R12 Oracle Sourcing Fundamentals Student Guide - D50463GC10

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D55957
Edition 1.0
August 2008
D50463GC10
Student Guide
R12 Oracle Sourcing Fundamentals
Oracle University and Egabi Solutions use only

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Author
Richard Sears
Technical Contributors and Reviewers
German Bertot, Barbara Snyder
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Table of Contents
Oracle Sourcing Functionality Overview ......................................................................................................1-1

Oracle Sourcing Functionality Overview ......................................................................................................1-3
Objectives ......................................................................................................................................................1-4
Sourcing Process ...........................................................................................................................................1-5
Manual Sourcing Process ..............................................................................................................................1-6
Online Sourcing Process................................................................................................................................1-7
Oracle Sourcing Productivity Benefits ..........................................................................................................1-8
Oracle Advanced Procurement ......................................................................................................................1-10
Oracle Advanced Procurement Applications.................................................................................................1-11
Sourcing Within Oracle Advanced Procurement...........................................................................................1-13
Benefits of Key Oracle Sourcing Functionality.............................................................................................1-14

Benefit 1 : Establish and Maintain Corporate Sourcing Strategy ...............................................................1-15
Benefit 2 : Invite and Collaborate with Suppliers.......................................................................................1-17
Benefit 3: Manage Complex Negotiations Effectively ...............................................................................1-19
Benefit 4 : Provide Negotiation Strategies..................................................................................................1-21
Benefit 5: Optimize the Decision Process ..................................................................................................1-23
Benefit 6: Award Negotiations and Generate Purchase Orders ..................................................................1-24
Summary........................................................................................................................................................1-25
Oracle Sourcing Product Overview ...............................................................................................................2-1
Oracle Sourcing Product Overview ...............................................................................................................2-3
Objectives ......................................................................................................................................................2-4
Navigating Oracle Sourcing Pages ................................................................................................................2-5
Oracle Sourcing Buyer Home Page ...............................................................................................................2-6
Oracle Sourcing Supplier Home Page ...........................................................................................................2-7
Guided Demonstration - Navigating Oracle Sourcing Pages.....................................................................2-8
Searching for Negotiations ............................................................................................................................2-10
Negotiations Search - Simple Search.............................................................................................................2-12
Negotiations Search Advanced Search .......................................................................................................2-14
Using the Search and Select Window............................................................................................................2-15
Negotiation Summary - Buyer.......................................................................................................................2-16
Negotiation Summary Supplier ..................................................................................................................2-17
Guided Demonstration - Conducting Searches..........................................................................................2-18
Oracle Sourcing Users ...................................................................................................................................2-20
Oracle Sourcing Super Users.........................................................................................................................2-21
Oracle Sourcing Buyers.................................................................................................................................2-22
Practice - Create a Sourcing Buyer............................................................................................................2-23
Solution Creating a Sourcing Buyer .......................................................................................................2-24
Guided Demonstration - Run the Fill Employee Hierarchy Process .........................................................2-28
Practice - Set Yourself Up As a Buyer ......................................................................................................2-29
Oracle Sourcing Supplier Users.....................................................................................................................2-31
Oracle Sourcing Process ................................................................................................................................2-32
Summary........................................................................................................................................................2-33
Creating Negotiations......................................................................................................................................3-1
Creating Negotiations ....................................................................................................................................3-3
Objectives ......................................................................................................................................................3-4
Negotiation Process .......................................................................................................................................3-5
Creation Process ............................................................................................................................................3-6
Sourcing Documents......................................................................................................................................3-8
Negotiation Header Information -1................................................................................................................3-10
Negotiation Header Information - 2...............................................................................................................3-11
Header Information Negotiation Name and Organization ..........................................................................3-12
Copyright Oracle 2008. All rights reserved.
Sourcing Fundamentals Table of Contents

i
Header Information - Response Styles ..........................................................................................................3-13

Header information - Negotiation Styles .......................................................................................................3-14
Header Information - Negotiation Outcomes ................................................................................................3-15
Header Information Security Level ............................................................................................................3-16
Header Information Collaboration Teams ..................................................................................................3-17
Header Information - Terms and Conditions .................................................................................................3-19
Header Information Specifying Currency Information...............................................................................3-20
Header Information Specifying Exchange Rates ........................................................................................3-22
Header Information Abstract and Forms ....................................................................................................3-23
Header Information Notes and Attachments...............................................................................................3-24
Entering Line Information - 1........................................................................................................................3-26
Entering Line Information - 2........................................................................................................................3-27
Adding Lines .................................................................................................................................................3-28
Line Information - 1 ......................................................................................................................................3-29

Lines, Lots, and Groups.................................................................................................................................3-31
Negotiation Date Controls .............................................................................................................................3-37
Staggered Line Closing .................................................................................................................................3-38
Negotiation Supplier Controls .......................................................................................................................3-39
Negotiation Response Controls .....................................................................................................................3-40
Negotiation Length Controls .........................................................................................................................3-41
AutoExtend....................................................................................................................................................3-42
Using AutoExtend .........................................................................................................................................3-43
Triggering AutoExtend From Multiple Bids .................................................................................................3-44
Negotiation Completion Controls..................................................................................................................3-45
Contract Clauses and Deliverables ................................................................................................................3-47
Identifying Invitees........................................................................................................................................3-49
Performing Supplier Searches .......................................................................................................................3-50
Supplier Searches ..........................................................................................................................................3-51
ASL Searches ................................................................................................................................................3-52
Business Classification Search ......................................................................................................................3-53
Restricting Suppliers......................................................................................................................................3-54
Document Approval Process .........................................................................................................................3-56
Reviewing the Negotiation ............................................................................................................................3-58
Publishing the Negotiation ............................................................................................................................3-59
Sharing Draft Sourcing Documents...............................................................................................................3-60
Printing Negotiation Information ..................................................................................................................3-61
Practice - Create a Simple Auction............................................................................................................3-62
Solution Create a Simple Auction ..........................................................................................................3-65
Additional Creation Methods ........................................................................................................................3-70
Practice Using Spreadsheet Upload ........................................................................................................3-71
Solution Using Spreadsheet Upload .......................................................................................................3-72
Practice Using AutoCreate......................................................................................................................3-74
Solution Using AutoCreate.....................................................................................................................3-75
Summary........................................................................................................................................................3-78
Using Requirements and Negotiation Attributes ..........................................................................................4-1
Using Requirements and Negotiation Attributes ...........................................................................................4-3
Objectives ......................................................................................................................................................4-4
Negotiation Attributes ...................................................................................................................................4-5

ii
Requirements.................................................................................................................................................4-7
Defining Requirements..................................................................................................................................4-8
Defining Requirements - Process .................................................................................................................4-9
Add Requirement Page..................................................................................................................................4-10
Requirement Properties .................................................................................................................................4-11
Requirement Examples..................................................................................................................................4-13
Scoring Requirements....................................................................................................................................4-14
Using Automatic Scoring ..............................................................................................................................4-15
Defining Acceptable Values Text...............................................................................................................4-16
Defining Acceptable Values - Numbers and Dates ......................................................................................4-17
Using Manual Scoring ...................................................................................................................................4-18
Scoring Teams ...............................................................................................................................................4-19
Defining Scoring Teams ................................................................................................................................4-20
Creating Scoring Teams ................................................................................................................................4-21
Using Weights ...............................................................................................................................................4-23

Calculating a Response's Total Score ............................................................................................................4-24
Practice - Creating Requirements ..............................................................................................................4-25
Solution Creating Requirements .............................................................................................................4-27
Line Attributes...............................................................................................................................................4-31
Defining Line Attributes................................................................................................................................4-32
Attribute Examples ........................................................................................................................................4-34
Negotiating Using Attributes.........................................................................................................................4-35
Multi-Attribute Scoring Negotiations............................................................................................................4-36
MAS Calculations .........................................................................................................................................4-37
Weight Examples...........................................................................................................................................4-38
Attribute Value Scores...................................................................................................................................4-39
Scoring Example ...........................................................................................................................................4-40
Practice Creating Line Attributes ...........................................................................................................4-41
Solution Creating Line Attributes...........................................................................................................4-42
Calculating the Price to Score Ratio ..............................................................................................................4-44
Summary........................................................................................................................................................4-45
Additional Creation Tools...............................................................................................................................5-1
Additional Creation Tools .............................................................................................................................5-3
Objectives ......................................................................................................................................................5-4
Additional Negotiation Creation Tools..........................................................................................................5-5
Cost Factors ...................................................................................................................................................5-6
Buyer Cost Factors ........................................................................................................................................5-7
Supplier Cost Factors.....................................................................................................................................5-8
Example Supplier Cost Factors .....................................................................................................................5-9
Negotiating Using Supplier Cost Factors ......................................................................................................5-10
Creating Supplier Cost Factors......................................................................................................................5-11
Reusable Cost Factor Lists ............................................................................................................................5-12
Practice Using Cost Factors....................................................................................................................5-13
Solution Using Cost Factors ...................................................................................................................5-14
Price Breaks...................................................................................................................................................5-17
Price Break Examples....................................................................................................................................5-18
Setting Up Price Breaks.................................................................................................................................5-19
Invitation Lists...............................................................................................................................................5-21
Practice - Create an Invitation List ............................................................................................................5-22
Solution Create an Invitation List...........................................................................................................5-23
Spreadsheet Upload of Header Attributes and Lines .....................................................................................5-25
Sourcing Document Templates......................................................................................................................5-26
Practice - Creating a Negotiation Template...............................................................................................5-27
Solution Creating a Negotiation Template .............................................................................................5-28
Using Negotiation Events ..............................................................................................................................5-31
Practice - Create an Event..........................................................................................................................5-32

iii
Solution Create an Event ........................................................................................................................5-33

Summary........................................................................................................................................................5-35
Responding to Negotiations ............................................................................................................................6-1
Responding to Negotiations...........................................................................................................................6-3
Objectives ......................................................................................................................................................6-4
Suppliers, Supplier Sites, and Supplier Users................................................................................................6-5
Adding Supplier Profile Information.............................................................................................................6-6
Guided Demonstration - Entering Supplier Information ...........................................................................6-7
Supplier Users ...............................................................................................................................................6-9
Sourcing Supplier Responsibility ..................................................................................................................6-10
Sourcing Supplier Responsibility Functions..................................................................................................6-11
Supplier User Registration Methods..............................................................................................................6-12
Using Invitation Notifications .......................................................................................................................6-13
Inviting Suppliers From Negotiations............................................................................................................6-14

Completing the Registration Notification (Supplier Users)...........................................................................6-15
Completing the Registration Request (Buyer/Supplier User Manager).........................................................6-16
Directly Registering Supplier Users ..............................................................................................................6-17
Registration Authorizations ...........................................................................................................................6-18
Sourcing Default Responsibility....................................................................................................................6-19
Practice Creating a Supplier and a Supplier User ...................................................................................6-20
Solution Creating a Supplier and a Supplier User ..................................................................................6-21
Response Process...........................................................................................................................................6-24
Response Methods.........................................................................................................................................6-26
Using the Supplier Home Page......................................................................................................................6-27
Searching for Negotiations ...........................................................................................................................6-28
Accessing Negotiations .................................................................................................................................6-29
Using the Negotiation Summary Page...........................................................................................................6-30
Printing Negotiation Information ..................................................................................................................6-31
Practice - Printing a Negotiation Document ..............................................................................................6-32
Solution Printing a Negotiation Document.............................................................................................6-33
Response Process...........................................................................................................................................6-34
Draft Response ..............................................................................................................................................6-36
Response Information....................................................................................................................................6-37
Responding to Requirements.........................................................................................................................6-38
Responding to Line Criteria...........................................................................................................................6-39
Responding to Line Attributes.......................................................................................................................6-40
Responding to Cost Factors ...........................................................................................................................6-41
Responding to Price Breaks...........................................................................................................................6-42
Contract Deliverables ....................................................................................................................................6-43
Using Notes and Attachments .......................................................................................................................6-44
Practice - Responding to a Negotiation .....................................................................................................6-45
Solution Responding to a Negotiation ....................................................................................................6-46
Power Bidding ...............................................................................................................................................6-49
Proxy Bidding................................................................................................................................................6-50
Surrogate Bidding..........................................................................................................................................6-52
Summary........................................................................................................................................................6-53
Monitoring Negotiations .................................................................................................................................7-1
Monitoring Negotiations................................................................................................................................7-3
Objectives ......................................................................................................................................................7-4
Monitor Process.............................................................................................................................................7-5
Best Response................................................................................................................................................7-6
Buyer Monitor/Management Tools ...............................................................................................................7-7
Live Console..................................................................................................................................................7-8
Practice - Using Live Console ...................................................................................................................7-9
Solution Using Live Console..................................................................................................................7-10
Analyze By Response....................................................................................................................................7-12

iv
Analyze By Line............................................................................................................................................7-13
Analyzing Responses to Price Breaks ...........................................................................................................7-14
Buyer Graphical Monitors .............................................................................................................................7-15
Spreadsheet Analysis.....................................................................................................................................7-16
Practice - Performing Response Analysis..................................................................................................7-17
Solution Performing Response Analysis ................................................................................................7-18
Monitor Supplier Activities Page ..................................................................................................................7-21
Supplier Lock Out .........................................................................................................................................7-23
Guided Demonstration - Using the Monitor Supplier Activities Display..................................................7-24
Collaborative Messaging ...............................................................................................................................7-25
Shortlisting Suppliers ....................................................................................................................................7-27
Negotiation Pause ..........................................................................................................................................7-28
Negotiation Extend ........................................................................................................................................7-29
Guided Demonstration - Pausing and Extending a Negotiation ................................................................7-30
Supplier Monitor Tools .................................................................................................................................7-32

Negotiation Monitor ......................................................................................................................................7-33
Response History Page ..................................................................................................................................7-35
Analyze By Response....................................................................................................................................7-36
Analyze By Line............................................................................................................................................7-37
Supplier Graphical Monitors .........................................................................................................................7-38
Negotiation Amendments ..............................................................................................................................7-39
Practice - Creating an Amendment............................................................................................................7-40
Solution Creating an Amendment...........................................................................................................7-41
Practice - Acknowledging a Negotiation Amendment ..............................................................................7-44
Solution Acknowledging a Negotiation Amendment .............................................................................7-45
Multi-Round ..................................................................................................................................................7-48
Practice - Taking a Negotiation to a Subsequent Round of Responding ...................................................7-49
Solution Taking a Negotiation to a Subsequent Round of Responding ..................................................7-50
Additional Monitoring Tools.........................................................................................................................7-53
Summary........................................................................................................................................................7-54
Awarding Negotiations....................................................................................................................................8-1
Awarding Negotiations..................................................................................................................................8-3
Objectives ......................................................................................................................................................8-4
Award Process - 1..........................................................................................................................................8-5
Award Process - 2..........................................................................................................................................8-6
Negotiation Summary Page ...........................................................................................................................8-7
Unlocking/Unsealing Responses ...................................................................................................................8-8
Scoring Requirements....................................................................................................................................8-9
Calculating Requirement Scores....................................................................................................................8-10
Practice - Scoring Requirements...............................................................................................................8-11
Solution Scoring Requirements ..............................................................................................................8-12
Award Methods .............................................................................................................................................8-15
Awarding By Line .........................................................................................................................................8-16
Awarding By Response .................................................................................................................................8-17
Awarding Multiple Lines...............................................................................................................................8-18
Awarding By Spreadsheet .............................................................................................................................8-19
Using Award Optimization Feature...............................................................................................................8-20
Award Optimization Feature .........................................................................................................................8-21
Scenario Constraints ......................................................................................................................................8-22
Practice - Creating an Award Scenario......................................................................................................8-24
Solution Creating an Award Scenario.....................................................................................................8-25
Practice - Awarding a Negotiation.............................................................................................................8-27
Solution Awarding Business in a Negotiation ........................................................................................8-28
Award Approval ............................................................................................................................................8-32
Completing the Award...................................................................................................................................8-33
Generating Purchase Orders ..........................................................................................................................8-34

v
Allocating Requisitions to a Purchase Order ................................................................................................8-35

Default Allocation .........................................................................................................................................8-36
Notifying Suppliers........................................................................................................................................8-38
Practice - Generating a Purchase Order .....................................................................................................8-39
Solution Generating a Purchase Order....................................................................................................8-40
Summary........................................................................................................................................................8-42
Using Negotiations and Collaborative Messaging.........................................................................................9-1
Using Notifications and Collaborative Messaging .......................................................................................9-3
Objectives ......................................................................................................................................................9-4
Notifications ..................................................................................................................................................9-5
Notification Events ........................................................................................................................................9-6
Accessing Notifications.................................................................................................................................9-7
Collaborative Messaging ...............................................................................................................................9-8
Creating a Message........................................................................................................................................9-10

Accessing Messages ......................................................................................................................................9-11
Guided Demonstration - Using Notifications and Collaborative Messaging.............................................9-12
Summary........................................................................................................................................................9-15
Using Forms and Abstracts.............................................................................................................................10-1
Using Forms and Abstracts............................................................................................................................10-3
Objectives ......................................................................................................................................................10-4
Forms and Abstracts ......................................................................................................................................10-5
Abstracts ........................................................................................................................................................10-6
Forms.............................................................................................................................................................10-7
Modifying the Abstract and Forms................................................................................................................10-8
Fields and Sections ........................................................................................................................................10-9
Values and Value Sets ...................................................................................................................................10-10
Creating Forms ..............................................................................................................................................10-11
Mapping the XML File..................................................................................................................................10-12
Guided Demonstration - Modifying the Abstract and Creating a Form ....................................................10-13
Practice Creating a Form ........................................................................................................................10-16
Solution Creating a Form........................................................................................................................10-17
Summary........................................................................................................................................................10-21
Using Transformational Bidding....................................................................................................................11-1
Using Transformational Bidding ...................................................................................................................11-3
Objectives ......................................................................................................................................................11-4
Transformational Bidding..............................................................................................................................11-5
Supplier and Buyer Price Factors ..................................................................................................................11-6
Example Buyer Price Factors ........................................................................................................................11-8
Visibility of Buyer Price Factor Effects ........................................................................................................11-9
Example 1 Transformations Visible ...........................................................................................................11-10
Example 2 Transformations Not Visible ....................................................................................................11-11
Defining Buyer Price Factors ........................................................................................................................11-12
Guided Demonstration - Using Transformational Bidding........................................................................11-13
Summary........................................................................................................................................................11-16
Processing Large Negotiations........................................................................................................................12-1
Processing Large Negotiations ......................................................................................................................12-3
Objectives ......................................................................................................................................................12-4
Large Negotiations ........................................................................................................................................12-5
Regular Versus Large Negotiations...............................................................................................................12-6
Using Large Negotiations ..............................................................................................................................12-7
Setup Parameters For Large Negotiations .....................................................................................................12-8
Guided Demonstration - Using Large Negotiations ..................................................................................12-9
Summary........................................................................................................................................................12-11
Setting Up and Implementing Oracle Sourcing ............................................................................................13-1

vi
Setting Up and Implementing Oracle Sourcing .............................................................................................13-3

Objectives ......................................................................................................................................................13-4
Implementation Applications.........................................................................................................................13-5
Implementation Tasks in Applications Technology Group ...........................................................................13-6
Modifying and Assigning Sourcing Responsibilities ....................................................................................13-7
Modifying the Sourcing Buyer Responsibility - 1.........................................................................................13-8
Modifying the Sourcing Buyer Responsibility - 2.........................................................................................13-9
Setting System Profile Options - 1 ................................................................................................................13-10
Setting System Profile Options - 2 ................................................................................................................13-12
Setting Workflow Options.............................................................................................................................13-13
Setting Up Demand Workbench....................................................................................................................13-14
Implementation Tasks Performed in Oracle Sourcing...................................................................................13-16
Setting Up Terms and Conditions..................................................................................................................13-17
Creating Negotiation Styles...........................................................................................................................13-18
Defining Notification Subscriptions ..............................................................................................................13-19

Setting Negotiations Configuration Values ...................................................................................................13-20
Rank Indicator and Visibility.........................................................................................................................13-22
Cost Factor and Price Break Defaults............................................................................................................13-23
Award Approval ............................................................................................................................................13-24
Requirements and Attributes Defaults...........................................................................................................13-25
Default UOM for Amount-Based Lines ........................................................................................................13-26
Multi-Round Negotiation Price Default ........................................................................................................13-27
Large Negotiation Support ............................................................................................................................13-28
Supplier Defaults ...........................................................................................................................................13-29
Implementation Tasks in Oracle Purchasing .................................................................................................13-30
Supplier Registration Tasks Performed in Oracle Purchasing.......................................................................13-31
Additional Implementation Tasks..................................................................................................................13-32
Implementation Process - 1 ...........................................................................................................................13-33
Summary........................................................................................................................................................13-36

vii

Preface
Profile
Before You Begin This Course
Thorough knowledge of Oracle Purchasing
Prerequisites
R12 Oracle Purchasing Fundamentals

How This Course Is Organized
This is an instructor-led course featuring lecture and hands-on exercises. Online demonstrations
and written practice sessions reinforce the concepts and skills introduced.

ix
Related Publications
Oracle Publications
Title Part Number
Oracle Sourcing Implementation and Administration B3159901
Oracle Purchasing Users Guide B28669-01

x
Typographic Conventions
Typographic Conventions in Text
Convention Element Example
Bold italic Glossary term (if The algorithm inserts the new key.
there is a glossary)
Caps and Buttons, Click the Executable button.
lowercase check boxes, Select the Cant Delete Card check box.
triggers, Assign a When-Validate-Item trigger to the ORD block.
windows Open the Master Schedule window.
Courier new, Code output,

Code output: debug.set (I, 300);
case sensitive directory names, Directory: bin (DOS), $FMHOME (UNIX)
(default is filenames, Filename: Locate the init.ora file.
lowercase) passwords, Password: User tiger as your password.
pathnames, Pathname: Open c:\my_docs\projects
URLs, URL: Go to http://www.oracle.com
user input,
User input: Enter 300
usernames
Username: Log on as scott
Initial cap Graphics labels Customer address (but Oracle Payables)
(unless the term is a
proper noun)
Italic Emphasized words Do not save changes to the database.
and phrases, For further information, see Oracle7 Server SQL Language
titles of books and Reference Manual.
courses, Enter user_id@us.oracle.com, where user_id is the
variables name of the user.
Quotation Interface elements Select Include a reusable module component and click Finish.
marks with long names
that have only This subject is covered in Unit II, Lesson 3, Working with
initial caps; Objects.
lesson and chapter
titles in cross-
references
Uppercase SQL column Use the SELECT command to view information stored in the
names, commands, LAST_NAME
functions, schemas, column of the EMP table.
table names
Arrow Menu paths Select File > Save.
Brackets Key names Press [Enter].
Commas Key sequences Press and release keys one at a time:
[Alternate], [F], [D]
Plus signs Key combinations Press and hold these keys simultaneously: [Ctrl]+[Alt]+[Del]

xi
Typographic Conventions in Code

Convention Element Example
Caps and Oracle Forms When-Validate-Item
lowercase triggers
Lowercase Column names, SELECT last_name
table names FROM s_emp;
Passwords DROP USER scott

IDENTIFIED BY tiger;
PL/SQL objects OG_ACTIVATE_LAYER
(OG_GET_LAYER (prod_pie_layer))

Lowercase Syntax variables CREATE ROLE role
italic
Uppercase SQL commands and SELECT userid
functions FROM emp;
Typographic Conventions in Oracle Application Navigation Paths

This course uses simplified navigation paths, such as the following example, to direct you
through Oracle Applications.
(N) Invoice > Entry > Invoice Batches Summary (M) Query > Find (B) Approve
This simplified path translates to the following:
1. (N) From the Navigator window, select Invoice then Entry then Invoice Batches
Summary.
2. (M) From the menu, select Query then Find.
3. (B) Click the Approve button.
Notations:
(N) = Navigator
(M) = Menu
(T) = Tab
(B) = Button
(I) = Icon
(H) = Hyperlink
(ST) = Sub Tab

xii
Typographical Conventions in Oracle Application Help System Paths

This course uses a navigation path convention to represent actions you perform to find
pertinent information in the Oracle Applications Help System.
The following help navigation path, for example
(Help) General Ledger > Journals > Enter Journals
represents the following sequence of actions:
1. In the navigation frame of the help system window, expand the General Ledger entry.

2. Under the General Ledger entry, expand Journals.
3. Under Journals, select Enter Journals.
4. Review the Enter Journals topic that appears in the document frame of the help system
window.

xiii

xiv
Oracle Sourcing Functionality Overview

Chapter 1 - Page 1
Chapter 1
Copyright Oracle, 2008. All rights reserved.

Oracle Sourcing
Functionality Overview


Chapter 1 - Page 2

Chapter 1 - Page 3

Objectives

Chapter 1 - Page 4
Sourcing Process

Sourcing Process
This page presents the entire sourcing process.
Analyze
Analyze needs to identify sourcing opportunities and establish strategy. Sourcing buyers
have access to a wide variety of reports to analyze and build upon previous sourcing
activities. Summary reports provide buyers with a quick overview, whereas detailed
sourcing activity reports allow buyers to drill down to analyze and better understand
specific sourcing areas.
Develop
Develop specifications, aggregate items, and define negotiation attributes.
Qualify
Qualify sources by identifying suppliers and creating bidders lists.
Negotiate
Negotiate and monitor events using negotiation controls.
Award
Assign purchase orders to winners and optionally notify other suppliers of outcome.
Monitor Supplier Performance

Chapter 1 - Page 5
Manual Sourcing Process

Manual Sourcing Process
Manual sourcing processes require much interaction on the part of the commodity buyer, either
by using paper, telephone, and/or fax machine. The process typically involves manually
entering purchase orders, contracts, and other purchasing information into separate systems.
These cumbersome tasks consume large amounts of time and are more reactive in nature and
not strategic. The commodity buyer is strapped for resources and can not properly renegotiate
all expiring contracts.
Additionally, internal customers such as marketing, manufacturing and engineering are finding
ways around the buying process to move quickly on purchases. Lost opportunities on group
purchases or prenegotiated contract purchases result in additional savings loss.

Chapter 1 - Page 6
Online Sourcing Process

Online Sourcing Process
With the use of Oracle Sourcing to perform the sourcing process online, information is
integrated and streamlined, reducing the amount of administrative tasks needing to be
preformed by the commodity buyer. Information flows seamlessly from Purchasing to
Sourcing, from Sourcing to Purchasing and Contracts. No re-keying of information is required.
The system transfers the information throughout the process. Moving from tactical to strategic
types of negotiations means that more information can be negotiations resulting in better
prices. Internal customers work through the purchasing department, not around it.

Chapter 1 - Page 7
Oracle Sourcing Productivity Benefits

Oracle Sourcing Productivity Benefits
Reduced total spend the use of auctions and the reduction in time and resources spent in the
supply chain managing responses to RFQs results in a reduction in total spend. Additionally,
because of effective aggregation of demand, larger and more accurate quantities are procured
again resulting in lower total spend.
Improved Productivity
Tactical tasks associated with sourcing are reduced and handled within the software, improving
productivity. Analyzing spend, creating negotiation events, conducting negotiations, and
creating contracts and purchase order documents are enabled in Sourcing, reducing time and
resources spent on these tasks.
Increased Visibility and Control
The use of reverse auctions has significant return on investment. However, the returns may
only be felt in the short term without lasing impact to the life of the contract. Without the
ability to monitor and manage the contract, the savings realized on paper from the reverse
auction are not realized. Using Oracle Sourcing, information that was once maintained in
separate systems can be centrally managed and distributed. Standard business rules can be

Chapter 1 - Page 8
established and implemented easily. You can also manage compliance and take any needed
corrective action.

Chapter 1 - Page 9
Oracle Advanced Procurement

Oracle Advanced Procurement
Oracle Sourcing is part of the Oracle Advanced Procurement suite of applications which is, in
turn, a part of the Oracle eBusiness Suite. Oracle Sourcing complements the procurement suite
by providing a complete application that allows buyers to develop RFIs, RFQ, and auctions;
negotiate with suppliers; and award and create purchasing documents.
Oracle Sourcing can operate as an independent application (for example, to conduct highly
visible auctions) or can be implemented as part of the entire eBusiness Suite. Integration comes
out of the box with the ability to create sourcing events from requisitions, create purchasing
document and contracts, as well as integrate with iSupplier Portal, iProcurement and other
applications.

Chapter 1 - Page 10
Oracle Advanced Procurement Applications

Oracle Advanced Procurement Applications
Oracle Purchasing
Professional procurement and management tool
Complete control over document routing and approval
Complete control over purchase order creation
Complete control over receiving
iProcurement
Ability to buy administrative and production items
Self guiding catalog
Desktop receiving
Single global instance
Integration with ERP system
Sourcing
Collaborative RFQ, RFIs, and auctions
Negotiate all aspects of the transaction

Chapter 1 - Page 11
iSupplier Portal
Record purchase order acknowledgements
Reschedule Promised-By dates
View RFQs
View expected deliveries
Create and view ASNs and ASBNs
View receipts, returns, and overdue receipts
Set processing lead time, minimum order quantities and fixed lot multiples
View invoice and payment information.
Purchasing Intelligence

Daily Business Intelligence reports for Oracle Procurement
Role-based performance overviews
Interactive summarization of buyer and supplier performance
Procurement Contracts
Establish contract standards
Author, negotiate contracts and administer contract changes
Administer contract deliverables
Services Procurement
Contingent labor procurement
Integrates Oracle Time and Labor for payment through Oracle Payables.
Oracle Supplier Network
Services to electronically enable suppliers
Electronic message transformation and routing services through an Interned-based hub
Self-service trading partner registration

Chapter 1 - Page 12
Sourcing Within Oracle Advanced Procurement

Sourcing Within Oracle Advanced Procurement
Oracle Sourcing is integrated with many of the other Advanced Procurement applications.
Oracle Sourcing can retrieve requisition information in Oracle Purchasing and use it as the
basis for negotiations. Once the negotiations are complete, the purchase documents can be
created back in Purchasing.
Oracle Sourcing can retrieve supplier profile and registration information contained in
iSupplier portal when registering suppliers with the system and researching supplier.
Supplier and transaction history information can be obtained in the for of reports from
Procurement Intelligence.
Contract requirements in the form of deliverables can be retrieved from Procurement Contracts
and associated with a negotiation.
Oracle Sourcing integrates with Services Procurement to negotiate for temp labor and other
types of services.

Chapter 1 - Page 13
Benefits of Key Oracle Sourcing Functionality

Benefits of Key Oracle Sourcing Functionality
The next few pages identify the benefits offered by key Oracle Sourcing functionality.

Chapter 1 - Page 14
Benefit 1 : Establish and Maintain Corporate Sourcing Strategy

Benefit 1: Establish and Maintain Corporate Sourcing Strategy
To help establish and maintain a corporate sourcing strategy, Oracle Sourcing offers the
following functionality:
Negotiation Templates
Enable a buyer to create all or parts of a negotiation, which can then be used by others in
the company as the basis of a negotiation. Oracle Sourcing supports public and private
templates so users or buying organizations can create their own library of templates for
different products/services.
Reusable Attribute Lists
Buyers can create their own attributes to describe a product or service needed, then group
these attributes together and save them as a list. Lists can be used during negotiation
creation.
Invitation Lists
Buyers can group and maintain lists of suppliers for different products or services. Buyers
then apply these lists to negotiations they are creating to ensure the appropriate suppliers
are targeted.

Chapter 1 - Page 15
Negotiation Copy
Users may copy negotiations that they or other users in the organization have created.
The details of the existing negotiation are copied into the new negotiation, although they
can be edited if necessary. This allows for the quick creation of the negotiation package
while maintaining standards and consistency.
Company Terms and Conditions
This allows the buying company to establish certain terms and conditions that suppliers
must agree to prior to participating in a negotiation.

Chapter 1 - Page 16
Benefit 2 : Invite and Collaborate with Suppliers

Benefit 2: Invite and Collaborate with Suppliers
To assist buyers in inviting and collaborating with their suppliers, Oracle sourcing offers the
Specific Supplier Invitation
Buyers may invite unregistered suppliers to register with the system to allow
participation, or buyers may register the suppliers directly.
Supplier E-mail Notifications
All suppliers invited to a negotiation receive an e-mail notification providing information
about the event, including a link to preview or participate in the negotiation.
Invitation Lists
Buyers use invitation lists to invite specific suppliers to negotiations.
Notification Acknowledgement
Suppliers invited to a negotiation can indicate their planned participation by clicking a
link the invitation e-mail, or a button on the negotiation details page.
Amendments
Negotiations can be modified during the negotiation process. Suppliers can view the
changes and must resubmit bids.

Chapter 1 - Page 17
Online Discussions
- Buyers and suppliers can communicate during the negotiation. These discussions
are included in the negotiation and can be referred to at a later time.

Chapter 1 - Page 18
Benefit 3: Manage Complex Negotiations Effectively

Benefit 3: Manage Complex Negotiations Effectively
To help manage complex negotiations effectively, Oracle Sourcing offers the following
functionality:
Multi-Attribute Weighted Scoring Negotiations
Buyers can create attributes with acceptable bid values or ranges. The buyer then assigns
weights to each attribute (as compared to other attributes), and scores to each acceptable
bid value or range. When a supplier responds, the system calculates the total score for the
response. Scores and prices are compared across all responses to indicate which response
provides the best overall value.
Price Breaks
Buyers can negotiation price breaks on negotiation lines.
Creating/Responding/Awarding by Spreadsheet
Spreadsheet support is provided for all stages of the negotiation process. During the
negotiation creation and awarding process, buyers can use spreadsheets to load items,
download response information, and load award decisions. Suppliers can download
negotiations into spreadsheets, enter their responses, then load completed spreadsheets to
the system.

Chapter 1 - Page 19
Total Cost Negotiations

Buyers can break price into custom-defined components. For example, an item may
require tooling, setup, or special transportation costs. These components can be specified
to that suppliers can provide price details.
Optimization
The Optimization feature can generate award scenarios based on complex criteria defined
by the buyer.
Complete Global Support
Oracle Sourcing supports multiple languages, and multiple currencies and exchange rates,
enabling buyers to receive responses from supplier in different countries to the same
negotiation.

Chapter 1 - Page 20
Benefit 4 : Provide Negotiation Strategies

Benefit 4: Provide Negotiation Strategies
To support negotiations, Oracle Sourcing provides the following functionality:
Draft Negotiations
During any step of the negotiation creation process, the buyer can save the negotiation as
a draft. This draft can be edited by other users, allowing a companys buyers to
collaborate on a single negotiation.
Amendments and Multiple Rounds
Buyers can initiate a new round of responding in a negotiation, as well as make changes
between rounds, such as adding, deleting, or editing items and lines.
Negotiation Controls
Oracle Sourcing provides numerous bid and quote controls, including different rank
indications, manual and automatic close date extensions, and partial or full quantity
requirements.
Multiple Line Items
Oracle Sourcing supports unlimited item lines for each negotiation.
Negotiation Styles
Oracle Sourcing supports three styles of negotiation:

Chapter 1 - Page 21
- Open (auctions only). Allows bidders to view details of other suppliers bids.
- Blind (auctions and RFQs). Only the buyer can view response details.
- Sealed (auctions and RFQs). Buyers can see response details after the negotiation
is unlocked. Suppliers can view responses after the negotiation is unsealed.
Proxy and Power Bidding.
Proxy bidding allows suppliers to have the system place new responses on their behalf
whenever a better response is received. Power bidding allows suppliers to have the
system rebid on multiple lines at a time.

Chapter 1 - Page 22
Benefit 5: Optimize the Decision Process

Benefit 5: Optimize the Decision Process
To help optimize the decision making process, Oracle Sourcing offers the following
functionality.
Graphical Monitors
Provide users with a graphical representation of all responses in an open negotiation. The
current winning bid is highlighted for ease of reference.
Side-by-side Comparison
This enables buyers to display the details of competing responses on a single page so the
values and attributes of each response can be compared.
Spreadsheet Download
if a buyer has received a large number of responses to a negotiation, the buyer can
download the responses into a spreadsheet to view and compare offline.
Award Optimization
If the award optimization feature is used, buyers can define numerous what if scenarios
with each conforming to different possible award constraints. Buyers can then view the
award decisions generated and pick the best award.

Chapter 1 - Page 23
Benefit 6: Award Negotiations and Generate Purchase Orders

Benefit 6: Award Negotiations and Generate Purchase Orders
To help in awarding negotiations and generating purchase orders, Oracle Sourcing offers the
Out of the box Integration with Oracle Purchasing
Purchase orders may be generated leveraging the Oracle Sourcing and Oracle Purchasing
integration.
Flexible Awarding
A buyer can award a negotiation to a single supplier, an entire negotiation line to a single
supplier, or split an award by awarding partial quantities to several suppliers.
Spreadsheet Download
Buyers can award negotiations offline by downloading a spreadsheet of responses,
entering award details, then uploading the spreadsheet to the system.
Email Notifications
Participating suppliers can optionally be notified of award decisions.
Online Awarding
Buyers can award negotiations in Oracle Sourcing. There is no need to conduct the award
process offline.

Chapter 1 - Page 24
Summary

Chapter 1 - Page 25

Chapter 1 - Page 26
Oracle Sourcing Product Overview

Chapter 2 - Page 1
Chapter 2
Overview

Oracle Sourcing Product


Chapter 2 - Page 2

Chapter 2 - Page 3
Objectives

Chapter 2 - Page 4
Navigating Oracle Sourcing Pages

Navigating Oracle Sourcing Pages
There are several ways to perform functions and move from one page to another within Oracle
Sourcing.
Tabs - move you from one functional area to another, for example, from processing
negotiations to administering the system. The dark tab identifies the current tab (the
example shows the tabs for the Sourcing Super User responsibility. The Sourcing Buyer
responsibility does not have the Administration tab available to it).
Navbar located in the top right corner of the page. Moves you among different displays
of information for the current page.
Links access another page or section of a page
Buttons perform an action on a page, for example, apply changes, or perform a search.
Menus allow selection from list of values defined within the application.
Icons allows certain actions (for example, search or update).
Pop-up calendar allows you to populate date fields ensuring the correct date format.

Chapter 2 - Page 5
Oracle Sourcing Buyer Home Page

Oracle Sourcing Buyer Home Page
The Sourcing Buyer Home page is the central location for Sourcing buyer tasks. Using this
page, buyers can
Search for negotiations using the
Negotiations Search fields
Published Negotiations table
Use the Quick Links section to perform various tasks:
Create RFIs, RFQs, auctions, events, and copy negotiations
Manage drafts, events, deliverables; and perform surrogate bidding and supplier research
Create RFI, RFQ, and auction templates
Create reusable lists.
Additionally, using the available side menus, buyers can quickly view and process
Draft negotiations
Unread messages
Incomplete negotiation tasks to which they have been assigned

Chapter 2 - Page 6
Oracle Sourcing Supplier Home Page

Oracle Sourcing Supplier Home Page
The Sourcing Supplier Home page is the central location for all a suppliers sourcing tasks.
Using this page, supplier can
Search for negotiations using the
Negotiations Search fields
Your Active and Draft Responses table
View negotiation invitations using the
Your Companys Open Invitations table
Use the Quick Links section to perform various tasks:
- Manage drafts, deliverables, and personal profile information
- View active, disqualified, awarded and rejected responses

Chapter 2 - Page 7

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THESE eKIT MATERIALS ARE FOR YOUR USE IN THIS CLASSROOM ONLY.

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Technical Contributors and Reviewers

German Bertot, Barbara Snyder

This book was published using: Oracle Tutor

Oracle Sourcing Functionality Overview ......................................................................................................1-1

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Sourcing Fundamentals Table of Contents

Header Information - Response Styles ..........................................................................................................3-13

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Solution Create an Event ........................................................................................................................5-33

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Allocating Requisitions to a Purchase Order ................................................................................................8-35

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Setting Up and Implementing Oracle Sourcing .............................................................................................13-3

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Thorough knowledge of Oracle Purchasing

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Typographic Conventions in Code

Passwords DROP USER scott

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Typographic Conventions in Oracle Application Navigation Paths

This simplified path translates to the following:

2. (M) From the menu, select Query then Find.

3. (B) Click the Approve button.

(ST) = Sub Tab

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Typographical Conventions in Oracle Application Help System Paths

The following help navigation path, for example

(Help) General Ledger > Journals > Enter Journals

represents the following sequence of actions:

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3. Under Journals, select Enter Journals.

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