Letter of credit (LC Matching) feature in Oracle R12

Background of Letter of Credit (LC):

A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.

In Oracle R12, this feature is a part of India Localization and it works at the customer level. It is different than Credit Check functionality available in base apps.

Let’s see how it works in system:

Say I want to ship material of amount for which customer has given be LC.

While saving the sale order make sure ‘LC Flag’ is selected in ‘Sales Order India Localization’ form.

Rest of the process of entering/booking sales order is normal.

* We will try to ship only one quantity

Perform below steps

1. Split the line to 1 qty.
2. Pick release order line

Now try to ship confirm the shipment.

Though at sales order level ‘LC Flag’, we did not match the LC with this shipment. In such cases, shipment will not go thru, system will show below error and the time of ship confirm.

Below is the form where we can create LC in system. As and when LC is applied to shipments, ‘Balance Amount’ value would get reduced.

Note: LC amount shall be inclusive of tax amount. Example: If sale order line amount is 100 and taxes on that line is 10.23, then LC need to be created of amount equal to or more than 110.23

Below is the screen where we can apply LC to order shipment, it is applied at Delivery details ID level.

Scroll to right side to see more columns. Feed all required details and click on ‘Apply’ button.

Once LC is applied to the line, balance amount of LC shall reduce by applied amount. Let’s verify it.

1	Sales Order base price	188967.00
2	Taxes	27872.63
3	Sales Order line total (1+2)	216839.63
1	LC amount	2168397.00
2	Sales Order line total	216839.63
3	LC balance amount (1-2)	1951557.37

Transactional details of LC will be available if you click buttons at bottom of the form… like ‘Qty Amendment’, ‘View Transaction’

Now as LC is applied to the shipment, system will allow to ‘Ship Confirm’.

You may be interested in below article as it given insight of accounting of LC.

https://oraclefinancial.files.wordpress.com/2010/05/case-study-on-letter-of-credit.pdf

Shipping Concepts

 Ship From

• The ship-from location represents the warehouse that is performing the shipping transaction. A warehouse is an Inventory organization.

Ship to

• The Ship To Location represents a Ship-To address that has been setup on the customers record. 

Deliveries

• A delivery must be created to perform Ship Confirm. It represent all the goods that were shipped from the same warehouse, going to the same Customer location.
• The grouping of delivery lines into deliveries is restricted by the grouping rules that are established on the Shipping Parameters - Delivery Tab.
• A delivery can be created automatically or manually from the Shipping Transactions form at any time after the order line status has become Awaiting Shipment or can be automatically created during the Release Sales Order process.
• A delivery is also automatically created when you invoke the action Pick and Ship or Pick, Pack, and Ship.

Delivery Lines

• Delivery lines are sales order lines which have completed all their workflow activities that are prerequisites to Oracle Shipping Execution such as Schedule Line or Create Supply.
• Delivery lines are visible from the Shipping Transactions form. They are also visible from the sales order lines Additional Information Deliveries tab.
• Delivery lines with similar attributes can be systematically grouped together into deliveries based on grouping rules.

Delivery leg

• A delivery leg consists of two stops where the delivery is picked up and dropped off, respectively on the same trip. The delivery might travel through several legs to get to its final destination and is synonymous to the Bill of Lading.
• A bill of lading is a receipt, listing all the goods that were signed over to a carrier.
• The Ship Confirm window enables you to generate a bill of lading which can then be printed separately or as part of the Delivery Document Set.

LPNs

• LPN, (License Plate Number) are also known as Containers. An LPN can be loaded inside of another container, for example, pack an item into a box and then pack that box onto a pallet.
• LPN number can be generated automatically by using 'Auto Create LPN' / Auto create Trip. In this case preferred container is picked from Item-Container relationship.
• Optionally LPN can be generated as per user specific naming convention by using 'Create LPN' option and then need to assign specific delivery lines to specific LPN number. During creating LPN manually system also give option to select container of user's choice
• Optionally LPNs can be setup as inventory items if the shipper is interested in using weight and Volume and packing functionality.
• LPNs can be made mandatory using your Shipping Parameters.

Trip

• A trip is carrier specific and represent a unique instance of that carrier leaving your warehouse with deliveries.
• The carrier could be a public carrier such as DHL or could be a company's own fleet of trucks.
• A trip could represent a truck, air cargo, ship cargo, or railcar. These entities would be set up as items in Oracle Inventory with an item type of Vehicle.
• Each trip has a minimum of two stops, pick-up and drop-off.
• A trip can be created automatically or manually from the Shipping Transactions form or can be automatically created from the Ship Confirm window.
• You can also create a trip as a part of a concurrent process.
• Companies that use public carriers can enable the system to automatically create Trips as part of of the Ship Confirm process. This eliminates unnecessary transactions.

Stops

• A stop is a point along the route of a trip that is due for pick-up or drop-off.
• The Ship Confirm process can initiate closing the pick-up stop updating the delivery
  status to In-transit.
• Manually record all stops made by the Trip using the Shipping Transactions form or
  have the Ship Confirm process automatically close a Trip, which creates and closes the
  pick-up stop and drop-off stop and changes the Delivery status to Closed.
• Companies that use public carries let the system automatically close a Trip as part of Ship
  Confirm.

Sets in Oracle Order Management

I found below video very interesting so thought of sharing it. Original link to this video is 

http://www.youtube.com/watch?v=1V_Y-IMdFYM

Quote to Sales Order cycle

Oracle Quotes offers limited functionality to create Quotes and Progress it through the Negotiation phase and finally creates Sales Order. Within Order Management we can avail simple functionality like. (Create Quote > Submit for Internal Approval > Take Customer Acceptance).

In company has complex / advance quoting needs then Oracle Sales Quoting needs to be implemented.

One more important point to be noted is data for Quote header/lines got inserted into OE_ORDER_HEADERS_ALL / OE_ORDER_LINES_ALL and same data will be used for order header /lines

Create Quote:
If you want then you can add Expiration date for the quote.
Initially quote remain in Draft status.

Submit for Internal Approval:
Once the draft is done then creator shall submit it for internal approval. This can be done from ‘Action’ button then select ‘Progress Quote’ and submit for approval.

Then the status becomes ‘Pending Internal Approval’


WorkFlow:
Remember the work flow associated to quote header only, there will be no Line level workflow associated in case of with Quote.

WF_ITEMS and WF_ITEM_ACTIVITY_STATUSES  with ITEM_TYPE ='OENH' , but once Quote got approved and converted to Orders , system will end date the workflow with ITEM_TYPE ='OENH' and creates new workflow with ITEM_TYPE ='OEOH'( for order header) and OEOL (for order lines).

Internal Approval:
Now the WF is waiting for internal Approval. We can modify the WF to have some customization like send email notification to concerned person.

After the internal approval from the authorities, WF get moved further and wait for Customer Acceptance.

At this stage status of the quote becomes “Pending Customer Acceptance”.



Customer Acceptance:
After receiving confirmation from your customer you may take the appropriate action.
In our case, let’s say customer sent Acceptance. So go to ‘Actions’ button and select ‘Customer Acceptance’ option.

Here you can add details about who and when accepted the quote.

At this stage quote WF is completed and Sales Order WF starts for header as well as for order lines.



Sales Order get created automatically

Order Header Workflow will be as below


Order Line Workflow will be as below.

From this point sales order cycle starts…

How does promotions work in Oracle EBS

Many companies need to give promotional offers to the customers. This article is related to such kind of scenarios and tries to get initial path to define promotions in system.

Discount Rule Example
Buy N of X, get Y at Z% off	Buy 2 (=N) pair of jeans (=X), get a sweater (=Y) at 50% (=Z) off.
Buy N of X, get Y at Z$ off	Buy 1 (=N) suit coat (=X), get a dress shirt (=Y) for $10 (=Z) off.
Buy N of X, get Y for Z$	Buy 2 (=N) shirts (=X), get a pair of pants (=Y) for $10 (=Z).
Buy N of X, get highest priced X at Z% off	Buy 3 (=N) items (=X), get 10% (=Z) off the highest priced item. X can be N of the same or different items. Item A is $19.99, item B is 15.99, item C is 10.00. Since item A is the highest priced item, $1.99 (10% of $19.99) is taken off the total.
Buy N of X, get lowest priced X at Z% off	Buy 3 (=N) items (=X), get 10% (=Z) off the lowest priced item. X can be N of the same or different items. Item A is $19.99, item B is $15.99, item C is $10.00. Since item C is the lowest priced item, $1.00 (10% off $10.00) is taken off the total.
Buy $N or more of X, get item Y at Z$ off	Buy $20 (=N) of Sporting Goods (=X), get $10 (=Z) off a basketball item (=Y).
Buy $N or more of X, get Y at Z% off	Buy $20 (=N) or more of Sporting goods (=X), get 10% (=Z) off a baseball cap (=Y).
Buy $N or more of X, get Y for Z$	Buy $500 (=N) or more of jewelry (=X), get a pair of earrings (=Y) for $25 (=Z).
Group Discount Example
Buy N of X for Z$	Buy 2 (=N) pair of jeans (=X), get them for $50 (=Z).
Buy N of X for Z% off	Buy 3 (=N) pair of jeans (=X), get 35% (=Z) off the total.
Buy N of X for Z$ off	Buy 3 (=N) pair of jeans (=X), get $25 (=Z) off the total.
Buy N or more of X for Z% off	Buy 3 (=N) or more pairs of jeans (=X), get 35% (=Z) off the total.
Buy N or more of X for Z$ each	Buy 3 (=N) or more pairs of jeans (=X), get them for $25 (=Z).

We will try to cover few of the above scenarios.
Note: Above scenarios are just to understand different requirements of promotions. All scenarios are not supported by Oracle applications.

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Let’s start with the setup now:

Define Items.
Computer Item:

Printer Item:

Step 2:  Assign the prices to those item on price list

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Scenario 1:
If a customer buys computer AS54888 (Sentinel Standard Desktop) with qty more than 2 then CM76840 (Lightning Inkjet Printer) shall be give at Discount of 40%.

1. Create a modifier with type Promotion
2. Choose modifier as Promotional Goods
3. Automatic check box shall be "yes"
4. Pricing Phase "Modifiers for BOOK Event"   

Click on "Define Details"

Go to Block "Additional Buy Product"
'Get Product Attribute'=Item Number and "Get product Values"= 'Item to be offered'
Get Qty= Qty to be offered, Get Price from particular Price List
Application Method = Percent and Values= Percentage of Discount (if you put 100% then it will be free)

Enter a Sales Order:

Enter the computer Item AS54888

Book Sales order:

On Booking you will get the discounted item on sales order. This item (printer) gets populated automatically with discount of 40% (List price =300, after discount of 20% it comes to 180)

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Scenario 2:
If a customer buys computer AS54888 (Sentinel Standard Desktop) with qty more than 2 then two CM76840 (Lightning Inkjet Printer) shall be give at Discount of amount 111.00. So here CM76840 has a price of 300 per unit, two units are of 600, after discount two CM76840 shall be offered at 489.00 (600.00-111.00)
Or same thing can be expressed as, two qty of CM76840 has be sold at per unit price of 244.50 (489/2).


Click on Define Details... 

Check the setup by putting sale order in place…

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Scenario 3:
If a customer buys computer AS54888 (Sentinel Standard Desktop) with qty more than 2 then CM76840 (Lightning Inkjet Printer) shall be give at fixed price of 199.00 per unit. So here CM76840 has a price of 300 per unit, two units are of 600 and these should be offer at 398 (199 X 2).



Click on Define Details... 

Check the setup by putting sale order in place…

Item Orderability Rule in R12

Item Orderability - This is new feature introduced in Oracle R12.1.1.This is the rule that user can define to restrict the items/group of item (Category) that can be ordered from the Sales Order form.

Because of the complex business scenario in the Modern time organization want to control which customer are allowed to order which product.
Consider below scenarios:
• If a company is developing customer specific items, then specific item shall be sold to specific customer only.
• Few products may be banned in specific region.
• Few items may be sold thru specific channel only. Example: Online, Distributors, franchises, Sales Executive etc.

Now Order management Provide a new utility in R12.1.1 to define the rule to restrict the Item to be sold, based on rules, this utility is name as Item Orderability Rules. It allows user to Order the Item based on the Rules. Item Orderability rules are defined at Operating Unit (OU) Level.

Now let’s have a deeper look at Item Orderability:

Level at which rule can be built:
As of Now Oracle has provided rules to control only at 11 attributes  

01. Customer
02. Customer Class
03. Customer Category
04. Region
05. Order Type
06. Ship To
07. Bill To
08. Deliver To
09. Sales Channel
10. Sales Representative
11. End Customer
Rule can be defined based on any combination of above attributes:
Example:

Suppose one rule is built based on multiple attributes as done in above example:
The OR condition is applicable when evaluating multiple conditions. In the example above, either the ‘Customer Category’ OR ‘Customer’ OR ‘Sales Channel’ is taken into consideration.

Criteria for the rule:
Criteria can be ‘Item’ or ‘Item Category’


If you select Category as a criterion then you will see “Item Categories Codes” from the Category Set which is assigned as ‘Default Category Set’ for Order Entry functional area for that OU.
Example: In our case ‘Order Entry’ has ‘Inv.Item’ category set assigned so we will be able see category codes from ‘Inv.Item’ Category set only.


Item Validation Organization is referred to validate ‘Item + Category’ combination

Generally Available Flag:
We can set up rules to define when an item or item category is generally not available (the Generally Available box is unselected) with the conditions available for that rule. For example, Item X is generally not available, however, since you have set up conditions at the Rule Level, it is available for a particular customer, or region or customer class.
Conclusion:
Generally Available box is unselected: Oracle will allow putting order for Criteria + ruling combination
Generally Available box is Selected:      Oracle will not allow putting order for Criteria + Rule combination

This is illustrated in the example below:

Case 1: Unselect Generally Available

This means, Item ‘AS54999’ is generally not available for all, but you want to sell it to Customer ‘A. C. Networks’ only.

So this rule allows putting order for Customer + Item combination.

Case 2: Select Generally Available


This means, Item ‘AS54999’ is generally available but you do not want Customer ‘A. C. Networks’ to order it.
So this rule does not allow putting order for Customer + Item combination



Effect of “OM: Use Materialized View for Items LOV (Honors Item Orderability Rules)”
If the value of the profile option OM: Use Materialized View for Items LOV (Honors Item Orderability Rules) is set to Yes, then the Ordered Item LOV displays only those items which are based on the rules defined. The Ordered Item LOV is then dynamically populated based on Item Orderability Rules and the current attribute values on the line.

If the value of the profile option OM: Use Materialized View for Items LOV (Honors Item Orderability Rules) is set to No, then the Ordered Items LOV lists all the items of the item validation organization of the current operating unit. This doesn't consider the defined item orderability rules, however if there is a defined rule that prevents the item from being ordered, then an error message is displayed while saving the order. You will not be able to save the order. Below is Simple test case for Item Orderability feature.

Steps to Define the Item Orderability Rule- 

1. Select the Criteria  (Item or Category. And Generally Available or not)
2. Select criteria values (Item Number / Category Code)
3. Select the Rules Level/s (by selecting any combinations of above 11 attributes)
4. Select Rules Level value.