In general, the particular material can be procured from different vendors (dealers) if a single source of supply doesn’t meet the company requirements. So, the total requirement can be divided among multiple vendors i.e. quota is assigned to each source of supply. This is called a Quota arrangement. Quota means nothing but what part of the total requirement is assigned to each source of supply. This can be maintained in SAP using transaction code MEQ1. In this article, we will show how to maintain a Quota arrangement and how the system determines the source from which the material to be procured based on quota rating in SAP.
For example, if there is a requirement of 24 pieces of a product and a single supplier is unable to fulfill this requirement. So distribute the total requirement among multiple vendors. For instance, let us assume there are two vendors A and B. The organization wants to procure 2 parts of the total requirement i.e. 16 pieces from vendor A and 1 part from vendor B i.e. 8 pieces from vendor B. This is called as Quota arrangement.
For instance, during purchase requisition, the system automatically determines the source from which a specific material to be procured based on quota rating. The source with the lowest quota rating (even 0) is considered as a valid source. If more than one sources having the same lowest quota rating, then the source with the highest quota value is considered as a valid source.
Quota rating can be calculated by using the following formula:
Quota rating = (Quota allocated quantity + Quota base quantity)/quota.
Where,
Quota allocated quantity = the quantity allocated from all the purchase orders, purchase requisitions, etc. from a given source of supply.
Quota base quantity = quantity from a new source of supply. It will be used only when the new source is added to the existing quota arrangement.
Quota = it is a number specifying what part of the total requirement is assigned to each source of supply.
The following are the steps to create a Quota arrangement and how actually it is useful in determining the source (vendor) while creating purchase requisition in SAP.
Before creating a quota, the following are the mandatory steps to be performed in SAP.
• You must maintain a source list for the particular material.
• Also in MM02, check the quota arrangement usage and source list checkboxes under purchasing tab.
Maintaining Source List for a Particular Material:
To maintain a source list follow the below steps.
Step 1:
- Enter transaction code ME01 in SD Master Data Screen.
Step 2:
- Enter Material number and Plant.
- Click on Enter.
- In our example, we are going to maintain the source list for material R-1140 and plant 1200.
Step 3:
- Enter valid from, valid to, vendor, purchasing organization details.
- Click on Save.
- In our case, we are maintaining a source list with two vendors (1025 and 1005) for R-1140 material.
- The following message will be displayed once a source list is created.
Check Quota Arrangement Usage and Source List Under Purchasing Tab in MM02:
To do this, follow the below steps:
Step 1:
- Enter transaction code MM02 in SD Master Data Screen
Step 2:
- Enter a material number and then click on Enter.
- Now select Purchasing in the select view window.
- Click on OK.
- In our case, we are changing the settings for R-1140 material.
Step 3:
- Enter Plant.
- Click on OK.
Step 4:
- Select the desired value from the dropdown of Quota arrangement usage.
- Check the source list checkbox.
- Click on Save.
Create Quota Arrangement:
Step 1:
- Logistics ⇒ Materials Management ⇒ Purchasing ⇒ Master Data ⇒ Quota Arrangement ⇒ Maintain
- Enter transaction code MEQ1 in SD Master Data Screen or Navigate to the above path.
Step 2:
- Enter the material and plant for which you want to maintain a quota arrangement.
- Click on Enter.
- In our example, we are creating a quota for material R-1140.
Step 3:
- Enter the following fields:
- Valid from
- Valid to
- Minimum quantity split: required quantity you want to distribute among the vendors.
- Click on Item to enter the vendor number from whom you want to procure the material.
Step 4:
- Enter the following fields
- Procurement type
- Vendor
- Quota: what ratio of the total requirement is given to the particular source of supply
- Click on Save.
- In our example, I want to procure in 2 parts of the total requirement from 1025 vendor and 1 part of the total requirement from 1005 vendor.
- The following message will be displayed once a quota arrangement is created.
An Example:
Let us take an example of a Purchase Requisition in which vendor will be automatically selected by a system based on Quota rating.
Step 1:
- Enter transaction code ME51N in SD Master Data Screen.
Step 2:
- Check the Source determination checkbox to automatically detect the vendor by the system.
- Enter material, quantity, and plant.
- Click on Enter.
- In the below screen, you can observe that system automatically populates the Vendor who has the lowest quota rating (valid source).
Conclusion:
By following the above steps, you can maintain a quota arrangement and determine the source under a quota arrangement in SAP. We sincerely hope that this was useful and any comment of feedback will be very helpful.
Now, you can easily connect your SAP ECC with the Ecommerce store or CRM to automate the business process!
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All About Purchase Requisition in SAP ECC
Steps to Create Inquiry and Quotation in SAP – The Ultimate Guide
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