M011959

Overview of Inventory
Management
Student Guide
Course Code 14509GC10

Edition 1.0
Month July 2000
Part Number MO-11959
Copyright © Oracle Corporation, 2000. All rights reserved.
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agreement containing restrictions on use and disclosure and is also protected by copyright law. Reverse
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Author
Shahrzad Hessabi
Technical Contributors and Reviewers
Susan Ellsworth, Pam Freeman, Paul Taylor, Eileen Wexler

Table of Contents
Overview of Inventory Management ...................................................................................1-1

Overview of Inventory Management ...................................................................................1-2
Objectives ............................................................................................................................1-3
Agenda.................................................................................................................................1-4
Overview .............................................................................................................................1-5
Inventory Flow Process .......................................................................................................1-6
Oracle Inventory Integration with Manufacturing Applications.........................................1-7
Integration of Oracle Inventory to Financial Applications .................................................1-8
Agenda.................................................................................................................................1-9
Inventory Enterprise Structure.............................................................................................1-10
Inventory Organizations ......................................................................................................1-11
Inventory Organizations Flow Chart ...................................................................................1-13
Oracle Organization.............................................................................................................1-14
Unit of Measure ...................................................................................................................1-15
Organization Calendar .........................................................................................................1-17
Review Question..................................................................................................................1-18
Agenda.................................................................................................................................1-20
Creating and Maintaining Items...........................................................................................1-21
Item Statuses and Attributes ................................................................................................1-22
Status Attributes...................................................................................................................1-24
Review Question..................................................................................................................1-25
Defining Items .....................................................................................................................1-27
Creating Item Templates......................................................................................................1-30
Enabling Attributes in a Template .......................................................................................1-31
Defining Item Relationships ................................................................................................1-32
Defining Items in Item Master.............................................................................................1-33
Organization Assignment and Organization Item................................................................1-34
Deletion Constraints and Deletion Groups ..........................................................................1-35
Review Question..................................................................................................................1-36
Categories and Category Sets ..............................................................................................1-38
Uses of Categories in Oracle Inventory ...............................................................................1-40
Defining Category Sets........................................................................................................1-41
Assigning Multiple Categories ............................................................................................1-42
Agenda.................................................................................................................................1-43
Inventory Controls ...............................................................................................................1-44
Overview .............................................................................................................................1-45
Locator Control....................................................................................................................1-46
Revision Quality Control .....................................................................................................1-48
Lot Control ..........................................................................................................................1-50
Serial Number Control.........................................................................................................1-51
Review Question..................................................................................................................1-52
Serial Genealogy..................................................................................................................1-54
Tracked Transactions...........................................................................................................1-55
Serial Genealogy Example...................................................................................................1-56
Agenda.................................................................................................................................1-57
Inventory Transactions ........................................................................................................1-58
Overview of Inventory Transactions ...................................................................................1-59
Defining Transaction Source Types.....................................................................................1-60
Customizing Transaction Entry ...........................................................................................1-61
Review Question..................................................................................................................1-62
Performing Miscellaneous Inventory Transactions .............................................................1-64
Overview of Inventory Management Table of Contents

i
Transferring Between Organizations ...................................................................................1-65
Inventory Transactions Without Documents and Requisitions............................................1-66
Inventory Transactions With Documents and Requisitions.................................................1-67
Move Orders ........................................................................................................................1-68
Move Order Source Types...................................................................................................1-70
Move Orders Process Flow..................................................................................................1-71
Shortage Alerts and Shortage Notifications.........................................................................1-72
Shortage Alerts and Shortage Notifications Example..........................................................1-73
Opportunistic Cross Docking...............................................................................................1-74
Collecting and Reporting Movement Statistics ...................................................................1-75
Agenda.................................................................................................................................1-76
Inventory Accuracy Controls...............................................................................................1-77
Cycle Counting ....................................................................................................................1-78
Cycle Counting ABC Analysis ............................................................................................1-81
Physical Inventory ...............................................................................................................1-83
Review Question..................................................................................................................1-85
Agenda.................................................................................................................................1-87
Inventory Planning and Replenishment ...............................................................................1-88
Reorder-Point Planning........................................................................................................1-90
Min-Max Planning...............................................................................................................1-92
Replenishment from Suppliers and Other Inventory Organizations ....................................1-94
Kanban Management ...........................................................................................................1-95
Kanban Execution................................................................................................................1-96
Summary..............................................................................................................................1-97

ii
Preface
Profile
Before You Begin This Course
Before you begin this course, you should have the following qualifications:
• Basic knowledge of inventory management and control concepts
Prerequisites
• There are no prerequisites for this course.
How This Course Is Organized
Overview of Inventory Management is a NetClass. Online demonstrations and

practice sessions reinforce the concepts and skills introduced.

iii
Related Publications
Oracle Publications
Title Part Number
N/A
Additional Publications
• System release bulletins
• Installation and user’s guides
• read.me files
• Oracle Applications User’s Group (OAUG) articles
• Oracle Magazine

iv
Typographic Conventions
Typographic Conventions in Text
Convention Element Example

Bold italic Glossary term (if The algorithm inserts the new key.
there is a glossary)
Caps and Buttons, Click the Executable button.

lowercase check boxes, Select the Can’t Delete Card check box.
triggers, Assign a When-Validate-Item trigger to the
windows ORD block.
Open the Master Schedule window.
Courier new, Code output, Code output: debug.set (‘I”, 300);

case sensitive directory names, Directory: bin (DOS), $FMHOME (UNIX)
(default is filenames, Filename: Locate the init.ora file.
lowercase) passwords, Password: User tiger as your password.
pathnames, Pathname: Open c:\my_docs\projects
URLs, URL: Go to http://www.oracle.com
user input,
User input: Enter 300
usernames
Username: Log on as scott
Initial cap Graphics labels Customer address (but Oracle Payables)

(unless the term is a
proper noun)
Italic Emphasized words Do not save changes to the database.

and phrases, For further information, see Oracle7 Server
titles of books and SQL Language Reference Manual.
courses, Enter user_id@us.oracle.com,
variables where user_id is the name of the user.
Quotation Interface elements Select “Include a reusable module component”
marks with long names and click Finish.
that have only
initial caps; This subject is covered in Unit II, Lesson 3,
lesson and chapter “Working with Objects.”
titles in cross-
references
Uppercase SQL column Use the SELECT command to view

names, commands, information stored in the LAST_NAME
functions, schemas, column of the EMP table.
table names

v
Arrow Menu paths Select File—> Save.
Brackets Key names Press [Enter].
Commas Key sequences Press and release keys one at a time:

[Alternate], [F], [D]
Plus signs Key combinations Press and hold these keys simultaneously:
[Ctrl]+[Alt]+[Del]
Typographic Conventions in Code

Caps and Oracle Forms When-Validate-Item
lowercase triggers
Lowercase Column names, SELECT last_name
table names FROM s_emp;
Passwords DROP USER scott

IDENTIFIED BY tiger;
PL/SQL objects OG_ACTIVATE_LAYER
(OG_GET_LAYER
(‘prod_pie_layer’))
Lowercase Syntax variables CREATE ROLE role

italic
Uppercase SQL commands and SELECT userid
functions FROM emp;
Typographic Conventions in Navigation Paths
This course uses simplified navigation paths, such as the following example, to
direct you through Oracle Applications.
(N) Invoice—>Entry—>Invoice Batches Summary (M) Query—>Find (B) Approve
This simplified path translates to the following:
1. (N) From the Navigator window, select Invoice—>Entry—>Invoice Batches

Summary.
2. (M) From the menu, select Query—>Find.
3. (B) Click the Approve button.

vi
Notations :
(N) = Navigator
(M) = Menu
(T) = Tab
(I) = Icon
(H) = Hyperlink
(B) = Button
Typographical Conventions in Help System Paths
This course uses a “navigation path” convention to represent actions you perform
to find pertinent information in the Oracle Applications Help System.
The following help navigation path, for example—
(Help) General Ledger > Journals > Enter Journals
—represents the following sequence of actions:
1. In the navigation frame of the help system window, expand the General
Ledger entry.
2. Under the General Ledger entry, expand Journals.
3. Under Journals, select Enter Journals.
4. Review the Enter Journals topic that appears in the document frame of the
help system window.

vii

viii
Overview of Inventory
Management
Chapter 1
Overview of Inventory Management

Chapter 1 - Page 1
Overview
Overview of
of Inventory
Inventory Management
Management
Oracle
Oracle Inventory
Inventory
Release
Release 11i
11i
Copyright  Oracle Corporation, 2000. All rights reserved.

Chapter 1 - Page 2
Objectives
Objectives
Objectives
After
After completing
completing this
this course,
course, you
you should
should be
be able
able to
to
describe
describe how
how to:
to:
•• Define
Define inventory
inventory structures
structures that
that correspond
correspond to
to
your sites
your sites
•• Define
Define and
and maintain
maintain item
item numbers
numbers
•• Implement
Implement controls
controls to
to track
track items
items in
in your
your inventory
inventory
•• Record
Record movement
movement of of items
items within
within your
your inventory
inventory
structures
structures
•• Check
Check accuracy
accuracy of
of on-hand
on-hand quantities
quantities byby
performing
performing physical
physical inventory
inventory and and cycle
cycle counting
counting
•• Perform
Perform inventory
inventory forecasting
forecasting and and planning
planning
®

Chapter 1 - Page 3
Agenda
Agenda
Agenda
•• Introduction
Introduction to
to Oracle
Oracle Inventory
Inventory
• Overview of Inventory Enterprise Structure
• Overview of Creating and Maintaining Items
• Overview of Inventory Controls
• Overview of Transactions
• Overview of Inventory Accuracy Controls
• Overview of Inventory Planning

Chapter 1 - Page 4
Overview
Overview
Overview
Oracle
Oracle Inventory
Inventory enables
enables you
you to
to satisfy
satisfy your
your
company’s
company’s business
business needs,
needs, area
area such
such as:
as:
–– Defining
Defining part
part numbers
numbers
–– Modeling
Modeling organization
organization structures
structures
–– Tracking
Tracking perpetual
perpetual inventory
inventory
–– Maintaining
Maintaining accurate
accurate on-hand
on-hand balances
balances
–– Planning
Planning material
material replenishments
replenishments
–– Forecasting
Forecasting anticipated
anticipated demand
demand

Chapter 1 - Page 5
Inventory Flow Process
Inventory
Inventory Flow
Flow Process
Process
Enterprise Structure
Items
Physical Inventory
Inventory Controls ABC Analysis
Inventory Planning
Cycle
Transactions Counting

Chapter 1 - Page 6
Oracle Inventory Integration with Manufacturing
Applications
Oracle
Oracle Inventory
Inventory Integration
Integration with
with
Manufacturing
Manufacturing Applications
Applications
Oracle
WIP Oracle
Flow Manufacturing Oracle
Oracle Cost Project
Management Manufacturing
Oracle External
Purchasing
Systems
Oracle
Inventory
Oracle Order
Management Oracle Master
Oracle Scheduling/MRP
Engineering Oracle Bills
Oracle of Material
Shipping ®
Integration of Oracle Inventory to Manufacturing Applications

Oracle Inventory interacts with the other applications by sharing information:
• Oracle Cost Management: From cost Information to transaction rates
• Oracle Work in Progress: From WIP activity and ATP supply information to
UOM, items, and on-hand quantity.
• Oracle Master Scheduling/MRP: From ATP supply information to on-hand
quantity and forecasts
• Oracle Bill of Materials to UOM and items
• Oracle Engineering: From engineering item information to UOM and items
• Oracle Order Management: From Shipping, reservations, and demand to UOM,
items, and ATP/on-hand quantity
• Oracle Purchasing: From receipts/deliveries, ATP supply, and planning supply to
UOM, items, requisition, and inter-org shipments

Chapter 1 - Page 7
Integration of Oracle Inventory to Financial
Applications
Integration
Integration of
of Oracle
Oracle Inventory
Inventory to
to
Financial
Financial Applications
Applications
External
Systems
Oracle Oracle
Payables General
Ledger
Oracle
Inventory
Oracle Oracle
Receivables Assets
®
Integration of Oracle Inventory to Financial Applications

Oracle General Ledger
• From: Set of Books and Currency Exchange Rates
• To: Transaction Accounting Summary or Detail
Oracle Payables
• To: UOM and Items
Oracle Receivables
• To: UOM and items
• From: Intercompany Invoice
Oracle Assets
• To: UOM and Items

Chapter 1 - Page 8
Agenda
Agenda
Agenda
• Introduction to Oracle Inventory

•• Overview
Overview of
of Inventory
Inventory Enterprise
Structure

Chapter 1 - Page 9
Inventory Enterprise Structure
Inventory
Inventory Enterprise
Structure
•• Creating
Creating organization
organization structures
structures in
in inventory
inventory
•• Defining
Defining aa unit
unit of
of measure
measure
•• Creating
Creating aa workday
workday calendar
calendar

Chapter 1 - Page 10
Inventory Organizations
Inventory
Organizations
•• Defining
Defining anan organization
organization
–– An
An organization
organization isis an
an inventory
inventory location
location with
with
its own set of books, costing method, workday
its own set of books, costing method, workday
calendar,
calendar, and
and list
list of
of items.
items.
–– An
An organization
organization can
can bebe aa company,
company, subsidiary,
subsidiary,
or
or warehouse.
warehouse.
Inventory Enterprise Structure

Consider the following issues when you plan your enterprise structure:
• Sets of Books: You can tie one Oracle General Ledger set of books to each
inventory organization.
• Costing Methods: You can choose your costing method (Standard or Average)
only at the organizational level. Costing organization is determined by the item
attribute control level.
• Item Costs: Oracle Inventory keeps one cost per item per inventory organization.
• Movement Between Inventory Sites: You can use intransit inventory for
interorganization transfers.
• Planning Method
– You can perform reorder point planning at the organization level.
– You can perform min-max planning at both the organization and the
subinventory levels.
– You can only perform replenishment counting at the subinventory level.
• Forecasting: Oracle Inventory forecasts item usage at the organization level only.
• Accuracy Analysis
– You can perform physical inventory at both the organization and the
– You can perform ABC classifications at both the organization and the

Chapter 1 - Page 11
– You can perform cycle counting at both the organization and the

Chapter 1 - Page 12
Inventory Organizations Flow Chart
Inventory
Organizations Flow
Flow Chart
Chart
Set of Books 2
Location B
Organization A Organization B
Location A
Set of Books 1
Subinventory Subinventory Subinventory Subinventory
Locator Locator Locator Locator Locator
Defining Organizations
Classify the Organization
• Choose an organization classification to describe the general purpose of your
organization.
• Examples of organization classifications are inventory organization, legal
company, and HR organization.
• Choose inventory organization as your organization classification to use your
organization for inventory management.
Set of Books
• Tie each organization to an operating unit, which is associated to a legal entity
and a general ledger set of books.
Inventory Parameters
• Use the Organization Parameters window to complete your organization
definition for inventory purposes.
• Define receiving parameters if you receive items on purchase orders, internal
orders, and intransit interorganization shipments.

Chapter 1 - Page 13
Oracle Organization
Oracle
Oracle Organization
Organization
Set
Legal Entity Vision Ops of
Books
Operating Unit Vision Ops
D2 M1 M2
Inventory
Organizations V1
V1
Vision Ops

Chapter 1 - Page 14
Unit of Measure
Unit
Unit of
of Measure
Measure
Defining
Defining aa unit
unit of
of measure:
measure:
•• A
A unit
unit of
of measure
measure (UOM)
(UOM) is is aa term
term that
that you
you must
must
use, along with a numeric value, to specify
use, along with a numeric value, to specify the the
quantity
quantity ofof an
an item.
item. For
For example,
example, “each”
“each” isis aa unit
unit
of
of measure that you would use to specify the
measure that you would use to specify the
number
number of of units
units ofof an
an item.
item.
•• Defining
Defining aa unit
unit of
of measure
measure class:
class:
•• A
A unit
unit of
of measure
measure class
class isis aa group
group ofof units
units of
of
measure with similar characteristics. For
measure with similar characteristics. For example, example,
“weight”
“weight” cancan be
be aa unit
unit of
of measure
measure classclass with
with units
units
of
of measure such as kilogram, gram, pound, and
measure such as kilogram, gram, pound, and
ounce.
ounce.
®

Chapter 1 - Page 15
Unit of Measure
Unit
Unit of
of Measure
Measure
Defining
Defining aa unit
unit of
of measure
measure conversion:
conversion:
•• A
A unit
unit of
of measure
measure conversion
conversion isis aa mathematical
mathematical
relationship
relationship between two different units
between two different units of
of
measure.
measure. For example, 16 ounces = 11 pound,
For example, 16 ounces = pound, or
or 2.2
2.2
pounds
pounds == 11 kilogram.
kilogram.

Chapter 1 - Page 16
Organization Calendar
Organization
Organization Calendar
Calendar
•• IfIf you
you perform
perform inventory
inventory forecasting,
forecasting, reorder-point
reorder-point
planning,
planning, available-to-promise
available-to-promise analysis,
analysis, or
or cycle
cycle
counting, you must define your workday
counting, you must define your workday calendar. calendar.
•• Oracle
Oracle Inventory
Inventory automatically
automatically generates
generates aa
workday
workday pattern (the base calendar) that
pattern (the base calendar) that includes
includes
all
all days,
days, including
including non-workdays,
non-workdays, between
between the
the
start
start and
and end
end dates
dates you
you specify.
specify.
•• You
You cancan assign
assign workday
workday exceptions
exceptions to
to the
the base
base
calendar to denote holidays, scheduled
calendar to denote holidays, scheduled
maintenance,
maintenance, or or overtime.
overtime.

Chapter 1 - Page 17
Review Question
Review
Review Question
Question
To
To define
define an
an inventory
inventory structure,
structure, you
you need
need to
to set
set up
up
1.
1. Organization
Organization only
only
2.
2. Organization
Organization and
and UOM
UOM
3.
3. UOM
UOM and
and workday
workday calendar
calendar
4.
4. Organization,
Organization, UOM,
UOM, and
and workday
workday calendar
calendar
5.
5. None
None of
of the
the above
above

Chapter 1 - Page 18
Review Question
Review
Review Question
Question
To
To define
define an
an inventory
inventory structure,
structure, you
you need
need to
to set
set up
up
1.
1. Organization
Organization only
only
2.
2. Organization
Organization and
and UOM
UOM
3.
3. UOM
UOM and
and workday
workday calendar
calendar
4.
4. Organization,
Organization, UOM,
UOM, and
and workday
workday calendar
calendar
5.
5. None
None of
of the
the above
above

Chapter 1 - Page 19
Agenda
Agenda
Agenda

•• Overview
Overview of
of Creating
Creating and
and Maintaining
Maintaining Items
Items

Chapter 1 - Page 20
Creating and Maintaining Items
Creating
Creating and
and Maintaining
Maintaining Items
Items
•• Defining
Defining item
item statuses
statuses and
and attributes
attributes
•• Defining
Defining items
items
•• Defining
Defining categories
categories and
and category
category sets
sets

Chapter 1 - Page 21
Item Statuses and Attributes
Item
Item Statuses
Statuses and
and Attributes
Attributes
•• Status
Status attributes
attributes are
are item
item attributes
attributes that
that enable
enable
key
key functionality
functionality forfor each
each item.
item.
•• An
An item
item status
status isis defined
defined byby selecting
selecting the
the value
value
check boxes for the status attributes.
check boxes for the status attributes.
•• Both
Both status
status attributes
attributes and and item
item status
status can
can be
be
controlled
controlled at at the
the item
item level
level or
or organization
organization levels.
levels.
Status Attribute Functional Area Functionality
Stockable Oracle Inventory You can stock the item

Transactable Inventory, Order Entry, You can transact the item
Purchasing, Work in Process in Inventory, OE,
Purchasing, or WIP
Purchasable Oracle Purchasing You can place the item on a PO
Build in WIP Oracle Work in Process You can build the item on a
discrete job or a repetitive
schedule
Customer Orders
Enabled Oracle Order Management You can place the item on a
sales order
Internal Orders
Enabled Inventory, Order Entry, You can create an internal
Purchasing sales order for the item
BOM Allowed Oracle Bills of Material You can create a bill of material
for the item
Invoice Enabled Oracle Revenue Accounting You can create an invoice for
the item

Chapter 1 - Page 22
Item Statuses and Attributes
Item
Item Statuses
Statuses and
and Attributes
Attributes
By
By giving
giving an
an item
item status,
status, you
you can
can control
control key
key
functionality
functionality of
of an
an item.
item.
Status Attributes
Invoice Enabled =
BOM Allowed = Yes
Item Status Yes
Build in WIP = Yes Transactable = Yes

Active
Customer Orders
Purchasable = Yes
Enabled = Yes
Internal Orders
Stockable = Yes
Enabled = Yes
®

Chapter 1 - Page 23
Status Attributes
Status
Status Attributes
Attributes
Master-Level
Master-Level Control
Control
•• An
An attribute
attribute that
that you
you maintain
maintain at
at the
the master
master level
level
has identical values for an item in all organizations
has identical values for an item in all organizations
that
that use
use it.
it.
Organization-Level
Organization-Level Control
Control
•• An
An attribute
attribute that
that you
you maintain
maintain at
at the
the organization
organization
level
level may
may have
have different
different values
values for
for an
an item
item in
in each
each
organization
organization that
that uses
uses it.
it.

Chapter 1 - Page 24
Review Question
Review
Review Question
Question
Status
Status attributes
attributes cannot
cannot be
be controlled
controlled at
at the
the item
item
level
level or
or organization
levels.
1.
1. True
True
2.
2. False
False

Chapter 1 - Page 25
Review Question
Review
Review Question
Question
Status
Status attributes
attributes cannot
cannot be
be controlled
controlled at
at the
the item
item
level
level or
or organization
levels.
1.
1. True
True
2.
2. False

Chapter 1 - Page 26
Defining Items
Defining
Defining Items
Items
An
An item
item is
is aa part
part or
or service
service that
that you
you purchase,
purchase, sell,
sell,
plan,
plan, manufacture,
manufacture, stock,
stock, distribute,
distribute, or
or prototype.
prototype. The
The
following Oracle Applications use
following Oracle Applications use items:items:
Inventory
Main Attribute s Purchasing
Attribute s Attribute s
Service Order Management
Work in Process Bills of Ma terial
Items
Rec eiving Costing
Phy sical MRP/MPS
Planning Invoicing
Attribute s Lead Time Attribute s
Attribute s
®

Chapter 1 - Page 27
Defining Items
Defining
Defining Items
Items
Choose Item Attribute Control Levels
Define Define Define Create Define

UOMs Status Categories Templates Catalogs
Control Define
Levels
Category
Define Sets
Statuses Define
Default
Category
Sets

Chapter 1 - Page 28
Defining Items
Defining
Defining Items
Items
Copy templates
Copy items
Enter attribute values
Enable in child organizations
Update organization level attributes
Define item costs

Chapter 1 - Page 29
Creating Item Templates
Creating
Creating Item
Item Templates
Templates
•• IfIf you
you regularly
regularly define
define many
many items
items that
that share
share the
the
same
same valuesvalues forfor aa number
number ofof attributes,
attributes, you
you may
may
want
want to to define
define item
item templates
templates toto avoid
avoid duplicating
duplicating
effort.
effort.
•• An
An itemitem template
template contains
contains values
values for
for any
any number
number
of
of item
item attributes.
attributes. Oracle
Oracle Inventory
Inventory has has several
several
predefined
predefined templates
templates that
that you
you can
can use
use to
to define
define
and
and update
update items.
items. Use
Use your
your own
own terminology
terminology toto
define
define templates.
templates.

Chapter 1 - Page 30
Enabling Attributes in a Template
Enabling
Enabling Attributes
Attributes in
in aa Template
Template
•• You
You can
can enable
enable attributes
attributes and
and assign
assign them
them values
values
in
in each
each template
template that
that you
you create.
create.
•• When
When youyou apply
apply aa template
template to
to an
an item,
item, Oracle
Oracle
Inventory
Inventory updates only the attributes that
updates only the attributes that are
are
enabled
enabled for
for the
the template.
template.
•• You
You can
can define
define templates
templates with
with relatively
relatively few
few
attributes
attributes enabled
enabled because
because you
you can
can apply
apply more
more
than
than one
one template
template to to define
define one
one item.
item.

Chapter 1 - Page 31
Defining Item Relationships
Defining
Defining Item
Item Relationships
Relationships
•• You
You can
can specify
specify the
the following
following types
types of
of
relationships
relationships for
for items:
items:
–– Item
Item cross-references
cross-references
–– Substitute
Substitute items
items
–– Related
Related items
items
–– Manufacturer
Manufacturer part
part numbers
numbers
–– Customer
Customer item
item numbers
numbers
•• You
You can
can define
define relationships
relationships between
between items
items to
to
improve
improve purchasing
purchasing management
management and
and item
item
searching
searching capabilities.
capabilities. You
You can
can receive
receive substitute
substitute
items
items in
in Oracle
Oracle Purchasing.
Purchasing.
®

Chapter 1 - Page 32
Defining Items in Item Master
Defining
Defining Items
Items in
in Item
Item Master
Master
•• Always
Always define
define items
items in
in the
the master
master item.
item. Oracle
Oracle
automatically
automatically changes
changes your
your current
current organization
organization
to
to the
the master
master organization.
organization.
•• Enable
Enable your item in
your item in as
as many
many child
child organizations
organizations
as you want.
as you want.

Chapter 1 - Page 33
Organization Assignment and Organization Item
Organization
Organization Assignment
Assignment and
and
Organization
Organization Item
Item
•• You
You can
can enable
enable youryour item
item inin all
all child
child organizations
organizations
under
under your
your master
master organization
organization or or choose
choose child
child
organizations where you use
organizations where you use the item.the item.
•• Oracle
Oracle Inventory
Inventory propagates
propagates youryour item
item to
to all
all
organizations
organizations in which you want to define it.
in which you want to define it.
•• You
You can
can use
use thethe master
master item
item inin each
each organization
organization
to
to enter
enter or
or change
change organization-level
organization-level attribute
attribute
values
values for
for items
items enabled
enabled in in the
the organization.
organization. For For
example, go to an organization to choose
example, go to an organization to choose reorder reorder
point
point planning
planning for for an
an item,
item, and
and then
then gogo to
to another
another
organization
organization and choose Min-Max planning for
and choose Min-Max planning for the
the
same
same item.
item.
®

Chapter 1 - Page 34
Deletion Constraints and Deletion Groups
Deletion
Deletion Constraints
Constraints and
and Deletion
Deletion Groups
Groups
•• IfIf you
you want
want to
to enforce
enforce specific
specific business
business rulesrules and
and
add
add custom
custom checks
checks before
before Oracle
Oracle Inventory
Inventory
allows
allows deletion
deletion ofof an
an item,
item, you
you must
must define
define item
item
deletion
deletion constraints to supplement the standard
constraints to supplement the standard
predefined
predefined itemitem deletion
deletion conditions.
conditions.
•• You
You cancan delete
delete items
items that
that have
have incorrect
incorrect attribute
attribute
information.
information. For For example,
example, ifif youyou make
make aa mistake
mistake in in
entering
entering an an item
item number,
number, use use the
the Deletion
Deletion Groups
Groups
window
window to to delete
delete the
the item.
item.
•• IfIf you
you decide
decide toto purge
purge the the item
item immediately
immediately after after
incorrectly
incorrectly defining it and before using
defining it and before using itit
anywhere
anywhere in in the
the system,
system, you you will
will be
be able
able to to delete
delete
it.
it.
®

Chapter 1 - Page 35
Review Question
Review
Review Question
Question
When
When you
you apply
apply aa template
template to
to an
an item,
item, Oracle
Oracle
Inventory
Inventory updates
updates only
only the
the attributes
attributes that
that are
are
enabled for the template.
1.
1. True
True
2.
2. False
False

Chapter 1 - Page 36
Review Question
Review
Review Question
Question
When
When you
you apply
apply aa template
template to
to an
an item,
item, Oracle
Oracle
Inventory
Inventory updates
updates only
only the
the attributes
attributes that
that are
are
1.
1. True
2.
2. False
False

Chapter 1 - Page 37
Categories and Category Sets
Categories
Categories and
and Category
Category Sets
Sets
Category
Category Grouping
Grouping Schemes
Schemes
Inventory
Inventory Purchasing
Purchasing Craig
Craig
Category
Category Set
Set Category
Category Set
Set Category
Category Set
Set
Finished Good Hardware PC
Other
Subassembly Software

Chapter 1 - Page 38
Categories and Category Sets
Categories
Categories and
and Category
Category Sets
Sets
•• Categories
Categories are
are logical
logical groupings
groupings of
of items
items that
that
have
have similar
similar characteristics.
characteristics.
•• A
A category
category set
set is
is aa distinct
distinct category
category grouping
grouping
scheme and consists of categories.
scheme and consists of categories.
Defining the Item Categories Flexfield

Each category grouping scheme can use different terminology for its categories, as well
as different naming structures based on number of segments.
You can define multiple structures for your Item Categories flexfield. You can
configure each flexfield structure by using as many segments and any level of value set
validation that you need.

Chapter 1 - Page 39
Uses of Categories in Oracle Inventory
Uses
Uses of
of Categories
Categories in
in Oracle
Oracle Inventory
Inventory
•• Inventory
Inventory Items:
Items: You
You can
can useuse categories
categories to to group
group
inventory
inventory items.
items.
•• Item
Item Category
Category Group:
Group: ForFor each
each item
item category
category
group, you can enter a list of recommended
group, you can enter a list of recommended
categories
categories toto use
use for
for items
items in in that
that catalog
catalog group.
group.
•• Summarizing
Summarizing Demand
Demand Histories:
Histories: You You can
can
summarize
summarize demand
demand history
history for for aa particular
particular
category
category of
of items.
items.
•• Loading
Loading Forecasts:
Forecasts: YouYou cancan compile
compile aa statistical
statistical
or
or focus forecast for a particular category
focus forecast for a particular category ofof items.
items.
Note
You can also perform min-max planning or reorder point planning for a particular
category of items.

Chapter 1 - Page 40
Defining Category Sets
Defining
Defining Category
Category Sets
Sets
Personalized
Personalized Lists
Lists of
of Items
Items
•• You
You can
can define
define categories
categories and and category
category sets
sets to
to
create personalized lists of items to limit
create personalized lists of items to limit the the
ranges
ranges ofof items
items appearing
appearing on on reports
reports or
or
processes.
processes.
•• This
This now
now enables
enables planners
planners to to submit
submit any
any report
report
just
just for
for items
items under
under their
their responsibility.
responsibility.

Chapter 1 - Page 41
Assigning Multiple Categories
Assigning
Assigning Multiple
Multiple Categories
Categories
•• You
You cancan choose
choose one one category
category for for each
each additional
additional
category
category set set that
that you
you want
want to to associate
associate with
with the
the
item.
item.
•• IfIf you
you assign
assign an an item
item or
or organization-level
organization-level
category
category set in the item master
set in the item master (for(for example,
example, inin the
the
Master
Master Item
Item window),
window), Oracle
Oracle Inventory
Inventory doesdoes not
not
propagate
propagate thatthat category
category set set to
to the
the child
child
organizations,
organizations, unless
unless it it is
is aa default
default category
category set.
set.

Chapter 1 - Page 42
Agenda
Agenda
Agenda

•• Overview
Overview of
of Inventory
Inventory Controls
Controls

Chapter 1 - Page 43
Inventory Controls
Inventory
Inventory Controls
Controls
•• Defining
Defining locator
locator control
control
•• Defining
Defining revision
revision control
control
•• Defining
Defining lot
lot control
control
•• Defining
Defining serial
serial number
number control
control
•• Defining
Defining serial
serial genealogy
genealogy

Chapter 1 - Page 44
Overview
Overview
Overview
•• With
With Oracle
Oracle Inventory
Inventory you
you can
can implement
implement locator,
locator,
revision,
revision, lot,
lot, and
and serial
serial number
number control.
control.
•• Flexible
Flexible Controls
Controls
–– You
You can
can implement
implement any any combination
combination of of the
the
four
four controls
controls (locator,
(locator, revision,
revision, lot,
lot, and
and serial
serial
number)
number) for
for each
each item.
item.
–– Inventory
Inventory controls
controls are
are optional
optional for
for all
all items.
items.
You
You can
can choose
choose toto implement
implement inventory
inventory
controls
controls for
for specific
specific items.
items.

Chapter 1 - Page 45
Locator Control
Locator
Locator Control
Control
Item with locator control

in this subinventory
Organization
Subinventory
Subinventory
Locator
Item without locator control

in this subinventory
®

Chapter 1 - Page 46
Locator Control
Locator
Locator Control
Control
•• Locators
Locators are
are structures
structures within
within subinventories.
subinventories.
•• Locators
Locators are
are the
the third
third level
level in
in the
the enterprise
enterprise
structuring
structuring scheme of Oracle Inventory ..
scheme of Oracle Inventory
•• Locators
Locators may
may represent
represent rows,
rows, aisles,
aisles, or
or bins
bins in
in
warehouses.
warehouses. You You can
can receive
receive items
items directly
directly into
into
and
and ship
ship items
items directly
directly from
from locators.
locators.
Locator Structuring
You can structure your Oracle Inventory installation so that some of the subinventories
and items have locator control while others do not. Each locator you define must
belong to a subinventory. Each subinventory can have multiple locators.

Chapter 1 - Page 47
Revision Quality Control
Revision
Revision Quality
Quality Control
Control
Revision Revision B
RevisionAA

Chapter 1 - Page 48
Revision Quality Control
Revision
Revision Quality
Quality Control
Control
•• A
A revision
revision is
is aa particular
particular version
version of
of an
an item,
item, bill
bill of
of
material,
material, or
or routing.
routing. By By using
using the
the revision
revision quantity
quantity
control
control option
option youyou can
can track
track item
item quantities
quantities by by
item
item revision. To do so you must specify aa
revision. To do so you must specify
revision
revision for
for each
each material
material transaction.
transaction.
•• You
You can
can enable
enable revision
revision quantity
quantity control
control for
for items
items
for
for which
which you
you must
must track
track version
version changes
changes or or
changes
changes that
that are
are significant
significant enough
enough toto track
track but
but
are
are not
not affecting
affecting the
the function
function and
and feature
feature ofof the
the
item
item and
and therefore
therefore do do not
not require
require an
an item
item change.
change.

Chapter 1 - Page 49
Lot Control
Lot
Lot Control
Control
•• A
A lot
lot is
is aa specific
specific batch
batch of
of an
an item
item that
that you
you receive
receive
and
and store
store in in your
your organization.
organization.
•• Lot
Lot control
control is is aa technique
technique for
for enforcing
enforcing the
the use
use of
of
lot numbers during material transactions,
lot numbers during material transactions, thus thus
enabling
enabling the the tracking
tracking of
of batches
batches ofof items
items
throughout
throughout their their movement
movement inin and
and out
out of
of
inventory.
inventory.
98
03 26
Lot#

Chapter 1 - Page 50
Serial Number Control
Serial
Serial Number
Number Control
Control
•• A
A serial
serial number
number is is an
an alphanumeric
alphanumeric piece piece of
of
information
information thatthat you
you assign
assign toto an
an individual
individual unit
unit of
of
an item. A serialized unit is a combination
an item. A serialized unit is a combination of an of an
item
item and
and aa serial
serial number.
number.
•• You
You can track individual units
can track individual units of
of items
items byby using
using
serial
serial numbers.
numbers. Serial
Serial number
number control
control isis aa system
system
technique
technique forfor enforcing
enforcing the
the use
use of
of serial
serial numbers
numbers
during
during aa material
material transaction.
transaction. YouYou cancan use
use serial
serial
numbers
numbers to to track
track items
items over
over which
which youyou want
want to to
maintain
maintain very
very tight
tight control.
control.
49
1 015
SN#0

Chapter 1 - Page 51
Review Question
Review
Review Question
Question
Which
Which ofof the
the following
following sentences
sentences describes
describes “Lot”
“Lot”
properly?
properly?
1.
1. An
An alphanumeric
alphanumeric piece
piece ofof information
information thatthat you
you
assign to an individual unit of an
assign to an individual unit of an item.item.
2.
2. A
A specific
specific batch
batch of
of an
an item
item that
that you
you receive
receive and
and
store
store in
in your
your organization.
organization.
3.
3. A
A particular
particular version
version of
of an
an item,
item, bill
bill of
of material,
material, or
or
routing.
routing.
4.
4. None
None ofof the
the above.
above.

Chapter 1 - Page 52
Review Question
Review
Review Question
Question
Which
Which ofof the
the following
following sentences
sentences describes
describes “Lot”
“Lot”
properly?
properly?
1.
1. An
An alphanumeric
alphanumeric piece
piece of
of information
information that
that you
you
assign to an individual unit of an item.
assign to an individual unit of an item.
2.
2. A specific batch of an item that you receive and
store in your organization.
3.
3. A
A particular
particular version
version of
of an
an item,
item, bill
bill of
of material,
material, or
or
routing.
routing.
4.
4. None
None of
of the
the above.
above.

Chapter 1 - Page 53
Serial Genealogy
Serial
Serial Genealogy
Genealogy
Using
Using serial
serial genealogy
genealogy enables
enables you
you to:
to:
•• Easily
Easily trace
trace from
from end
end item
item to
to all
all components
components
•• Trace
Trace from
from component
component toto final
final assembly
assembly
•• Isolate
Isolate the
the compromised
compromised assemblies
assemblies after
after finding
finding
aa defect
defect with
with components
components
•• Isolate
Isolate source
source of
of defects
defects by
by tracing
tracing from
from problem
problem
assembly to components
assembly to components

Chapter 1 - Page 54
Tracked Transactions
Tracked
Tracked Transactions
Transactions
Component
Component and
and assembly
assembly serial
serial numbers
numbers may
may be
be
associated
associated with
with each
each other
other at
at WIP
WIP issue,
issue, operation
operation
completion,
completion, or
or assembly
assembly completion.
completion.
Associate component
and assembly serial numbers
P.O.
receipt
Inventory
Manufacture
Inventory
Copyright  Oracle Corporation, 2000. All rights reserved. Shipping

Chapter 1 - Page 55
Serial Genealogy Example
Serial
Serial Genealogy
Genealogy Example
Example
Serial number
ZZ321
Serial number
Parent Genealogy
Child Genealogy
XY654
Serial number
AS1234
Serial
Serial number Serial number
Serial number number AS1234 JK9874
CD6541 EF2165

Chapter 1 - Page 56
Agenda
Agenda
Agenda

•• Overview
Overview of
of Transactions
Transactions

Chapter 1 - Page 57
Inventory Transactions
Inventory
Transactions
•• Customizing
Customizing and
and processing
processing transactions
transactions
•• Performing
Performing miscellaneous
miscellaneous inventory
inventory transactions
transactions
•• Move
Move orders
orders
•• Shortage
Shortage alerts
alerts and
and shortage
shortage notifications
notifications
•• Movement
Movement statistics
statistics

Chapter 1 - Page 58
Overview of Inventory Transactions
Overview
Overview of
of Inventory
Transactions
Material Flow Business Flow
Receive Goods
WIP Purchasing
Move Goods Inventory
Ship Goods MRP Order Entry
Transaction
• A transaction is an item movement into, within, or out of inventory.
• A transaction changes the quantity, location, or cost of an item.
• Oracle Inventory supports a number of predefined and user-defined transaction
types.
• Every material movement has a corresponding set of accounting transactions that
Oracle Inventory automatically generates.
• All transactions validate the various controls (revision, locator, lot number, and
serial number) you enable for your items.
• You can choose your own transaction processing methods to use available
computing resources most effectively.

Chapter 1 - Page 59
Defining Transaction Source Types
Defining
Defining Transaction
Transaction Source
Source Types
Types
A
A transaction
transaction source
source type
type and
and transaction
transaction action
action
make
make up
up aa transaction
transaction type.
type.
Transaction Transaction
Source Type Action
Transaction
Type
Transaction Source Types

You can add user-defined transaction types to the list of predefined transaction types.

Chapter 1 - Page 60
Customizing Transaction Entry
Customizing
Customizing Transaction
Transaction Entry
Entry
•• Define
Define aa new
new transaction
transaction source
source type
type
•• Use
Use the
the new
new transaction
transaction source
source type
type and
and aa
transaction
transaction action to define a new transaction type
action to define a new transaction type
Reasons
Reasons to
to Customize
Customize Transactions
Transactions
•• Flexibility
Flexibility to
to use
use your
your own
own terminology
terminology to to name
name
common
common transactions
transactions
•• Unlimited
Unlimited number
number ofof transactions
transactions to
to use
use for
for
recording material movement
recording material movement
•• Ability
Ability to
to record
record and
and review
review material
material movement
movement
using
using customized
customized transaction
transaction names
names andand source
source
types
types
®

Chapter 1 - Page 61
Review Question
Review
Review Question
Question
A
A transaction
transaction is
is an
an item
item movement
movement into,
into, within,
within, or
or out
out
of
of inventory.
inventory.
1.
1. True
True
2.
2. False
False

Chapter 1 - Page 62
Review Question
Review
Review Question
Question
A
A transaction
transaction is
is an
an item
item movement
movement into,
into, within,
within, or
or out
out
of
of inventory.
inventory.
1.
1. True
True
2.
2. False
False

Chapter 1 - Page 63
Performing Miscellaneous Inventory Transactions
Performing
Performing Miscellaneous
Miscellaneous Inventory
Inventory
Miscellaneous
Transactions
Transactions Miscellaneous
Receipt Issue
Subinventory Organization Subinventory

Locator Locator
Subinventory
Subinventory
Transfer
Transfer
Locator Locator
Direct Interorganization
Interorganization Transfer by Way
Transfer of intransit
Subinventory Organization
Organization Subinventory
Locator Locator
Subinventory
Subinventory Transfer
Transfer
Locator Locator
®
You Can Perform the Following Oracle Inventory Transactions

• Receive items into your organization from a general ledger account number
• Issue items from your organization to a general ledger account number
• Transfer items from a subinventory in your organization to another subinventory
in the same organization
• Transfer items directly between organizations
• Transfer items between organizations by way of intransit
• Reserve items for a specific account or temporarily prevent the release of items
onto the shop floor

Chapter 1 - Page 64
Transferring Between Organizations
Transferring
Transferring Between
Between Organizations
Organizations
You
You can
can define
define shipping
shipping networks
networks before
before entering
entering
interorganization
interorganization transfers.
transfers.
London Singapore
Organization Organization
Use Intransit Use Intransit
Inventory Inventory
(FOB = Receiving) (FOB = Shipping)
Austin
Organization
Require Direct
Internal Order Transfer
Sacramento to Ship New York
Organization Organization
®

Chapter 1 - Page 65
Inventory Transactions Without Documents and
Requisitions
Inventory
Transactions Without
Without
Documents
Documents and
and Requisitions
Requisitions
D1 M3 Dallas M1 Warehouses
Singapore (Ave Cost) Direct Seattle
org transfer
Intransit
Intransit Intransit org
org transfer transfer shipment
receipt
Subinventories Misc Issue

FGI Stores
Subinv Misc Receipt
transfer
Row 1, Rack 1, Bin 1 Subinv

Locators Row 1, Rack 1, Bin 2 transfer
Row 1, Rack 2, Bin 1 ...
®
Moving Inventory
Inventory organization transfers may be accomplished without using an internal
requisition/internal sales order.
• You can use miscellaneous receipts to receive material without a purchase order
number.
• Use miscellaneous issues to receive material without approvals or a document
number.
• Use subinventory transfers to transfer the location of material without a
document number.

Chapter 1 - Page 66
Inventory Transactions With Documents and
Requisitions
Inventory
Transactions With
With
Documents
Documents and
and Requisitions
Requisitions
D1 M3 M1 Warehouses
Singapore Dallas Internal Seattle
SO ship
Intransit confirm
Internal Internal SO
PO receipt ship confirm
Move order:
Subinventories
FGI Stores account transfer
Move order: PO receipt
subinv transfer
Move order:
Locators Row 1, Rack 1, Bin 1 subinv transfer
Row 1, Rack 1, Bin 2
Row 1, Rack 2, Bin 1 ... ®
Moving Inventory (continued)

You can use internal requisitions and internal sales orders as an approval mechanism
and to provide a document to track when you transport material between warehouses or
transfer material across inventory organizations.
Use miscellaneous receipts to receive material without a purchase order number.
• Use move orders with an Account Transfer transaction type to approve a
transaction and to provide a document to track the issue of the material.
Previously, sales orders with approvals in the order cycle were used to issue the
material and track the movement.
• Use move orders with a Subinventory Transfer transaction type to approve a
transfer and to provide a document to track the transfer of the material.

Chapter 1 - Page 67
Move Orders
Move
Move Orders
Orders
•• A
A move
move order
order is
is aa request
request for
for aa subinventory
subinventory
transfer
transfer or
or account
account issue
issue (also
(also called
called an
an account
account
transfer).
transfer). When using an account transfer, the
When using an account transfer, the
actual
actual movement
movement is is an
an issue,
issue, not
not aa transfer
transfer from
from
subinventory
subinventory toto subinventory.
subinventory.
•• Using
Using move
move orders,
orders, you you can
can manage
manage all all material
material
requisitions
requisitions and
and request
request processes
processes within
within an
an
organization
organization by
by manually
manually or or automatically
automatically
creating,
creating, approving,
approving, and and transacting
transacting aa move
move order.
order.
Overview
Previously, these transactions have been one-step occurrences, and there has been no
way to plan these intraorganization material movements. Move orders allow planners
and facility managers to request the movement of material within the four walls of a
warehouse or facility for replenishment, material storage relocations, quality handling
or other purposes.
Individual users can request move orders, and Oracle Inventory automatically creates
move orders when warranted for inventory replenishment and order picking.
This lesson covers the basic types of move orders, their uses, and the benefits of
managing inventory movement by using move orders.

Chapter 1 - Page 68
Move Orders
Move
Move Orders
Orders
Managed
Managed Material
Material Flow
Flow
•• Oracle
Oracle Inventory
Inventory uses
uses move
move orders
orders toto distinguish
distinguish
the
the user roles that should manage inventory levels
user roles that should manage inventory levels
from
from those
those who
who carry
carry out
out actual
actual transactions.
transactions. This
This
provides:
provides:
•• Faster
Faster response
response
–– Warehouse
Warehouse visibility
visibility
–– Tracking
Tracking
Managed Material Flow

Oracle Inventory uses move orders to distinguish the user roles that should manage
inventory levels from those who carry out actual transactions. This provides:
Faster Response: You can now request a transaction and forward the request on to a
picker for actual transaction execution. The request is tracked in Oracle Inventory to
avoid manual systems that can result in inaccurate information transfer. When
warranted, replenishment mechanisms can automatically generate move orders without
the intervention of an item planner for simple cases where the material is drawn from
within the facility. This results in faster inventory replenishment with minimal human
intervention.
Warehouse Visibility: Move orders use inventory picking rules to determine where to
source material for a subinventory or account transfer. This ensures that the same
mechanisms created to rotate material properly for deliveries can be used to rotate
material within the facility. It also uses the material visibility in Oracle’s Inventory to
suggest source locations, lots, and so on automatically.
Tracking: Move orders can be transacted through Application Program Interface. APIs
allow you to use mobile devices to transact, giving you better material visibility and
accuracy. Move orders can also be created to cross-dock material to staging locations.

Chapter 1 - Page 69
Move Order Source Types
Move
Move Order
Order Source
Source Types
Types
• Account
Move Order • Manually Generated
Transfer
• Optional Approval
Requisition • Subinventory
• Processing
Transfer
• Kanban • Automatically
Replenishment • Min Max Generated
Move Orders • Replenishment • Preapproved
Count • Ready for Transaction
• Automatically
Pick Wave Subinventory Generated
Move Orders Transfer • Preapproved
• Ready for Transaction
®
Source Types
Oracle Inventory provides two types of move orders. The move order type refers to the
entity that created the move order. For all move orders, the final result is one of the two
supported transactions: subinventory or account transfer.
Move Order Requisition: The requisition is a manually generated request for a move
order. You must create a move order requisition. You can generate requests for
subinventory transfers or account transfers. The requisition can optionally go through
an Oracle Workflow approval process before it becomes a move order. If no approval
process is used, the requisition becomes a move order immediately.
Replenishment Move Order: These move orders are generated by Kanban cards where
the pull sequence calls for a subinventory transfer (intraorganization kanbans), or by
min-max planned items where the item’s replenishment source (set at the item-
subinventory level) is another subinventory. In this case, the min max or replenishment
count report automatically generates a move order. Replenishment move orders are
preapproved and ready to be transacted.
Pick Wave Move Orders: The pick release process generates move orders to bring the
material from its source location in stores to a staging location, which you define as a
subinventory in Oracle Inventory. This transaction is a subinventory transfer.

Chapter 1 - Page 70
Move Orders Process Flow
Move
Move Orders
Orders Process
Process Flow
Flow
Move order locates
material sources
Approve
Move order move
order
requisition
Pick
created
Ticket
In case of shortage
move order
can be re-planned
Put away Picking

Destination Source
location location
®

Chapter 1 - Page 71
Shortage Alerts and Shortage Notifications
Shortage
Shortage Alerts
Alerts and
and Shortage
Shortage
Notifications
Notifications
•• Shortage
Shortage Messages:
Messages: Alerting
Alerting oror notifying
notifying
individuals
individuals that
that material
material needed
needed elsewhere
elsewhere in in the
the
organization is newly available.
organization is newly available.
•• Shortage
Shortage messages
messages maymay alert
alert the
the user
user to
to aa cross
cross
docking opportunity.
docking opportunity.

Chapter 1 - Page 72
Shortage Alerts and Shortage Notifications Example
Shortage
Shortage Alerts
Alerts and
and Shortage
Shortage
Notifications
Notifications Example
Material
shortage
Receive Bulk
Begin PO into bulk
receipt
Direct
receiving
Raw in
process Waiting
WIP job/
schedule ®

Chapter 1 - Page 73
Opportunistic Cross Docking
Opportunistic
Opportunistic Cross
Cross Docking
Docking
Putaway to Bulk Inventory

Cross Docking
Opportunity
Begin PO Receipt
Receive
and transact
Pick Wave Bulk
Move Order
Line Receive
Transact Pick Wave Move Order

Outbound Line Inbound
Backordered
Staging Staging
sales order

Chapter 1 - Page 74
Collecting and Reporting Movement Statistics
Collecting
Collecting and
and Reporting
Reporting Movement
Movement
Statistics
Statistics
Follow
Follow these
these steps
steps to
to collect
collect and
and report
report movement
movement
statistics:
statistics:
1. Define movement statistics
parameters
2. Enter movement statistics
information
3. Link movement statistics to

invoices
4. Report and review movement

statistics
5. Freeze movement statistics

®

Chapter 1 - Page 75
Agenda
Agenda
Agenda

•• Overview
Overview of
of Inventory
Inventory Accuracy
Accuracy Controls
Controls

Chapter 1 - Page 76
Inventory Accuracy Controls
Inventory
Inventory Accuracy
Accuracy Controls
Controls
•• Cycle
Cycle counting
counting
•• Physical
Physical inventory
inventory

Chapter 1 - Page 77
Cycle Counting
Cycle
Cycle Counting
Counting
•• Cycle
Cycle counting
counting is is the
the periodic
periodic counting
counting ofof
individual
individual items
items throughout
throughout thethe year.
year. Count
Count items
items
of higher value more frequently than items
of higher value more frequently than items of of
lower
lower value.
value.
•• Perform
Perform cycle
cycle counting
counting instead
instead of
of performing
performing
physical
physical inventory.
inventory. You
You can
can use
use both
both techniques
techniques
to
to verify
verify the
the accuracy
accuracy of of on-hand
on-hand quantities
quantities and
and
values.
values.
Initialization
Initialization is the process of identifying the items to cycle count. Initialize your cycle
count by choosing an ABC group that you define.
Automatic Scheduling
Automatic scheduling is the process of choosing the specific items to count in a time
interval. Oracle enables you to choose how frequently you want to run the automatic
scheduler. How frequently you run the automatic scheduler determines the time interval
for which Oracle Inventory schedules items to cycle count.
Manual Scheduling
Manual scheduling is the process of requesting counts for any item at any time. You
can request counts for specific subinventories, locators, and items, and you can set the
count for any date.

Chapter 1 - Page 78
Cycle Counting
Cycle
Cycle Counting
Counting
Day 1 of Cycle Count
High-Value Item to Count
Low-Value Item to Count

Chapter 1 - Page 79
Cycle Counting
Cycle
Cycle Counting
Counting
1
Define cycle count header
2
Update cycle-count items
3
Schedule items to count
4
Generate count requests
5
Enter cycle counts
6
Approve cycle counts
®
Uses in Oracle Inventory

• You can reconcile system on-hand balances with actual counts in inventory.
• You can maintain tighter control of items of higher relative value.
• You can perform cycle count for the entire organization or for specific
subinventories within an organization.

Chapter 1 - Page 80
Cycle Counting ABC Analysis
Cycle
Cycle Counting
Counting
ABC
ABC Analysis
Analysis
1a 1b
Define ABC compilation Define ABC classes
2
Define ABC group
3
Assign items to ABC classes
4
Update class assignments
5
Purge ABC information
®
Reasons for ABC Analysis

• You can perform an ABC analysis to decide how frequently you want to count
items in each ABC class.
• Typically you count items of higher value more frequently than you count items
of lower value.
• The principle of ABC analysis is that effort saved through relaxed controls on
low-value items can be applied to improve control of high-value items.

Chapter 1 - Page 81
Cycle Counting ABC Analysis
Cycle
Cycle Counting
Counting
ABC
ABC Analysis
Analysis
•• ABC
ABC analysis
analysis is is aa method
method of of determining
determining the the
relative
relative value
value ofof items
items inin your
your inventory
inventory sites.
sites.
•• An
An ABC
ABC analysis
analysis involves
involves ranking
ranking your
your items
items
according
according to a criterion and then grouping items
to a criterion and then grouping items
into
into classes.
classes. ABCABC refers
refers to
to the
the rankings
rankings youyou
assign
assign your
your items
items as as aa result
result of
of this
this analysis,
analysis,
where
where A A items
items are
are more
more valuable
valuable than
than B
B items,
items, and
and
so
so on.
on.
Computer Printer Mouse

Item A Item B Item C
®
ABC Classification
ABC classification is the process of assigning items to groups called ABC classes.
With Oracle Inventory you can use your own terminology to define ABC classes.
ABC Ranking
With Oracle Inventory you can choose one of 11 compilation criteria for performing an
ABC analysis. You can also maintain multiple rankings of the same set of items.

Chapter 1 - Page 82
Physical Inventory
Physical
Physical Inventory
Inventory
•• A
A physical
physical inventory
inventory isis aa periodic
periodic reconciliation
reconciliation ofof
system
system on-hand
on-hand balances
balances withwith physical
physical counts
counts inin
inventory.
inventory.
•• You
You can
can perform
perform aa physical
physical inventory
inventory whenever
whenever
you
you choose to verify the accuracy of
choose to verify the accuracy of your
your system
system
on-hand
on-hand quantities.
quantities.
•• You
You can
can perform
perform aa physical
physical inventory
inventory for
for the
the entire
entire
organization
organization oror for
for particular
particular subinventories
subinventories within
within
an
an organization.
organization.

Chapter 1 - Page 83
Physical Inventory
Physical
Physical Inventory
Inventory
Define physical inventory
Take snapshot of on-hand quantities
Generate tags
Count items
Enter counts
Void tags
Approve counts
Run adjustment program
Purge physical inventory
Reasons for Performing Physical Inventories

Accurate on-hand quantities are essential for effective planning and for minimizing
inventory investment. Accurate on-hand quantities are required for tax and audit
purposes.
Physical Inventory Tags
A tag is a tool for recording the on-hand quantity of a specific item in a particular
location. Usually a tag is a slip of paper posted at the item’s location. You refer to a tag
by using alphanumeric notation. Oracle can automatically generate tag numbers that
you can use to enter physical inventory counts. You can enter tag numbers that the
system does not generate for you.

Chapter 1 - Page 84
Review Question
Review
Review Question
Question
You
You cannot
cannot perform
perform aa physical
physical inventory
inventory for
for the
the
entire
entire organization
organization or
or for
for particular
subinventories
within
within an
an organization.
organization.
1. True
1. True
2.
2. False
False

Chapter 1 - Page 85
Review Question
Review
Review Question
Question
You
You cannot
cannot perform
perform aa physical
physical inventory
inventory for
for the
the
entire
entire organization
organization or
or for
for particular
subinventories
within
within an
an organization.
organization.
1. True
1. True
2.
2. False
False

Chapter 1 - Page 86
Agenda
Agenda
Agenda

•• Overview
Overview of
of Inventory
Inventory Planning
Planning

Chapter 1 - Page 87
Inventory Planning and Replenishment
Inventory
Inventory Planning
Planning and
and Replenishment
Replenishment
Planning
Planning methods:
methods:
•• Performing
Performing reorder-point
reorder-point planning
planning
•• Performing
Performing Min-Max
Min-Max planning
planning
•• Subinventory
Subinventory replenishment
replenishment planning
planning
••Creating
Creating and
and executing
executing Kanban
Kanban cards
cards
Replenishment
Replenishment source:
source:
•• Suppliers
Suppliers
•• Inventory
Inventory organizations
organizations
•• Subinventories
Subinventories
•• Manufacturing
Manufacturing
®

Chapter 1 - Page 88
Inventory Planning and Replenishment
Inventory
Inventory Planning
Planning and
and Replenishment
Replenishment
WIP Sales Order

Issues Shipments
Statistical and
Focus Forecasts
Inter-Org Miscellaneous
Shipments Issues
®
When to Order?
Typically, you should order when: On-hand quantity + supply − demand < minimum
inventory level.
The minimum level is a safety stock designed to be on an exception basis to meet
demand or inventory while waiting for replenishment.
How Much to Order?
Typically you should order a quantity that balances the cost of placing an order with
the cost of carrying inventory while covering expected demand. You then create a
requisition to replenish inventory from another organization or a supplier.
Planning Methods
• Reorder-point planning (organization)
• Min-max planning (organization and subinventory)
• Material-requirements planning: Master Production Scheduling/Master Demand
Scheduling (organization)

Chapter 1 - Page 89
Reorder-Point Planning
Reorder-Point
Planning
•• Reorder-point
Reorder-point planning
planning isis aa method
method ofof determining
determining
the
the size
size and
and timing
timing of
of item
item replenishment
replenishment orders.
orders.
•• Reorder-point
Reorder-point planning
planning uses
uses the
the following
following pieces
pieces
of information:
of information:
–– Safety
Safety stock
stock
–– Replenishment
Replenishment lead
lead time
time
–– Item
Item demand
demand
–– Order
Order cost
cost
–– Carrying
Carrying cost
cost

Chapter 1 - Page 90
Reorder-Point
Planning
Quantity
Reorder Point
Safety Stock
Time
®

You can perform reorder-point planning for the entire organization. You can use
reorder point planning for items under independent demand.
You can specify reorder point planning as the inventory planning method when you
define an item. You can use reorder point planning for items that you do not need to
control very tightly and that are not very expensive to carry in inventory.

Chapter 1 - Page 91
Min-Max Planning
Min-Max
Min-Max Planning
Planning
•• Min-max
Min-max planning
planning is
is aa method
method of of determining
determining
when
when and
and how
how much
much to to order
order based
based on
on user-
user-
defined
defined minimum and maximum inventory levels.
minimum and maximum inventory levels.
•• In Oracle Inventory you can perform
In Oracle Inventory you can perform min-maxmin-max
planning
planning at
at two
two levels:
levels:
–– Organization:
Organization: To
To perform
perform organization-level
organization-level
min-max
min-max planning
planning forfor an
an item,
item, you
you must
must
specify
specify organization-level
organization-level minimum
minimum and
and
maximum quantities.
maximum quantities.
–– Subinventory:
Subinventory: ToTo perform
perform subinventory-level
subinventory-level
min-max
min-max planning for
planning for an
an item,
item, you
you must
must
specify
specify subinventory-level
subinventory-level minimum
minimum and
and
maximum
maximum quantities.
quantities. ®

Chapter 1 - Page 92
Min-Max Planning
Min-Max
Min-Max Planning
Planning
Determine minimum
and maximum Enter minimum quantity
quantities
Enter maximum quantity
Do you want Yes

specific lot Enter fixed lot increments
increments?
No
Enter minimum order quantity
Run min-max report Enter maximum order quantity

Chapter 1 - Page 93
Replenishment from Suppliers and Other Inventory
Organizations
Replenishment
Replenishment from
from Suppliers
Suppliers and
and Other
Other
Inventory
Organizations
Oracle Inventory Processes
Min-Max Reorder-Point Subinventory Kanban
Planning Planning Replenishment
Populate Requisition
Interface
Oracle Purchasing Processes

Run Req. Import
Create Purchase Create Internal

Requisition Requisition
Create Purchase Create Internal
Order Order
Oracle Order Entry Processes

Run Order Import

Organization-Level Planning: You can perform min-max planning for the entire
organization.

Chapter 1 - Page 94
Kanban Management
Kanban
Kanban Management
Management
Techniques
Techniques used
used
••Define pull sequences
Define pull sequences
••Calculate
Calculate number
number ofof cards
cards and
and Kanban
Kanban size
size
••Kanban
Kanban requirements
requirements simulation
simulation
••Generate
Generate nonreplenishable
nonreplenishable Kanbans
Kanbans
••Automate
Automate transactions;
transactions; generate
generate requisitions
requisitions
Kanban
Kanban Cards
Cards Replenish
Replenish From
From Doc.
Doc. Created
Created
Supplier
Supplier Supplier
Supplier Purchase
Purchase Req.
Req.
Inter-org
Inter-org Inventory
Inventory Org
Org Internal
Internal Req.
Req.
Intra-org
Intra-org Subinventory
Subinventory Move
Move order
order
Production
Production Manufacturing
Manufacturing Work
Work order/Flow
order/Flowschedule
schedule
®

Chapter 1 - Page 95
Kanban Execution
Kanban
Kanban Execution
Execution
Kanban
Quantity
Calculation
Pull Signal
Sequence Card
Card Printing Replenishment
Creation
(Batch or (Scan Card or
(Automatic
Sourcing individual) Manually
Rules or Manual)
Signal)
PO
Creation
Source Card
Internal Aggregation
Order Type ? Status ?
Creation reqd ?
Work Order
Creation
Wait Error
Move Order
Creation Material
Receipt
®
Processing Kanban Signals

The example above gives you a map of how Oracle Inventory executes the following
Kanban signals:
• Request supplier Kanbans(PO)
• Request inter-Org Kanbans (Internal order)
• Request production Kanbans (work order)
• Request intra-org Kanbans
• Aggregate Kanban Signals
• Replenishable and Nonreplenishable

Chapter 1 - Page 96
Summary
Summary
Summary
In
In this
this lesson,
lesson, you
you should
should have
have learned
learned how
how to:
to:
•• Define
Define inventory
inventory structures
structures that
that correspond
correspond to to
your sites
your sites
•• Define
Define and
and maintain
maintain item
item numbers
numbers
•• Implement
Implement controls
controls to
to track
track items
items in
in your
your inventory
inventory
•• Record
Record movement
movement of of items
items within
within your
your inventory
inventory
structures
structures
•• Check
Check accuracy
accuracy of
of on-hand
on-hand quantities
quantities by
by
performing
performing physical
physical inventory
inventory and
and cycle
cycle counting
counting
•• Perform
Perform inventory
inventory forecasting
forecasting and
and planning
planning

Chapter 1 - Page 97

Chapter 1 - Page 98

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Overview of Inventory

Course Code 14509GC10

Restricted Rights Legend

Technical Contributors and Reviewers

Susan Ellsworth, Pam Freeman, Paul Taylor, Eileen Wexler

Overview of Inventory Management ...................................................................................1-1

Copyright © Oracle Corporation, 2000. All rights reserved.

Overview of Inventory Management Table of Contents

Copyright © Oracle Corporation, 2000. All rights reserved.

Overview of Inventory Management Table of Contents

Before You Begin This Course

• Basic knowledge of inventory management and control concepts

• There are no prerequisites for this course.

How This Course Is Organized

Overview of Inventory Management is a NetClass. Online demonstrations and

Copyright © Oracle Corporation, 2000. All rights reserved.

Overview of Inventory Management Table of Contents

Title Part Number

• System release bulletins

• Installation and user’s guides

• Oracle Applications User’s Group (OAUG) articles

Copyright © Oracle Corporation, 2000. All rights reserved.

Overview of Inventory Management Table of Contents

Typographic Conventions in Text

Convention Element Example

Caps and Buttons, Click the Executable button.

Courier new, Code output, Code output: debug.set (‘I”, 300);

Initial cap Graphics labels Customer address (but Oracle Payables)

Italic Emphasized words Do not save changes to the database.

Uppercase SQL column Use the SELECT command to view

Copyright © Oracle Corporation, 2000. All rights reserved.

Overview of Inventory Management Table of Contents

Commas Key sequences Press and release keys one at a time:

Typographic Conventions in Code

Convention Element Example

Passwords DROP USER scott

Lowercase Syntax variables CREATE ROLE role

Typographic Conventions in Navigation Paths

(N) Invoice—>Entry—>Invoice Batches Summary (M) Query—>Find (B) Approve

This simplified path translates to the following:

1. (N) From the Navigator window, select Invoice—>Entry—>Invoice Batches

2. (M) From the menu, select Query—>Find.

3. (B) Click the Approve button.

Copyright © Oracle Corporation, 2000. All rights reserved.

Overview of Inventory Management Table of Contents

Typographical Conventions in Help System Paths

The following help navigation path, for example—

(Help) General Ledger > Journals > Enter Journals

—represents the following sequence of actions:

2. Under the General Ledger entry, expand Journals.

3. Under Journals, select Enter Journals.

Copyright © Oracle Corporation, 2000. All rights reserved.

Overview of Inventory Management Table of Contents

Overview of Inventory Management Table of Contents

Copyright © Oracle Corporation, 2000. All rights reserved.

Overview of Inventory Management

Copyright  Oracle Corporation, 2000. All rights reserved.

Copyright © Oracle Corporation, 2000. All rights reserved.

Overview of Inventory Management

Copyright  Oracle Corporation, 2000. All rights reserved.

Copyright © Oracle Corporation, 2000. All rights reserved.

Overview of Inventory Management

Copyright  Oracle Corporation, 2000. All rights reserved.