About Sourcing

Overview

Sourcing rules control how an order is fulfilled. The ROM user interface enables clients to set up and adjust the order sourcing logic by defining specific rules that control the fulfillment process.

To facilitate order brokering, ROM uses two types of sourcing rules:

• Core Rules, which identify all nodes that could fulfill an order.

• Seller Rules A set of fulfillment constraints), fulfillment optimizations, sourcing restrictions), and node prioritization rules., which identify the optimal fulfillment for the order.

The rules depend on the overall fulfillment network setup, geographies served, and supported fulfillment types combined with their optimization choices.

Considerations for Core Rules

To determine the Core Rules should be set up for a seller, consider the following factors:

• What fulfillment types are supported?
  • Ship-to Store A fulfillment process in which orders are shipped to a retail store where shoppers can pick them up. Also called STS. See also ISPU. fulfillment?
  • Ship-from Store A fulfillment process in which orders are shipped from a retail store rather than a warehouse or distribution center. Also called SFS. fulfillment?
  • In-Store Pickup A fulfillment process in which the shopper picks up orders in a retail store rather than having the orders shipped. Also called ISPU. See also Ship to Store.?
  • DC A node type ID that stands for distribution center. only fulfillment?
  • Dropship fulfillment?
• What Ship-to destinations are supported?
  • Domestic US only?
  • International shipping?
  • APO/ FBO/ DPO addresses?
• Are there order types that require different order brokering, such as Marketplace or Retail Connection orders?
• Do you sell Hazmat items that need to be fulfilled by a DC versus a retail store?
• Do you offer Giftwrap? If so, are your retail stores set up with the materials and training to do it?
• Is ROM determining the sourcing location?
• If Ship-from Store is enabled, should there be a limit on the number of orders released to each store location per shift?
• If Ship-from Store is enabled and there are store locations in Alaska, Hawaii or Puerto Rico, do you want to always try to source from the store within that location first for order with Ship-to addresses in those locations?
• If Dropship is enabled, do you always want to source to the primary vendor first?
• If you support preorders, do you always want to source them to DCs?
• Do you have SKUs that are only stocked in a DC and not in your store network?
• Do you want all orders with overnight ship methods to be shipped from the DCs?

Define and Set Up Core Rules

Core rules are composed of selection criteria, including fulfillment types and attributes, and sourcing rules, which form a core rule set. You can have one or multiple active rule sets.

You can schedule core rules to be active for set amount of time. For example:

During Black Friday weekend, change the priority to source from DCs and lower foot traffic stores, and optimize by date as opposed to minimal shipments.

Selection Criteria

A rule can have one distinct criteria set, for example:

For all STH orders, source in this order: DCs first, followed by Retail Stores within the lower 48 states.

You can also combine criteria; for example:

For all STH orders that have overnight shipping, only consider DCs.

Each order line identifies the best-fit core rule based on the selection criteria.

The following table describes the selection criteria and when to use them.

The following table shows an example of a Ship Region File set up using postal codes.

The following tables shows an example of a Ship Region Group file.

The following table shows an example core rule setup.

Sourcing Rules

The core rule sourcing rules include:

• Override Definitions, including the Fulfillment Network Override and Fulfillment Geography Restriction toggles

• Fulfillment Nodes for Sourcing Priority (Mandatory)

• Inventory Burn Rule (Mandatory)

Override Definitions

The following table defines the available override settings and when to use them.

Fulfillment Nodes for Sourcing Priority

Mandatory Configuration

The sourcing process determines the potential fulfillment nodes for the order line item. This determination is based on the defined priority order of the fulfillment nodes.

• You can configure one to many fulfillment node types. For each type, you must define a priority ordered; the system does not define it.
• The lower the number, the higher the priority.
• You can set up multiple types with equal priority. In this case, ROM considers those types with the same priority. For example, if Node123 has the same priority as a Zone Group, ROM selects both Node 123 and all of the nodes within that Zone Group.

The following table describes the node types you can use and tells you when to use them.

Inventory Burn Rule

Mandatory Configuration

Define and Set Up Seller Rules

Seller A seller is part of an organization. It can represent a sales channel, geographic region, or line of business. Organizations can have more than one seller, but a seller can have only one organization. Rules are applied after the Core Rule selection. ROM moves to optimize the order itself and takes all order lines into consideration to determine the optimal fulfillment for the order, not order line level. Only one set of seller rules is configured.

Seller Rules have four aspects:

• Fulfillment Optimization

• Fulfillment Constraints

• Sourcing Restrictions

• Node Prioritization

Fulfillment Optimization

The following table describes the fulfillment optimization methods.

Fulfillment Constraints

Fulfillment constraints work within the Fulfillment Optimization settings. They are very powerful settings. Be sure that you understand them fully before selecting them.

Best Practice: Default settings is to have none of these options selected which will have an end result of ROM fulfilling as much as possible in as little shipments as possible.

Note: If all settings are selected, ROM enforces the following two settings: Order Ship Complete Indicates that all items in a ship group must be scheduled (sourced) or not scheduled at all. + Order Ship from Single Node

The following examples show how Order Ship Complete works.

1. Easton declines both lines.
   • If both lines are available at Rialto, both lines release to Rialto.
   • If one or both lines are unavailable at Rialto, both lines are canceled.
2. Easton declines one line and ships the other.
   • If the line is available at Rialto, it is released to Rialto.
   • If the line is not available at Rialto, it is canceled.

ROM enforces the ship order complete constraint during every sourcing attempt. However, once the order is released (if ROM believes the fulfillment node(s) to have the inventory), then the fulfillment location is in control of the fulfillment.

In the warehouse, the warehouse management system (WMS) could potentially have a control in place to make sure to enforce ship order complete.

The ship order complete flag attempts to ensure the order is shipped complete, but cannot guarantee it if the inventory is not actually available.

Sourcing Restrictions

The parameters are applied whenever a sourcing process is executed.

The following table shows best practice for sourcing restrictions.

Node Prioritization (Optional)

The following table shows best practice for node prioritization.

Business Logic

When an order is scheduled, the sourcing logic executes based on the configured core rules. The system uses the following process for each order line:

1. ROM identifies the core rule set that has the most granular match based on the configured criteria.
2. After selecting the core rule set, ROM identifies all nodes from the highest priority Fulfillment Nodes for Sourcing setting for that core rule.
   1. If the Fulfillment Geography Restriction is enabled and the ship-to address falls into configured rule, ROM excludes those node(s).
   2. If the Network Override Rule is enabled, ROM excludes those node(s).
   3. If multiple Fulfillment Nodes For Sourcing have the same priority rating, they are treated equally.
3. ROM identifies the inventory available for each of the remaining nodes. Note: On-hand and future inventory are taken into consideration for the availability calculation.
   1. If none of the selected nodes has full availability to fulfill the item, ROM identifies all nodes from the next highest priority Fulfillment Nodes for Sourcing setting. It excludes those based on geography restrictions and network override settings.
   2. ROM continues to work through the sourcing order in sequential order.

   Note: ROM considers the following node settings when determining availability:

   • Node Status: Active
   • Node: Enabled for Availability
   • Max Items Scheduled to Node: When the max number of items has been met for the store with more inventory, then ROM either goes to the next store, or schedules the order to the store to be released at the next day/shift. (If the Max Item setting is not configured, then ROM goes by highest ATP.)
   • Held Status: When inventory is in a HELD A supply type that means store fulfillment items were declined for lack of inventory. Immediately after the decline for that node, inventory status is switched to HELD to prevent more sales, cause delays that require resourcing, or avoid cancellation of the fulfillment order. status, the inventory is returned as 0.
   • Configured Overdue Supply Supply, usually in the form of a purchase order, for which the expected arrival date is in the past (earlier than current date).
   • Configured Overdue Demand Demand with an expected ship date in the past (earlier than the current date).
   • Configured Forward Days to Consider Supply The number of days future Supply can be considered to fulfill a Demand.
   • Configured Backward Days to Consider Supply The number of days to go back and check for available Supply for a Demand.
   • Receipt Processing Time The number of days required to process receipt of a product at the inventory node. The processing time is added to the product arrival date to determine Available Date when the received merchandise is available for sale.
   • Advance Notification Time The number of days in advance that a node needs to be notified to prepare an order for shipment.
   • Reserved Demand
4. When more than one location has the order line item availability, ROM applies the Inventory Burn Rule to prioritize the location.
5. After potential nodes, with availability, are identified and the data is aggregated, ROM then moves over to execute against the Seller Rules to identify the optimal fulfillment.
6. Seller Rules are applied after the Core Rule selection. ROM moves to optimize the order itself and takes all order lines into consideration to determine the optimal fulfillment for the order, not order line level. Only one set of seller rules is configured.
7. ROM determines the fulfillment optimization type prioritized first:
   1. Minimum Shipments: If selected, ROM determines the inventory availability with in the configured optimized date range
   2. Date: If selected, ROM determines the earliest inventory availability date
8. ROM filters out any options that exceeds the max splits or max sourcing attempts
9. If there are multiple solutions with the same priority, then ROM determines:
   1. If Node Prioritization is set, ROM identifies the node choice based on the configured preferences:
      1. Fulfillment Network Preference (DC or Store)
      2. Node Preference (retail store ranking)
      3. Node Item Preference
   2. If Landed Cost The total price of a product or shipment once it has arrived at a buyer's doorstep. Includes the original price of the product, transportation fees, customs, duties, taxes, tariffs, insurance, currency conversion, crating, handling and payment fees. is enabled, ROM identifies the node choice of closest proximity.
10. Sourcing selection is made and fulfillment order(s) are appropriately routed.

Note: If the fulfillment type is ISPU In-Store Pickup., the item is routed to the shopper-identified node.