http://functionalguy.blogspot.com/2009/02/back-to-back-order- cycle.html Back-to-Back Order Cycle In Order ManagementIn today‟s environment where lead times are often only a matter of 24 hours, many companies want to create a specific supply order linked to each customer order and they want these supply order created as soon as the customer orders have been booked. These compan ies want to have the supply order “ha rd pegged” to the customer order that it is supplying, and once the supply reaches the warehouse they do not want it inadvertently taken by another order or demand. They also need visibility to where the Sales Order line is in the process at all times, so they can answer customer service inquiries. We call this process „Back -to-back orders‟, indicating that the Sales Order and the supplying Purchase Order are very closely linked, often where one PO is tied to one Sales Order. Key Business DriversLower inventory cycle time and cost Link supply to specific demand Can offer a variety of product to customer Used heavily in contract manufacturing environment where the product is standardized and the company plans to focus more on product design rather than manufacturing. 1.Create a B2B item : oIn the Order Management tab, check the Assemble to Order flag (ATO).
Back-to-Back Order Cycle In Order Management In today‟s environment where lead times are often only a matter of 24 hours, many
companies want to create a specific supply order linked to each customer order andthey want these supply order created as soon as the customer orders have beenbooked. These companies want to have the supply order “hard pegged” to thecustomer order that it is supplying, and once the supply reaches the warehouse theydo not want it inadvertently taken by another order or demand. They also needvisibility to where the Sales Order line is in the process at all times, so they cananswer customer service inquiries. We call this process „Back-to-back orders‟,indicating that the Sales Order and the supplying Purchase Order are very closelylinked, often where one PO is tied to one Sales Order.
Key Business Drivers Lower inventory cycle time and cost Link supply to specific demand Can offer a variety of product to customer Used heavily in contract manufacturing environment where the product is
standardized and the company plans to focus more on product design ratherthan manufacturing.
1. Create a B2B item :o In the Order Management tab, check the Assemble to Order flag (ATO).
o In the Purchasing tab, enter a value in the List Price field (in this demoit is 100).
o In the Work in Process tab, make sure the Build in WIP flag is checked.o In the General Planning tab, set the Make or Buy flag to Buy.o Save, and assign to Organization M1Note:
the ATO item attribute is checked as the B2B process utilizes theATO process of the workflow. However, the item is not manufactured inWIP, and instead is a 'Buy' item that is replenished by a supply order in PO.Hence the item may also be called an ATO Buy item
Check reservation status: Go to Tools > Scheduling > Reservation Details >
'Supply' tab. Right now it is Inventory as Requisition is not yet created.
7. Go to Purchasing > Reports > Run and run the concurrent program RequisitionImport with the Import Source parameter = CTO (or blank). Leave the otherparameters as default. The concurrent program can also be run from OM >Orders, Returns > Requisition Import
The line status of the sales order line will now show PO-ReqCreated(flow_status_code PO_REQ_CREATED)
Check Reservation status: Go to Tools > Scheduling > Reservation Details >'Supply' tab. As the requisition has created now the supply for reservationchanges
8. Go to Purchasing > Requisitions > Requisition Summary. In the Find Requisitions window, enter requisition number found in the previous
step and click on Find. Verify that the status is Approved Requisition must have status APPROVED as
we ran Req. Import with Requisition approval initiation= Yes9. Go to Purchasing > Autocreate. From Edit > Clear > Record, clear any query criteria that may be defaulted. Enter requisition number and click Find.
Check the checkbox to the left of the line, and click on Automatic. Enter the Supplier and Supplier site such as the following and click on Create10. The Purchase Order form will automatically open with the PO that got
created. Click on the Approve button. Click on the OK button in the Approval Documents window to approve the PO. Note down the PO number, and verify that the status is Approved.
For More details also Refer: Requisition to Pay Cycle
The line status of the sales order line will now show PO-Created(flow_status_code PO_CREATED).
Check Reservation status: Verify that the order line is reserved against the PO.
11. Go to Purchasing > Receiving > Receipts. Enter Purchase Order number and click on Find. In the Receipts window, check the checkbox to the left of the line and enter
1. Destination Type : Inventory2. Subinventory : FGI3. Save the receipt.
12. Go to Purchasing > Receiving > Receiving Transactions Summary. Enter the Purchase Order number and click on Find. Click on the Transactions button. Verify a Receive and Delivery transaction. This means that the B2B item has
been received into Inventory.
The line status of the sales order line will now show Awaiting Shipping(flow_status_code = AWAITING_SHIPPING)
Check Reservation status: As the material is now in FGI sub-inventory, supplychanges to Inventory.
If the PO is canceled without canceling the requisition, the reservation istransferred back to the requisition. If both are canceled, the reservation isremoved. In the latter case, you can run the autocreate purchase requisitionbatch program to create a new requisition for sales order.
If a partial PO quantity canceled, or the PO qty is reduced, then the
reservation quantity is reduced accordingly. Again, run the autocreatepurchase requisition batch program to create a new requisition for theoutstanding quantity.
Receive an Assembly: When a purchase order has been reserved to the salesorder, the inventory will be automatically reserved against the sales orderwhen you receive the purchase order.
Once a sales order reservation to the PO has been removed (eitherautomatically or manually), it cannot be manually re-reserved. You canmanually reserve on-hand stock to the sales order or the autocreate purchaserequisition batch program can pick it up again and create a new supply orderalong with a new reservation.
Now if for some business reason customer needs to cancel the PO and requisition, insuch a case Cancellation of PO result in deletion of the complete record fromMTL_RESERVATION table and also B2B order line workflow rewind back to “CreateSupply Order – Eligible” workflow activity , also flow status code onOE_ORDER_LINES_ALL updated back to "Supply Eligible"Now if user cancel the requisition and once again progress the workflow it result increation of new requisition ( via requisition import) and now record in mtl_reservationtable.
