Dual UoM in Oracle R12

Lets take a case Food industry:

FG Foods Ltd. sell variety of Chicken which can have different weight. The superior quality of a chicken weighs to 4 Pound (on an average) but the deviation can be ±10%. This chicken is purchased on number basis and later it is sold on Number (Each) basis as well as on weight (Pound-Lbs) basis. So here Chicken is getting transacted based on two UOM and FG Foods want to track Qty on both UoM basis.

To satisfy this requirement we need to define an item which can be tracked on two UoM, define converser rate between these UoMs.

Item Definition:

UoM Conversion:

Also define Inter-class conversion that too item specific.

1 Unit = 4 Pound

Transactions:

Lets look at the transaction below, 100 Lbs comes to 25 chickens (as per tolerance), but if it goes beyond the tolerance then Oracle will not accept it.

In this case, based on tolerance defined it will accept values for secondary UoM ±2.5 (10% of 25).

So in below transactions one line is on –ve tolerance and other is on +ve tolerance.

On-hand and Availability:

Miscellaneous Issue:

Lets try doing issue transaction based on only Secondary UoM (Each). Oracle will automatically calculate quantity in other UoM based on the conversion rate.

On-hand Qty:

In above transaction, even though we did not give value in Lbs, Oracle deducted one chicken and 4 Pounds (refer the conversion).

51-1   = 50 Each

200-4 = 196 Lbs

Price List View:

Oracle accepts different price values for different UoM as shown below, and you can sell the product on any UoM.

Sales Order Lines 68097 :

Lets sell this product based on different UoM..

Oracle will pull the price based on UoM you mentioned on the Order line, also it asks to feed the secondary qty as well. But remember the final transaction will happen based on UoM added on Order line and then other qty will be calculated.

Now Process the Order: Book > Pick Release > Pick Confirm > Ship Confirm.

Observe the above shipping transactions,

Line 1.1: even though its showing Secondary Req Qty as 12 actual Secondary Shipped Qty is 11.5 (as per the conversion), as 46Lbs of chicken comes to 11.5 (46/4)

Line 1.2: Here we did not give qty in Lbs, so oracle calculated it based on conversion and populated.

At the end of this transaction the final On-Hand shall as below:

50 - (11.5+12) =  26.5

196 - (46+48)  = 102

Note:

Dual unit of measure control is available in Oracle Inventory, Purchasing & Receiving and Order Management and Shipping .

https://docs.google.com/document/d/17VOIKY48ptS3WBSBC9mV6GTf4OI-A14ZLifuR4nEufQ/pub

What’s new in R12- Inventory Management

R12 Oracle Inventory Management, New Features

==========================================================
• Changed Features in R12 Inventory
----o OPM Inventory conversion.
----o Material traceability: Enhanced material control
----o Dual UOM functionality.
----o Material Status control.
----o Advanced Lot control.
----o Lot indivisibility functionality.
----o Material aging workflow.

• OPM Inventory Convergence
----o Structural changes in Inventory Organization
----o Benefits of OPM Inventory convergence

• Changed features for Inventory Process Convergence
----o Oracle Process Inventory Obsolescence
----o OPM Functionalities are supported by Oracle Inventory
----o New features pertaining to OPM
-------- Dual unit of Measure control
-------- Material status control
-------- Advanced Lot Control
-------- Support for Indivisible lot
-------- Material Aging workflow.

• Oracle Process Inventory Obsolescence: Before

• Oracle Process Inventory Obsolescence: After

• Advantages: Oracle Process Inventory Obsolesces
----o Single Item Master to be maintained.
-------- Process Attributes are added to Item definition
-------- Dual quantity tracking for item.

----o Combined view of Inventory
-------- On-Hand balance in one application
-------- Inventory transacted by one system

----o Integrated Supply Chain
-------- Seamless integration to other products like WMS & MSCA available to Process users.


• Advantages: Oracle Process Inventory Obsolesces
----o Dual Units of Measure control
----o Material Status control
----o Advanced Lot control
----o Lot Indivisibility
----o Material Aging Workflow


• Inventory tracking in Dual Units of Measure
----o Explanation
----o Set up and Process
----o Dependencies and Interactions.
----o Even without constant conversion, quantity can be tracked in two Units of Measures.
----o Transact, reserve, check on-hand and availability in multiple Units of Measure.
----o For Planning and Costing, Primary Units of Measure is used.


• Dual Units of Measure: Set up
----o Define Tracking for Single or Dual UOMs Specify defaulting logic for secondary UOM

• Dual Units of Measure control:
----o Transaction Enter Secondary Quantity at Receipt and all subsequent transactions

• Dual Units of Measure control: On-Hand material
----o View on hand and availability in both UOMs

• Dual Units of Measure control: Dependencies and Interactions
----o Oracle Receiving, Shipping Execution, Order Management, Inventory, WMS and the process manufacturing modules will honor dual UOM
----o If another module in e-Business suit or third party application posts a transaction to inventory via transaction open interface that does not indicate

the secondary quantity, the default conversion is used.


• Enhanced Material control by Material Statuses
----o Introduction
----o Set up and processes
----o Dependencies and Interactions
----o Material Status
-------- List of Allowed and Disallowed transactions
-------- Determination of whether or not the product is nettable, Reservable & ATP-able.

----o Applied to Lot, Serial, Sub inventory & Locator
-------- Assigned at receipt of new lot or serial
-------- Assigned in Sub inventory and Locator forms
-------- Disallowed transactions and planning actions are cumulative
-------- Location status applies to material in location and not Location

----o Update status in material workbench or mobile status update forms
----o Status change history report
----o View On-Hand balances by Material status.


• Set up required to enable Material Status:

• Material Status control setup: Enable Transaction
----o Specify which transaction types can be restricted by status

• Material Status control setup: Define Status code
----o Specify planning attributes for material status Specify allowed and disallowed transactions for this material status

• Material Status control setup: Enable Item
----o Enable status control selectively for Items

• Material Status Control Process- Perform Transaction
----o Status restrictions enforced during transactions
-------- Transactions prohibited by status at any level will not be allowed.
-------- Material will not be allocated for transaction not allowed to complete.


• Material Status Control: Dependencies and Interactions
----o Oracle Receiving, Shipping Execution, Advanced Planning and Scheduling, Inventory and Process manufacturing modules will honor material status.
----o If another module in e-Business suit or third party application posts transaction to inventory via transaction open interface that violated material status restriction, that transaction will be allowed.


• Improved Lot Traceability
----o Additional Lot attributes
-------- Grade, Origination, Retest Date, Expiration Action Code, Expiration Action Date, Maturity Date, Hold Release Date.

----o Sub-Lot tracking
----o Lot-level UOM conversions
----o Indivisibility of Lots


• Additional Lot Attributes:
----o Grade, Origination, Retest Date, Expiration Action Code, Expiration Action Date, Maturity Date, Hold Release Date.
----o Grade attributes allowed for allocating a particular grade of material for specific customer or order.
----o Expiration action code allows for particular action to be taken on material when lot has expired.


• Sub-Lot tracking:
----o Sub-Lot: A lot with parent
----o Sub-Lot numbers & Parent numbers can be generated at receipt.
----o Search for material by Lot or Sub-Lot.
----o Automatically name lots as a concatenation of parent lot and sub-lot name.


• Sub-Lot Track: Set up
----o Enable Sublot Control on Item Master

• Sub-Lot track: process
----o Parent Lot number entered during transaction for sublot controlled Items

• Lot level UOM Conversion:
----o Conversions can be created or modified for specific lots
----o Lot level conversions automatically stored as a part of initial receipt transactions for item.
----o Update conversion for the lot and automatically adjust on-hand balances accordingly.
----o View lot level conversions in lot maintenance form


• Lots Indivisibility:
----o Need for Lot Indivisibility
----o Item attribute to determine Indivisibility
----o System will over or under allocate accordingly so that only full lots are chosen
----o Indivisible lots may be manually split, but other transactions for partial quantities are prevented
-------- Exception for receipt into same locator and miscellaneous issue


• Lot Indivisibility: Set up
----o ‘ Lot Divisible’ flag indicates whether lots of this Item can be divided

• Management of Aging of Material
----o Material aging workflow: allows user to be notified about specific date attributes of lot or serial.
----o Concurrent Request: Designed to take action on any date attributes.
-------- The date attributes usually are Expiration date, retest date, maturity date or other types of dates.

----o Workflow is initiated when the given date attribute is within the given number of days of current date defined in concurrent request.
----o Default workflow sends notification, but can be customized to support any functionality.


• Lot Genealogy Enhancement:
----o The enhancement is incorporated in the lot genealogy form to allow user to:
-------- Highlight a particular item lot on a genealogy tree
-------- Toggle between the tabs like ‘where used’ & ‘source’ using highlighted item lot as a top node in the tree.
-------- Refresh the tree with different top level nodes without being forced to go back to query window
-------- View more level of details in the left side navigator where lot branches are expanded before they are forced to scroll horizontally.


• Summary
----o We have learnt about:
----o OPM inventory conversion
----o Dual UOM functionality
----o Material Status control
----o Advanced Lot control
----o Lot Indivisibility
----o Aging of material
----o Lot Genealogy Enhancement



*NOTE: This article is not completely prepared by me, content is edited and complied after referring various sites

Material Status Control in R12 Oracle Inventory

           Material Status control restricts the movement and usage of portions of on-hand inventory. Using material status control enables you to control whether you can pick or ship an internal order or sales order, or issue material for a work order. You can also specify whether material needs to be quarantined until you inspect it. In addition, you can determine whether products with a particular status can be reserved, included in available to promise calculations, or netted in production planning. You assign material statuses at four levels:

• Sub-inventory
• Locator
• Lot
• Serial Number

           Item status drives the item attributes by allowing you to keep an item from being built in Oracle Work In Process, ordered, procured etc. Material status is a granular control over each inventory transaction that applies to specific material within your warehouse or manufacturing facility

Material Status Control Levels:

           You assign subinventory and locator statuses in the subinventory and locator windows. The location status applies to the material in the location and not the location itself. To assign a material status to a lot or serial, you must first enable the item attributes Lot Status Enabled, and Serial Status enabled on the item in the Item Master. You can also optionally assign a default lot or serial status to an item on the Item Master. When you receive the item, the system automatically assigns the default lot or serial status to the item. The lot or serial status remains the same through all inventory transactions including organization transfers. If necessary, you can change the material status at receipt, use the material workbench, or mobile status update page to modify the material status.

  

            When a material status is assigned to a subinventory or locator, the material is not assigned the material status of the subinventory or locator; rather, it takes on the behavior indicated by the material status at the subinventory or locator level. i.e. Material Status is not directly assigned to Material, it is assigned to subinventory / locator / lot / serial and then Material is assigned to subinventory / locator / lot / serial. This way Material and Material Status are indirectly tagged to each other.

Cumulative Effective Status: 

            A cumulative effective status is the combination of all disallowed transactions. Disallowed transactions and planning actions are cumulative.

           When you transact an item, the system checks all of the material statuses. If the system finds a status that disallows the transaction, whether at the serial, lot, locator, or subinventory level, then the transaction fails.

           For example, if you have a locator whose status disallows WIP Issue and that locator is in a subinventory whose status disallows Sales Order Issue, neither of those transactions will be allowed for material that is in the locator

 
 
1. Enable Status Control for the Transaction Type :

We have to set Profile option INV: Material Status Support = Yes

• If you do not enable status control for a transaction type, then the transaction type is always allowed

2. Define Material Status Code :



3. Attach Material Status Code to Sub-inventory / Locator / Lot / Serial : 
Here we are attaching it to Locator.

As we defined Status code for Usage at Locator and Lot level, this can be used only for Locator or Lot



 
 
 

What's new at R12 Purchasing

What’s new in R12- Purchasing:

· The Professional Buyer’s Work Center speeds up daily purchasing tasks by providing buyers with a central launch pad from where they can efficiently perform their daily tasks, such as:

o Viewing and acting upon requisition demand

o Creating and managing orders and agreements

o Managing contract deliverables

o Running negotiation events, including auctions and RFxs

o Managing supplier information

· The Professional Buyer’s Work Center tightly weaves Oracle Purchasing with other products in the procurement family, such as Oracle Sourcing, Oracle Procurement Contracts, and Oracle Services Procurement. Buyers can now easily navigate from purchasing to sourcing documents, and vice-versa, using a single, friendly user interface.

· From the Demand Workbench, buyers can access the catalog and favorites to find negotiated alternatives to non-catalog requests. While authoring orders and agreements, buyers can use the catalog or favorites to quickly add items, thereby accelerating the document creation process. The enhanced catalog access provides easy access to pre-negotiated items. This reduces spending by leveraging negotiated pricing.

· Document Styles is a new feature in R12. It allows buying organizations to control the look and feel of the application to match the needs of different purchasing documents. Through reusable document styles, deploying organizations can enable or disable various Oracle Purchasing features, thereby simplifying the user interface. This helps people to use familiar name to Purchasing documents.

o When a purchasing document is created using a style, disabled features are hidden to simplify the user interface. For example, organizations can create a document style for a specific commodity, such as temporary labor. This document style optimizes field labels and display for that commodity, simplifying purchase order entry by hiding regions/attributes that are only relevant for goods purchases.

· Procurement of Complex Services is an integrated solution for Oracle Services Procurement used to model complex work contracts that involve advanced payment terms. These contracts tend to have high dollar values, often running into several millions of dollars. They also tend to be long lead time contracts, sometimes extending over multiple years. These contracts are characterized by progress payments that are governed by the complex payment terms, and which are released based on completion of work.

o The business flow can originate with a services request which the buying organization determines needs complex payment terms to manage and fulfill. The sourcing process allows negotiation of the complex payment terms and these are carried forward to the Contract after the award.

o The Contract, once approved and signed off by the involved parties is now in a state ready for execution. The Supplier can report progress on the work specified on the Contract, which the buying organization can certify as complete. Subsequently, payments can be processed for the progress made on the contract. The payment terms specified on the contract are used to compute the payment due to the supplier.

· Public APIs are modified to support Multi-Org Access Controls (MOAC). Public APIs take Operating Unit as a parameter. Operating Unit is an optional parameter. If it is not provided, the default operating unit from setup is used to set the desired context.

o PO Change API – POXCHN1B.pls

o Cancel PO API – POXPDCOB.pls

o Price Control API – POXPCPRB.pls

· Oracle E-Business Tax is a new infrastructure for tax knowledge management and delivery using a global system architecture that is configurable and scalable for adding country specific tax content.

o As the single point solution for managing transaction-based tax, Oracle E-Business Tax delivers tax services uniformly to Oracle E-Business Suite business flows through one application interface.

o Oracle E-Business Tax provides a comprehensive solution to configure, maintain, manage, and access transaction-based taxes. Organizations will have the ability to effectively address multiple tax needs, from global tax requirements to local compliance.

o Previously, only basic tax code and tax group based tax computation capabilities were supported. By integrating with Oracle E-Business Tax, the Procure to Pay business flow will be able to address complex tax requirements. Another benefit of the integration is the ability to utilize a single point tax solution across the E-Business Suite, which greatly simplifies maintenance and tax management.

o Tax is calculated for the following purchase documents:

§ Purchase and Internal Requisitions, at the requisition line level

§ Standard and Planned Purchase Orders, at the PO shipment level

§ Blanket and Scheduled Releases, at the Release shipment level

o Tax is calculated whenever a purchase transaction is created and tax is recalculated when any tax determination attributes on the transaction is updated. So any saved purchase document should have its applicable tax already calculated.

o In case of upgrading to R12 client may opt to keep using Pre-R12 tax setup or can do some additional setups for using new functionalities.

· In release 11i, Oracle Advanced Procurement Suite supported XSL-FO stylesheet based layout templates. In release 12, you can use layout templates created in Microsoft RTF and Adobe PDF formats. With Release 12, buyers can print purchasing documents on demand using any of the pre-defined layout templates. It also allows buyers to print a purchasing document in multiple formats

o Attachment type supported

§ Notes to Supplier (R12, 11i)

§ Long Short text (R12, 11i)

§ Files (R12)

§ URL (R12)

· Maintain Sourcing Rules/ASLs for Agreement Items: Prior to this release, system-generated sourcing rules and ASLs were only created at the time of blanket agreement approval. These rules were enabled for all organizations, which might not have mirrored actual business processes.

In this release, you create sourcing rules and ASL entries for a specific inventory organization. You can create these rules for agreements that you manually create, or for agreements that you import through the open interface.

In addition, the dependency of rules creation with the approval process has been removed. As a result, you can create rules for existing agreements that have already been approved. This concurrent program allows you to automatically create rules for all of the operating units in which a blanket agreement is enabled.

o

· Support for Contract Purchasing Users: In this release, contingent workers can perform the same actions as requesters and buyers who are employees. These actions include creating requisitions, purchase orders, and receipts. In addition, contingent workers can approve both requisitions and purchase orders.

Now the question is what the benefit of this:

• Companies can outsource their procurement functions to third parties, allowing them to focus on their core competencies.

• For the many companies that utilize the services of contingent workers, these workers can raise requisitions on their own behalf.

• Companies can meet compliance requirements because they no longer have to define contingent workers as employees for contingent workers to perform their jobs.

· Auto-Approval Tolerances for Change Orders: (Purchasing : Tolerances and Routing > Change Order) Auto-Approval Tolerances are defined on Setup screen or in Workflow Attributes. Once a Purchasing Document is submitted for approval, in the Approval Workflow a check is done to ensure that all changes are within tolerance. If they are then main approval is bypassed otherwise the document is routed through main approval process in workflow.

· Model Complex Pricing for Blanket Line Items: R12, Oracle Purchasing provides an additional option to model complex pricing for Blanket line items. In this release Oracle Purchasing has built an integration with the Oracle Advanced Pricing product. Oracle Advanced Pricing provides a set of tools in the form of price lists, formulas and modifiers to model complex pricing scenarios. This integration may eliminate the need for existing Oracle Purchasing customers to incorporate custom code into the product in the form of the custom pricing hook.

The integration with advanced pricing allows dynamic calculation of prices providing significant additional flexibility to complement the existing blanket agreement functionality. Companies can now accurately price all requests and purchases, thus reducing their dependence on the supplier’s billing capabilities.

Pricing Hierarchy

• If the transaction references an item from the item master, the list price of the item in the item master is first defaulted into the transaction.

• If the transaction references an approved and active blanket agreement, the pricing engine then determines the price from the applicable agreement price breaks if there’s any.

• If there isn’t any price break defined, it picks up the price from the agreement line.

• If there’s pricing information available in Oracle Advanced Pricing in the form of price list lines and/or modifiers, these pricing rules are then applied to arrive at the net price.

• It is important to note that if you have defined custom pricing rules in the custom hook provided, those rules override any other pricing that the system may have derived.

· Mass Re-pricing of Purchasing Documents was availabel from 11i9, in R12 it is improved a lot. You can now be able to re-price orders in batch using the existing “Retroactive Price Update” concurrent program even if the orders were not sourced from Blankets.

This Concurrent Program is now capable of re-pricing transactions based on pricing rules defined:

o On Oracle Advanced Pricing Price Lists/Modifiers

o And on Custom Pricing Hooks

· Advanced Approval Support for Requisitions:

o Parallel Approvals

o Support for Viewers

o Position Hierarchy Support

·

·

Why upgrade to R12.1 ???

Latest Release (R12.1) of Oracle E-Business Suite Helps Reduce Costs, Improve Controls

Expanded support for shared services was introduced in Oracle E-Business Suite Release 12 and continues with the latest release. Release 12.1 offers additional capabilities for supporting shared service centers (an increasingly important option for reducing administrative costs), improving transaction-processing efficiency, and addressing higher levels of regulatory scrutiny.
With shared services, global organizations establish a central department, often in a country chosen for its low labor costs, to process financial transactions for all business units and geographical locations. “CFOs and other C-level executives continue to say consolidation, centralization, and standardization are their top priorities. These goals are top of mind and influence their IT projects,” says Amrita Mehrok, director of financials product strategy at Oracle.
To address these demands, Oracle E-Business Suite offers an architecture that enables businesses to run finance operations centrally to enforce enterprisewide standards and achieve global visibility."

As globalization shifts work around the world, companies must address the different accounting, tax, and reporting requirements of the countries in which they operate. For example, most organizations with foreign subsidiaries find themselves preparing consolidated financial statements according to International Financial Reporting Standards (IFRS) or U.S. Generally Accepted Accounting Principles (GAAP), as well as statutory reports to meet local requirements." Mehrok explains. "Oracle E-Business Suite Financials Release 12.1 delivers configurable rules engines that keep you current with legal requirements and makes sure those requirements are applied consistently across the enterprise."
Other features that support shared services include

• Multi-Organization Access Control (MOAC enables shared services personnel to enter transactions, process data, view information, and run reports on behalf of other divisions or business units within the enterprise. Users no longer need to switch responsibilities to enter invoices, view consolidated requisitions, perform collection tasks, and receive or drop-ship goods for multiple operating units.
• Oracle E-Business Tax is a comprehensive infrastructure for managing transaction tax rules and transactions. The automation of tax processing through a central integrated engine improves the efficiency of your shared services organization and reduces errors. Your shared services staff can leverage the central setup and maintenance of tax rules by your tax or accounting personnel. An internal (or multi-entity) subscription model allows the tax rules to be shared across legal entities, along with the ability to apply business rules that enforce company wide tax content.
• Payments and collections can be processed more efficiently in a shared services environment with the centralized payment engine and bank account model in Oracle E-Business Suite Financials. The highly configurable centralized engine enables straight-through processing based on industry-standard protocols, with a dashboard for process visibility and management.
• The payment engine and bank model together enable a shared service center to make a single payment run spanning operating units, currencies, payment methods, and bank accounts. According to Mehrok, this dramatically increases the efficiency of a company's finance operations by reducing the number of payment files sent to the bank

Readers are requested to add other reasons for upgrade to R12 in the comment section...