Thursday, 30 August 2012


India Localization for SCM - Presentation Transcript
1. India Localizations for SCM Ravi Sagaram, PMP Motorola
2. Agenda
o Introduction to India Localization
o India Taxes
o Localization Setups
o Localization in Purchasing
o Localization in Order Management
o Question and Answers
3. Introduction
o India Localization is complying with the India Specific Tax Requirements.
o India Localization Patch set has to be applied for India Localization over and above the standard R12 implementation.
o India Localization Provides some seeded responsibilities like India Local Purchasing, India Local Inventory, India Local Order Management, India Local Payables, India Local Receivables etc. Also it provides India related menus, functions, reports etc.
o Localization provides provision for defining of taxes, defaulting of taxes, recording of taxes, calculation of taxes, and reporting of taxes.
4. Taxes
o Central Excise
o Sales Tax
o Income Tax
o VAT
o Customs Duty
o Service Tax
5. Central Excise
o Applied to both manufacturing and trading Orgs when the organization is excise registered.
o It is a federal tax controlled by the central excise department.
o A CE registration called ECC# is required for each physical location. If there are two inventory orgs at the same location, they will share a common ECC#
6. Sales Tax
o Sales Tax is administered by States
o The Tax is applied at the time the product is sold to the end customer
o There are 2 components for Sales tax– Central Sales Tax and Local Sales Tax. Different tax registration is required for both of them
o The head office would be responsible for tax settlement and accounting for all the tax registered orgs.
o Each state will have a separate LST and CST registration numbers. These are defined at each inventory Org.
o If multiple Inventory orgs fall under one state, they all will use the same CST and LST registrations.
7. Income Tax
o Head office is normally registered with the Income Tax at the LE level. PAN (Permanent account number) will be allocated for the head office, defined at the LE.
o TAN (Tax Deduction Account Number) is allocated by the local Income Tax jurisdiction office for the income tax under local jurisdiction at the OU level.
o A separate TAN Number is required for each OU that fall under different states
o A common TAN can be used for multiple OUs if they are all under the same State
8. VAT
o Value Added Tax (VAT) is a tax levied on the value added to a product at different stages.
o VAT is a tax levied at each of the stages in a multi point entry in the supply chain with the facility of set-off of input tax. It is levied by States in the place of Sales Tax.
o A manufacturer may pay VAT on input raw materials and recovers that tax when he sells the finished goods to a dealer. The difference of tax collected from the dealer and the tax paid for the raw materials is paid to the tax authority.
o Similarly, a dealer may pay VAT on the finished Goods and recovers that tax when he sells it to a retailer. The tax after recovery is paid to the tax authority.
o Finally the end customer pays the VAT to the retailer. The retailer recovers his portion of the tax he paid and pays the balance to the tax authorities.
o CENVAT is a Central VAT. You have the provision to claim this tax at the time of receipt. The RG registers are updated with the CENVAT entries at the time of receipt.
9. Customs Duty
o Customs Duty is paid on goods when goods are imported into India
o It is paid in INR as a % of the duty over the value of goods received in foreign Currency.
o In Oracle, provision is made to pay this duty as a prepayment before receiving the materials and it is adjusted against BOE given by Customs.
o When goods are received into the inventory org, they should be associated with the BOE Tax amount paid on them at the time of import.
o These Entries are registered in a Tax Register called RG23D
o While Shipping the goods on a sales order, the deliveries are associated with these registry entries.
10. Service Tax
o Service tax is paid for the services rendered. Examples are telecom service, tax services, consulting services Etc.
o You can define Tax regime for Service tax and have service tax registration.
11.
o SETUPS
12. Setups
o Localization Setups
Inventory Orgs
Sub Inventories
Items
Tax Regimes
VAT
Service Tax
Bond Register
13. Define Addl. Info for Inv Orgs
o The information that you provide in the organization additional information using India Localization would become the basis for the recording, reporting and accounting for the tax
o Setup Inventory Orgs in the regular way
o Setup records for each inventory Org and inventory location in the Organization additional information
o Each organization should have a record with Null location first. The other records for each location should be defined there after
o Each organization has tabs for providing Tax Info, Accounting Info and Trading Info.
o In the Tax info, Provide the Excise Registration Information, Sales Tax registration Information.
o In the Accounting Info tab, provide all the accounting related information.
o In the Trading Info, provide the trading excise registration information related to the trading orgs.
14. Define Addl. Info for Inv Orgs (Contd..)
o Each organization should have a record with Null location first.
o Each organization has tabs for providing Tax Info, Acct Info and Trading Info
o Provide the Excise Information, Sales Tax information, Income tax information,and VAT registration info under this tab
o Once you enter the excise info, the org will be treated as Manufacturing Org
o Create separate records for each location
o You can set up one of those records as Master and the other as Child Orgs for Excise. Then Excise will be consolidated at the Master org level
o Most of the excise info that you specify here will print on the excise related documents.
o Most of the Sales Tax info that you provide here would print on the sales tax documents.
o If you enter excise info in the Tax Info tab, then you will not be able to enter the excise info under the trading tab. An Organization is either a manufacturing org or a trading org but not both.
.
15. Define Addl. Info for Inv Orgs (Contd..)
16. Define Addl. Info for Inv Orgs (Contd..)
o Provide the Excise information under trading info tab for the trading organization
o Checking Excise in RG23D option will create entries in the RG23D register. If this is not selected, then the excise amount will be added to the inventory cost on receipt
o Order Price Inclusive Option includes the Excise tax in the order price. If the option is checked, then excise duty is not added to the receivables account. If it is unchecked, then the excise tax is added to the receivables account
17. Associate Sub Inventories with India Localization
o Associate sub inventories for India Localization
o Check the Bonded flag for the Excise related Sub Inventories. Then only Excise related transactions will be recorded.
o Check the trading flag for trading Organizations.
18. Setup item templates for India Localization and apply the templates to Items
o Apply these Item templates to Items for each Inventory Org
o You can override the attribute values derived from the template
You can define Item Templates for Excise and VAT and apply the template attributes to the items. Template Attributes
19. Template attributes for items under VAT and Excise Yes RECOVERABLE     Finished Goods ITEM CLASS     Yes APPLICABLE Value Added Tax           No RECOVERABLE     Finished Goods ITEM CLASS     Yes APPLICABLE Vat Not Recoverable VAT Attribute Value Attributes Template Name Type Yes EXCISABLE     No MODVATABLE     Finished Goods India ITEM CLASS     Yes TRADABLE Excise Tradable EXCISE
20. Setup Tax Calendar
o Tax Year in India is from 1 st April to 31 st March
o This task needs to be done every tax year.
o Do not open the tax year for the next year by mistake as it will become current and cannot be changed.
o If Excise invoice has to be generated with a specific prefix, then complete the setups under Excise Generation
21. Define Tax Authorities as Vendors
o Define Customs, Excise, VAT and Service Tax authorities as Vendors in the Payables.
o Appropriate Vendor Type has to be selected while defining these vendors. For example while defining the Customs Authority, select the vendor type India Customs Authority
o Some of the types are India Custom Authority, India Excise Authority, India VAT authority etc.
o You will cut Payables Invoices to these authorities for the taxes to be paid.
22. Regimes Registration
o Setup VAT and Service Tax Regime Registrations
o You specify the registration numbers, Tax Types and the inventory Orgs for which it is applicable
o Also you specify the tax account details like Liability Account, Recovery Account etc.
o The Regime would be used to define the rules that are applicable to all the taxes assigned to it. Taxes defined under the regime would default only for those organizations assigned to it. You can over ride them at the org level.
23. Define Bond Register
o Setups in Bond Register are required to generate Excise Invoice numbers and Updation of excise registers.
o You specify the Order type from OM in bond register to associate the related excise transactions
o The excise transactions related to manufacturing and trading need to be associated with the bond register.
o By associating the order types to the excise transactions for an inventory org and location, excise records will be passed based on the nature of goods cleared.
o Some of the register types are Trading Domestic with Excise; Trading Export with Excise; Export with Excise etc.
24. Defaulting of Taxes
o The item category will list items and associated tax category
o When POs are created, taxes are defaulted from Item category specified on the supplier and supplier sites in the additional supplier information.
o In PO Receipts, taxes are defaulted from the PO Lines.
o When Sales orders are created, taxes are defaulted on the sales orders from Item Category Specified on the customers and customer site in the additional customer information.
o When lines are shipped, the lines will have taxes defaulted from sales orders
25. Define Additional Info for Supplier and Customers
o VAT, Excise and Service tax registrations can be defined for each supplier, supplier site, customer and customer site.
o The information that you setup here would be the basis for tax defaults on PO and SO.
o These can be setup in the additional Supplier or customer information
o VAT info on customer is mandatory for VAT Invoice Generation
o Assessable Price List is used where excise or VAT has to be calculated based on assessed amount rather than line price.
26.
o Localization in PO
o for a trading org
27. Flow of Customs Duty on a PO in a trading Org Create a Tax Category Create PO and Apply Tax Category to PO and submit PO for approval Enter BOE Invoice Interface BOE with AP And generate AP Invoice Create a Receipt Apply the BOE amount to the receipt Verify the Registry Entry And accounting
28. Setup Taxes and Tax Categories for India
o Define Taxes separately and group them together into tax categories
o Taxes are OU specific.
o When you define tax category, you can define tax over tax, or tax over basic amount etc.
o When You create Purchase orders and sales orders, it is easy to apply these tax categories on each PO and SO line than several individual taxes
Credit % indicates the credit that can be claimed Tax % Tax Category Taxes Tax
29. Setup of Precedence in Tax Category
o Tax Precedence indicates whether the tax is on base amount or tax on tax
o CVD is Counter Vailing Duty (Excise Duty) imposed on value of goods + customs duty.
Precedence
30. Application of Taxes on PO lines
o Create PO the regular way
o Before the PO is submitted for approval, query the PO using the India Localization Menu.
o For each PO line, specify a Tax category. All the taxes under the tax category will apply to the PO line
o If tax category is not specified, then specify all the taxes for each PO line
o Save the records.
o Open the PO through the regular PO screens and submit it for approval.
You can specify the default tax category and it will default to all the PO lines
31. Enter a BOE Invoice
o Enter a BOE Invoice for the customs duty to be paid.
o Go to BOE Details to enter the Tax details
o The total tax amount will reflect on the BOE Invoice header.
o The BOE Invoice will interface with Payables and will create an AP Invoice.
1 2 3 4
32. PO Receipts
o PO Receipts should be created using India Localization Menus.
o Create the receipt.
o Enter the Excise Invoice #
o Apply the BOE. The Apply BOE button is enabled only for those receipts which have customs duty tax component.
o Look at the Registers and verify whether they are populated with the registry entries.
o Also the accounting should be populated.
o If the receipt routing is Standard and claim CENVAT on receipts is set to Y, Excise Quantity and the Duty registers are updated and accounting entries are passed.
o Registers RG23A is updated for CENVAT on input, RG23C is updated by CENVAT on capital goods, RG23d is updated by dealers register. These are decided by the values for items defined in the Item Class
o If CENVAT is not claimed, then the tax amount should be added to the item cost for inventory valuation
PO Receipt RG23D Register Entries
33.
o Localization in SO
o for a trading org
34. Flow of transactions on a SO in a trading Org Create a Tax Category for SO Enter SO and Apply Tax Category to a SO and Book Pick Release Match the delivery with Receipt Ship Confirm Generate Excise Invoice
35. Application of Taxes on SO lines
o Create SO the regular way
o Before the SO is booked, query the SO using the India Localization Menu.
o For each SO line, specify a Tax category. All the taxes under the tax category will apply to the SO line
o If tax category is not specified, then specify all the taxes for each SO line
o Save the records.
o Open the SO through the regular OM screens and book the SO.
Specify the default tax category which will default to all the SO lines
36. Application of Taxes on SO lines
o Tax is calculated based on the tax category and the line amount.
o If the tax is based on a different price than the line price, a separate assessable price list can be created and attached at the customer or customer site level. System will use the price on the assessable price list instead of the line price.
o You can choose excise exemptions and vat exemptions on the header on a sales order.
o Changes made to the base order line quantities, cancellations and splitting of the lines are automatically reflected on the localization lines.
o Taxes are automatically copied when new sales orders are created using the copy functionality
o RMAs can be created and taxes will be copied from the original sales order that is referred.
37. Match the delivery with the receipt and Ship Confirm
o Pick Release the Sales order
o Match the delivery with the receipt
o The Match Receipts functionality allows to pass on excise credit to your customers.
o The excise duty is tracked while receiving the goods in a trading organization and it can be allowed as CENVAT credit to customers.
o Before confirming the shipment, the organization needs to allocate the excise duty involved during receipt of the excisable goods.
o While shipping from the trading org, you are required to track the exact amount of the duty paid by the original manufacturer for passing down the credit under CENVAT procedures
o You can see the tax details from the ship confirm screen
o Ship Confirm the sales order
o RG23D will be updated with the quantity matched
1 2 3
38. Generate Excise / VAT Invoice
o Generate Excise Invoice using the concurrent Program ‘India – Excise Invoice Generation’
o This can be generated by running Excise Invoice Concurrent Program. The program will generate Invoice number for each delivery ID and hits the excise registers and accounting.
o This needs to be run every day a few times atleast to take care of the deliveries created in a day
o This needs to be run after the inventory interface.
o This needs to be run before the auto invoice if the excise invoice information is required in AR
o The program will not generate any report.
o Generate VAT invoice using the concurrent program ‘India – VAT Invoice Generation / Accounting’. This can be run from Order Management.
o The Program captures the VAT localization taxes in shipments and inserts VAT invoice number in India localization shipment table.
o This Program needs to be scheduled and needs to be run as a mandatory program.
39. Reports
o RG23D report register will give the complete details of the register as per central excise act.
o This can run as a concurrent report.
o India Excise/VAT Invoice Template report gives invoice template giving the required data for excise / VAT invoicing. We need to customize this report for the actual reporting
40.

Sunday, 26 August 2012

What is the difference between Match Approval Level and Invoice Match Option??

From Oracle User GuideSelect one of the following options for Match Approval Level:
• Two-Way: Purchase order and invoice quantities must match within tolerancebefore the corresponding invoice can be paid.
• Three-Way: Purchase order, receipt, and invoice quantities must match withintolerance before the corresponding invoice can be paid
.• Four-Way: Purchase order, receipt, accepted, and invoice quantities must matchwithin tolerance before the corresponding invoice can be paid.If you enter an item, a value for this field is defaulted. See: Purchase OrderDefaulting Rules, page 4-10.Select an Invoice Match Option:
• Purchase Order: Payables must match the invoice to the purchase order.
• Receipt: Payables must match the invoice to the receipt.Choose Receipt if you want to update exchange rate information on the receiptor if you want your accounting to use exchange rate information based on thereceipt date. (If you use Periodic Costing, you must match to the receipt toensure accurate cost accounting.)The Invoice Match Option defaults from the Supplier Sites window. You canchange the Invoice Match Option on the shipment until you receive against theshipment.
Note: The Invoice Match Option and the Match Approval Level areindependent options. You can perform whichever Invoice MatchOption you want regardless of the Match Approval Level.

Why are expense items typically accrued at period-end, and why are inventory

A: One should accrue on receipt if perpetual inventory is adopted to facilitate reconciliation between inventory valuation reports and accounting entries. Expense items typically are not accounted for on a daily basis, and most companies find it easier to account for and reconcile these expenses at month-end rather than at the time each individual expense is incurred.

When both inventory and expense items are accrued on receipt, the following problems may be encountered:
A) Receiving inspection balances will include both inventory assets and expenses, so at the end of the month, they will need to be manually reclassified.
B) The number of entries needed to research and reconcile the perpetual A/P Accrual Account(s) becomes significantly increased. Since the expense receipts could double the number of accrual accounting entries to process, the Accrual Reconciliation Report could take twice as long to run. The amount of time required by your staff to research any discrepancies would also increase.

What is the difference between 'Accrue On Receipt' and 'Accrue at Period End'

A: Accrue On Receipt means that when a receipt is saved, accrual transactions are immediately recorded and sent to the general ledger interface. This is also known as "online" accruals. Accrue at Period End means that when a receipt is saved, the accrual transactions are not immediately recorded and sent to the general ledger; instead, the accounting entries are generated and sent at the end of the month by running the Receipt Accruals - Period-End Process.

All items with a destination type of either Inventory and Outside Processing are accrued on receipt. For items with a destination type of Expense, you have the option of accruing on receipt or at period end.

Saturday, 11 August 2012

General tips on Configure to Order


This document briefs about some of the important tips and techniques to leverage the best of Configure to Order features introduced in R12. It will be updated on regular basis.

Choose Match or Not:

Match to existing configurations is an excellent feature of Configure to order. In R12, this profile offered more flexibility as you can make this setting at Model item level instead of restricted only at Profile level. When set for matching, the Autocreate configured items program looks first for an existing configured item with the same options of model selected in CANNED table. In case it doesnt exist, the relevant selection data of newly created item  also moves to CANNED table. So, when same options are selected next time, the program picks up the existing configred item instead of creating new item. You need to choose based your priorities and business requirements on whether to have match or not.

Match ON

1. With match on, you can have good track on how each combination of your ATO Options are selected by customers. You can easily figure out the most popular combinations and may plan for them as pre-configured items.

2. Your Business Intelligence reports provide the data on how each combination performed based on various KPI's

3. You can avoid Overheads of toomany Configured items and BOM's getting created.

Match OFF

1. With Match On, the Autocreate configured items do not create the item and matches to the existing configured items whenever the configurations match. This can create some disadvantages such as:

a. newly offered discounts or other pricing will not apply because that price calculations happen on the basis of selected options in the sales order lines.

b. In the same way, any modifications in the lead times, will not reflect as leadtime rollup is bypassed due to matching and no creation of new item

c. Any updated costs at component level are rolled up to the newly created configured item but if the match happens to the existing item, the same cost of the item remain

2. Invoicing of matched configured items, will not be displaying the options selected in the sales order line.  Many customer would like to see the Invoice with the details of subassemblies/ options that they selected. for example, when a computer is bought, the invoicing if shows the price of memory and CD drives, it may be more appealing to some section of customers.

Choose the Item Attribute "Create Configured item, BOM and Routing"

R12 provided the feature of choosing the Autocreate COnfigured item based on this attribute. According to the setting to one of the 3 values for this attribute, the program creates as follows:

1- Based on Sourcing: Item and BOM are created only in the organizations in Sourcing chain defined for the ATO Model

2- Item Based on Model, BOM, Routing based on Sourcing: Configured item is created in all organization to which Model is assigned and BOM is created in organizations which lie in the Sourcing Chain from shipping warehouse of Sales order.

3- Based on Model- Both Item and BOM are created in all organizations to which the ATO model is assigned

Choose 2 in any of the below conditions

If the item involves in inter org transfers that involves organizations which are not in sourcing chain of the configured item or if the item is invoiced in org which is not in sourcing chain
If you have a practice of  return the configured items for repair in to a Non-Manufacturing organizations (This is to make sure the returned items are not picked up by Planning for other fulfillments)
Choose 3 in any of the below conditions

If the item involves in inter org transfers that involves organizations which are not in sourcing chain of the configured item or if the item is invoiced in org which is not in sourcing chain
If you have a practice of  return the configured items for repair in to a Non-Manufacturing organizations (This is to make sure the returned items are not picked up by Planning for other fulfillments)
You need Global Order Promising Features (Like suggesting the best ship from org based on the Sourcing definitions and Option Specific Sourcing setup, validating the shipfrom warehouse)
If your ATO Model has multiple sources such as Customer based, Category based etc.
If in your transactions you quite often change the warehouse after configured item is created.
Limitations : If you make the choice of 3 for an ATO Model, you need to ensure all ATO Models that are child Models to this Parent Models must also be set for choice 3. There is no business justification to this restriction but it is a technical limitation as not having child models in some organizations create inconsistency.

In case you make any changes to the Attribute Create Configured Item, BOM and routing, you need to make sure you run the program "Update Existing configurations" to get all the earlier created items are corrected with the changed settings.

Finetuning: Making the choice 3, provides many advantages as mentioned above but also creates overheads of BOM Creation in all the organization especially if there are a few organizations where you may not need BOM. In such cases you can effectively set the BOM Parameter "Create Config Allowed".

for example, in OM Validations Organization where if you do not manufacture items, the BOM may not be required. You may set the parameter to NO in this organization.

Model design is critical

While you design the Model, you must be very careful in decision making. You need to be clear on how your organization wants to do business and the dynamics of business as well as the pattern of transactions such as sales, returns ,frequency of changes the way item is sourced and delivered and repaired.

Make the configuration userfriendly:

You need to make sure the user spend optimum time with ease while configuring the models in order entry, irrespective of the complexity.

Try to use the existing features to the best effect. Implicit rules Optional, Sales Basis and Mutually Exclusive in BOM settings help ensure  you offer the only options that you make or assemble. For example, Mutually exclusive makes sure the user doesnt select two options together when you give any one of them.
You can also restrict the quantity per, in a range that is offered by you. When u know only 1 is allowed to choose as quantity U can set it in BOM definition for that component.

2. Use configurator rules to default the selections (including the quantities) based on the popularity that you might be knowing to make sure the user changes only a few and completes the configuration. Define Guided selling to avoid loading all multi-level options in one shot and direct to the right options based on progressive selection.
3. Prevent  issues by proper setup well in advance. For example if the user needs to select the Decimal quantities, set the profiles in OM (OM Indivisible) and CZ (CZ: Allow decimal Quantities) to allow decimal quantities.
4. Depending on the kind of requirements that you have, decide on OM Options Window Vs Configurator as Performance is better when you use OM Options windows while there are lots of features in Configurator.
Preconfiguration Settings

Model BOM Options Population: You can do preconfiguration from BOM using the Base Model set for  the ATO Item. And depending on the profile setting, the configurator picks up the  BOM from OM Validation organization or from the BOM Organization. Please be aware of this profile to ensure the outcome is in line with the preferences. Other important profile for preconfiguration is BOM: Configurator URL to make sure you call the configurator from within BOM.

Sourcing Rules and OSS Setups: The Sourcing definitions and Option Specific Sourcing setup impacts the Preconfigured BOM Creation. If you try to preconfigure an item based on a model that is sourced entirely from another organization, you will receive an error asking you to go to the source organization to configure the item.

Preconfigured BOM Creation: Autocreate Configured items program while creating the Configured item also performs the  weight and volume calculations, lead time calculations, cost rollup, list price and purchase price rollup for the configuration items. However in case of Preconfigured BOM Creations you need to perform the individual concurrent programs. Please also be aware that you cant pre-configure alternate BOM.

If a routing already exists for an ATO Item having a base model, and then the user preconfigures the bill for the ATO Item, the BOM Creation doesnt override the existing Routing.

Also make a note the Weight and Volume calculations do not happen during the Preconfiguration. You need to run the Batch program to get this calculation done.

Configuration Effective Dates


You need to be very cautious about the way, the effectivity of the Optional and included components of the Model and Option classes are considered by various programs and tools.
Configurator populates the optional items in the Configurator UI based on the effectivity dates Site level parameter (Configuration Effectivity Dates). The value of this parameter can be Model Line Creations, System date till booking, System date till pick released. The system date is compared with the effective and expiry dates of each component and populates only the items whose Model Creation date or system date falls between them (according to the value set to the parameter).


However the complexity is in the way, the configured BOM is validated. Autocreate Configured items program created the BOM and includes the components for which the scheduled date of the order line falls between the effective and expiry dates. The effectivity of the selected options and included items might have changed between the day the configured item options are selected and the day when the configured item and BOM are created. the system flashes warning and even apply hold to the sales order line depending on the settings. Apart from this, the program also looks at sourcing rules and if the options are expired or not available in the Model BOM of Sourcing org, there will be inconsistency.

Use Advanced Features but with Caution

R12 offers Option Specific Sourcing and also adopted to Global Order Promising of Planning.But you need to make sure you setup carefully to make sure the features give all good, without any conflicts.

Weight and Volume Calculations

Once again make a note that the weight and volume calculations happen differently based on whether you create the configured items from Progress order of Sales order, Concurrent Program or through preconfigured item.

Also the weights and volumes are picked up for calculations from the values of items in the OM Validation organization but the calculated values are copied to all Organization items.

The calculations can fail if the UOM conversions between Weight UOM of components and parent is not maintained. At any level if the calculation doesnt happen further roll up doesnt happen and hence the configured item will not have weight and volume.

Make sure you set the right volume and weight to the items in OM Validation Organization.

Lead Time Calculation

Lead time calculation can be misleading if the setup is not done properly

When Configured items are created from Sales Order Pad through Progress Order, the lead time can be calculated based on the Profile setting on whether to do Lead time calculation or not. When you do not have option dependent routing steps, it is better to set the Lead time calculation to No. In such case,  the lead time for configured item is picked up from the lead time value set for the ATO Model.

If Concurrent program is run to create configured items, the profile setting is defaulted but you can override to do or not to do the calculation.

The accuracy of Lead time as what you want, also depends on the BOM parameter 'Include Model and Option Class in Lead Time Rollup'. If you set to Yes, the lead time and Model and Option Class are included in the Roll up along with the lead times of selected options.

You will set this value to No, when you have appropriate numbers for the optional items.

Autocreate Configurations through Batch Program Vs Progress Order

You need to know subtle differences between the configured item creation process when run from Sales order vs the outcome of the Concurrent process "Autocreate Configured Items".

Certain validations do not happen when the process is run from the Sales order pad.

1. All Profile setting defauts are referred while executing Leadtime calculations, Cost Rollup and Price Rollup when you create configured item through Progress order from Sales order pad. Where as in case of Concurrent program profile settings are defaulted but you can override them.

2. Basis settings in the BOM are honored by the concurrent program

3. You cant set the Release offset days

FAQ Receiving and Returns


Is it possible to perform Returns or Corrections for Internal Shipments (Inter-Org and Internal Order)?
  Is it possible to perform Returns/Corrections for RMAs?
 

Can I return/correct a cancelled PO line or shipment to a vendor?
  Can I change the line status of PO to "Closed for Receiving" and then query the PO in Returns/Corrections Form to correct them?
  Why am I unable to complete returns/adjustments for an un-ordered receipt?
  Can Returns/Corrections be performed when the deliver_to person is not active?
  How do I return an item under serial control?
  How can I  return or correct an item from a different subinventory than the one it was received into?
 

 

 

 

 


 


Applies to:

Oracle Inventory Management - Version 10.7 to 12.1.3 [Release 10.7 to 12.1]
Information in this document applies to any platform.
Form:RCVTXERE.FMB - Enter Returns GUI
Form:RCVTXECO.FMB - Enter Corrections GUI




Purpose

RECEIVING: Returns/Corrections - Release 10.7, 11.0, 11.5.X, r12
Frequently reported how-to questions relating to product specific programs.
Questions and Answers


Is it possible to perform Returns or Corrections for Internal Shipments (Inter-Org and Internal Order)?

No, it is not possible to perform Returns or Corrections on Internal Shipments. You need to reverse the original process if you want to return an internally ordered item. Once the intransit shipment is created, the items are issued out of the subinventory.
The intransit shipment must be processed (received and delivered) in the receiving/destination organization. To correct the quantities the following options are available:
- Perform miscellaneous transactions to adjust inventory
- Perform InterOrg transaction to correct the quantity

Note: Return/Correction can be performed if the IOT or IR have only be RECEIVED, but not yet DELIVERED.

Is it possible to perform Returns/Corrections for RMAs?

No, it is not possible to return or correct 'delivered' RMA receipts. See Note 390858.1 Unable To Correct Or Return RMA Receipt The reason Corrections/Returns cannot be performed for RMA Lines after the Item has been Delivered is because there is no functionality in Order Management code to recreate or change the Order Management RMA Workflow to a previous Status



Can I return/correct a cancelled PO line or shipment to a vendor?

It is not possible to return/correct a cancelled PO line or shipment.
As a workaround the following can be performed:
For Inventory Item:
Enter a 'Miscellaneous Issue' in Inventory Module against this Item. This will correct the quantity in inventory.
For expense item:
Enter adjustment directly in GL, or credit memo to cancel accruals.

Please note: The Cancel Action (and Final Close) in the PO Summary form is an irreversible action. A warning message is displayed indicating no further transaction activity will be allowed if the Cancel action is selected. The warning message provides an opportunity for the User not to continue with the Cancel. Oracle development does not support any datafixes on cancellation and finally closed (user actions) since there are double verifications done while proceeding on this action.










Can I change the line status of PO to "Closed for Receiving" and then query the PO in Returns/Corrections Form to correct them?

The customer should NEVER change the status of the cancelled/finally-closed line without development's consent via a bug.
Oracle Development may not provide a datafix for explicitly cancelled lines because of "user errors".



Why am I unable to complete returns/adjustments for an un-ordered receipt?

Adjustments and/or returns to vendor on unordered receipts can only be done after the receipt has been matched to a Purchase Order. Verify this has been done.

Can Returns/Corrections be performed when the deliver_to person is not active?

Returns/Corrections are not allowed if the deliver to person is not active. You have to re-activate the employee to perform returns/corrections.

How do I return an item under serial control?

Check whether the Serial Number is available in the subinventory and organization.

How can I  return or correct an item from a different subinventory than the one it was received into?

Please refer to Note 967003.1 - Unable to Perform Returns or Corrections From Different Subinventory That Was Received In

Internal Sales Order Setup Flow



Setup Instructions For Internal Sales Orders Across Operating Units [ID 403786.1]
________________________________________
Modified 03-NOV-2011 Type HOWTO Status PUBLISHED
In this Document
Goal
Solution
References
________________________________________
Applies to:
Oracle Purchasing - Version: 11.5.10.2 to 12.0.6 - Release: 11.5 to 12
Oracle Order Management - Version: 11.5.6 to 12.0.6 [Release: 11.5 to 12.0]
Information in this document applies to any platform.
Goal
What are the mandatory setups for creating internal sales order between operating units?
Solution
Setup for creating Internal Sales orders between Operating units

There should be two Operating Unit one is Destination Organization and the other is Source Organization

1) choose responsibility: Human Resources
People> Enter and Maintain
Enter Last Name, First Name, Type
click Assignment:
(both Job and Position are Key flex fields)

2) choose responsibility: System Administrator
Security > User > Define

3) choose responsibility: Purchasing, Destination Organization
Setup > Personnel > Buyer > define
It is required for creating requisition and purchase order in PO.

4) Setup > Purchasing > Document Type
choose internal Requisition
make sure 'Owner Can Approve' checked.

5) Setup > Approvals > Approval Groups
Name = Executive
make sure Document Total and Account Range are defined.

6) Setup > Approvals > Approval Assignment
choose Position (from step 1)
define Document Type = Approve Internal Requisitions
and Approval Group = Executive

7) Setup > Organizations > location
define new location (destination location) for Internal requisition use.
Name
Inventory organization = destination organization
Ship to location = the same name as location name
check Ship-to site and Internal Site and Receiving Site

8) Items > Master Items
a) define Master Item
make sure Item
Purchased = Yes
Purchasable = Yes
Stock able = Yes
Internal Order Enabled = Yes
Inventory item = Yes.
List price = Enter the list price

b) click Special > Organization Assignment
Make sure Item assign to destination organization, source organization/warehouse

c) Setups > Inventory > Costs
Set inventory cost for that item

d) Setups > Inventory > Cost Update
Run the "update standard cost" concurrent program

9) choose resp:Order Management, Source organization
Setup > Document > Define
Name = Internal
Application = Oracle Order Management
Type = automatic
Initial Value =

10) Pricing > Lists > Price Lists
Price List = Corporation

11) Setup > Transaction Type > Define
Order Type =
Transaction Type Code = ORDER
Order Category = Order
Order Work flow = Order Flow - Generic
Price List =
click Assign Line Flows…
Order Type =
Line type =
Item Type = Standard Item
Line Flow - Generic

12) Setup > Document > Assign
Application = Oracle Order Management
Category = Internal
Sets of Books =
Method =
Sequence =
Need to define customer location associations for both source and destination operating units

13) Choose responsibility: Order Management, Destination organization > Customer > Standard
make sure the internal customer for each destination organization connected with destination
location.
query on Customer =
choose Address .. - destination operating unit customer site address..
choose Ship-to...
Internal zone
location :
Organization :destination inventory organization
(OE requires both a ship-to and an invoice-to for each order, even though internal order lines
are not invoiced., you can make the ship-to address both a ship-to and bill-to business purpose
and set the Primary flag to Yes.)

14) Choose responsibility: Order Management, Source organization > Customer > Standard
make sure the internal customer for each source organization connected with destination
location.
query on Customer =
choose Address .. - source operating unit customer site address..
choose Ship-to...
Internal zone
location :
Organization : source inventory organization
(OE requires both a ship-to and an invoice-to for each order, even though internal order lines
are not invoiced., you can make the ship-to address both a ship-to and bill-to business purpose
and set the Primary flag to Yes.)

Setups - OM Customer Association - click details provide the internal organization name

15) choose responsibility: Inventory, Destination organization > On-Hand,Available > On-hand quantity
choose Item = and Sub inventory =
make sure there is quantity available in source organization

16) Setup > Organizations > Shipping Network
choose ... add the following:
From = source organization, TO = Destination organization and From = Destination organization,
TO = source organization
Tran fer Type = In transit
FOB = Receipt,
Receiving Routing = Standard
Internal Order Required = 'Y'.

17) choose responsibility: Purchasing, Source organization
Setup > Organizations > Purchasing Options
choose Internal Requisition zone
define Order type = Internal1 and Order Source = Internal

18) choose responsibility: Purchasing, Destination organization
Requisitions > Requisitions
create an Internal Requisition
Item#=
Qty=
Destination Type =
Organization =
Location =
Source =
Organization =
Need By date = <current date>
created a requisition #
approve the requisition.
go to Requisition Summary and query out this requisition, make sure it has been approved.

19) choose responsibility: Purchasing, Destination organization
Report > run > run Create Internal Sales Orders

20) choose responsibility: Order Entry, Source organization
Orders, Returns > Import Orders > Order Import Request submit the report.
References
NOTE:744481.1 - Internal Sales Order Cycle In Order Management
 Related
________________________________________
Products
________________________________________
Oracle E-Business Suite > Procurement > Procurement > Oracle Purchasing
Oracle E-Business Suite > Order Management > Order Management > Oracle Order Managemen

Oracle SCM functional Interview Question Answers


Contents

Inventory

Costing

Purchasing

Order Management

MPS/MRP

ASCP

BOM

WIP

ECO

Purchasing

1. What is 2-way, 3-way, 4-way matching? Can you give me an example of 2 way matching? [Complexity **]

2-way matching:
2-way matching verifies that Purchase order and invoice quantities must match within your tolerances as follows:

Quantity billed <= Quantity Ordered
Invoice price <= Purchase order price
(<= sign is used because of tolerances)
Often used for services where no receiver is generated.

3-way matching:
3-way matching verifies that the receipt and invoice information match with the quantity tolerances defined:
Quantity billed <= Quantity received

4-way matching:

4-way matching verifies that acceptance documents and invoice information match within the quantity tolerances defined:
Quantity billed <= Quantity accepted.
(Acceptance is done at the time of Inspecting goods).

2. Tell me difference between Job hierarchy and position hierarchy?  What are the steps involved in setting up Position Hierarchy? [Complexity ***]
Job hierarchy is used when there is a single approval hierarchy system in the organization compared to Position hierarchy which is used if for the same job, multiple positional approvals are required i.e. Junior buyer’s requisition needs to be approved by senior buyer and senior buyer’s requisition is sent to Supply Chain manager and then to Finance manager for final approval. In Position hierarchy, approval might happen between different positions for the same Job.
Setups required:
Use Approval hierarchy must be checked in Finance Options
Jobs must be defined
Position must be defined and mapped to jobs
Position hierarchy must be setup
Position hierarchy must be mapped to Document type
Define and assign Approval groups
Assign employees
Run Fill Employee hierarchy concurrent program

3. What is the difference between bill of distribution and sourcing rule? [Complexity *]
Sourcing rule is used to determine the source of particular item i.e. Suppliers or source organization in an organization.  Bill of distribution is used to determine how the item is distributed in an organization i.e. warehouses to which item are to be distributed.

4. A buyer is authorized to approve PO worth 5000 but though the PO is below 5000, he’s not able to approve it? Which setup are we missing? [Complexity *]
There might be restriction on the item, category or account combination that would prevent a particular user not approve a PO.
Check if approval workflow is running
If any changes have been done to position or Job, has the Fill employee hierarchy program been run to update these positions
If Employee supervisor hierarchy is set, is the supervisor a valid and active employee.
Are multiple users mapped to same employee?

5. We provide ranks and allocations in Sourcing Rules to Suppliers or Inventory organizations, what is the use of these ranks and allocations and where is it used? [Complexity **]

Ranks and allocations are used by MRP or ASCP modules to create supply based on the ranks provided. If a requisition needs to be created for a demand of an item, then system checks the sourcing rule and creates a requisition to the Rank 1 supplier and based on the allocation percentage specified.

For example, if demand for an item X, is to be satisfied by creating a requisition, then system looks at the sourcing rule, if two suppliers are given Rank 1 and allocation as 70% and 30% then system creates two requisition lines, one for 70% of supply quantity from supplier 1 and other for 30% of supply quantity from supplier 2.

Total of allocation for each rank must sum up to 100 for the sourcing rule to be planning active.

6. Client requires every Purchase order to have paper based Requisition number entered mandatory in Create Purchase order screen by users [Client doesn’t want to create Requisition in APPS and use Auto-create functionality in this scenario]. How to handle this requirement? [Complexity **]

Enable a DFF at PO line level and make the DFF mandatory to be entered by user for each line.

7. What is the difference between Blanket Purchase Agreement and Contract Purchase Agreement? [Complexity **]

Blanket purchase agreements carry detail of the goods or services you plan to buy from a specific supplier in a period, but you do not yet know the detail of your delivery schedules. You can use blanket purchase agreements to specify negotiated prices for your items before actually purchasing them.

Contract purchase agreements are created with your suppliers to agree on specific terms and conditions without indicating the goods and services that you will be purchasing. You can later issue standard purchase orders referencing your contracts

8. Client requires control over procurement for each department. Is it possible in EBS to handle such a requirement? [Complexity **]

Yes, Using Encumbrance functionality, Each department can be allocated a specific amount and purchasing would honor this and ensure system doesn’t approve PO more than the budgetary amount.

9. What are the types of receipts and their functions in Purchasing? [Complexity **]

There are no distinct types of receipts as we find in PO documents (Requisition, Quotation, Purchase order etc). Receipts differ mainly by the method of recording the receiving transactions.

1) Unordered receiving
2) Blind receiving
3) Express receiving
4) Substitute receiving

10.  For an OSP Sub-assembly, when you move transaction to the 'Queue' of an OSP Operation, Requisition Import is fired which creates an Approved Requisition and an Unapproved PO. What are the setups that govern creation of PO? [Complexity **]

Sourcing Rule needs to be defined for the item. The sourcing rule needs to be mapped to item and organization under an assignment set.

11. When does a Purchase order or requisition goes into ‘Pre-Approved’ status? [Complexity *]
• A person with the final authority to approve the document approves it, but then forwards it to someone else for additional approval, thus changing its status to Pre–Approved.
• Your organization uses encumbrance (reserves funds for documents), and the document is authorized for approval but funds have not yet been reserved for it. Even if someone with sufficient approval authority approves the document, its status may still be Pre–Approved if funds were not able to be reserved at the time of approval. Once funds are reserved for the approved document, the document changes its status to Approved.

12. If the preparer of purchase requisition is not authorized to Approve that requisition then what setup should be performed in the system to achieve this? [Complexity *]

In document type, set Owner can approve flag to No

13. How do I ensure if Purchase order is cancelled then corresponding requisition is also cancelled? [Complexity *]
In Purchasing Option, Set Cancel requisition to ‘Optionally’ or ‘Always’

14. What is the functionality I am achieving by setting Receipt close % as 100 %? [Complexity *]

Receipt close % ensures that PO line ordered quantity is closed up to that specified percentage. If Receipt close point is set as 60% and if Order quantity is 100 then if PO receipt is made for 40 quantities then PO line would be moved to closed status automatically,

15. Client wants each requisition auto created in the system to be grouped by Buyer, how to achieve this in EBS? [Complexity *]

In Purchasing option, Set requisition group by parameter to ‘Buyer’

Inventory

1. Operating Unit 1 (OU1) has 3 Inventory orgs say M1, M2 and M3 and Operating Unit2 (OU2) has 3 Inventory orgs say S1,S2 and S3. OU1 & OU2 has different Set Of Books (SOB) and Legal Entity (LE). Now is it Possible to change the Operating Unit (OU) for Inventory Org S3 from OU2 to OU1
If Possible, what are the Inventory Setup requirement needed? Also, what are all the financial impacts? [Complexity **]

No, it’s not possible to change an inventory org from one OU to another.

2. Please explain the concept of 'Genealogy' in Inventory Management? [Complexity **]

Genealogy is the maintained for all Lot controlled and Serial controlled items. Lot Genealogy tracks the relationship between lots and provides lot traceability that result from inventory transactions.
Serial genealogy tracks the transaction and multilevel composition history of any serial-controlled item from receipt through work in process and inventory to your customer sale. The composition genealogy is captured through material transactions in Oracle Work in Process.

3. During closure of inventory period, system throws an error stating pending transaction exist for this period? How to resolve this and close the Inventory period? [Complexity **]

Navigate to inventory accounting period, click on the pending task and identify the nature of the task which is pending and resolve as per issue.

4. What is concept of Multi-org? Whats the purpose of running concurrent request ‘Replicate Seed Data’? [Complexity **]

Multi-org means single installation of Oracle Applications will support multiple organizations with the use of different Set of Books. Multi-org supports any number of Legal Entities.
Replicate seed data is a concurrent program used to replicate the generic data attributes such as Supplier, customer header information across OUs. This program is typically run after creation of new OUs.

5. What’s the difference between Cycle counting and Physical inventory? [Complexity **]

Cycle counting is recurring and more often phenomena compared to Physical inventory. Cycle counting typically happens for A class items on periodic interval say every quarter.
Physical inventory is done on an annual basis for all items in the inventory.

6. What transactions would be available in Item Supply/Demand form? [Complexity *]
Demand such as Sales order booking
Supply such as Purchase orders, requisitions etc.

7. Which report should I run for viewing item on hand quantity across organization? [Complexity *]
Multi-organization Quantity Report
8. What are types of managers in Oracle? [Complexity *]
Cost Manager
Lot Move transaction Manager
Move Manager
Material manager



9. Whats the difference between nettable and non-nettable sub inventories? [Complexity *]

Nettable sub inventories are the only sub inventories which are used by MRP/ASCP engines for identification of any supply for an item
Non Nettable sub inventories are not considered by planning engines as sources of supply.

10. What transactions would be available in Transaction Open interface? [Complexity **]

Transaction Open interface is a key interface through which user can submit transactions. Transaction open interface can process different transactions to do on hand conversions from legacy systems and do other transactions like sub inventory transfer, account alias issue / receipts etc.
The transactions could involve Lot and /or serial controlled items.

11. Whats the difference between Intra-class and Inter-class UOM conversions? [Complexity **]

UOM conversions that happen within the same UOM class (Quantity, Weight) are known as Intra-class UOM conversions. (Kg to Pounds)
UOM conversions that happen across UOM class are known as inter-class UOM conversions.

12. In Shipping Networks, whats the role of field FOB? [Complexity **]

Receipt: The shipping organization owns the shipment until the destination
Organization receives it.
Shipment: The destination organization owns the shipment when the from
Organization ships it (and while the shipment is in transit).

In EBS, Free on Board is specified in shipping network for the system to recognize the costing impact of inter-organization transaction. If FOB is set as Shipment then costing of transaction would happen during sale order shipment. If FOB is set as Receiving then costing of transaction would happen during Receipt of item in the requesting organization.

13. What is the purpose of Organization Access? [Complexity *]

Organization Access is used to restrict responsibilities to organization. Once this mapping is set up, a user logging into an Oracle Manufacturing product is restricted to the organizations mapped to the responsibility chosen.

14. Client doesn’t have business practice of issuing transactions that would drive inventory to have negative balances, how would you setup this requirement in EBS? [Complexity *]

In organization parameters form, ensure the Allow negative balance checkbox is not checked.

15.  Can I perform Sub-inventory transfer to transfer items across organizations? [Complexity *]

Sub inventory transfer can be used to transfer items from one sub inventory to another within a single inventory organization.








Costing

1. Can you explain the process involved in updating of ‘Frozen’ costs in Standard costing organization?

Items are typically assigned to updatable cost type other than Frozen cost type and at the month end when previous inventory period is closed and new period is not opened, the item costs defined in user defined cost types are updated to Frozen cost and hence becomes the base cost for any transaction in the next month.

2. What is concept of Cost group?

Cost group is a unique identifier that is used to identify set of accounts such as Material, Outside Processing, Material Overhead, Overhead and Resource accounts for an inventory organization.

3. What is FIFO costing? When would variances be recognized in FIFO costing organization?

FIFO (First In, First Out). is a separate perpetual costing method based on actual cost. This method is also referred to as layer costing. FIFO costing is based on the assumption that the first inventory units acquired are the first units used.

Variances would be recognized in FIFO organization when transactions occur that drive inventory negative.

4. What is the concept of Layer costing?

In layer costing, a layer is the quantity of an asset item received or grouped together in inventory and sharing the same costs. Available inventories are made of identifiable cost layers.
• Inventory Layer
On–hand inventory contains layers that are receipt–based (purchased items) or completion–based (manufactured items).
• Work in Process (WIP) Layer
Components issued to a work in process job are maintained in layers within the job itself. Each issue to WIP represents a separate layer within the job. In addition, each WIP layer consists of only one inventory layer initially consumed by the issue transaction. The costs of those inventory layers are held separately within the WIP layer.



5. What is Purchase Price Variance? When would PPV be recognized in the system in a standard costing organization?

Purchase price variance is the variance that is caused by the difference in PO price and standard cost of that item in an organization. PPV is recognized at the time delivery transaction of PO receipt into inventory. In general, it’s the difference between PO price and Std cost of that item.

6. How to setup Overheads for a department?

Overheads for a department are defined as a sub-element of type overhead. Cost element, Absorption account and basis is specified for the overhead. Resources which are to account for this overhead are specified against a cost type in Resources window. The rates applicable for the resources are specified in Rates window.

7. What are the types of costing supported in Oracle EBS?

Standard
Average
FIFO
LIFO

8. Where can I see the cost updates for an item under standard costing?

Standard cost updates for an item is available under View cost history screen.

9. What is the concept of Standard costing?

Under standard costing, predetermined costs are used for valuing inventory and for charging material, resource, overhead, period close and job close and schedule complete transactions. Differences between standard costs and actual costs are recorded as variances.

10. If a client is using LIFO costing and client is operating in a country where inflation is going down drastically then would client stand to benefit in this environment?

No, FIFO costing would be beneficial in this type of environment.

11. What would happen if item is costed X in Average costing organization and this item is transferred to another organization which is Standard costing enabled?

Average or transfer cost would be compared to item’s standard cost and the difference would be accounted under the variance account.

12. What is the importance of Inventory period closure and its impact in Costing?

Inventory period closure brings a procedural control in the system and thereby ensures that transactions that occur in a particular period are accounted in that period itself. System would prevent any transactions in a period which is in closed status.

13. What is the use of Sub-elements in costing?

Sub elements bring a greater item cost visibility and flexibility, EBS allows users to define multiple material sub-elements. Sub-elements are a smaller classification of the cost elements. For every sub-element you define, you must enter the method of allocating the cost to the sub-element (basis type).


14. What is the use of Multi-org flag in Cost types?

Multi-org flag ensures that cost type defined in one inventory organization is available for other organizations as well. Multi-org flag ensures that cost type is available for sharing across organization.


15. What is Transfer Price costing?

Transfer price costing occurs when a sales order is created for an intransit transfer, between two internal organizations, in two different operating units.


Order Management

1. Client operates in a retail shop environment where most of the goods sold are to the walk-in customers and wants to use Oracle Order Management. What are the configurations to be done to support such businesses where quick order entry, entering existing or new customers with ease, no elaborate picking and shipping process is required?

Workflow of type ‘Bill and Ship only’ depending on client’s requirement. Quick Sales order form can be used to facilitate order details entry. Generic customer can be defined to account for walk-in customers.

2. Whats the use of specifying alternate items in Order Management?

System facilitates order entry user to choose between items which are set as Alternates based on attributes such as ATP etc. Hence alternate items can be booked if original item is not available as per customer timelines.

3. Client requires a single delivery for all orders of a customer, what setups needs to be done for such a requirement?

In Shipping Parameter, set delivery grouping parameter to Customer and Auto create Delivery criteria as ‘Across Orders’.

4. What are Back-to-Back orders and what are the setups involved?

Back to Back orders are orders for which items booked in Sale order is not available in Inventory and system creates a purchase requisition and tracks the item through creation of Purchase order from the requisition and finally when PO receipt is made for the item, the receipt quantity is reserved against the sale order.

Setups include definition of item with attributes such as ‘Built in WIP’ and ‘Assemble to order’ set to Yes. Sourcing rule needs to be defined for the item and sourcing rule should be mapped to MRP: Assignment set.

5. What are ATO and PTO items?

ATO and PTO are types of Item which are used in OM and Configurator mainly.

ATO or Assemble to Order items are typically items that are built as per the customer’s requirement. Hence ATO model is entered in Sales order and end items are chosen from the configurator window. The workflow of the item creates a Discrete job and chosen item is built in WIP. Once the Discrete job is complete, the item is available in OM for picking and shipping.

PTO or Pick to order items are items which are picked from inventory based on customer requirements and then picked and shipped.

6. What are the typical reasons for a line to get backordered during Pick Release?

Primary reasons for line to be backordered are
1. Item is not available in inventory
2. Inventory period is closed
3. Holds are placed against the order or order line.

7. What is the purpose of Trips and Stops?

A trip is an instance of a specific freight carrier departing from a particular location containing deliveries. A trip is carrier specific and contains at least two stops such as a stop to pick up goods and another stop to drop off goods, and may include intermediate stops.

8. Client wants to ensure that a particular item when placed in a Sale order is not processed until Inspection happens and approval is given, how to setup such a requirement?

Create a Hold Source and specify Hold criteria as Item and criteria value as the item name.

9. How to setup Drop shipment cycle in OM?

Oracle Order Management and Oracle Purchasing integrate to provide Drop Shipments. Drop Shipments are orders for items that your supplier ships directly to the customer either because you don't stock or currently don't have the items in inventory, or because it's more cost effective for the supplier to ship the item to the customer directly.

In the sale order, specify the Source type as External. Purchase Release program should be run and post this program, requisition import program should be run.


10. What is the purpose of Interface Trip Stop?

Interface Trip Stop creates the sales order issue transaction and thereby depletes the inventory to the sale order shipped quantity.  As part of ITS, COGS account gets generated.

11. What is RMA and what are the scenarios when RMA cycle would be used?

If I have shipped an order via Order Management to a wrong customer or the wrong item/quantity has been shipped, then I will do an RMA transaction in Inventory to bring the item back. This will generate a credit memo in AR.

If the customer finds that item is faulty or defective, then he returns the shipment to us. In this case too, we will create an RMA in Inventory and receive the item back. This again creates a credit memo.


12. How to setup credit hold in Order Management?

Credit hold setups include setting up

Customer site level – Credit check must be enabled, Amount and currency must be specified
Payment term – Credit check must be enabled
Credit check rule – Credit check rule must be defined.
Order type – Credit check Rule must be mapped as required

13. How to setup quantity discounts in Price lists?

Quantity discounts are handled by specifying Price breaks by giving quantity and corresponding price applicable.


14. What is the purpose of scheduling a sale order?

Scheduling a sales order ensures that line is available for Picking and further transactions applicable. Also, Scheduling looks at sourcing rules to determine the source of the item specified in order line. Scheduling honors Promise date and Latest Acceptable date whichever is applicable as per setups.

15. What are processing constraints in OM?

Processing constraints ensure that user doesn’t violate any business process or system defined process by putting checks on various actions performed by user.

Typically actions such as cancelling orders are governed by processing constraints.

MPS/MRP

1.  What are demand classes?

Demand classes allow you to segregate scheduled demand and production into groups, allowing you to track and consume those groups independently. A demand class may represent a particular grouping of customers, such as governmental and commercial customers, or it may represent sales channels or regions. Demand classes may also represent different sources of demand, such as retail, mail order, and wholesale.

 2. What is expected delivery date?

Excepted delivery date is number of days that system allows orders to arrive before they are needed.
The Acceptable Early Days item attribute is defined in Oracle Inventory. Oracle Master Scheduling/MRP and Supply Chain Planning does not generate a reschedule out recommendation if the number of days the order is going to arrive early is less than the acceptable early days delivery. This allows you to reduce the amount of rescheduling activity within a material plan.


 3. On what criteria are requisitions released via the planner workbench?

System looks at orders and ensures there exist no compression days for those orders i.e. recommendation of those orders doesn’t involve reduction of procurement lead times.

 4. What is Forecast consumption?

Forecast consumption replaces forecasted demand with actual sales order demand. Each time you create a sales order line, you create actual demand. If the actual demand is already forecasted, the forecast demand must be decremented by the sales order quantity to avoid counting the same demand twice.

 5. What are the uses of Master scheduling?

Master scheduling is used for:
• demand management
• scheduling production
• validating the production schedule
• managing the production schedule
You use the schedules generated by master scheduling as input to other manufacturing functions, such as material requirements planning and rough-cut capacity planning.

 6. What are the demand types used in MDS?

Demand types of Master Demand Schedule include

Item forecast
Sales order
Internal Requisition
Spares demand

 7. What is meant by schedule reliefs?

Schedule reliefs are MDS entries to be decremented when you create purchase orders, purchase requisitions or discrete jobs. System would show the unfulfilled demand by performing relief operations.

 8. What is Demand time fence and Planning time fence?

Demand time fence is the period of time where system only considers Sales order demand and ignores forecast demand in that period.

Planning time fence is the period of time where plan doesn’t suggest any orders and considers the existing demand/supply to be frozen.

 9. What is the purpose of Planning Manager?

The Planning Manager is a background concurrent process that performs automatic forecast consumption as you create sales orders.

10. What is the difference between Shrinkage Rate and Component yield?

Shrinkage Rate
For a particular inventory item, you can define a shrinkage rate to describe expected scrap or other loss. Using this factor, the planning process creates additional demand for shrinkage requirements for the item to compensate for the loss and maintain supply.
For example, if you have a demand of 100 and a discrete job for 60, the planning process would suggest a planned order for 40 to meet the net requirements, assuming no shrinkage rate exists.
With a shrinkage rate of .2 (20%), Oracle Master Scheduling/MRP and Supply Chain Planning assumes you lose 20% of any current discrete jobs and 20% of any suggested planned orders. In this example, since you have a discrete job for 60, assume you lose 20% of that discrete job, or 60 times 20%, or 12 units. The net supply from the discrete job is 48. Since you have a total demand of 100 and supply of 48, you have a net requirement of 52 units. Instead of suggesting a planned order for 52, the planning process has to consider that 20% of that planned order is also lost to shrinkage.

Component yield

Component yield is the percentage of a component on a bill of material that survives the manufacturing process. A yield factor of 0.90 indicates that only 90% of the usage quantity of the component on the bill actually survives to be incorporated into the finished assembly.

The difference between a shrink rate and component yield is that Oracle Master Scheduling/MRP and Supply Chain Planning applies the same shrink rate to every use of an item on a bill, whereas you can vary the component yield factor you assign to each occurrence of an item on a bill. Another difference is that shrinkage demand is calculated at the parent assembly level and passed down to components. Component yield is calculated at the component level.

ASCP

1. What is the difference between ASCP and MRP?

ASCP allows users to perform holistic planning by taking into consideration multiple organizations in an EBS instance where MRP plan considers only one inventory organization and multiple plans needs to be created for multiple organizations. ASCP allows constraint planning thereby taking into consideration supplier, organization capacity where as MRP only facilitates unconstraint planning.

2. What is the difference in running an ECC and EDD plan?

ASCP plan with Enforce capacity constraints option ensures that all capacity constraints are honored which might result in demand due date getting pushed in to future.

ASCP plan with Enforce demand due date constraint option ensures that demand due date is given the priority and plan would overload Supplier or resource capacities to honor the Demand due date.

3. What is the role of Memory based planner?

The planning engine’s Memory Based Planner calculates the planned order demand due dates for dependent demands based on the actual requirement date with respect to lead-time. It saves the calculated requirement date based on the lead-time value for subsequent calculation.


4. Explain the process of data collection?

The data collection process consists of the Data Pull and the Operational Data Store (ODS) Load. The collection process lets you collect across Oracle Application Versions.

The two types of collections process are standard and continuous.

• Standard collections process: Using the standard collections process, you can
manually run three types of collection methods including a complete refresh, a net change refresh, or a targeted refresh on specific business entities.

• Continuous collections process: The continuous collections process is an automated process of data collection that efficiently synchronizes the data on the planning server by looking up the sources. If you opt for continuous collections, the system automatically determine the type of collection that needs to be run on entities selected by you. The continuous collections process collects data from the sources with the least user intervention. The Continuous Collections concurrent program performs continuous collections.

5. What is the architecture of ASCP?

Oracle Advanced Planning Suite has a component architecture that separates the transaction data and associated processing (for example, inventory receipts and order entry) in a source instance from the planning calculations done in a destination instance. This allows planning calculations to be done on a different physical machine than the machine that performs transactions and results in better system response. It also allows planning calculations (demand planning, inventory planning, supply planning and order promising) to be applied simultaneously to information from across multiple source instances, which is useful when transaction information for a global supply chain is spread across multiple instances.

6. What is the purpose of exception messages?

The planning engine issues exception messages (exceptions) to:
• Alert you to a situation that may need your intervention, for example, a past due sales order
• Recommend that you perform an action, for example, change the date of a supply order
The planning engine issues certain exceptions for all plan types and others for only certain plan types.
The planning engine only issues exceptions against items and resources that have exception sets assigned to them.

7. What is meant by Hub and Spoke Planning?

Oracle Advanced Supply Chain Planning provides you with the option of using
demands from all planned orders during hub and spoke planning. When you use your plans as demand schedules to other plans, the planning engine considers all planned orders in the source plan as demands and explodes down the bills of material creating demands for the lower level components.

Hub and spoke planning uses a multi-plan approach where you can plan across
the supply chain at the top level and then release planned orders to a lower level
manufacturing plan for all MRP planned items. The top level plan includes only end items or end items with critical sub-assemblies, and typically only the final assembly plants. The lower level plan (MRP) is at the component level and includes the final assembly plants and the component manufacturing plants. Hub and spoke planning is a commonly used term for this type of subset planning.


8. What is the difference between component substitution and End item substitution?

Oracle ASCP supports two types of substitution: component substitution and end-item-level substitution.

The term end-item refers to the finished good or saleable product. End-item-level substitution is an acceptable business practice in many industries. It is often possible to fulfill customer demand on time when the requested item is not available by substituting a more functionally rich product. Substitution is also done to use up existing inventory of older, functionally equivalent items.

Component substitution refers to substitution of component of BOM with another component.

9. What is purpose of setting Demand Priority rules?

Demand Priority rules guide the constraint plan in terms of identifying supply for demand based on the user defined rule.

Demand quantities that are pegged to planned order supplies are considered in internal priority order. Demands with higher internal priority get the first opportunities to take up available resource and material capacities; demands with lower internal priorities can only use remaining resource and material capacities and are therefore more likely to be satisfied late.

10. How is organization security maintained in ASCP?

Organization security restricts plan information access to authorized individuals. Oracle ASCP allows users to associate job responsibilities to organizations for security purposes. This ensures that you see/change planning data in an organization only if you have a job responsibility associated with the organization.


BOM

1. What is bill looping? How would you check for any looping in bills?

Bill loops occur when a bill is assigned as a component to itself somewhere in the multilevel structure of the bill. The loop check program searches for such loops.

2. What is meant by Charge type in a Resource definition?

Charge type determines how each resource is charged in Work in Process. When an operation completes, Work in Process records the units applied to the job or repetitive schedule in the resource unit of measure. You can charge resources manually or automatically.
• Manual: Work in Process does not automatically charge this type of resource to a job or repetitive schedule. You must manually charge it to a job or repetitive schedule using Work in Process.
• PO Receipt: Automatically charge this resource upon receipt of a purchase order in Oracle Purchasing. The assemblies are not automatically moved to the next operation upon receipt, so you must manually move them using Work in Process.
• PO Move: Automatically charge this resource upon receipt of a purchase order in Oracle Purchasing and move the assemblies to the Queue intraoperation step of the next operation, or to the To move intraoperation step if this is the last operation.
• WIP Move: Work in Process automatically charges this type of resource to a job or repetitive schedule when you complete an operation.

3. What are supply types available for BOM in EBS?

A bill of material component field that controls issue transactions from inventory to work in process. Supply types supported by Work in Process include: Push, Assembly pull, Operation pull, Bulk, Supplier, Phantom, and Based on bill.

4. What is extended quantity in BOM?

Extended quantity takes into consideration scrap resulting from operations performed. Scrap is modeled in the system by specification of shrinkage rate.

The extended quantity of the component used in the parent item is calculated as follows:
((explosion quantity of parent item x component usage quantity) / component yield) / (1- shrinkage rate for parent)


5. What is Alternate resource? How to setup Alternate resource?


Alternate resources can be defined for each resource. You can define an alternate resource or set of alternate resources to describe a different manufacturing step used to produce the same product. Alternate resource is set at Routing > Operation Resource level.


6. What is Common BOM? How to create Common BOM?

An assembly that uses the bill of material of another assembly as its bill. This enables you to reduce your maintenance effort by sharing the same bill structure among two or more assemblies. For example, if you have identical bills of material that produce the same product in two different organizations, you can define common bills of material for the identical structures.

Common BOM are created based on primary BOM by specifying the organization to which the BOM needs to be referenced.


7. What is Planning Bill of Materials?

A bill of material for a planning item that contains a list of items and planning
percentages. You can use a planning bill to facilitate master scheduling and/or material planning. The total output of a planning bill of material is not limited to 100% (it can exceed this number by any amount).

8. What is Simulation Sets?

A group of capacity modifications for resource shifts to simulate, plan, or schedule capacity.

9. What is difference between Cumulative Manufacturing lead time and Cumulative total lead time?


Cumulative manufacturing lead time

The total time required to make an item if you had all raw materials in stock but had to make all subassemblies level by level. Bills of Material automatically calculates this value. Purchased items have no cumulative manufacturing lead time.

Cumulative total lead time
The total time required to make an item if no inventory existed and you had to order all the raw materials and make all subassemblies level by level. Bills of Material automatically calculate this value.

10. How do you model by-products in BOM?

Material produced as a residual of a production process. By-product components are represented by negative usage in the bill of material for an assembly.

WIP

1. What are the differences between standard and non-standard discrete jobs?

Non-standard jobs are similar to standard jobs, however, there are noteworthy
differences including:
• Non-standard jobs are more flexible than standard jobs. Because of this they can be used to manage such varying activities as rework, field service repair, upgrades, disassembly, maintenance, engineering prototypes, and other miscellaneous projects.
• Oracle planning products do not create planned orders or reschedule
recommendations for non-standard jobs. You must manually define and reschedule non-standard jobs. However, if a non-standard job is assigned an assembly bill of material, a routing, or both, planning considers the job's material requirements as demand and its assemblies as supply.
• Oracle planning products do not deduct scrapped assemblies from the MRP net
quantity, or deduct the MRP net quantity by the item shrinkage rate for
non-standard jobs. As such, you must identify planned assembly shrinkage by
entering an MRP net quantity that is less than the job quantity.

2. What is the difference between Discrete and Repetitive manufacturing?

Standard discrete jobs control the material, resources, and operations required to build an assembly and collect its manufacturing cost.

Non-standard discrete jobs control material and collect costs for miscellaneous manufacturing activity. They may or may not build an assembly. This type of activity can include rework, field service repair, upgrade, disassembly, maintenance, engineering prototypes, and other projects.


3. What is the purpose of using WIP accounting class?

Standard discrete accounting classes can be used to group job costs. For example, if you build subassemblies and finished goods, you can define your accounting classes so that you can separately value and report the costs associated with subassembly and finished goods production. Standard discrete accounting classes can be automatically defaulted when you create discrete jobs.

4. What is back flushing?

When you complete assemblies, all components with the supply type of Assembly pull are automatically backflushed. When components for assemblies under lot control, serial number control, or lot and serial control are backflushed upon assembly completion, you must assign lot and/or serial numbers to the components.

Backflush components are issued in the quantity and item as defined on the bill of material.


5. What would be scenario if the Discrete job on which OSP operation exists is closed before the receipt of OSP item?

If Discrete job which has OSP operation is closed before receipt of the OSP item, then the resource transaction would cost this transaction would error out.

Typically, system warns the user when user tries to close such discrete jobs.

6. What is the criteria system checks when linking Sales order to Discrete job?

When linking ATO sales orders and jobs, however, the following rules are applied:
• Assembly item cannot be a Pick-to-order item
• Sales order line item must be demanded, but not yet shipped
• Assembly item must be a standard item or an ATO item, not a model or an option







7. What is Outside processing? What are the modules involved in OSP?

Oracle Manufacturing enables you to include supplier-sourced components and resources in your manufacturing processes. Features include:
• Using specialized supplier skills in your manufacturing process to help lower engineering and manufacturing costs and increase production quality
• Using supplier capacity to increase your overall production capacity.

Outside processing items represent supplier-sourced items, resources, and services that you include in your build process. These items can be non-stocked items which represent the actual supplier contribution in your build process or you can define the assembly itself as an outside processing item. The outside processing item is the item on your requisition or purchase order and the item you receive in your purchase order receipts.

Modules involved are Inventory, Purchasing and WIP

8. What is the difference between Detailed Scheduling and Dynamic lead-time offsetting?

WIP Scheduling uses routing details for calculation job/operation start and end dates. This is called "Detailed Scheduling".

If you are using MRP/ASCP, Dynamic lead time offsetting is the scheduling method used and it uses the Fixed and Variable lead time defined in Item master.

9. If OSP requisition needs to be generated at the time of move transaction to that particular operation then what are the setups required for handling this scenario?

In WIP parameters form, specify Requisition creation time as At Operation.


10. Client wants to track the value of transactions that is being scrapped during an operation, what are the setups required to handle this scenario?

In WIP parameters form, specify one of the inter-operations steps as Scrap and Require Scrap account is checked.



ECO

1. What is the purpose of Auto-implement Manager?

Auto-Implement Manager runs at the specified dates and times and automatically implements items whose schedule dates occur on or before the current date. Engineering change orders or revised items whose status is scheduled are automatically implemented.

2. What is a prototype?

Engineering enables you to create engineering items, bills of material and routings the same way you define manufacturing item information. Each item defined in Engineering is assigned to engineering. You can define engineering items and assign item attribute details as you do for manufacturing items.

3. What is Use-up date?

The use-up date is the date when on-hand quantity is exhausted based on projected gross requirements. It calculates the use-up date by applying any on-hand quantity in inventory (supply) against any gross requirements (demand).

4. How is ECO lifecycle being maintained in EBS?

Engineering uses two ECO status fields to control the ECO life cycle: ECO Status and ECO Approval Status.
You can open, hold, release, schedule, implement, or cancel a revised item or an ECO. Engineering does not let you set the ECO Status field to Implemented or Scheduled if the approval status has not been set to Approved.

5. What is the purpose of Approval Lists?

You can define lists of approvers required to approve an ECO before it can be released. Oracle Engineering notifies the people on the list, using an alert, that the ECO requires their approval.