Dividing and Conquering: Mastering Material Sourcing with Quota Arrangements in SAP PP

In the fast-paced Production Planning (PP) world, securing a steady supply of materials is crucial. But what if you have multiple vendors or internal production lines vying to fulfill your needs? This is where Quota Arrangements in SAP PP come into play.

What is a Quota Arrangement?

Imagine a pie. A Quota Arrangement lets you slice that pie – representing your total material requirement – among various sources of supply. Each slice, defined as a quota, specifies the portion a particular vendor or production line will provide over a specific period.

Benefits of Using Quota Arrangements:

• Spreading the Risk: By diversifying your sourcing, you’re less vulnerable to disruptions from a single supplier.
• Fair Distribution: Quota Arrangements ensure a balanced workload among vendors, fostering healthy supplier relationships.
• Strategic Sourcing: You can leverage specific vendors based on cost, quality, or lead time.
• Improved MRP: Quota Arrangements are seamlessly integrated with Material Requirements Planning (MRP), resulting in more accurate procurement proposals.

Setting Up Quota Arrangements:

1. Material Master: In the Material Master (MM01/MM02), navigate to the “MRP 4” view and activate the “Quota arrangement” checkbox.
2. Define Sources: Specify your sources, such as vendors (using Info Records) or internal production lines (using Production Versions).
3. Quota Maintenance (MEQ1): Here’s where you bake the pie! Define quota percentages for each source within a chosen period.

Beyond Procurement:

Quota Arrangements aren’t limited to external procurement. You can leverage them for:

• In-house Production: Allocate production quotas among different plants or production lines.
• Alternative Bill of Materials (BOMs): Prioritize specific BOM versions based on component quota arrangements.

Remember: Quota Arrangements assign the entire requisition quantity to a single source within the period. They don’t split individual purchase requisitions.

Conclusion:

You gain control over your material sourcing strategy by mastering Quota Arrangements in SAP PP. It empowers you to strategically distribute requirements, mitigate risks, and optimize production processes. So, conquer your material sourcing challenges with this powerful tool!