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Simplification Item: PP – Simplified Sourcing

With the TOP Simplification List Items approach we want to start a S/4HANA SCN Blog series to provide more information about dedicated simplification items. Simplification items where we assume that any customer project has to deal with. The following S/4HANA SCN Blog is collecting these TOP Simplification Items with the links to the dedicated S/4HANA blogs.

The TOP Simplification List Items

Within this blog we want to provide additional information regarding the Simplification Item: Simplified Sopurcing


In MRP, the system calculates material shortages, then the lot sizes, and then it determines the sources of supply. In lot sizing, the system can decide to cover several material shortages with just one material receipt. After lot sizing, the planned material receipts and their requirement dates and quantities are known.  Subsequently, sourcing determines whether the required quantity is manufactured or purchased and, if purchased, from which supplier.

The basic idea of this simplification is a reduced set of possible sources of supply with a clear and symmetric definition that do not require any additional settings in the material master or in customizing. In addition, quota arrangements are always considered if they exist. Consideration of quota arrangements is not dependent on any material master attributes.

Business Impact

SAP S/4HANA supports the following types of sources of supply:

  • If the material is manufactured, production versions are the only valid source of supply (irrespective of any material master attributes or customizing).
  • If the material is purchased, delivery schedules, purchasing contracts, and purchasing info records are valid sources of supply even without using source list records.

If defined, quota arrangements will always be taken into consideration.

Required and Recommended Action(s)

Make sure you have production versions for all manufactured materials (using the Production Version Migration Report)

For more details see the PDF attached to the following SAP Note:

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      Author's profile photo Former Member
      Former Member
      Blog Post Author


      additionally see the following blog from Caetano Almeida:

      MRP: Simplification on S/4 HANA | SCN

      Kind Regards,


      Author's profile photo Monika Patel
      Monika Patel

      Thx for sharing

      Author's profile photo Former Member
      Former Member



      Thank Frank. very useful.