R12 Defining Inventory Organizations

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 Objective

After completing this module, you should be able to do the

following:
• Understand the structure of an inventory organization
• Understand the multi-organization structure in Oracle
Applications
• Understand how to use the organization reports
• Understand how to set up the organization profile
options
• Understand organization implementation
considerations

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 Inventory Organizations

Distribution
Center

Company Warehouse

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Inventory Organization Structure

Organization

Subinventories

Locators

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 Sample Inventory Organization

Receiving Raw materials Manufacturing

sub sub sub
Inbound

Finished goods Inspection Defective

sub sub goods
sub

Shipping sub

Outbound Outbound

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 Multi-Organization Structure

What is multi-organization structure?

• Applications and database enhancement
• Enables you to consolidate your operations under one
installation of Oracle Applications on a single global
instance
• Enables you to keep transaction data secure by line of
business

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 Setting Up Locations

Physical location

Employees Organizations

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 Defining Organizations

Ledger

Operating unit

Inventory Inventory
Organization A Organization B

Subinventory Subinventory Subinventory Subinventory

Locator Locator Locator Locator Locator

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 Inventory Parameters

The Inventory Parameters tab enables you to:

• Set up organization information
• Enable specific products and features

Oracle Enterprise
Asset Management
Oracle Process Oracle Warehouse
Execution Management

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 Costing Parameters

Which costing method is the

organization going to use?
• Standard
• Average
• LIFO (last-in-first-out)
• FIFO (first-in-first-out)

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

Revision parameters Lot parameters

Revision A Lot 403B

Serial parameters LPN parameters

Item AS5222
Serial #5847329 LPN101

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 ATP, Pick, Item-Sourcing Parameters

The ATP, Pick, Item-Sourcing Parameters tab enables you

to:
• Set the available to promise (ATP) default rule for the
organization
• Set the picking defaults for the organization
• Set the item-sourcing defaults for the organization

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 Interorganization Parameters

The Inter-Org Information tab enables you to determine the

parameters the organization uses when it transfers
material between organizations.

M1 Seattle M2 Boston
manufacturing manufacturing

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 Other Account Parameters

You use the Other account parameters tab enables you to

set up receiving account information, profit and loss
account information, and other additional accounts.

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 Warehouse Management Parameters

If you have Oracle Warehouse Management installed you

can enter organization parameters that apply only to
Oracle Warehouse Management.

Oracle Warehouse
Management

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What is a Subinventory?

Finished goods

Raw materials

Defective items

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 What is a Subinventory (Cont)

Receiving Subinventory Storage Subinventory

• Optional • Mandatory
• Tracking of goods is • Tracking of goods is
possible possible
• Does not reflect in on • Material reflects in on-
hand quantity hand quantity
• Available if receipt is
made through use of
Oracle Warehouse
Management and Oracle
Mobile Supply Chain
Applications

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 Defining Subinventories

Subinventory
• Physical or logical separation of material
• You must define at least one subinventory for each
organization

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 Locator Control

Rack
Row

Bin

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 Dynamic and Static Locators

Dynamic Locators Static Locators

• Generate during a • Predetermined
transaction as needed

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 Subinventory-Locator Relationship

With locator control Without locator control

Subinventory: BULK Subinventory: FROZEN

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Locator Flexfield Structure

M1 Seattle M2 Boston

Row 1A Row 1A

Rack 1A Rack 1A

Bin 1A Bin 1A

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Interorganization Shipping Networks

Intransit shipment

Shipping
organization

Direct
organization
transfer

Destination Destination
organization organization

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 Shipping Method

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 Additional Set Up Steps

Freight carriers

Employees Planners

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 Additional Organizational Setups

Organization access Material shortages

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 Copying Inventory Organizations

Copy organization

M1 Seattle M2 Boston
manufacturing manufacturing

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 Organization Hierarchy

M1 Seattle
manufacturing

M2 Boston M3 Dallas M6 Phoenix

manufacturing manufacturing manufacturing

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 Organization Reports

Report Description

Item-Subinventory Report Lists items assigned to

Locator Quantities Report
Subinventory Quantities Report
subinventories.
Shows inventory item quantities
stored in specific locators.
Shows inventory item quantities by
subinventory.

Freight Carrier Listing Lists the freight carrier codes for the
current organization.
Inter-organization Shipping Lists the shipping networks for the
Information Listing current organization.
Locator Listing Lists the locators for the current
organization.

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 Organization Reports (Cont)

Report Description

Organization Parameters Listing Lists the organization parameters for

the current organization.
Subinventory Listing Lists the subinventories for the
current organization.
Organization Hierarchy Exceptions Displays all organizations belong to a
Report legal entity that are not assigned to
an organization hierarchy.

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 Profile Options
Profile Option
INV:Allow Expense to Asset Transfer
INV:Inter-Organization Currency
Conversion
INV: Override Neg for Backflush
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Description
Indicates whether you can transfer an
item from an expensed subinventory
to an asset location.
Indicates the currency conversion for
interorganization transfers between
organizations using different
currencies.
Indicates whether backflush
transactions can drive the inventory
negative even if the inventory
organization parameter Allow
Negative Balances is unchecked.
 Implementation Considerations

Products and features

• Do you need to set up additional products or features?

Oracle Enterprise
Asset Management
Oracle Process Oracle Warehouse
Execution Management

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 Implementation Considerations (Cont)

Subinventories
• Is it necessary to differentiate between receiving and
storage subinventories in your warehouse? Do you
need to link your receipts to a receiving location? Do
you need to track material without it appearing in on-
hand quantity?

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 Implementation Considerations (Cont)

Locator control
• Do you need to implement locator control?
• Do you need to need to implement locator control for
the organization, for individual subinventories, or at the
item level?
• Should locator control be predefined, just-in-time, or
both?

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 Implementation Considerations (Cont)

Organization access
• Should all responsibilities have access to the
organization?
• Which responsibilities should have access to the
organization?

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 Implementation Considerations (Cont)

Shipping networks
• Do you need to ship material between organizations?
• Do you need to track inventory between transfers?
• How do you want to ship material between
organizations?
• Do you ship material to Japan, Korea, or Taiwan?

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 Implementation Considerations (Cont)

Shipping networks
• Who owns the material until receipt the shipping
organization or the receiving organization?
• Which receipt routing do you use standard, direct, or
inspection required?
• Is an internal order required for each shipment?

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 Summary

You should now be able to:

• Understand the structure of an inventory organization
• Understand the multi-organization structure in Oracle
Applications
• Understand how to use the organization reports
• Understand how to set up the organization profile
options
• Understand organization implementation
considerations

Copyright © 2007, Oracle. All rights reserved.