pricing during the event award process and the pricing information is sent back to the product sourcing dashboard.

SAP Ariba enables you to enter validity periods for pricing in RFP sourcing events and contract line item documents (CLIDs). This enables you to collect different prices during different validity periods, such as months, quarters, and years. You can also define optional volume scales. For example, you may want to collect pricing for items at the 500, 1000, and 1500 volume tiers. Collecting cost terms per volume against a validity period can lead to more accurate pricing.

Event owners can set volume tiers in the event as part of the item term's attribute definition.

You can define different item terms for the following term types:

• Money
• Single line
• Single line limited
• Whole number
• Extended Price
• Decimal
• Quantity
• Percentage

The price-by-volume functionality enables customers to perform the following tasks:

• Define validity periods for volume pricing.
• Define volume scales within each validity period.
• Allow suppliers to create their own validity periods.
• Add item terms to the price conditions.

The pricing condition bidding rule fields are available in the Bidding Rules section of RFP event templates. It allows buyers to create different validity periods for suppliers to provide the pricing for.

The Allow Pricing Conditions rule must be enabled to use pricing conditions, validity periods and volume scales in RFP sourcing events. To allow event creators to configure validity periods, choose Yes. To disable validity periods, choose No.

When the Allow Pricing Conditions rule is enabled, the following rules appear:

1. Validity Period Type: This field is required. This rule determines the type of period for which you want to collect pricing. The following options are available for this rule:
   • Monthly: Choose this value to collect volume pricing in monthly increments. For example, if you want the validity period duration to last 8 months, choose Month in this field and enter 8 in the Validity Period Duration field.
   • Quarterly: Choose this value to collect volume pricing in quarterly increments.
   • Annually: Choose this value to collect volume pricing in yearly increments.
   • Buyer Defined: Choose this value to enable event owners to define the validity periods on an ad hoc basis. For example, a buyer can create a 6 month period, then a 3 month period, and then a 6 month period.
     • Date Range: This field displays when you choose Buyer Defined. Enter the date ranges for which you want the validity periods to apply.
   • Perpetual: Choose this value to collect volume pricing with no end date.
     • End Date: This read-only field appears when you choose Perpetual. This field indicates the date on which the validity for the pricing conditions end.
   • Supplier Defined: Choose this value to enable suppliers to define the validity period type when they submit their event responses.
     • End Date: This field appears when you choose Supplier Defined. Enter the date on which you want the validity period for the pricing conditions to end.
     • Volume Threshold: This field appears when you choose Supplier Defined. Enter the volume amount that suppliers must meet when submitting their responses.
   • Start Date: Date on which the validity periods begin. The validity period automatically ends after the duration time expires.
   • Number of Periods: The number of validity periods. For example, if you want the validity period duration to last 6 months, choose Month for the Validity Period Type field and enter 6 in this field.
2. Scales: Enter the volume tiers for which you want to collect pricing. For example, if you want to collect pricing for items at the 500, 1000, and 1500 volume tiers, you enter 500, 1000, and 1500. You can add additional volume tiers as needed.
3. Enable Period Quantity: Choose Yes to display the period quantity field on the pricing condition page. The period quantity value will either be a calculated field based on BOM volumes or a buyer entered value.
4. Suppliers can view period quantity: This rule appears when you choose Yes for the Enable period quantity rule. Choose Yes to show suppliers the period quantity field. The period quantity field appears as a non-editable field for suppliers.

An Add term to Pricing conditions rule is available on the Edit Term page.

To include the term when collecting price by time and volume information, choose Yes.

When the Add term to Pricing conditions rule is enabled, a View pricing conditions link appears in the Item Terms section on the Add Item and Edit Item pages. To view the volume scale, validity period, and the cost terms, choose View pricing conditions.

Pricing condition functionality supports the following data types:

• Text
• Short String
• Whole Number
• Money
• Extended price