Creating Global Policies and Constraints

This chapter provides an overview of global policies and constraints and discusses how to create and maintain global policies and constraints.

Understanding Global Policies and Constraints

PeopleSoft Enterprise Strategic Sourcing enables you to define award constraints and set up defaulting rules so that the constraints can automatically default onto events. During the award process, the constraint rules are included in the optimization process so that the ideal award allocation is recommended while ensuring adherence to the defined constraints. When awards are posted, the system also checks the awards to ensure adherence to the constraints.

For example, your organization may have a policy to give a certain amount of business to minority and woman-owned businesses. This could be a global constraint that applies to all events created across all Sourcing business units. You can specify that 10 percent of all business must be awarded to minority and woman owned businesses. You can then tie the constraint to a bid factor that asks whether the bidder is qualified as a minority or woman-owned business. At award time, the optimization engine ensures that this constraint is met when determining the ideal award. In some cases, more than 10 percent may be awarded to a minority or woman-owned business, based on other constraints that were defined and the bidder's actual responses. Therefore, you can track the progress throughout the year to ensure that the 10 percent objective is being met.

If you are not using the optimization engine to recommend an award or if you change an award that the optimization engine recommended, the system will verify the award to ensure that it adheres to the constraints. If an award violates any constraints, the user will either receive an error or a warning depending on the user's constraint permissions on the Strategic Sourcing User Preferences page.

You can also perform a what-if analysis by changing or inactivating constraints and then rerunning the optimization process.

For constraints that are tracked across events, a progress to date amount is maintained and relayed so that you can track the target goal to the actual results to date. The progress to date is based on the calendar selected during the creation of the business constraint.

By using this functionality, you can:

Define constraints based on global, business unit, event, and line levels.
Base constraints on bid factors, the number of awarded bidders, or the quantity or amount that must be awarded.
Associate defaulting rules to the constraints so that the constraints are automatically attached to the applicable events.
Add, remove, and modify constraints during event creation, analysis, and award processing.

Prerequisites

Before using the global policies and constraint feature, you must perform the following:

If you want to allow default mandatory constraints to be overridden for Strategic Sourcing events, select one of the following options in the Sourcing Constraint Permission group box on the Strategic Sourcing User Preferences page (Set Up Financials/Supply Chain/Common Definitions, User Preferences, Strategic Sourcing):
- Event: Constraints that apply within a specific sourcing event.
- Business Unit: Constraints that apply to all sourcing events within a business unit.
- Global: Constraints that apply to all sourcing events across all PeopleSoft Enterprise Strategic Sourcing business units.
If you do not select any one of these options, then you cannot override mandatory constraints that default onto events and the system will enforce the mandatory constraints when posting awards. You will also not be able to change the importance of mandatory constraints or choose to ignore those constraints.
Create and maintain constraints using the Sourcing Constraint Setup component (Sourcing, Create Events, Constraints Setup).

Common Elements Used in this Chapter

Status	Select Active or Inactive for the constraint. The default value upon creation is Active.
Type	Select the type of constraint that you're defining: Bus Unit (business unit): Constraints that track spend across all events within the specified business unit. Event: Constraints that are associated to a specific event. The constraint attributes are applied to the entire event or specific line if the constraint is associated with a line item. Global: Constraints that track spend across all events for all PeopleSoft Enterprise Strategic Sourcing business units to which the constraint is associated. Note. If the constraint has a defaulting event header rule, then the spend is based on the total award amount. If the constraint has a defaulting event line rule, then the spend is based on the total award amount for the specified line.
Sourcing Objective	Select an option: Target Goal: The system does not require that the target goal be met for this constraint. Mandatory Goal: The system forces the mandatory goal to be met for every event containing this constraint.
Priority	Select a value to prioritize the importance of a constraint. The optimization engine uses the constraint priority to determine an ideal award allocation. The optimization engine meets the higher priority constraints first. 1 - Not Important 2 - Less Important 3 - Important (default value) 4 - Very Important 5 - Critical Note. Mandatory constraints have a default priority of Critical. Note. This field is used with the Target Goal value in the Priority field.
Award Constraint	Select a value of Price or Quantity. This option applies only to constraints based on bid factors. If you selected Price, the constraint is based on the awarded price. If you selected Quantity, the constraint is based on the awarded quantity.
Award Sign	Select a specific sign (such as less than, equal to, or between) to indicate the selection parameters of the award.
Value	Enter a numerical value.
Award Basis	Select Amount or Percent to indicate the basis upon which the award is to be based. This field works with constraints based on amount, bid factor, or quantity. If you selected Amount, the value specified is on the awarded amount. If you selected Percent, the value specified is on a percentage of the award.
Apply Constraint	Select Across Bidders or Per Bidder. This field is enabled only for constraints based on bid factors. If the constraint is based on amount or quantity, the constraint is always applied per bidder. If you selected Across Bidders, the constraint value is applied across all awarded bidders.

Creating and Maintaining Global Policies and Constraints

To create global policies and constraints, use the Sourcing Constraints component.

This section discusses how to:

Define constraints.
Associate constraints to business units.
Define constraint defaulting rules.

Pages Used to Create and Maintain Global Policies and Constraints

Page Name	Object Name	Navigation	Usage
Constraint Setup	CONSTRAINT_PG	Sourcing, Create Events, Constraints Setup, Constraint Setup	Create and maintain constraints.
Assign Business Units	CONSTRAINT_BU_SEC	Click the Assign Business Units link on the Constraint Setup page.	Assign constraints to business units.
Constraint Rules	CONST_RULE_SEC	Click the Assign Defaulting Rules link on the Constraint Setup page.	Assign defaulting rules.

Defining Constraints

Access the Constraint Setup page.

Step 1: Describe the constraint.

Effective Date	Indicate the date that the constraint is to be effective.
Description	Enter a short description for the constraint. This field is required.
Calendar ID	Select a calendar ID to use for global or business unit constraints. The calendar ID is used to calculate the progress to date for the selected constraint. This field is required for global and business unit constraints. For example, if your organization wants to ensure that 10 percent of business is awarded to minority and woman-owned businesses by the end of the year, you should select a calendar ID associated with an annual calendar. The total spend throughout the year is then compared to the spend awarded to minority and woman-owned businesses to calculate a progress to date that you can track throughout the year.
Long Description	(Optional) Enter a long description for the constraint.
Currency Code	Select a currency code for the constraint.
Summary	Displays a text description summarizing the constraint parameters. The summary field is automatically completed as you define the constraint attributes.

Step 2: Define the constraint attributes.

Constraint Based On

Select a value:

Amount: Constraint is based on the amount awarded.
Bid Factor: Constraint is associated to a bid factor.
Bidders: Constraint is based on the number of awarded bidders.
Quantity: Constraint is based on the awarded quantity.

Click to add additional attributes to the constraint. You can add additional constraint criteria only for constraints that are based on bid factors.

Value Selected in the Constraint Based On Field	Fields that are Available in Step 2
Amount	Award Sign Value Award Basis Apply Constraint (display only)
Bid Factor	Bid Factor Code Bid Factor Sign Award Constraint Award Sign Value Award Basis Apply Constraint
Bidders	Award Sign Value
Quantity	Award Sign Value Award Basis Apply Constraint (display only)

(Optional) Step 3: Add additional constraint criteria.

If the constraint is based on a bid factor, click to add additional constraint criteria to the constraint.

For example, using the minority or woman-owned business constraint discussed earlier, if you have two different bid factors asking whether a bidder is a minority or woman-owned business, you would define the constraint as based on bid factor and first select the MINORITY bid factor. You could then add additional constraint criteria for the WOMANOWNED bid factor.

Associating Constraints to Business Units

Access the Assign Business Units page.

Select the business units that you want to associate with the constraint and click OK. You must associate at least one Sourcing business unit to business unit type constraints.

Defining Constraint Defaulting Rules

Access the Constraint Rules page.

Constraint Rules

By defining defaulting rules and associating them to the constraint, the system automatically applies the defaulting rules to sourcing events. You can review the constraints associated with the event, and modify the constraints as needed based on the user preferences settings. Defaulting rules can be added at the event (header) level or at the line level.

Rule Type	Select Header or Line to indicate whether to apply the constraint to the entire event (header) or per line.
Category or Item ID	(Optional) Select a value for these fields.
Quantity	(Optional) Enter as numerical value in this field.
Start Price and Extended Price	(Optional) Enter values in these fields.
Copy Previous Rule Attribute	If more than one rule is defined for the constraint, click this button to copy the previous rule's values into the new rule.
Rule Summary	Displays a system-defined summary of the constraint rule.
	Click to add constraints based on different criteria. See Step 2: Define the constraint attributes in Setting Up Constraints