Vendor categories and catalogs
Procurement categories
You can assign vendors to procurement categories and other categories. Additionally, you can use procurement categories to control which products can be purchased from specific vendors.
You can classify a vendor as approved or preferred for a category, and this can be used in the procurement policies to control if the vendor can be selected on the purchase requisition line for supplying within a category.
Catalogs
Procurement catalogs are used to group the products for internal users to define whether they can buy from a specific procurement category. You can hide or show categories of products and individual products in a category.
When deciding how a catalog should be structured, you should consider which products that users can view and order.
Benefits of using catalogs for indirect procurement include:
- Employees can quickly find the products they need.
- Procurement professionals can enforce purchasing policies and make sure that employees are purchasing only allowed products.
- You can add products to your catalog by importing product data directly from your vendors, or you can manually add products to your procurement catalog.
External vendor catalogs
In addition to procurement catalogs, Supply Chain Management provides support for external vendor catalogs and imported vendor catalogs.
If you rely on your vendors to host a procurement catalog, you can configure Supply Chain Management to access a vendor's external catalog website by using the External catalog feature.
To use this feature, you will need to receive the remote access settings from your vendor and then set up the required configurations in finance and operations by using the message format for an External catalog page.
With external catalogs, you can do the following:
- Order properties on the external catalog form allows you to define additional fields to diagnose issues with a vendor catalog. The errors that are on the catalog will be displayed on the cXML cart message log option on the External Catalog. This functionality can be very useful when beginning to use the catalog, to see any errors and troubleshoot the external catalog without the use of more technical resources. For any errors that are on the purchase order, they will be displayed on the CXML Parameters > Purchase order requests form, once the purchase order is sent, the ability to see the request and response cXML message is available.
- Activate or deactivate the catalog so that your users can access the catalog.
Links to the external shopping site must be associated with the vendor for which the external catalog is configured and your procurement categories.
Set up an external catalog for PunchOut eProcurement
By using the external catalog, you can ensure that the product and price information that you subsequently process in Supply Chain Management is accurate and up-to-date. The requisition can then be approved and converted to a purchase order and an order can be placed with the vendor.
When the external catalog is set up and an employee is preparing a requisition, there will be an option to redirect to an external site, the external catalog, and return to the shopping cart that was created at the external site. This communication is based on the cXML protocol and it must be set up between the systems of the buying and the selling organizations.
To set up communication, your vendor has to provide information for you to use in the configuration of the external catalog, such as identity, domain of the buyer's company, DUNS and DUNS number, credentials, and the URL to reach the vendor's catalog.
Set up an external catalog
The external catalog should enable an employee who enters a purchase requisition to be redirected to an external site to select products. The products that the employee selects from the external catalog are returned to Supply Chain Management with up-to-date price information and from here, they can be added to the purchase requisition. The intention is not to enable employees to place an order on the external site. When setting up the external catalog, you need to make sure that the purpose of the site that can be accessed by the external catalog is to collect quote information and not to place a real order.
To set up an external vendor catalog, complete the following tasks.
- Set up a procurement category hierarchy. For more information, refer to Set up policies for procurement category hierarchies.
- Register the vendor in Supply Chain Management. Before you can set up configurations to access an external vendor's catalog, you must set up the vendor and the vendor contact in finance and operations. The external catalog's vendor must also be added to the selected procurement category. For more information about registering vendors in Supply Chain Management, refer to Manage vendor collaboration users.
- The Vendor record cXML setup is located on the Purchase order defaults fast tab. Enable the ability to Send purchase order via cXML by setting the toggle to yes. This field is then populated on the Purchase order header so that all of that vendor's purchase orders are automatically sent via cXML.
- Make sure that the units of measure and the currency that the vendor uses are set up. For information about how to create a unit of measure, refer to Manage unit of measure.
- Configure the external vendor catalog by using the requirements for your vendor's external catalog site. For more details about this task, refer to Configure the external vendor catalog.
- Test the vendor's external catalog configurations to verify that the settings are valid and that you can access the vendor's external catalog. Use the Validate settings action to validate the request setup message that you've defined. This message should cause the vendor's external catalog site to be opened in a browser window. During validation, you can't order items and services from the vendor. To order items and services, you must access the vendor's catalog from a purchase requisition.
- Activate the external catalog by using the Activate catalog button on the External catalogs page. The external catalog must be activated before employees can use it. You can inactivate the external catalog at any time.
Configure the external vendor catalog
To configure the external vendor catalog, you must complete the following tasks:
Enter a name and description for the vendor's external catalog. The name that you enter will appear on the cart that represents the external catalog that is shown to employees who create a requisition. Employees can select the cart to open the catalog on the vendor's external catalog site.
Add an image by using the External catalog image action. The image will appear on the cart that represents the external catalog that is shown to employees who create a requisition. Note that the image's width and height must be equal; otherwise, the image won't be displayed correctly.
Select whether the vendor's external catalog website should appear in the same browser window as the one where the employee has created the requisition, or if it should open in a new window.
Select the vendor for the catalog. In the Legal entities list is a row for each legal entity where the vendor is set up. To allow users to request products directly from the vendor's catalog in some legal entities but not others, you can use the Prevent access or Allow access buttons for each legal entity where you want the catalog to be or not to be available.
In the Default expiration (Days) field, enter the number of days that a quotation received from the external catalog is valid and can be used to purchase from the external vendor. When a quotation is created and retrieved from the vendor's external catalog site, the quotation is valid as of the current system date and remains valid for the number of days that you enter in this field.
Select the Add button to start mapping the procurement categories to the external catalog. In the Category name list, select a category. The list of categories is a superset of procurement categories that the vendor has been mapped to in all the legal entities that are set up for the vendor.
Note
Procurement policies are used to allow or restrict access to categories for the buying legal entity or receiving operating unit. Punchout to an external catalog requires that access be allowed to at least one of the procurement categories that is mapped to the catalog.
Set up the cXML setup request message that will be sent to the vendor. The automatically generated message format is the minimal template that is required to start a session. Fill in values for the tags.
At any time, you can reload the system-generated message template by selecting Restore message format. Note that if you restore the message format, the current message will be replaced by the automatically generated message format, which has empty tags.
cXML setup message
The following is a description of the tags that are included in the template.
| Field | Description |
|---|---|
| < Header >< From >< Credential domain=”” > | The domain of the buyer’s company. |
| < Header >< From >< Credential>< Identity >< /Identity > | The identity of the buyer’s company. |
| < Header >< To >< Credential domain=”” > | The domain of the vendor’s company. |
| < Header >< To >< Credential>< Identity >< /Identity> | The identity of the vendor’s company. |
| < Header >< Sender >< Credential domain=”” > | The domain of the buyer’s company. |
| < Header >< Sender >< Credential >< Identity >< /Identity> | The identity of the buyer’s company. |
| < Header >< Sender >< Credential >< SharedSecret >< /SharedSecret > | The shared secret for the buyer’s company. |
| < Request deploymentMode=”” > | The test or production deployment. |
| < Request >< PunchOutSetupRequest >< SupplierSetup >< URL >< /URL> | The URL of the vendor’s punchout endpoint. |
Extrinsic elements
An extrinsic element is additional information, such as a username that is based on a user that punches out. The extrinsic element is set when the punchout occurs and it can be sent in the request setup message. Your vendor could have a requirement for receiving an extrinsic element in the setup request. In that case, you should add the extrinsic element to the list of extrinsic elements in the Message format section of the External catalog page. Specify a name for the extrinsic element that the vendor can recognize, and then map it to a value.
The options for values are:
- Username
- User email
- Random value
Post back message
The post back message is the message that is received from the vendor when the user checks out from the external site and returns to finance and operations. Post back messages can't be configured. The messages are based on the cXML protocol definition.
In addition, on the purchase requisition and purchase order, the SupplierPartAuxiliaryID field in the Line details fast tab that the vendor can choose to return in the post back message when a customer checks out represents a unique configuration for an item.
For more information about the cXML protocol, go to: Commerce XML Resources.
The following is the information that can be part of the post back message that is received on a requisition line.
| Message received from vendor | Copied to requisition line in Supply Chain Management |
|---|---|
| < ItemIn quantity=”” > | Quantity |
| < ItemIn>< ItemID >< SupplierPartID >< /SupplierPartID > | External item ID |
| < ItemDetail>< UnitPrice >< Money currency=”” > | Currency |
| < ItemDetail >< UnitPrice >< Money >< /Money > | Unit price |
| < ItemDetail >< Description ShortName=”” > | Product name |
| < ItemDetail >< Description >< /Description > | Included in item description; Product name if ShortName is not specified. |
| < ItemDetail >< UnitOfMeasure >< /UnitOfMeasure > | Unit |
| < ItemDetail >< Classification >< /Classification > | Included in item description |
| < ItemDetail >< Classification domain=”” > | Included in item description |
Delete an external catalog
Delete an external catalog with the Delete action on the page. If a product from the external vendor catalog has been requested, the external vendor catalog cannot be deleted. Instead, the status of the external vendor catalog is set to inactive. If you want to remove access to the external vendor's catalog site, but not delete it, change the external catalog status to Inactive.
Imported vendor catalogs
You can use imported vendor catalogs to maintain product information that you receive from a vendor. This can help reduce the amount of data entry and maintenance that is required from your purchasing professionals.
Imported vendor catalogs are useful when you purchase many products from a single vendor, for products that change frequently, or if new products are introduced frequently. In addition to the time saved for data entry, imported vendor catalogs are useful if a customer wants to maintain product inventory.
For example, Contoso is in the business of selling widgets that are produced in a factory. These widgets require various nuts, bolts, and washers for them to be assembled. Contoso purchases most of the nuts, bolts, and washers from Fabrikam.
Fabrikam offers thousands of different size and types of nuts, bolts, and washers. The product designer, is responsible for maintaining the product information and bill of materials (BOMs) in finance and operations.
Instead of typing the information about the thousands of nuts, bolts, and washers into the system manually, the product designer works with Fabrikam to create a template file that they can import into the system that contains all the required information about the nuts, bolts, and washers that Fabrikam offers.
Then, they can use the imported product information to quickly find and build the BOMs for the widgets that are being produced.
Note
When the vendor catalog is imported, you must release the product to the legal entity and configure mandatory product information before you can use the product.
Catalog process overview
The process for creating a new procurement catalog includes multiple steps, and not all the steps are performed by the purchasing professional. The primary steps for creating a catalog include first defining the product categories that you want to use in your catalog and then associating products to those categories.
Category management is a concept in which the range of products that are sold by an organization is split up into discrete groups of similar or related products; these groups are known as product categories (examples of grocery categories might include: meat, vegetables, washing detergent, toothpastes).
Category hierarchies
Category hierarchies are used to classify products and can be used for reporting and analysis. Each category hierarchy consists of a structure of categories. An organization can create more than one category hierarchy.
For example, your organization might create one category hierarchy for classifying purchased products and another hierarchy for selling products.
The number of category hierarchies that are used by your organization, and the structure and categories within each category hierarchy, depends on the procurement process of the organization, the products that are purchased or sold, the industry standards that apply, or the reporting requirements for the organization.
After you create a category hierarchy, you can assign a type to the category hierarchy that determines how the hierarchy will be used.
For example, your organization wants to set up a category hierarchy to classify products. You create a category hierarchy and then assign the Procurement category hierarchy type to it. After you assign products to each of the categories, you can analyze the spending, costs, and other statistics for each of the categories.
Category hierarchy types
Go to Product information management > Setup > Categories and attributes > Category hierarchies to create and maintain category hierarchies.
This hierarchy is used for organizing products for purchasing activities. Only one active procurement category hierarchy can be defined for an organization.
Category policy rules
Two types of category policy rules can be defined to control how categories function in the system: category access policy rules and category policy rules.
A category access policy rule is a type of rule where you can define which categories are available in each legal entity or operating unit. A category policy can be assigned for a procurement category.
For example, a company can allow employees to use only approved vendors for the category or enforce matching policy rules that should be applied, and specify whether employees should respond to questionnaires and more.