Inventory Organizations

Inventory Organization Structure

SubInventory

Locator Locator

Subinventory

Organization

Locations• Setting Up Locations

– Define information describing the physical location of employees and organization

– Locations are shared between Oracle Inventory, Oracle Purchasing and Oracle Human Resources Management Systems.

– Locations flagged as global locations are available to all business groups

– Associate organization with only one location,however you can associate more than one organization with same location

Defining Organizations• Sample Inventory Organization

Locator Locator

Subinventory

Locator

Subinventory

Inventory Organization A

Locator

Subinventory

Locator

Subinventory

Inventory Organization B

Operating Unit

Ledger

Multi-Organization Structure• Applications and database enhancement

• Enables you to consolidate your operations under one installation of Oracle Applications on a single global instance

• Enables you to keep transactions data secure by line of business

Multi-Organization Structure

Inventory Parameters• Enables you to

• Setup organization information• Enable specific products and features

Oracle Process Execution

Oracle Enterprise asset management

Oracle Warehouse Management

Inventory Parameters (continued)• Organization Features

• Organization codes• Item master organization

• Product Features• Oracle Process Execution• Oracle Enterprise Asset Management• Oracle Warehouse Management

Costing Parameters• Which Costing method is the organization

going to use?• Standard• Average• FIFO ( First in First Out)

– Costing method where items that were received earliest are transacted first

• LIFO ( Last in First Out)– Costing method where items that were received most

recently are transacted first

Revision, Lot, Serial, and License Plate Number(LPN) Parameters

ATP, Pick, Item-Sourcing Parameters The ATP, Pick, Item-Sourcing Parameters

enables you to• Set the available to promise(ATP) default rule for

the organization• Set the picking defaults for the organization• Set the Item-sourcing defaults for the

organization

Interorganization Parameters The Inter-organization Information tab enables

you to determine the parameters the organization uses when it transfers material between organizations

DM1 Organization DM2 Organization

Other Accounting Parameters Other Accounting Parameters tab enables you to

setup receiving account information,profit and loss account information, and other additional account information

Subinventory– Physical or logical separation of material– At least one subinventory must be defined for each

organization

Locator control– Locators are structures within sub inventories– Locators may represent rows, aisles or bins in

warehouse– Dynamic Locators

– Generate during a transaction as needed

– Static Locators– Predefined

Sub inventory Locator Relationship

Interorganization Shipping Network– Relationships between shipping organization

and destination organization– You must define a shipping network between

two organizationsShipping Method

Additional Organizational Setups

Material Shortage Parameters • Define parameters for the system to determine when

unsatisfied demand exceeds available supplyOrganizational Access

• Controls access to the organization based on users responsibility assigned to user by the system administrator

Organizational Hierarchy– Organization Hierarchy enables you to

– Assign items to organizations– Copy item attributes– View item information– Open and Close accounting information– Purge Transactions

Organization ReportsReport Description

Item-subinventory Report Lists items assigned to

sub inventories

Locator Quantities Report Shows the inventory item quantities stored in specific locators

Subinventory Quantities Report

Shows the inventory item quantities by subinventory

Freight Carrier Listing Lists the freight carrier codes for the current organization

Inter-organization Shipping Information Listing

Lists the shipping networks for the current organization

Organization Reports (Continued)

Report Description

Locator Listing Lists the locators for the current organization

Organization Parameters Listing

Lists the organization parameters for the current organization

Subinventory Listing Lists the sub inventories for the current organization

Organization Hierarchy Exception Report

Displays all organizations belong to a legal entity that are not assigned to an organization hierarchy

Profile OptionsProfile Option Description

INV: Allow Inventory Asset to Transfer

Indicates whether you can transfer an item from expensed sub inventory to an asset location

INV: Inter-Organization Currency Conversion

Indicates the currency conversion for inter organization transfers between organizations using different currencies

INV: Override Neg for Back flush Indicates whether back flush transactions can drive the inventory negative even if inventory parameter allow negative balances unchecked

What is an ItemAn item is a part or services you

– Purchase– Sell– Plan– Manufacture– Stock– Distributive– Prototypes

Defining Items Use the Master item window to define and update items and item

attributes

Item Master Organization• An item master Organization is a logical entity that you use to

define items

Defining Item Master Organization

C h ild O rga n iza tion D M 1 C h ild O rga n iza tion D M 2

M as te r O rg an iza tion D M M

Item Attributes• Item attributes are the collection of information about an item.

Item Attribute Groups

Item Status• When you define an item you use the

item status attribute to assign an item status

Unit of Measure AttributesPrimary Unit of Measure

– Stocking unit of measure any necessary conversions are on this unit of measure

Tracking – The System can track the Item in either the primary only

or the primary and secondary Unit of Measure.– If the system tracks the item by the primary and

secondary unit of measure this is called the dual unit of measure control.

Unit of Measure Attributes (Continued)Defaulting – Attribute controls the behavior of dual unit of measure

controlled Item

Fixed – System stores inventory in both the primary and

secondary units of measure

– Enter an item quantity in one unit of measure, and the system converts the quantity to the secondary units of measure and displays both the quantities.

Item Statuses and Attributes• Item attributes describe an item• Status attributes are item attributes that enable the key functionality of an

item. • Status Attributes and Functionality

Status Attribute Functionality Area Functionality

Stockable Inventory Enables you to store the item in an asset subinventory

Transactable Inventory, Order Management, Purchasing, Work in Process

Enables you to transact the item in Oracle Inventory, Oracle Order Management,Oracle Purchasing and Oracle Work in Process

Item Statuses and Attributes (Continued)

Status Attribute Functionality Area Functionality

Purchasable Purchasing Enables you to place the item on a Purchase Order

Build in WIP Work in Process Enables you to build the item on a discrete job, a repetitive schedule or both

Customer Orders Enabled

Order Management Enables you to place the item on Sales Order for the item

Internal Orders Enabled

Inventory, Order Management, Purchasing

Enables you to create an internal Sales Order for the item

Item Statuses and Attributes (Continued)

Status Attribute Functionality Area Functionality

BOM allowed Bills of material Enables you to create the bills of material for the item

Invoice Enabled Receivables Enables you to create an invoice for an item

Recipe enabled Process Manufacturing

Enables you to create a recipe or formula for this item in the process manufacturing

Process Execution Enabled

Process Manufacturing

Enables you to use the item in the production batch as an ingredient, product or by-product

Status Attribute DependenciesAttribute Must be Set to If

Stockable No Inventory Item is set to Yes

Stockable Yes ASL is VMI enabled

Transactable No Stockable set to Yes

Transactable Yes ASL is VMI enabled

Status Attribute Dependencies (Continued)Attribute Must be Set to If

Purchasable No Purchasable set to No

Build in WIP No Inventory Item is set to No or BOM Item Type is NOT set to Standard

Customer Orders Enabled No Customer ordered item is set to No

Internal Orders Enabled No Internal ordered item set to No

Status Attribute Dependencies (Continued)

Attribute Must be Set to If

BOM allowed No Inventory Item is set to No

Invoice Enabled No Invoiceable item set to No

Process Execution Enabled

No Inventory or Recipe Enabled flag set to No

Item attribute relationships When you define an item , Oracle Inventory enforces particular relationships between some of the item attributes

– Required attributes– Interdependent attributes – Updateable attributes– Control level dependencies

Item Templates An item template can be assigned when you create or

update an inventory item. The template contains values for any number of item attributes

Enabling attributes in a template• Enable item attributes and assign them values in each

template that you create• When you apply template to an item,Oracle Inventory

updates only the attributes that are enabled for the template

• Define templates with relatively few attributes enabled because you can apply more than one template to define one item

Organization Assignment and Organization Items

Control levelsMaster Level Controls

– An attribute you maintain at the master level has identical values across all organizations that use the Item

Organization-Level Control – An attribute you maintain at the Organization level may

have different values for each organization that uses it. Attribute Control

– Some attributes can be maintained at only the master level or organization level. Units of measure are controlled at the Master level. If you are using multiple organizations, then you should maintain min-max planning at the organization level.

Revision Control• A revision is a particular version of an item, bill

of material, or routing. • Use the Revision control to track the item

quantities by item revision and specify a revision for each material transaction.

• Enable revision control for items you must track version changes that are significant enough to track but do not affect the function and feature of the item.

• You cannot change the revision control item attributes when an item has quantity on hand

Revision Control (Continued)

• If revision control is controlled at the master item level, the check for on-hand quantity is against the sum of on-hand – quantity in all child organizations.

• If revision control is controlled at the organization level, the check for on-hand quantity is against the sum of on-hand quantity in that organization

• Use letters, numbers, and characters such as A, A1, 2B, and so on to define revision numbers

Item Relationship• You can define relationship between items. This allows you to search for

items through these relationships.

Categories and Category Sets• A category is a logical classification of items

that have similar characteristics • A Category set is a distinct grouping scheme

and consists of categories• You can define an unlimited number of

categories and group subsets of your categories into category sets

• A category can belong to multiple category sets

Categories and Category Sets (Continued)

When you install Oracle Inventory, you must assign default Category set

• Inventory• Purchasing• Order Management• Costing• Engineering and Planning

Item CatalogItem catalogs enable you to add descriptive information to items and to partition your Item Master into groups of items that share common characteristics

Deletion Constraints and Deletion Groups

• If you want to enforce specific business rules and add custom checks before you can delete an item, you must define the delete constraints to

supplement the standard predefined item deletion conditions• You can delete items that have incorrect attribute information.

– For Example, if you make a mistake in entering an Item number, use the Deletion Groups window to delete the item

• If you decided to purge the item immediately after defining it and before using it anywhere in the system you will be able to delete it.

Deletion Constraints• If you want to enforce specific business rules and add custom checks

before Oracle Inventory allows deletion of an item, you must define item deletion constraints to supplement the standard predefined item deletion conditions

• The major use of item deletion is to correct the data entry errors

– For example, if you defined an item with the wrong primary unit of measure,you can use the delete function to remove the item from your database. If you decide to purge the item immediately after incorrectly defining it and before using it anywhere in the system, you will be able to delete it.

Deletion Constraints (Continued)

• After an item is used, for example in an assembly Oracle Inventory automatically creates references to it.

• Oracle Inventory checks all possible references to an item and does not allow it to be deleted until every reference is removed

Item ReportsReport Description

Item statuses Report Lists Item Statuses

Item Template Listing Lists item template definitions

Customer Item Commodity Codes Listing Lists customer item commodity cods and inactive dates

Customer Item Cross Reference Report Lists customer item cross references

Item Reports (Continued)

Report Description

Customer Items Report Lists customer items

Inactive Items Report Lists items that have not had inventory transaction since the date you specify

Item Organization Assignment Report Assigns an item, range of items, category set or range of categories to multiple organizations belonging to the same Item Master Organization.

Item Definition Details Lists comprehensive item information

Profile OptionsProfile Option Description

INV: Default Status Indicates the default item status when you define an item

INV: Item Master Flex Field Indicates which flex field is used to define items in MTL_SYSTEM_ITEMS

INV: Use Model & Options for Configuration Pricing

This profile option determines the price for Model & options or configured items. The available options are Yeas and No.this profile option is only update at the site level

Profile Options (Continued)

Profile Option Description

INV: Default Item Template This profile option enables you to set a default item template for all items you create

INV: Cross reference type This profile option communicates to the receiving pages of the mobile device to use assignments for this particular cross reference type to validate the items while receiving receipt

INV: View Item category type This profile option enables you to show only current organization employees in the people LOV of the category grants window

Lot Control

– A lot can represent a quantity of an item that shares the same specifications.

– You can divide each lot into child lots that can reflect whatever characteristics you choose for items within a lot.

Lot Control (Continued)

– When you allocate stock for production, you can allocate specific lots to a production batch based on the potency, age or other item characteristics.

– Items under lot control assign lot numbers to each receipt, and thereafter reference the same lots each time you perform material transactions, enables to have tight control over lot controlled items in your inventory.

Child Lots Child lot is a subdivision of a lot that you can use if you

produce a lot over a period of time, but still want to group the material as a single lot.

Setting up Lot Control(Organization Parameters)

– Lot Control uniqueness– Lot generation– Child lot generation control

• Format validation• Copy lot attributes

– Auto create lot UOM conversion– Allow different lot status

Setting Up Lot Control ( Item Attributes)

• Lot Control• Starting prefix and number• Maturity and hold days

• Child lot enabled• Format validation• Copy lot attributes

• Lot Expiration• Shelf life days• Retest interval• Expiration action interval and action

• Grade Control• Grade

Managing LotsAssigning lots

– Pre assign on lot master– Assign during transactions– Add quantities to existing lots– Split Inventory receipts into several lots

• Maintain Lots

– Update lot expiration date– View lot information– View Supplier lot information

Expired Lots An expired lot

– Is not considered as on hand supply when you are performing Min-Max, reorder point,or MRP planning calculations

– Cannot be reserved for a date beyond the expiration date– Can be transacted and is included in on-hand quantities– Included in all inquiries and reports, including inventory

valuation reports– Included in a cycle count and count entry and adjustments

are allowed– Included in a physical inventory and tag entry and

adjustments are allowed

Disabled LotsDisabled Lot

• Is included in available to transact, available to promise, and to available to reserve calculations

• Is included as on-hand supply when you are performing min-max,reorder point or MRP planning calculations

• Is included as on-hand in all inquiries and reports, including inventory valuation reports.

• Can be transacted with Inventory functions and the Transactions Open Interface

• Can be reserved

Lot Number Purging– You can purge all lot transaction information from

your current organization. The transactions must be in closed accounting period.

– Purging lot transactions eliminates information used in lot reports and inquiries.

Cycle Counts Under Lot Control– The cycle count listing includes the lot numbers of

the items to be cycle counted– Assign lot numbers to all items under lot control

for which you enter counts– If there is a difference between cycle count

quantity and the system on-hand quantity. Oracle Inventory adjusts the item quantity in that lot.

Physical Inventory Under Lot Control– Oracle Inventory includes the lot numbers of the

items to count in your physical inventory when generating Inventory tags.

– You must assign lot numbers to all items under lot control for which you enter counts in the Physical Inventory Tags count window

– If there is a difference between cycle count quantity and the system on-hand quantity. Oracle Inventory adjusts the item quantity in that lot.

Serial Number Overview– Serial number is an alphanumeric piece of

information you assign to an individual unit of an item.

– Serial number control is a system technique for enforcing the use of serial numbers during a material transactions

Generating Serial Numbers– Many serial numbers as you want for any item

under serial number If you specify No Control as the serial control type then the system does not enforce serial number control.

– If you specify Predefined as the serial number control type, then you must predefine serial numbers for that item.

– If you select At Inventory receipt or At sales order issue, then you can optionally predefine serial numbers for the item.

Generating Serial Numbers (Continued)– Oracle Inventory uses the starting serial number

prefix and the starting serial number you specify in the Item window to load the number of predefined serial numbers you request. You can load as control.

– The process of generating serial numbers is done through a concurrent report.

– The process does not assign numbers to units in inventory, it simply reserves specify serial numbers for an item for later use.

Maintaining Serial Numbers– You can use serial numbers window to update

supplier information associated with your serial numbers

– You can view all the serial numbers you created in your current organization.

– You can view location and status information and update supplier information associated with your serialized units

Lot Genealogy– Lot genealogy tracks the relationship between lots

and provides lot traceability that results from inventory transactions, includes all lot splits, merges, and translations.

– Serial genealogy tracks the transaction and multilevel composition history of any serial controlled item from receipt to customer sale.

Lot and Serial ReportReport Description

Lot Transaction Register You can use this report to audit lot transaction for a specified time interval,for a range of dates, for ranges of items or categories, of for other criteria

Expired Lots Report You use this report to isolate lots that are about to expire,find expired lots, and find serial assigned to expired lots

Serial Number Transaction Register

You can use this report to audit serial number transaction for a specified time interval, location or group of locations, reason or group of reasons or other criteria

Lot and Serial Report (Continued)

Report Description

Lot Inventory Report This report provides you with an overview of item lots,quantities and lots statuses in all or the selected sub inventories or locators within the organization.

Lot Master Report This report provide you with an overview of an information you set up in the lot matter. You can run this report for a specific item, or all items in the organization.

Grade History Change Report

This report enables you to view all of the grade changes made during a given period for a particular item within an organization

Profile OptionsProfile Option Description

INV:Genealogy prefix or suffix You use this to determine if and how the item number is displayed on the object Genealogy form.

INV: Target preferred grade Determines whether data for picking and reservations must be filtered to match the preferred grade that is defined on the order line.

INV: Genealogy Unlimited Allows you to pick the character that appears between the item name and lot number in the genealogy tree.

Profile Options (Continued)Profile Option Description

INV: Validate Returned Lot This profile option determines whether the component lot that is returned from WIP should be validated against lots that are issued to the same job.

INV: Validate Returned Serial This profile option determines whether component serials that are returned from WIP should be validated against serials that are issued to the same job.

INV: Restrict Receipts of Serials

Indicate whether the system performs two validation checks for serial numbers Oracle work in process uses. This profile option also indicates if you can re-receive a serial number via a RMA receipt for an item with serial control set at sales order issue.

Material Status Material Status enables you to control the movement and usage of material for portions of your inventory.

Material Status Control– Material Status controls the transactions and

planning actions that can be performed on an Item.

– Material Status brings in a granular level control, which is very effective

– It can be assigned to a specific Sub inventory, Locator, Lot Number and Serial Number.

Material Status Transactions

Cumulative Effect

Material Status Example

Setting Up. Define Transaction Types

Enable Transaction Types for Material Status Control

Define Material Status

Enable Profile Option

Enable Material Status

Assign Material Status

Defining Item Material Status Control

.

Assigning Material Status Control to Sub inventories Locators

.

Assigning Planning Statuses.

Disabling Material Statuses.

Material Status Reports. Report Description

Material Status Definition Report Provides you an overview of each material status and how it is used

Material Status History Report Provides you the full status history of who changed the material status and what reason was given

Profile Option. Report Description

INV: Material Status Support This Profile Option determines whether Material Status is enforced. If Material Status is not used in the installation, it is recommended to switch it off to increase the performance of the system

Overview of Inventory Planning Oracle Inventory provides four types of

Replenishment Methods:

» Min-Max Planning » Reorder-point Planning » Kanban Replenishment Planning » Replenishment Counting

Order Planning

How Much to Order

Overview of Inventory Forecasting Inventory Forecasting is the process of extrapolating

the expected demand of an item over a number of periods in the future

Forecasting Types

Forecast setup and Maintenance

Inventory Replenishment Methods

Replenishment Methods Levels• Inventory Replenishment can be performed at Organization or Sub

inventory Level

Planning Method Organization Sub inventory

Reorder-point Yes No

Min-Max Yes Yes

Replenishment Counting No Yes

Kanban N/A N/A

Reorder Point Planning– Reorder Point Planning as the name suggests

places an Order when the Inventory level falls to a predefined Re-order Point.

– The Order Size is equal to the EOQ.

– Reorder Point Planning is recommended for those items, which are not very expensive.

Reorder Point Planning(Continued)

Uses of Reorder Point Planning

Reorder Point Planning Steps

Min- Max Planning– In this method, the Inventory is planned based on

user defined Minimum and Maximum Quantity.

– Inventory is replenished to the Maximum level whenever the Stock Level falls to the Minimum level.

– It can be applied to All or selected Items.

– It is a simple method used for low value item which doesn’t need strict monitoring.

Min- Max Planning

Quantity

Time

Maximum Level

Minimum Level

Stock Level

Min- Max PlanningMin-Max at Org Level

Set Inventory Planning Method to Min-Max

Specify Min & Max Qty

Run the Min-Max Report

Kanban Planning– Kanban is a Pull based replenishment in

Manufacturing System.

– It leads to shorter lead times and reduced inventory.

– Kanban is typically applied to items with relatively constant demand and medium-to-high production volume.

– Kanban represents replenishment signals that are usually manual and highly visible like Color-coded Cards, Light and Empty bin.

Types of Kanban Replenishment

– Inter Org: Replenishes by creating Internal Requisition

– Intra Org: Triggers Material movement from a subinventory in the same Organization.

– Production: Creates or releases a Production Job

– Supplier: Creates a Purchase Requisition.

Kanban Elements– Pull Sequence is a group of information that defines a

Kanban location, source information, and planning parameters for an Item.

– Kanban chain is a series of Pull Sequences, which defines the replenishment network. E.g.: Assembly to Stores.

– Kanban Cards are created for Item, Subinventory and Locator (optional) and uniquely identified by a Kanban number

– Replenishable Cards can be created automatically through Pull Sequence or manually through ‘Kanban Cards’ window.

Kanban : Using Cards

Replenishment Counting– Replenishment Counting is a method of ordering

Items for non-Tracked Subinventory.

– Non-Tracked subinventories are expense subinventory, for which On-hand balances are not maintained.

– Whenever an Item is moved into Expense Subinventory, the Expense account is charged and the quantity is discarded.

– Items are replenished in Non-Tracked Subinventory by periodically counting the items physically.

Replenishment Counting

Profile OptionsProfile Option Description

INV: fill Kanban on Partial Move Order Receipt

Determine whether or not a Kanban card can be considered filled if the move order created to fill it was only partially transferred.

INV: Replenishment Move Order Grouping

Enable you to create only one move order header per request

TP: INB Enter Replenishment Count Form

Indicates processing control in the Enter Replenishment count window.

Profile Options (Continued)Profile Option Description

INV: Replenishment Count Requisition Approval

Indicates the status of sub inventory Replenishment requisition created by the replenishment processor.

INV:Replenishment Count Line Failure Indicates the action taken when a failure is detected while processing a replenishment count line

INV: Minmax Reorder Approval Indicates the status of requisitions created by the min-max planning report