The procurement process starts from creation of a purchase requisition by the user department. This purchase requisition is then passed on to the purchase department. The purchase department then sends it to a vendor. The vendor in turns supplies the requested material or service.
In SAP this process flow is followed for various kinds of purchasing methods like request for quotation, subcontracting, consignment, long term contract or simply through purchase order. But in any common circumstance, there are always more than one source for procuring a material or service. If you have such a scenario then it is lot better to get all those sources, compare them for price and other terms and then procure the material from the source which offers most favorable purchasing conditions.
In SAP, this is possible. How it is done?
In SAP sources of supply are kept in form of info records, source lists, contracts and vendor quota arrangements. A material thus can have many sources of supply already there in the SAP system. Now when you create a purchase requisition, you can find out all the sources of supply. Then you can do analysis by comparing prices and other terms of purchasing. Once you find out the best source then you can go ahead and assign the requisition to that source.