Oracle Inventory Defining Organization

Defining Inventory Organization

Navigate to the Inventory Super User responsibility.

Setup à Organizations à Organizations

Define the following organizations as per the requirement of business

·         Business Group

·         Legal entity

·         Operating Unit

·         Organization

External organizations (for example, tax offices, insurance carriers, disability organizations, benefit carriers, or recruitment agencies)
Internal organizations (for example, departments, sections or cost centers)

Select New

Creating an Organization

1.       Enter a name for your organization in the Name field. A check is performed to see if organizations with the same name already exist.
All Oracle applications you install share the information entered in the Organization window. Therefore organization names must be unique within a business group, and business group names must be unique across your applications network.

2.       Optionally, select an organization type in the Type field.
Organization types do not classify your organization; you use them for reporting purposes only. The type may identify the function an organization performs, such as Administration or Service, or the level of each organization in your enterprise, such as Division, Department or Cost Center.

3.       Enter a start date in the From field. This should be early enough to include any historical information you need to enter.

4.       Enter a location, if one exists. You can also enter an internal address to add more details such as floor or office number.

5.       Enter internal or external in the Internal or External field. You cannot assign people to an external organization.
Examples of external organizations that may require entry are disability organizations, benefits carriers, insurance carriers, organizations that employees name as beneficiaries of certain employee benefits, and organizations that are recipients of third party payments from employees’ pay.

6.       Then save your work.

Organization Classification

As we are defining an Inventory Organization, we will choose the classification name as Inventory Organization.

Then mark the enabled checkbox and then save your work.  

Then go to Others

Select Accounting Information

Here, we need to attach the Ledger, Legal Entity and Operating Unit.

Enter the details and select Ok, again in next window Ok.

This will ask for a confirmation, select Yes.

Then again from the Others button, select Inventory Information.

This will pop up the Organization Parameters window.

Organization Parameters

You can define and update default inventory and costing parameters for your current organization in the following areas:

1. Inventory Parameters
2. Costing Information
3. Other Account Parameters
4. Revision, Lot, Serial, LPN Parameters
5. ATP, Pick, Item–Sourcing Parameters
6. Defining Inter–Organization Information
7. Defining Warehouse Parameters

Inventory Parameters

1. Enter an organization code for which you want to set up the organization parameter.

2. Select an Item Master organization. Oracle Inventory only defines items in the Item Master organization of the organization from which you enter the Items window.

3. Select a workday calendar. This is required when Oracle Master Scheduling/MRP and Oracle Supply Chain Planning is installed.

4. Optionally, select a demand class. Demand classes segregate scheduled demand and production into groups, allowing you to track and consume those groups independently. Oracle Master Scheduling/MRP and Oracle Supply Chain Planning uses this demand class during forecast consumption, and shipment and production relief.

5. In the Move Order Timeout Period field, enter the number of days a move order requisition can wait for approval.
The workflow approval process sends a notification to the item planner when a move order requisition requires approval. After the first timeout period, if the recipient has not approved or rejected the order, a reminder notice is sent. After the second timeout period, the order is automatically approved or rejected, depending on whether you select Approve automatically or Reject automatically in the Move Order Timeout Action field. If you want to bypass the move order approval process and automatically approve move order requisitions, enter 0 days in the Move Order Timeout Period field and select Approve automatically in the Move Order Timeout Action field.

6. Select a move order timeout action

Approve automatically: After the second timeout period, move order requisitions are automatically approved. Select this option and set the Move Order Timeout Period to 0 if you want to bypass the move order approval process and automatically approve move order requisitions.
Reject automatically: After the second timeout period, move order requisitions are automatically rejected.

7. Select a locator control option:
None: Inventory transactions within this organization do not require locator information.
Prespecified only: Inventory transactions within this organization require a valid, predefined locator for each item.
Dynamic entry allowed: Inventory transactions within this organization require a locator for each item. You can choose a valid, predefined locator, or define a locator dynamically at the time of transaction.
Determined at subinventory level: Inventory transactions use locator control information that you define at the subinventory level.

• Indicate whether to allow negative balances. Determines whether inventory transactions can drive the inventory balance of an item negative.
  Attention: If insufficient quantity on hand exists in a supply subinventory to satisfy backflush demand, Oracle Work in Process forces the supply subinventory balance negative, ignoring this option setting.
• Auto delete allocation at Move Order cancellation
• Indicate whether this organization is an Oracle Warehouse Management enabled organization. You can use WMS features such as LPNs, task management, warehouse execution rules and cost
  groups in this organization. Locator control must be enabled in order to enable WMS. Once this has been enabled and transactions have been entered in this organization, this box cannot be unchecked.
• Indicate whether this organization is enabled for Quality inspection.
• Indicate whether this organization is an Oracle Enterprise Asset Management enabled Organization.
• Enter a total load weight and unit of measure for this organization.
• Enter a total volume and unit of measure for this organization.  

8. Select a Default On-hand Material Status tracking option. This step is optional.

9. Indicate whether locator aliases must be unique across the organization

Costing Information

1. Costing Organization

2. Costing Method

3. Transfer to GL Indicate whether all transactions are posted in detail to the general ledger.
Caution: Transferring detail transaction distributions to the general ledger increases general ledger posting times due to the number of records created.

4. Reverse Encumbrance Indicate whether to reverse encumbrance entry upon receipt in inventory.
You normally select this option if you use encumbrances with Oracle Purchasing.

5. Optionally, enter a Cost Cutoff Date
If you leave this field blank, all available transactions will be costed,as usual. If you enter a date, all transactions prior to this date will be costed. All transactions on or later than this date will not be costed.

For inter–organization transfers, a standard costing, receiving organization will not cost a receipt if the sending organization did not already cost the transaction.
The default time is the first instant of the date. You can optionally choose another time.

The standard cost update process can be performed on the cost cutoff date. You can restart cost processing by changing the cutoff date to blank, or a future date.

6. Default Material Sub element
For standard costing, select a material sub–element that this organization uses as a default when you define item costs. For average costing, the default material sub–element you select can be used for cost collection when Project Cost Collection Enabled is set.

7. Material Over head Sub element
Optionally, select a Default Material Overhead Sub–Element from the list of values. During the Supply Chain Rollup process, when costs are merged from another organization, markup and shipping costs will use this value.

The supply chain cost rollup will complete successfully, regardless of whether this field is populated. If the Cost Rollup identifies an organization with a default material overhead sub–element not set up, a corresponding warning message will be printed in the log file.

8. Default Cost Group
Indicate the default cost group for the organization. This will default into the Default Cost Group field for each subinventory. If the WMS cost group rules engine fails to find a cost group, this cost group will be used.

9. Valuation Accounts
You choose a default valuation account when you define organization parameters. Under standard costing, these accounts are defaulted when you define subinventories and can be overridden. Under average costing, these accounts (except for Expense) are used for subinventory transactions and cannot be updated. For a detailed discussion of cost
elements.
Material An asset account that tracks material cost. For average costing, this account holds your inventory
and intransit values. Once you perform transactions, you cannot change this account.
Material Overhead An asset account that tracks material overhead cost.
Resource An asset account that tracks resource cost.
Overhead An asset account that tracks resource and outside processing overheads.
Outside processing An asset account that tracks outside processing cost.
Expense The expense account used when tracking a non–asset item.

Other Accounts

Purchase Price Variance : The variance account used to record differences between purchase order price and standard cost. This account is not used with the average cost method.

Invoice Price Variance : The variance account used to record differences between purchase order price and invoice price. This account is used by Accounts Payable to record invoice price variance.

Inventory A/P Accrual : The liability account that represents all inventory purchase order receipts not matched in Accounts Payable, such as the uninvoiced receipts account.

Encumbrance: An expense account used to recognize the reservation of funds when a purchase order is approved.

Sales: The profit and loss (income statement) account that tracks the default revenue account.

Cost of Goods Sold: The profit and loss (income statement) account that tracks the default cost of goods sold account.

Project Clearance Account: When performing miscellaneous issues to capital projects, the project clearance account is used to post the distributions.

Deferred COGS Account: This account is used by the Sales Order Issue transaction type to deferred COGS until AR recognizes revenue.

Cost Variance Account:  Under average costing with negative quantity balances, this account represents the inventory valuation error caused by issuing your inventory before your receipts.

Landed Cost Management (LCM) variance account: This account is used by the new Landed Cost Management module.

Note: For standard costing, only the Purchase Price Variance, Inventory A/P Accrual, Invoice Price Variance, Expense, Sales and Cost of Goods Sold accounts are required. The other accounts are used as defaults to speed your set up.

Note: For average costing, only the Material, Average Cost Variance, Inventory A/P Accrual, Invoice Price Variance, Expense, Sales and Cost of Goods Sold accounts are required. The other accounts are used as defaults or are not required.

Revision, Lot, Serial, LPN Parameters

Enter a starting revision to be the default for each new item.

Lot Number
1. Select an option for lot number uniqueness.
Across items: Enforce unique lot numbers for items across all organizations.
None: Unique lot numbers are not required.

2. Select an option for lot number generation.
User–defined: Enter user–defined lot numbers when you receive items.
At organization level: Define the starting prefix and lot number information for items using the values you enter in the Prefix, Zero Pad Suffix, and Total Length fields. When you receive items, this information is used to automatically generate lot numbers for your items.
At item level: Define the starting lot number prefix and the starting lot number when you define the item. This information is used to generate a lot number for the item when it is received.

3. Indicate whether to add zeroes to right–justify the numeric portion of lot numbers (Zero Pad Suffix).

4. Optionally, select an alphanumeric lot number prefix to use for system–generated lot numbers when generation is at the organization level.

5. Optionally, define the maximum length for lot numbers. If you use Oracle Work in Process and you set the WIP parameter to default the lot number based on inventory rules, then WIP validates the length of the lot number against the length you define in this field.

Serial Number
1. Select an option for serial number uniqueness.
Within inventory items: Enforce unique serial numbers for inventory items.
Within organization: Enforce unique serial numbers within the current organization.
Across organizations: Enforce unique serial numbers throughout all organizations.

2. Select an option for serial number generation.
At organization level: Define the starting prefix and serial number information for items using the information you enter in the following fields of this window.
At item level: Define the starting serial number prefix and the starting serial number when you define the item.

3. Optionally, select an alphanumeric serial number prefix to use for system–generated serial numbers when generation is at the organization level.

4. Optionally, enter a starting serial number to use for system–generated serial numbers.
If serial number generation is at the organization level you must enter a starting serial number.

5. Indicate whether the system will suggest serial numbers as part of the move order line allocating process. If you do not select this option, you must manually enter the serial numbers in order to transact the move order.

ATP, Pick, Item–Sourcing Parameters

Select a default ATP rule.
ATP rules define the options used to calculate the available to promise quantity of an item. If you are using Oracle Order
Management, the default is the ATP rule for the Master organization.

Picking Defaults
Select a default picking rule.
Picking rules define the priority that order management functions use to pick items.
Notes: This rule will not be employed in a WMS enabled organization. The WMS picking rules will be used.

Enter a default subinventory picking order.
This value indicates the priority with which you pick items from a subinventory, relative to another subinventory, in which a given item resides. The value you enter here displays as the default when you define a subinventory.

Enter a default locator picking order.
This value indicates the priority with which you pick items from a locator, relative to another locator, where a given item resides. The value you enter here displays as the default when you define a locator.

Check the Pick Confirmation Required box if you want your pickers to manually pick confirm. If you do not check the box, pick confirmation will occur automatically.

Item-Sourcing Default
Select a source type for item replenishment.
Inventory: Replenish items internally from another subinventory in the same organization or another organization.
Supplier: Replenish items externally, from a supplier you specify in Oracle Purchasing.
None: No default source for item replenishment.

Select the organization used to replenish items.
You must enter a value in this field if you selected Inventory in the Type field.

Select the subinventory used to replenish items.
You must enter a value in this field if you selected your current organization in the Organization field. You cannot enter a value in this field if you selected Supplier in the Type field.

Inter–Organization Information

Select an Inter–Organization Transfer Charge option.
None: Do not add transfer charges to a material transfer between organizations.
Predefined percent: Automatically add a predefined percent of the transaction value when you perform the inter–organization transfer.
Requested value: Enter the discrete value to add when you perform the inter–organization transfer.
Requested percent: Enter the discrete percentage of the transfer value to add when you perform the inter–organization transfer.

Inter–organization cost accounts
Enter default inter–organization cost accounts. These accounts are defaulted when you set up shipping information in the
Inter–Organization Shipping Networks window

Oracle Inventory Defining Organization

Defining Inventory Organization

Navigate to the Inventory Super User responsibility.

Setup à Organizations à Organizations

Define the following organizations as per the requirement of business

·         Business Group

·         Legal entity

·         Operating Unit

·         Organization

External organizations (for example, tax offices, insurance carriers, disability organizations, benefit carriers, or recruitment agencies)
Internal organizations (for example, departments, sections or cost centers)

Select New

Creating an Organization

1.       Enter a name for your organization in the Name field. A check is performed to see if organizations with the same name already exist.
All Oracle applications you install share the information entered in the Organization window. Therefore organization names must be unique within a business group, and business group names must be unique across your applications network.

2.       Optionally, select an organization type in the Type field.
Organization types do not classify your organization; you use them for reporting purposes only. The type may identify the function an organization performs, such as Administration or Service, or the level of each organization in your enterprise, such as Division, Department or Cost Center.

3.       Enter a start date in the From field. This should be early enough to include any historical information you need to enter.

4.       Enter a location, if one exists. You can also enter an internal address to add more details such as floor or office number.

5.       Enter internal or external in the Internal or External field. You cannot assign people to an external organization.
Examples of external organizations that may require entry are disability organizations, benefits carriers, insurance carriers, organizations that employees name as beneficiaries of certain employee benefits, and organizations that are recipients of third party payments from employees’ pay.

6.       Then save your work.

Organization Classification

As we are defining an Inventory Organization, we will choose the classification name as Inventory Organization.

Then mark the enabled checkbox and then save your work.  

Then go to Others

Select Accounting Information

Here, we need to attach the Ledger, Legal Entity and Operating Unit.

Enter the details and select Ok, again in next window Ok.

This will ask for a confirmation, select Yes.

Then again from the Others button, select Inventory Information.

This will pop up the Organization Parameters window.

Organization Parameters

You can define and update default inventory and costing parameters for your current organization in the following areas:

1. Inventory Parameters
2. Costing Information
3. Other Account Parameters
4. Revision, Lot, Serial, LPN Parameters
5. ATP, Pick, Item–Sourcing Parameters
6. Defining Inter–Organization Information
7. Defining Warehouse Parameters

Inventory Parameters

1. Enter an organization code for which you want to set up the organization parameter.

2. Select an Item Master organization. Oracle Inventory only defines items in the Item Master organization of the organization from which you enter the Items window.

3. Select a workday calendar. This is required when Oracle Master Scheduling/MRP and Oracle Supply Chain Planning is installed.

4. Optionally, select a demand class. Demand classes segregate scheduled demand and production into groups, allowing you to track and consume those groups independently. Oracle Master Scheduling/MRP and Oracle Supply Chain Planning uses this demand class during forecast consumption, and shipment and production relief.

5. In the Move Order Timeout Period field, enter the number of days a move order requisition can wait for approval.
The workflow approval process sends a notification to the item planner when a move order requisition requires approval. After the first timeout period, if the recipient has not approved or rejected the order, a reminder notice is sent. After the second timeout period, the order is automatically approved or rejected, depending on whether you select Approve automatically or Reject automatically in the Move Order Timeout Action field. If you want to bypass the move order approval process and automatically approve move order requisitions, enter 0 days in the Move Order Timeout Period field and select Approve automatically in the Move Order Timeout Action field.

6. Select a move order timeout action

Approve automatically: After the second timeout period, move order requisitions are automatically approved. Select this option and set the Move Order Timeout Period to 0 if you want to bypass the move order approval process and automatically approve move order requisitions.
Reject automatically: After the second timeout period, move order requisitions are automatically rejected.

7. Select a locator control option:
None: Inventory transactions within this organization do not require locator information.
Prespecified only: Inventory transactions within this organization require a valid, predefined locator for each item.
Dynamic entry allowed: Inventory transactions within this organization require a locator for each item. You can choose a valid, predefined locator, or define a locator dynamically at the time of transaction.
Determined at subinventory level: Inventory transactions use locator control information that you define at the subinventory level.

• Indicate whether to allow negative balances. Determines whether inventory transactions can drive the inventory balance of an item negative.
  Attention: If insufficient quantity on hand exists in a supply subinventory to satisfy backflush demand, Oracle Work in Process forces the supply subinventory balance negative, ignoring this option setting.
• Auto delete allocation at Move Order cancellation
• Indicate whether this organization is an Oracle Warehouse Management enabled organization. You can use WMS features such as LPNs, task management, warehouse execution rules and cost
  groups in this organization. Locator control must be enabled in order to enable WMS. Once this has been enabled and transactions have been entered in this organization, this box cannot be unchecked.
• Indicate whether this organization is enabled for Quality inspection.
• Indicate whether this organization is an Oracle Enterprise Asset Management enabled Organization.
• Enter a total load weight and unit of measure for this organization.
• Enter a total volume and unit of measure for this organization.  

8. Select a Default On-hand Material Status tracking option. This step is optional.

9. Indicate whether locator aliases must be unique across the organization

Costing Information

1. Costing Organization

2. Costing Method

3. Transfer to GL Indicate whether all transactions are posted in detail to the general ledger.
Caution: Transferring detail transaction distributions to the general ledger increases general ledger posting times due to the number of records created.

4. Reverse Encumbrance Indicate whether to reverse encumbrance entry upon receipt in inventory.
You normally select this option if you use encumbrances with Oracle Purchasing.

5. Optionally, enter a Cost Cutoff Date
If you leave this field blank, all available transactions will be costed,as usual. If you enter a date, all transactions prior to this date will be costed. All transactions on or later than this date will not be costed.

For inter–organization transfers, a standard costing, receiving organization will not cost a receipt if the sending organization did not already cost the transaction.
The default time is the first instant of the date. You can optionally choose another time.

The standard cost update process can be performed on the cost cutoff date. You can restart cost processing by changing the cutoff date to blank, or a future date.

6. Default Material Sub element
For standard costing, select a material sub–element that this organization uses as a default when you define item costs. For average costing, the default material sub–element you select can be used for cost collection when Project Cost Collection Enabled is set.

7. Material Over head Sub element
Optionally, select a Default Material Overhead Sub–Element from the list of values. During the Supply Chain Rollup process, when costs are merged from another organization, markup and shipping costs will use this value.

The supply chain cost rollup will complete successfully, regardless of whether this field is populated. If the Cost Rollup identifies an organization with a default material overhead sub–element not set up, a corresponding warning message will be printed in the log file.

8. Default Cost Group
Indicate the default cost group for the organization. This will default into the Default Cost Group field for each subinventory. If the WMS cost group rules engine fails to find a cost group, this cost group will be used.

9. Valuation Accounts
You choose a default valuation account when you define organization parameters. Under standard costing, these accounts are defaulted when you define subinventories and can be overridden. Under average costing, these accounts (except for Expense) are used for subinventory transactions and cannot be updated. For a detailed discussion of cost
elements.
Material An asset account that tracks material cost. For average costing, this account holds your inventory
and intransit values. Once you perform transactions, you cannot change this account.
Material Overhead An asset account that tracks material overhead cost.
Resource An asset account that tracks resource cost.
Overhead An asset account that tracks resource and outside processing overheads.
Outside processing An asset account that tracks outside processing cost.
Expense The expense account used when tracking a non–asset item.

Other Accounts

Purchase Price Variance : The variance account used to record differences between purchase order price and standard cost. This account is not used with the average cost method.

Invoice Price Variance : The variance account used to record differences between purchase order price and invoice price. This account is used by Accounts Payable to record invoice price variance.

Inventory A/P Accrual : The liability account that represents all inventory purchase order receipts not matched in Accounts Payable, such as the uninvoiced receipts account.

Encumbrance: An expense account used to recognize the reservation of funds when a purchase order is approved.

Sales: The profit and loss (income statement) account that tracks the default revenue account.

Cost of Goods Sold: The profit and loss (income statement) account that tracks the default cost of goods sold account.

Project Clearance Account: When performing miscellaneous issues to capital projects, the project clearance account is used to post the distributions.

Deferred COGS Account: This account is used by the Sales Order Issue transaction type to deferred COGS until AR recognizes revenue.

Cost Variance Account:  Under average costing with negative quantity balances, this account represents the inventory valuation error caused by issuing your inventory before your receipts.

Landed Cost Management (LCM) variance account: This account is used by the new Landed Cost Management module.

Note: For standard costing, only the Purchase Price Variance, Inventory A/P Accrual, Invoice Price Variance, Expense, Sales and Cost of Goods Sold accounts are required. The other accounts are used as defaults to speed your set up.

Note: For average costing, only the Material, Average Cost Variance, Inventory A/P Accrual, Invoice Price Variance, Expense, Sales and Cost of Goods Sold accounts are required. The other accounts are used as defaults or are not required.

Revision, Lot, Serial, LPN Parameters

Enter a starting revision to be the default for each new item.

Lot Number
1. Select an option for lot number uniqueness.
Across items: Enforce unique lot numbers for items across all organizations.
None: Unique lot numbers are not required.

2. Select an option for lot number generation.
User–defined: Enter user–defined lot numbers when you receive items.
At organization level: Define the starting prefix and lot number information for items using the values you enter in the Prefix, Zero Pad Suffix, and Total Length fields. When you receive items, this information is used to automatically generate lot numbers for your items.
At item level: Define the starting lot number prefix and the starting lot number when you define the item. This information is used to generate a lot number for the item when it is received.

3. Indicate whether to add zeroes to right–justify the numeric portion of lot numbers (Zero Pad Suffix).

4. Optionally, select an alphanumeric lot number prefix to use for system–generated lot numbers when generation is at the organization level.

5. Optionally, define the maximum length for lot numbers. If you use Oracle Work in Process and you set the WIP parameter to default the lot number based on inventory rules, then WIP validates the length of the lot number against the length you define in this field.

Serial Number
1. Select an option for serial number uniqueness.
Within inventory items: Enforce unique serial numbers for inventory items.
Within organization: Enforce unique serial numbers within the current organization.
Across organizations: Enforce unique serial numbers throughout all organizations.

2. Select an option for serial number generation.
At organization level: Define the starting prefix and serial number information for items using the information you enter in the following fields of this window.
At item level: Define the starting serial number prefix and the starting serial number when you define the item.

3. Optionally, select an alphanumeric serial number prefix to use for system–generated serial numbers when generation is at the organization level.

4. Optionally, enter a starting serial number to use for system–generated serial numbers.
If serial number generation is at the organization level you must enter a starting serial number.

5. Indicate whether the system will suggest serial numbers as part of the move order line allocating process. If you do not select this option, you must manually enter the serial numbers in order to transact the move order.

ATP, Pick, Item–Sourcing Parameters

Select a default ATP rule.
ATP rules define the options used to calculate the available to promise quantity of an item. If you are using Oracle Order
Management, the default is the ATP rule for the Master organization.

Picking Defaults
Select a default picking rule.
Picking rules define the priority that order management functions use to pick items.
Notes: This rule will not be employed in a WMS enabled organization. The WMS picking rules will be used.

Enter a default subinventory picking order.
This value indicates the priority with which you pick items from a subinventory, relative to another subinventory, in which a given item resides. The value you enter here displays as the default when you define a subinventory.

Enter a default locator picking order.
This value indicates the priority with which you pick items from a locator, relative to another locator, where a given item resides. The value you enter here displays as the default when you define a locator.

Check the Pick Confirmation Required box if you want your pickers to manually pick confirm. If you do not check the box, pick confirmation will occur automatically.

Item-Sourcing Default
Select a source type for item replenishment.
Inventory: Replenish items internally from another subinventory in the same organization or another organization.
Supplier: Replenish items externally, from a supplier you specify in Oracle Purchasing.
None: No default source for item replenishment.

Select the organization used to replenish items.
You must enter a value in this field if you selected Inventory in the Type field.

Select the subinventory used to replenish items.
You must enter a value in this field if you selected your current organization in the Organization field. You cannot enter a value in this field if you selected Supplier in the Type field.

Inter–Organization Information

Select an Inter–Organization Transfer Charge option.
None: Do not add transfer charges to a material transfer between organizations.
Predefined percent: Automatically add a predefined percent of the transaction value when you perform the inter–organization transfer.
Requested value: Enter the discrete value to add when you perform the inter–organization transfer.
Requested percent: Enter the discrete percentage of the transfer value to add when you perform the inter–organization transfer.

Inter–organization cost accounts
Enter default inter–organization cost accounts. These accounts are defaulted when you set up shipping information in the
Inter–Organization Shipping Networks window

Creating a Purchase Order from an Approved Requisition

Navigate to Purchasing Super User responsibility
Then to Management à Manage Buyer Workload

If you have the Approved requisitions number for which you would like to create a PO, you can mention the same in the requisition field, else can query for all approved requisition.

Then find for the Buyer, for whom you want to create PO.
Here you can filter to the specific details, if you have any data like requestor, Buyer, etc.
Here I am filtering using the requestor name, so that I can get all requisitions created by the requestor.

Now here you will find all the Requisitions

Then select a Buyer to whom you want to assign the requisition lines in New Buyer field.

Then select the lines

And Save.

Then go back to the navigator and select AutoCreate

Then find all requisition lines assigned to a specific buyer.

Then Find
This will show all Requisition lines assigned to the buyer specified.

Check the details and select the line

Check the Action, Document Type, and Grouping.
If you want to create Automatic, then select the Automatic button

If Document field is asking any value to input, then enter an unique document number and then click Create.

This will create a Purchase Order and will navigate you to the Purchase Order form.

Line status should be Incomplete.

Similarly you can follow the manual process too.

Creating an Item in Oracle Apps

Please follow the process to create a new Item.
Navigate to the Inventory Super User responsibility.
Go to Items à Master Items
1. Enter the Item name in Item field
2. Enter the Item Description in Description field
3. Save the form

4. Now you can copy attributes from any existing templates or manually set all the attributes for all the tabs.
5. For copying attributes from existing template, go to Tools à Copy From

6. Select any existing template which suits your requirements and then click Apply, once Template is Implemented then click done.
7. Now all attributes are set as per the template.
8. You can check the tabs individually and whenever any attribute needs to change for your business requirement, you can do the change.
9. After done with all the changes, Click Save.

Overview of Purchasing in Oracle Apps

Create requisition to procure goods and service with supplier information, delivery instructions, multiple accounting distributions, and notes to buyers, approvers, and receivers. A request for quotation (RFQ) is sent to a supplier to request pricing and other information for an item. A quotation is the supplier’s response to that RFQ. Identify requisitions that require supplier quotations and automatically create a RFQ Or create manually and send it thru’ Fax or iSupplier portal. Record supplier quotations from a catalog, telephone conversation, or response from your RFQ. You can also receive quotations electronically and import as Quotations (catalog). Review, analyze, evaluate and approve supplier quotations. Create standard purchase order, BPA and blanket releases. Inform your suppliers of your shipment schedule requirements. Record supplier acceptances of your purchase order’s terms and conditions. Provide a quantity and price for each item you are ordering. Alternatively, you should also be able to create your purchase order simply by providing an amount if you are ordering a service that you cannot break down by price and quantity. Enter goods and service receipt information against the PO using routing controls viz: Direct delivery, standard receipt or standard receipt with inspection. Transfer and deliver goods using the Receiving Transactions window. If you want to perform an inspection transaction, you can open the Inspections window to specify accepted and rejected quantities.
This cycle involves following steps from creating a requisition to transfer the details to GL.
1. Create Requisition
Approve requisition
2. Create Purchase Order
Approve Purchase Order
3. Create Receipt after receiving the goods
4. Create an Invoice in AP
5. Pay the invoice
6. Transfer, Import and Post Journal to GL

Basic Components of Procurement

Requisition

Requisition is nothing but a formal request to buy something (like Inventory material, office supplies etc) needed for the enterprise. Only an employee can create one.
With on-line requisitions, you can centralize your purchasing department, source your requisitions with the best suppliers, and ensure that you obtain the appropriate management approval before creating purchase orders from requisitions.

Purchasing provides you with the features you need to satisfy the following basic requisition needs. You should be able to:

· Create, edit, and review requisition information on-line. You should also be able to enter suggested supplier information, delivery instructions, multiple accounting distributions, and notes to buyers, approvers, and receivers.
· Review the current status and action history of your requisitions. You should always know who approves requisitions and whether they are in the approval, purchasing, receiving, or delivery stage.
· Route requisitions according to your approval structure. You should also be able to set authorization limits by amount, charge account, item category, and location.
· Review and approve requisitions that need your approval. You should also be able to see the full requisition detail and review the action history before you approve a requisition.
· Print requisitions (with status Approved, Cancelled, Rejected, In Process, Pre-Approved, and Returned) for off-line review and approval. You should always be able to track the status of requisitions through the approval process.
· Import requisitions from other systems such as material or distributions requirement planning applications
· Perform on-line funds checking before creating requisitions. You should always know how your planned expenses compare to your budget.
· Automatically source requisitions from outstanding blanket purchase agreements or quotations you have received from suppliers
· Create requisitions quickly and easily for commonly purchased items
· Provide attachments as notes on requisition headers and lines
· Assign requisition lines to buyers and review buyer assignments for requisition lines
· Forward all requisitions awaiting approval from one approver to an alternate approver. Within your security and approval constraints, you should be able to reroute requisitions from one approver to another whenever you want.
· Record suggested foreign currency information for each requisition line

Requisition Types:

1. Purchasing Requisition: Purchase requisitions are used for requesting material from suppliers.
2. Internal Requisition: Internal requisitions provide the mechanism for requesting and transferring material from one inventory to other inventory

RFQ

A request for quotation (RFQ) is sent to a supplier to request pricing and other information for an item. A quotation is the supplier’s response to that RFQ. You send an RFQ to a supplier by fax, making a phone call, or using Oracle iSupplier Portal. A supplier can send a quotation, whether or not in response to an RFQ, is through the Purchasing Documents Open Interface.If you don’t receive quotations electronically from your supplier, you can create the quotation manually using the Quotations window, or copy the quotation from an RFQ.

Using Quotation for Purchase Order

When you create a purchase order (manually or from requisitions), you can use the Supplier Item Catalog window to retrieve quotation information. (The Supplier Item Catalog window can include quotations sent to you by your supplier through the Purchasing Documents Open Interface.) Purchasing provides all your approved quotation shipment information for a specific item or manufacturing category. You can copy this quotation shipment to an existing blanket purchase agreement or standard purchase order when you add this item or purchasing category to a purchase order line. You can sort this quotation information according to your needs, using criteria such as price or quantity. You can easily evaluate the source that is best for an item.

After you select the quotation shipment you want to use, Purchasing copies the item unit price, quantity, unit of measure, supplier product number, inspection required status, receipt required status, quotation number, quotation type, and supplier quotation number on your purchase order. Purchasing also copies the quotation item description on your purchase order if you define your items to do so. Purchasing automatically warns you when the terms and conditions of the quotation are different from the terms and conditions of your purchase order. The original purchase order terms and conditions remain unchanged.

Types of Quotations

There are three types of quotations and RFQs that come with Purchasing by default:

Bid: Used for a specific, fixed quantity, location, and date. For example, a Bid would be used for a large or expensive piece of equipment that you’ve never ordered before, or for an item that incurs transportation or other special costs. You cannot specify price breaks for a Bid quotation or RFQ.
Standard: Used for items you’ll need only once or not very often, but not necessarily for a specific, fixed quantity, location, and date. For example, you could use a Catalog quotation or RFQ for office supplies, but use a Standard quotation or RFQ for a special type of pen you don’t order very often. A Standard quotation or RFQ also includes price breaks at different quantity levels.
Catalog: Used for high–volume items or items for which your supplier sends you information regularly. A Catalog quotation or RFQ also includes price breaks at different quantity levels.

For all three types, you can define effectivity dates at the header level.
For Catalog and Standard quotations, you can also specify effectivity dates for individual price breaks. (For a Bid, you cannot specify effectivity dates at the shipment level.) You can also define your own RFQ or quotation types using the
Document Types window.

Purchase Order

Purchasing provides the Purchase Orders window that you can use to enter Standard and planned purchase orders as well as Blanket and Contract purchase agreements. You must be defined as a buyer to use this window.
Purchasing provides you the features you need to satisfy the following purchasing needs. You should be able to:
· Review all of your purchases with your suppliers to negotiate better discounts
· Create purchase orders simply by entering a supplier and item details
· Create standard purchase orders and blanket releases from both on-line and paper requisitions
· Create accurate and detailed accounting information so that you charge purchases to the appropriate departments
· Check your funds availability while creating purchase orders.
· Review the status and history of your purchase orders at any time for all the information you need
· Print purchase orders flexibly by using a number of print options
· Inform your suppliers of your shipment schedule requirements
· Record supplier acceptances of your purchase orders. You always know whether your suppliers have received and accepted your purchase order terms and conditions
· Create your purchase orders by providing a quantity and price for each item you are ordering. Alternatively, you should also be able to create your purchase order simply by providing an amount if you are ordering a service that you cannot break down by price and quantity

Purchase Order Types

There are mainly 4 types of Purchase Orders
· Standard Purchase Order
· Blanket Purchase Agreements
· Contract Purchase Agreements
· Planned Purchase Orders

Standard Purchase Order

You generally create standard purchase orders for one-time purchase of various items. You create standard purchase orders when you know the details of the goods or services you require, estimated costs, quantities, delivery schedules, and accounting distributions.

Blanket Purchase Agreements (BPA)

You create blanket purchase agreements when you know the 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.
You can issue a Blanket release against a BPA to place the actual order (as long as the release is within the blanket agreement effectively dates).

Contract Purchase Agreements

You create contract purchase agreements 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.

Planned Purchase Orders

A planned purchase order is a long-term agreement committing to buy items or services from a single source. You must specify tentative delivery schedules and all details for goods or services that you want to buy, including charge account, quantities, and estimated cost.
You can issue scheduled releases against a planned purchase order to place the actual orders. If you use encumbrance accounting, you can use the planned purchase order to reserve funds for long term agreements.

Assigning an Item to an Organization

Before assigning an item to an Organization, Item should have been defined in the master org.
If Item has already been defined in master org, then follow the steps to assign it to an Organization.
1. Go to the Inventory responsibility.
2. Navigate to Items à Master Items
3. Query the item in the master item form

4. Go to Tools à Organization Assignment
This will show all organization which use this master org as their master org

5. Check the assigned button against the Org to which you want to assign this item
6. Save
This will assign this item to that Organization.
Now you can query this item in that specific Org and if needed you can change the organization specific item attributes for the item.

Assigning an Item to an Organization

Before assigning an item to an Organization, Item should have been defined in the master org.

If Item has already been defined in master org, then follow the steps to assign it to an Organization.

1. Go to the Inventory responsibility.

2. Navigate to Items à Master Items

3. Query the item in the master item form

4. Go to Tools à Organization Assignment

This will show all organization which use this master org as their master org

5. Check the assigned button against the Org to which you want to assign this item

6. Save

This will assign this item to that Organization.

Now you can query this item in that specific Org and if needed you can change the organization specific item attributes for the item.

Assigning an Item to an Organization

Before assigning an item to an Organization, Item should have been defined in the master org.

If Item has already been defined in master org, then follow the steps to assign it to an Organization.

1. Go to the Inventory responsibility.

2. Navigate to Items à Master Items

3. Query the item in the master item form

4. Go to Tools à Organization Assignment

This will show all organization which use this master org as their master org

5. Check the assigned button against the Org to which you want to assign this item

6. Save

This will assign this item to that Organization.

Now you can query this item in that specific Org and if needed you can change the organization specific item attributes for the item.

Creating an Item in Oracle Apps

Please follow the process to create a new Item.

Navigate to the Inventory Super User responsibility.

Go to Items à Master Items

1.       Enter the Item name in Item field

2.       Enter the Item Description in Description field

3.       Save the form

4.       Now you can copy attributes from any existing templates or manually set all the attributes for all the tabs.

5.       For copying attributes from existing template, go to Tools à Copy From

6.       Select any existing template which suits your requirements and then click Apply, once Template is Implemented then click done.

7.       Now all attributes are set as per the template.

8.       You can check the tabs individually and whenever any attribute needs to change for your business requirement, you can do the change.

9.       After done with all the changes, Click Save.

Creating an Item in Oracle Apps

Please follow the process to create a new Item.

Navigate to the Inventory Super User responsibility.

Go to Items à Master Items

1.       Enter the Item name in Item field

2.       Enter the Item Description in Description field

3.       Save the form

4.       Now you can copy attributes from any existing templates or manually set all the attributes for all the tabs.

5.       For copying attributes from existing template, go to Tools à Copy From

6.       Select any existing template which suits your requirements and then click Apply, once Template is Implemented then click done.

7.       Now all attributes are set as per the template.

8.       You can check the tabs individually and whenever any attribute needs to change for your business requirement, you can do the change.

9.       After done with all the changes, Click Save.