Oracle Inventory Implementation Introduction

Oracle Inventory is one of Oracle’s enterprise applications products. Oracle Inventory enables companies to satisfy business needs such as these:

• Defining part numbers
• Modeling organization structures
• Tracking perpetual inventory
• Maintaining accurate on-hand balances
• Planning material replenishments
• Forecasting anticipated demand

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Order Management in Order to Cash Lifecycle

Important applications involved

1.       Order Import: May be imported from external systems, internal planning tools or created manually

2.       Inventory: Provides all item onhand and availability details

3.       Pricing: Provides unti price after implementing discounts or modifiers if any

4.       Shipping: Ships the goods to designated location

5.       Receivables: Invoices and receipts from customer

Order Management Process:

1.       Enter or Import Order

2.       Order Creation

·         Defaulting Rules

·         Pricing

·         Availability

       

3.       Booking Order

·         Scheduling

·         Reservations

4.       Managing Orders

·         Bulk Updates

·         Holds

·         Purges

5.       Packing Goods

6.       Shipping

7.       Accounts Receivables

Order Management – Multiple Fulfillments

There are multiple models to fulfill an order

1.       Ship from Stock

2.       Make to Order

3.       Internal Order

4.       Configure to Order

5.       Back to Back Order

6.       Drop Ship to Customer

Ship from Stock

1.       Customer places purchase order

2.       Order Management creates Sales Order

3.       Books and reserves the order getting data from Inventory

4.       Packing of the goods done

5.       Shipping of the goods

6.       Invoice generates

7.       Account Receivable done for Invoice

Make to Order

1.       Order management receives the order

2.       Master schedule/Plan Item manufacture

3.       Work in Process

4.       Inventory

5.       Packing and shipping

6.       Receivables and Cash Management

Internal Order

1.       Internal Requisition created in Purchasing

2.       Approval of internal requisition

3.       Order Import imports the order details and creates Sales Order in order management in the sourcing Org and a PO in the requesting org.

4.       Book and reserve the sales order

5.       Ship goods

6.       Receive goods in requesting org in the PO

Configure to Order, ATO, PTO

1.       Order Management gets the Order

2.       Master schedule/Plan configuration item

3.       Create configuration item

4.       Assembly/ Work In Process

5.       Final Assembly

6.       Inventory

7.       Packing and shipping

8.       Receivables and Cash Management

Back to Back Order

1.       Customer Purchase Order in becomes the Sales Order  in Order management

2.       Organization outs a procurement request through procurement

3.       Purchase order to supplier

4.       Supplier supplies goods

5.       After receiving the goods, the Sales Order for customer reserves the goods, so that it cannot be used in any other orders

6.       Packing, Shipping and Receivables

Drop Ship to Customer

1.       Sales order from Customer

2.       Seller puts a purchase order to the supplier

3.       Supplier ships the goods directly to the Customer

4.       Supplier sends the invoice to the Seller

5.       Seller sends the invoice to the customer

6.       Receivables and cash management

This is the model of fulfilling the sales order by selling the goods without handling, stocking and delivering them from the organization. The seller buys the goods for fulfilling the customer demand from its supplier and the supplier sends the goods directly to the seller’s customer.

Drop shipments are done mainly because of following reason

1.       The product ordered by customer might not be a stockable item in the organization

2.       Customer may need large quantity of the item which is not available with the seller

3.       When it is more economical if the supplier ships the parts to the customer directly

Drop shipments are created as Sales Order but it can be identified when the source type is External.

The Purchase Release concurrent program or workflow in Order Management creates records in the Requisition import tables in the purchasing module. This creates requisitions and once these are approved, it generates the purchase order to supplier where the source type is Supplier.

This Purchase Order sent to the supplier who will arrange the delivery of the item to the customer via an Invoice, EDI document or an ASN (Advanced Shipment Notice). Then Seller will generate the invoice to customer.

In addition to this, when the seller receives the confirmation of the drop shipment or receives the invoice from the supplier, it creates a receipt. It creates the inbound and outbound transactions for the accounting purpose.

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[To Download Order to Cash Cycle as PDF, click Here]

Order to Cash Cycle

Following are the steps the process will go through from creating a Sales Order to Posting the details in GL.

·         Enter the Sales Order

·         Book the Sales Order

·         Launch Pick Release

·         Ship Confirm

·         Create Invoice

·         Create the Receipts either manually or using Auto Lockbox ( In this article we will concentrate on Manual creation)

·         Transfer to General Ledger

·         Journal Import

·         Posting

Involved Modules

Order Management: Creating and shipping the Order

Inventory:  Onhand availability, Reservation

Receivables: For Receipt against invoice

General Ledger: Importing, entering and posting the journals.

Enter the Sales Order:

Order Management Super User Operations (USA)>Orders Returns >Sales Orders

Enter the Customer details (Ship to and Bill to address), Order type.

Click on Lines Tab. Enter the Item to be ordered and the quantity required

Line is scheduled automatically when the Line Item is saved.

Scheduling/unscheduling can be done manually by selecting Schedule/Un schedule from the Actions Menu.

You can check if the item to be ordered is available in the Inventory by clicking on Availability Button.

Save the work.

Tables Affected:

OE_ORDER_HEADERS_ALL

OE_ORDER_LINES_ALL

Columns used for identification of flow

FLOW_STATUS_CODE in both the tables which is ENTERED.

Book the Sales Order

Book the Order by clicking on the Book Order button

Now that the Order is BOOKED, the status on the header is change accordingly.

Tables affected:

The FLOW_STATUS_CODE in the table OE_ORDER_HEADERS_ALL would be BOOKED.

The FLOW_STATUS_CODE in OE_ORDER_LINES_ALL will be AWAITING_SHIPPING.

New records will be created in WSH_DELIVERY_DETAILS with RELEASED_STATUS=’R’ (Ready to Release)

Also Record(s) will be inserted into WSH_DELIVERY_ASSIGNMENTS

At the same time DEMAND INTERFACE PROGRAM runs in the background and inserts into MTL_DEMAND.

Launch Pick Release

Shipping > Release Sales Order > Release Sales Orders

Give the Sales Order and Rule details as required

Key in the details in Shipping Tab, Autocreate Delivery: Yes, Auto Pick Confirm: Yes, Autopack Delivery: Yes

Similarly key in the Subinventory, location and org details in Inventory tab as required

Then select Execute Now button.

On completion this will show below window

Pick Release process will in turn run few more concurrent requests like

Auto Pack Report, Pick Slip Report, Shipping Exceptions Report (These are what we have chosen in the shipping tab during Pick Release)

Tables Affected

If Autocreate Delivery is set to ‘Yes’ then a new record is created in the table WSH_NEW_DELIVERIES

DELIVERY_ID is populated in the table WSH_DELIVERY_ASSIGNMENTS

The RELEASED_STATUS in WSH_DELIVERY_DETAILS would be now set to ‘Y’ (Pick Confirmed) if Auto Pick Confirm is set to Yes otherwise RELEASED_STATUS is ‘S’ (Release to Warehouse)

Pick Confirm the Order:

If Auto Pick Confirm is set to Yes during Pick Release, then this process will happen systematically.

In other cases, need to do this by doing a move order transaction

Inventory Super User > Move Order> Transact Move Order

Take the Move Order Number form the Shipping Transaction Form and find that and transact.

Ship Confirm the Order:

Order Management Super User>Shipping >Transactions

Find by Order Number

Here you can find all the details

If the line status is Staged/Pick Confirmed, we can go for a shipment

Then Click on the Delivery tab

Then Click Ship Confirm

Note: If Ship Confirm button is inactive, then please check to the user id you are logged in, whether Shipping Grant given or not. If not they add a shipping grant to the user id and try again.

Then OK.

The Status in Shipping Transaction form in Delivery tab should be closed

This will kick off concurrent programs like.INTERFACE TRIP Stop, Commercial Invoice, Packing Slip Report, Bill of Lading

Tables Affected:

RELEASED_STATUS in WSH_DELIVERY_DETAILS would be ‘C’ (Ship Confirmed)

FLOW_STATUS_CODE in OE_ORDER_HEADERS_ALL would be “BOOKED“

FLOW_STATUS_CODE in OE_ORDER_LINES_ALL would be “SHIPPED“

Once all background process completes, the Shipping Transaction Status in Lines/LPNs tab becomes Interfaced

Create Invoice:

Run workflow background Process

Order Management >view >Requests

Workflow Background Process inserts the records RA_INTERFACE_LINES_ALL with

INTERFACE_LINE_CONTEXT     =     ’ORDER ENTRY’

INTERFACE_LINE_ATTRIBUTE1=     Order_number

INTERFACE_LINE_ATTRIBUTE3=     Delivery_id

And spawns Auto invoice Master Program and Auto invoice import program which creates Invoice for that particular Order 

Check the Invoice:

The Invoice created can be seen using the Receivables responsibility

Receivables Super User> Transactions> Transactions

Query with the Order Number as Reference

Affected Tables:

RA_CUSTOMER_TRX_ALL will have the Invoice header information. The column INTERFACE_HEADER_ATTRIBUTE1 will have the Order Number. 

RA_CUSTOMER_TRX_LINES_ALL will have the Invoice lines information. The column INTERFACE_LINE_ATTRIBUTE1 will have the Order Number.

Create receipt: Receivables> Receipts> Receipts

Click Apply to apply this to an invoice and then select the invoice in next screen and then apply.

Tables affected:

AR_CASH_RECEIPTS_ALL

Transfer to General Ledger:

To transfer the Receivables accounting information to general ledger, run General Ledger Transfer Program

Receivables> View Requests

Parameters:

• Give in the Start date and Post through date to specify the date range of the transactions to be transferred.
• Specify the GL Posted Date, defaults to SYSDATE.
• Post in summary: This controls how Receivables creates journal entries for your transactions in the interface table. If you select ‘No’, then the General Ledger Interface program creates at least one journal entry in the interface table for each transaction in your posting submission. If you select ‘Yes’, then the program creates one journal entry for each general ledger account.
• If the Parameter Run Journal Import is set to ‘Yes’, the journal import program is kicked off automatically which transfers journal entries from the interface table to General Ledger, otherwise follow the topic Journal Import to import the journals to General Ledger manually.

Tables Affected:

GL_INTERFACE

Journal Import:

To transfer the data from General Ledger Interface table to General Ledger, run the Journal Import program from Oracle General Ledger.

General Ledger > Journal> Import> Run

Parameters:

• Select the appropriate Source.
• Enter one of the following Selection Criteria:

No Group ID: To import all data for that source that has no group ID. Use this option if you specified a NULL group ID for this source.

All Group IDs: To import all data for that source that has a group ID. Use this option to import multiple journal batches for the same source with varying group IDs.

Specific Group ID: To import data for a specific source/group ID combination. Choose a specific group ID from the List of Values for the Specific Value field.

If you do not specify a Group ID, General Ledger imports all data from the specified journal entry source, where the Group_ID is null.

• Define the Journal Import Run Options (optional)

Choose Post Errors to Suspense if you have suspense posting enabled for your set of books to post the difference resulting from any unbalanced journals to your suspense account.

Choose Create Summary Journals to have journal import create the following:

• one journal line for all transactions that share the same account, period, and currency and that has a debit balance

• One journal line for all transactions that share the same account, period, and currency and that has a credit balance.

• Enter a Date Range to have General Ledger import only journals with accounting dates in that range. If you do not specify a date range, General Ledger imports all journals data.
• Choose whether to Import Descriptive Flexfields, and whether to import them with validation.

Click on Import button

Affected tables

GL_JE_BATCHES, GL_JE_HEADERS, GL_JE_LINES

Posting:

We have to Post journal batches that we have imported previously to update the account balances in General Ledger

General Ledger> Journals > Enter

Click Find

From the list of unposted journals displayed, select one journal at a time and click on Post button to post the journal.

If you know the batch name to be posted you can directly post using the Post window

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