SAP ME05 Tcode: How to Create a Source List Determination

By : Olivia Turner Olivia Turner
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⚡ Smart Summary

Create a Source List in SAP using transaction ME05. A source list records the approved suppliers for a material at a plant, and where a source list requirement exists, ordering cannot proceed without one.

  • 📋 Core Definition: A plant specific list of permitted sources for one material, each valid for a defined period.
  • ⚙️ Generation Transaction: ME05 builds entries automatically from existing info records and outline agreements.
  • 🧪 Test Run Flag: The transaction defaults to simulation; untick the box to write the records for real.
  • 📌 Fixed Indicator: Marks one supplier as the preferred source so requisitions adopt it without asking.
  • 🚫 Blocked Indicator: Excludes a supplier temporarily without deleting the record or its history.
  • 🔗 Downstream Effect: Source determination reads this list before contracts and info records when proposing a vendor.
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Create a source list in SAP using ME05

What is Source List?

You can create a sourcelist in ME05 transaction. A source list is a list of possible sources for a material. If a source list requirement exists for the material, you must create a source list to proceed with the ordering.

The record answers one question for a given plant and validity period: which suppliers are we allowed to buy this material from? Each line names a source, which can be an external vendor, an outline agreement, or another plant supplying internally.

Two indicators on each line do the real work:

  • Fixed source: Marks one line as the preferred supplier. Source determination stops at this record and adopts it without offering alternatives.
  • Blocked source: Excludes a line from selection while leaving it on file. This is how a supplier under quality investigation is suspended without losing the record.

The source list requirement itself is switched on either per material, in the Purchasing view of the material master, or for a whole plant in customizing. Once set, a purchase order or requisition for that material is rejected until a valid source list entry exists.

How to Create a Source List in SAP

  1. Execute t-code ME05.
  2. Enter material, or material list/range.
  3. Enter plant.
  4. Untick the test run check box to perform the transaction instead of using the test mode.
  5. Execute the transaction.

Create a Source List Determination

On the results screen select the appropriate line item and click on the save button. You have created a source list.

⚠️ Warning: Leave the test run box ticked on the first pass. ME05 generates entries across a whole material range, and reviewing the simulated output is far easier than removing unwanted records afterwards.

ME05 vs ME01: Generate or Maintain

Two transactions produce source list entries and they solve different problems. Choosing the wrong one is the most common reason a buyer cannot find the record afterwards.

Parameter ME05 – Generate source list ME01 – Maintain source list
Working mode Mass generation across a material range Manual maintenance, one material at a time
Where entries come from Existing info records and outline agreements Typed in by the user
Test run available Yes, and it should be used first No, entries are saved directly
Fixed and blocked flags Set afterwards in ME01 or ME02 Set directly on the line
Best for Initial load or a new plant rollout Adding a single approved supplier

The supporting transactions complete the set: ME03 displays a source list, ME04 shows its change history, and ME06 analyses source list records across materials. ME05 is therefore a generator, while ME01 is the editor used for day to day corrections.

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Where the Source List Fits in Source Determination

A source list does not act alone. When source determination runs on a requisition, SAP checks four objects in a fixed order, and understanding that order explains why an expected vendor sometimes fails to appear.

  1. Quota arrangement. If a quota exists for the material and period, SAP allocates the demand according to the configured split and stops searching.
  2. Source list. Valid entries are read next. A line flagged as fixed is adopted immediately; blocked lines are skipped entirely.
  3. Outline agreement. Contracts and scheduling agreements are checked, and they outrank info records when both are valid.
  4. Purchase info record. The fallback source, supplying price and lead time for the vendor and material pair.

Three failure patterns follow directly from this sequence. A blocked line makes an otherwise valid vendor invisible. An expired validity period has the same effect as no record at all, since the check is date driven against the delivery date. And two fixed lines valid on the same date force manual selection rather than automatic assignment, because SAP will not choose between equally preferred sources.

Once the list is maintained, source determination can propose a supplier automatically on the next requisition. Continue with creating a purchase requisition, or review how the wider mechanism works in the purchasing and purchase requisition overview.

FAQs

No. It becomes mandatory only when the source list requirement is set on the material master purchasing view or for the whole plant in customizing. Otherwise it is optional.

No. Only one line may carry the fixed indicator for any overlapping validity period. Splitting demand between suppliers requires a quota arrangement instead.

AI reviews delivery and quality history, then recommends which supplier should carry the fixed flag and which should be blocked, keeping the approved list aligned with actual performance.

Yes. Models identify materials where only one approved source exists and spend is high, prompting buyers to qualify a second supplier before a disruption forces an urgent search.

Set the blocked indicator in ME02 to suspend it, or delete the line if the relationship has ended permanently. Blocking is preferred because it preserves the audit trail.

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