Implementing Manufacturing and Supply Chain Materials Management

Oracle SCM Cloud
Implementing Manufacturing and

Supply Chain Materials Management
Release 13 (update 18C)

Oracle SCM Cloud
Implementing Manufacturing and Supply Chain Materials Management
Release 13 (update 18C)

Part Number E98392-02
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Authors: Kristy Carlile, Carl Casey, C Fehily, Barbara Mise, Manisha Padhy, N Shereen, R Taunque, Swapna Vankamamidi, Venkat Dharmapuri
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Oracle SCM Cloud
Implementing Manufacturing and Supply Chain Materials
Management
Contents
Preface i
1 Implementing Back-to-Back Fulfillment 1

Introduction ............................................................................................................................................................... 1
Implementing Back-to-Back Fulfillment ................................................................................................................... 11
Back-to-Back Fulfillment Cross-Product Features ................................................................................................... 18
2 Implementing Internal Material Transfers 21

Internal Material Transfer: Overview ......................................................................................................................... 21
Internal Material Transfer Setup Tasks: Explained ................................................................................................... 22
Internal Material Transfer Process Flow: Explained .................................................................................................. 24
Internal Material Transfer Document and Enrichment Rules: Points to Consider ...................................................... 27
Internal Material Transfer Price: How It Is Calculated .............................................................................................. 28
Setting Up Interorganization Parameters for Transfer Orders: Explained .................................................................. 29
Setting Up Intersubinventory Parameters for Transfer Orders: Explained ................................................................. 30
Setting Up Subinventory Parameters for Transfer Orders: Explained ....................................................................... 32
FAQs for Implementing Internal Material Transfers .................................................................................................. 32
Oracle SCM Cloud
Management
3 Implementing Contract Manufacturing 35

Contract Manufacturing: Explained ......................................................................................................................... 35
Contract Manufacturing Features: Overview ............................................................................................................ 35
Contract Manufacturing-Modeling of Entities: Explained .......................................................................................... 38
Contract Manufacturing Business Flow: Overview ................................................................................................... 39
Planning and Promising Contract Manufacturing Orders: Explained ........................................................................ 41
Automatic Supply Creation and Fulfillment: Explained ............................................................................................. 41
Track Production Progress: Explained .................................................................................................................... 42
Automatic Change Management: Explained ............................................................................................................ 43
Plan and Account Costs: Explained ........................................................................................................................ 43
Setting Up Supplier for Contract Manufacturing: Explained ..................................................................................... 44
Setting Up Inventory Organizations for Contract Manufacturing: Explained .............................................................. 44
Setting Up Item: Explained ..................................................................................................................................... 45
Setting Up Work Definition in Contract Manufacturing: Explained ............................................................................ 46
Setting Up a Blanket Purchase Agreement in Contract Manufacturing: Explained .................................................... 47
Setting Up Receiving Parameters in Contract Manufacturing: Explained .................................................................. 48
Setting Up ATP Rules in Contract Manufacturing: Explained ................................................................................... 48
Setting Up Sourcing Rules in Contract Manufacturing: Explained ............................................................................ 48
Contract Manufacturing Setup and Implementation: Critical Choices ....................................................................... 49
Oracle SCM Cloud
Management
4 Implementing Outside Processing 51

Outside Processing: Overview ................................................................................................................................. 51
Outside Processing Features in Oracle Supply Chain Management Cloud: Overview ............................................... 51
Managing and Executing Outside Processing: Explained ........................................................................................ 52
Creating and Managing Work Orders with Supplier Operations: Explained .............................................................. 53
Purchasing Documents For Outside Processing: How The Documents Are Created And Managed ......................... 54
Shipping Documents For Outside Processing: How The Documents Are Created And Managed ............................. 55
Receiving and Delivering Goods for Outside Processing: Explained ......................................................................... 56
Monitor, Manage, and Execute Supplier Operations in Manufacturing: Explained .................................................... 56
Planning, Accounting, and Reviewing Outside Processing Costs: Explained ............................................................ 57
Managing Demand and Supply Side Changes in Outside Processing: Explained ..................................................... 57
Setting Up Outside Processing: Overview ............................................................................................................... 58
Setting Up Plant Parameters for Outside Processing: Explained .............................................................................. 58
Setting Up Mapping Sets for Outside Processing: Explained .................................................................................. 59
Setting Up Items for Outside Processing: Explained ............................................................................................... 59
Setting Up Suppliers for Outside Processing: Explained .......................................................................................... 60
Setting Up Blanket Purchase Agreement for Outside Processing: Explained ........................................................... 60
Setting Up Standard Supplier Operations: Explained .............................................................................................. 60
Setting Up Work Definition With Supplier Operations: Explained ............................................................................. 60
Implementing Outside Processing: Explained .......................................................................................................... 61
Oracle SCM Cloud
Management
5 Implementing Inventory Management 63

Implementing Inventory Management: Overview ...................................................................................................... 63
Manage Subinventories and Locators ..................................................................................................................... 65
Manage Interorganization Parameters ..................................................................................................................... 70
Manage Account Aliases ......................................................................................................................................... 72
Manage Transaction Sources and Types ................................................................................................................ 73
ABC Analysis .......................................................................................................................................................... 74
Manage ABC Classes ............................................................................................................................................. 79
Manage ABC Classification Sets ............................................................................................................................. 80
Manage ABC Assignment Groups .......................................................................................................................... 83
Manage Inventory Transaction Reasons .................................................................................................................. 86
Manage Item Transaction Defaults .......................................................................................................................... 86
Manage Material Statuses ....................................................................................................................................... 87
Manage Pick Slip Grouping Rules ........................................................................................................................... 88
Manage Picking Rules ............................................................................................................................................ 89
Manage Picking Rule Assignments ......................................................................................................................... 90
Manage Inventory Consumption Rules .................................................................................................................... 93
Manage Intersubinventory Parameters .................................................................................................................... 97
Manage Inventory Descriptive Flexfields .................................................................................................................. 98
Manage Item Keyword Search for Inventory ........................................................................................................... 99
Integrating with 3PL and Warehouse Management Systems ................................................................................. 100
Capture Serial Number at Pick ............................................................................................................................. 108
Manage Min-Max Planning .................................................................................................................................... 109
6 Implementing Receiving 115

Manage Receiving Parameters .............................................................................................................................. 115
Print Shipping Documents .................................................................................................................................... 121
Oracle SCM Cloud
Management
7 Implementing Shipping 135

Introduction ........................................................................................................................................................... 135
Manage Release Sequence Rules ......................................................................................................................... 141
Manage Ship Confirm Rules ................................................................................................................................. 142
Manage Shipping Cost Types ............................................................................................................................... 144
Manage Transportation Schedules ........................................................................................................................ 145
Manage Shipping Exceptions ................................................................................................................................ 148
Manage Default Packing Configurations ................................................................................................................ 151
Manage Shipping Zones ....................................................................................................................................... 152
Manage Shipping Parameters ............................................................................................................................... 154
Manage Pick Wave Release Rules ........................................................................................................................ 158
Integrating Shipping with Transportation and Trade Management Systems ........................................................... 162
Shipping Documents ............................................................................................................................................. 177
Manage Quick Shipment ....................................................................................................................................... 180
8 Implementing Receipt Accounting 183

Receipt Accounting: Overview .............................................................................................................................. 183
Setting Up Receipt Accounting: Procedure ........................................................................................................... 183
Enabling Legal Entity Time Zones: Procedure ....................................................................................................... 184
Configuring Expense Accruals: Points to Consider ................................................................................................ 185
Implementing Subledger Accounting: Critical Choices ........................................................................................... 186
Creating an Accounting Method: Explained .......................................................................................................... 186
Creating a Subledger Journal Entry Rule Set: Explained ....................................................................................... 188
Creating an Accounting Method: Procedure ......................................................................................................... 190
Setting Up User Defined Account Rules: Procedure .............................................................................................. 191
Setting Up User Defined Journal Entry Rule Sets: Procedure ................................................................................ 192
Assigning User Defined Journal Entry Rule Sets to Accounting Method: Procedure ............................................... 193
Activating Journal Entry Rule Sets Assignments: Procedure .................................................................................. 193
Preview Accounting Results: Procedure ................................................................................................................ 194
Mapping Sets: Explained ...................................................................................................................................... 194
Predefined Mapping Sets: Overview ..................................................................................................................... 195
Using Predefined Mapping Sets: Procedure .......................................................................................................... 195
FAQs for Receipt Accounting ................................................................................................................................ 196
Oracle SCM Cloud
Management
9 Implementing Cost Accounting 199

Cost Accounting: Overview ................................................................................................................................... 199
Setting Up Cost Accounting: Procedure ............................................................................................................... 199
Enabling Legal Entity Time Zones: Procedure ....................................................................................................... 201
Managing Cost Organizations and Cost Books ..................................................................................................... 202
Cost Organizations, Inventory Organizations, and Cost Books: How They Fit Together ......................................... 202
Setting Up the Cost Organization Structure: Points to Consider ............................................................................ 205
Setting Up a Cost Profile ...................................................................................................................................... 206
Setting Up a Cost Organization Structure: Examples ............................................................................................ 209
FAQs for Managing Cost Organizations and Cost Books ...................................................................................... 210
Managing Cost Elements and Analysis Groups ..................................................................................................... 211
Defining Cost Accounting Policies ......................................................................................................................... 213
Defining Overheads Absorption ............................................................................................................................. 225
Implementing Subledger Accounting ..................................................................................................................... 229
FAQs for Subledger Accounting ............................................................................................................................ 242
10 Implementing Landed Cost Management 245

Landed Cost Management: Overview ................................................................................................................... 245
Setting Up Landed Cost Management .................................................................................................................. 246
Managing Charge Names ..................................................................................................................................... 247
Managing Landed Cost Reference Types ............................................................................................................. 248
Managing Routes .................................................................................................................................................. 249
11 Implementing Subledger Accounting for France 251

Subledger Accounting for France: Overview .......................................................................................................... 251
Setting Up Subledger Accounting for France: Procedure ...................................................................................... 251
Mapping Sets: Explained ...................................................................................................................................... 253
Predefined Mapping Sets for Subledger Accounting for France: Overview ............................................................. 254
Using Predefined Mapping Sets for Subledger Accounting for France: Procedure ................................................. 254
12 Implementing Intrastat Reporting 257

Intrastat Reporting: Overview ................................................................................................................................ 257
Setting Up Intrastat Reporting: Procedure ............................................................................................................. 257
Manage Intrastat Country Characteristics .............................................................................................................. 259
Manage Intrastat Rules ......................................................................................................................................... 264
Manage Intrastat Parameters ................................................................................................................................ 266
FAQs for Setting Up Intrastat Reporting ................................................................................................................ 267
Oracle SCM Cloud
Management
13 Implementing Manufacturing 271

Setting Up Manufacturing: Procedure ................................................................................................................... 271
Setting Up Manufacturing Plant: Explained ........................................................................................................... 273
Setting Up Plant Parameters: Critical Choices ....................................................................................................... 273
Setting Up Lookups for Manufacturing: Explained ................................................................................................. 281
Manage Work Areas: Explained ............................................................................................................................ 281
Manage Work Centers: Explained ......................................................................................................................... 282
Manage Resources: Explained .............................................................................................................................. 285
Manufacturing and Oracle Social Networking: Explained ....................................................................................... 286
Configuring Human Tasks for Manufacturing: Explained ........................................................................................ 288
14 Implementing Supply Chain Orchestration 291

Supply Chain Orchestration Introduction ............................................................................................................... 291
Manage Supply Orchestration Lookups ................................................................................................................ 296
Manage Supply Orchestration Attachment Categories .......................................................................................... 297
Manage Supply Order Defaulting and Enrichment Rules ....................................................................................... 298
Manage Execution Document Creation Rules ....................................................................................................... 301
15 Implementing Supply Chain Financial Orchestration 305

Introduction ........................................................................................................................................................... 305
Manage Documentation and Accounting Rules ..................................................................................................... 309
Manage Supply Chain Financial Orchestration Transfer Pricing Rules .................................................................... 310
Manage Supply Chain Financial Orchestration System Options ............................................................................. 311
Manage Profit Center Business Unit Party Relationships ....................................................................................... 312
Manage Supply Chain Financial Orchestration Qualifiers ....................................................................................... 313
Manage Supply Chain Financial Orchestration Flows ............................................................................................ 314
Creating Financial Orchestration Flows .................................................................................................................. 320
Oracle SCM Cloud
Management
16 Implementing Maintenance 333

Setting Up Maintenance: Procedure ..................................................................................................................... 333
Setting Up Maintenance Organization: Overview ................................................................................................... 334
How can I define the default maintenance organization? ....................................................................................... 334
Setting Up Maintenance Plant Parameters: Critical Choices .................................................................................. 334
Manage Lookups for Maintenance: Explained ....................................................................................................... 338
Work Areas, Resources, and Work Centers: How They Fit Together ..................................................................... 339
Managing Maintenance Work Areas: Explained ..................................................................................................... 340
Managing Maintenance Resources: Explained ...................................................................................................... 340
Managing Maintenance Resource Instances: Explained ........................................................................................ 341
Managing Maintenance Work Centers: Explained .................................................................................................. 341
Managing Maintenance Organization Relationships: Explained .............................................................................. 343
Setting Up Electronic Signatures and Electronic Records for Maintenance Exception Closure: Explained ............... 344
17 Implementing Supply Chain Collaboration 347

Supply Chain Collaboration Introduction ............................................................................................................... 347
Supply Planning Collaboration ............................................................................................................................... 347
Contract Manufacturing Collaboration ................................................................................................................... 352
B2B Messaging .................................................................................................................................................... 353
Supply Chain Collaboration Setup ......................................................................................................................... 354
Manage Supply Chain Collaboration Settings ........................................................................................................ 354
Manage Supply Chain Collaboration Messages ..................................................................................................... 358
Manage Supply Chain Collaboration Lookups ....................................................................................................... 359
18 Implementing E-Signatures and E-Records 361

Electronic Signatures and Electronic Records: Overview ....................................................................................... 361
E-Signatures and E-Records Process Flow: Explained .......................................................................................... 361
Electronic Signatures and Electronic Records Setup: Explained ............................................................................ 364
Configuring E-Signature Preferences: Procedure ................................................................................................... 365
Enabling Audit for E-Signatures and E-Records: Explained ................................................................................... 365
Task Configurations for Supply Chain Management: Overview .............................................................................. 366
Defining Approval Rules for Inventory Transactions: Procedure ............................................................................. 367
Approval Groups: Overview .................................................................................................................................. 367
Oracle SCM Cloud Preface
Management
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Oracle SCM Cloud Preface
Management
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ii
Oracle SCM Cloud Chapter 1
Implementing Manufacturing and Supply Chain Materials Implementing Back-to-Back Fulfillment
Management
1 Implementing Back-to-Back Fulfillment
Introduction
Back-to-Back Fulfillment: Overview
The back-to-back fulfillment process is one in which specific sales order demand triggers supply creation, and a link is
established between the sales order and the supply.
The following figure provides a high-level flow diagram showing the back-to-back supply creation and fulfillment process flow.
Process
Sales Order
Determine Supply
Sources
Receive and
Manage Supply
Consolidate Supply Ship to Customer
Order
in Warehouse
Back-to-back fulfillment is where supply is procured and then received at a warehouse only after an order is placed. The
supply is reserved against a sales order until shipping. This process provides support to create and link supply after a sales
order is entered and scheduled, allowing you to reduce your inventory while maintaining the ability to respond to customer
demands.
You create supply for a back-to-back order using one or more of the following back-to-back flows:
• Buy: Procurement from an external supplier.
• Make: Production in an internal manufacturing facility (includes in-house manufacturing and contract manufacturing).
• Transfer: Transfer from another warehouse.
• On hand: Reservation of on-hand supply in the fulfillment organization.
Note: For information about back-to-back flows for contract manufacturing, see the Implementing Contract
Manufacturing chapter in this guide.
After the supply is received into the fulfillment warehouse, the back-to-back order is ready for shipment to the customer.
1
Management
Back-to-Back Fulfillment: How It Works

The back-to-back process flow is one in which specific sales order demand triggers supply creation and a link is established
between the sales order and the supply. An organization procures goods from an internal or external supplier or source to
a specific warehouse from where you can combine those goods with others to create a single shipment to the customer.
Back-to-back supply processes are similar to regular supply processes that deliver supply to a warehouse except for one
difference; the back-to-back supply is always reserved to an order management fulfillment line.
At a high level, you can think of back-to-back fulfillment as a three-step process:
1. Creation of a customer sales order (source of demand).
2. Creation and fulfillment of supply document (source of supply) to the fulfillment warehouse.
3. Shipment of sales order from the fulfillment warehouse to the customer.
However, the back-to-back flow is truly a highly integrated process flow involving several Oracle Fusion applications. The
following figure shows the back-to-back process flow in detail. An explanation for each number follows the figure.
Order Capture and

Manage
Management
Sales Order
Order Schedule
Sales Order 7
Promising
Line
3 4 5
Create Request Monitor
Supply Request
Supply Supply Supply
Orchestration Reservation
Order Documents Document
Create and
Manufacturing/ Complete
6
Supply
Procurement/Inventory
Document
8 9
Reserve
Ship B2B
Supply Receive
Inventory/Logistics Sales
Against B2B Supply
Order
Demand
2
Management
Explanation of Callouts
1. The back-to-back flow begins with order capture. Typically, an order entry specialist enters a customer sales order for
an item that is designated for back-to-back fulfillment. After the sales order is entered and scheduled, Oracle Fusion Global
Order Promising is invoked.
2. Global Order Promising performs two key functions:
a. First, Global Order Promising promises orders for back-back items by choosing the best possible sources across the
supply chain, while considering sourcing rules, available-to-promise (ATP) rules, and other constraints.
b. Second, Global Order Promising releases supply recommendations (or the supply picture) to Oracle Fusion Supply Chain
Orchestration. These supply recommendations are based on how Global Order Promising pegs supply against the back-to-
back demand.
After the sales order fulfillment line is scheduled, Oracle Fusion Order Management releases the fulfillment line information (or
the demand picture) to Supply Chain Orchestration.
3. Supply Chain Orchestration processes the demand picture from Order Management and the supply picture from Global
Order Promising to create a supply order in Supply Chain Orchestration.
4. Supply Chain Orchestration also triggers the creation of supply documents in the supply execution application. Depending
on how sourcing rules are defined and how Global Order Promising sends its supply recommendations, the supply document
can be a purchase order in Oracle Fusion Procurement, a work order in the Oracle Manufacturing Cloud solution, or a transfer
order in Oracle Fusion Inventory Management.
Note: Back-to-back purchase order creation requires the initiation of a purchase requisition, which is then
converted (automatically or manually) to a purchase order.
5. Supply Chain Orchestration tracks the creation of the supply document and immediately initiates a reservation request to
tie the sales order demand with the supply document.
6. The reservation of supply to demand is made in Inventory Management and ensures that the incoming supply is not
allocated incorrectly or diverted to any other demand source.
Note: Global Order Promising respects the pegging between the supply document and the sales order during
subsequent reschedules for the order.
7. Supply Chain Orchestration tracks the status of the supply document and sends updates to order management.
8. After the supply is received into stock (purchase order receipt and put away, transfer order receipt and put away, or work
order completion), the reservation switches from the supply document to on hand that has been created by the supply
document receipt.
9. The sales order is now ready to be shipped to the customer. Order Management requests shipment to the customer and
then interfaces with receivables for billing. Supply Chain Orchestration tracks the process until the goods are shipped to the
customer.
Back-to-Back Supply Creation Flows: Explained

You can set up Oracle Fusion applications that support back-to-back fulfillment to trigger one of several supply creations
flows (buy, make, transfer, and on hand) after a sales order is entered and scheduled. Each variant of the back-to-back
flow differs in the supply document that is created and the supply execution application in which the document is created.
3
Management
Depending on the source of the item, supply is provided from manufacturing, procurement, or inventory. Then, after the
supply is received into the fulfillment warehouse, the back-to-back order is ready for shipment to your customer.
The following table describes the supply creation flows and associated supply document supported for each flow when using
back-to-back fulfillment.
Supply Creation Flow Supply Document Description
Purchase Order Procurement from an external supplier.

Buy
Work Order Production or assembly at an internal

Make manufacturing location.

Transfer Order Transfer from another warehouse.

Transfer
Request Reservation Only Reservation of on-hand supply (in cases

On-hand Available where on hand available in the fulfillment
warehouse).

Back-to-Back Supply Creation Buy Flow

The supply document for a back-to-back buy flow is a purchase order. Based on supply recommendations from Oracle
Fusion Global Order Promising, a purchase order is created and reserved against the sales order. When the purchase order is
received by the supplier, on hand is created to ship out the back-to-back sales order.
4
Management
The following figure shows the back-to-back supply creation buy flow.
Initiate
Order B2B Sales
Management Order
Schedule
Order Sales
Promising Order Line
Create Request
Supply Request
Supply Purchase
Order Order (PO)
Create
Procurement Purchase
Order (PO)
Reserve
Ship B2B
Supply Receive
Inventory/Logistics Sales
Against B2B PO
Order
Demand
Back-to-Back Supply Creation Make Flow

The supply document for a back-to-back make flow is a work order. As soon as the work order is created in Oracle Fusion
Manufacturing, it is tied to the back-to-back sales order in the form of a reservation in inventory. The work order goes through
the regular production process and the work order completion transaction issues finished goods to inventory.
5
Management
The following figure shows the back-to-back supply creation make flow.
Enter
Order B2B Sales
Management Order
Schedule
Order Sales
Create Request
Supply Request
Supply Work
Order Order (WO)
Create Complete
Manufacturing Work WO to
Order (WO) Inventory
Reserve
Ship
Supply
Inventory/Logistics B2B
Against B2B
Sales Order
Demand
Back-to-Back Supply Creation Transfer Flow

The supply document for a back-to-back transfer flow is a transfer order. The transfer order is created in inventory and
reserved against the back-to-back sales order. When the transfer order is ready to be fulfilled, an interorganization shipment
moves goods from the source organization to the destination organization. An interorganization receipt in the destination
organization (which is also the fulfillment warehouse on the back-to-back sales order) creates on hand to fulfill the sales order.
6
Management
The following figure shows the back-to-back supply creation transfer flow.
Enter
Order B2B Sales
Management Order
Schedule
Order Sales
Create Request
Supply Request
Supply Transfer
Order Order (TO)
Ship TO Receive Ship

Create
from TO in B2B
Transfer
Source Destination Sales
Order (TO)
Inventory/Logistics Warehouse Warehouse Order
Reserve
Supply
Against B2B
Demand
Back-to-Back Supply Creation On-Hand Flow

The back-to-back on-hand available (ATP) flow is the simplest in terms of the number of steps that constitute the flow. This
flow occurs where on hand supply is available in the fulfillment warehouse for the ordered back-to-back item at the time of
order promising. Because on-hand goods already exist in the form of on hand, Oracle Fusion Supply Chain Orchestration
directly sends a request to reserve the on hand quantity against the back-to-back sales order. You can ship the sales order
immediately after the reservation is created.
7
Management
The following figure shows the back-to-back supply creation on-hand flow.
Initiate
Order B2B Sales
Management Order
Schedule
Order Sales Order
Promising Line
Supply Create Request

Orchestration Supply Order Reservation
Reserve
Inventory/Logistics Ship B2B
Supply Against
Sales Order
B2B Demand
Oracle Fusion Applications That Support Back-to-Back Fulfillment:

Explained
There are several Oracle Fusion applications that support back-to-back fulfillment, however, some additional setup is
required.
The following table lists those applications, a brief description of their importance in back-to-back fulfillment, and when you
must perform additional setup for the applications. The supply flow columns indicate which applications support which flows,
and the comments describe at a high-level the product-specific back-to-back setup that is required for the flows to work. For
setup instructions, see Setting Up Back-to-Back Fulfillment: Roadmap.
Oracle Fusion Make Supply Buy Supply Flow Transfer Supply On-Hand Supply Comments For More
Application Flow Flow Flow Information
Oracle Fusion Yes Yes Yes Yes You must Enabling Items
Product Model identify items for for Back-to-
back-to-back Back Fulfillment:
orders. This is Procedure
a mandatory
first step in
implementing
back-to-back
fulfillment.
Depending on
your supply
8
Management
demand
needs, setup
of additional
applications
might also be
necessary.

Oracle Fusion Yes Yes Yes Yes You must create Configuring
Global Order available-to- Global Order
Promising promise (ATP) Promising
rules so that to Support
Global Order Back-to-Back
Promising can Fulfillment:
send scheduling Explained
information
(when product
can ship and
where from)
to Oracle
Fusion Order
Management.
In addition, you
must also set up
sourcing rules
so that Global
Order Promising
can send
Oracle Fusion
Supply Chain
Orchestration
buy, make,
transfer and
on hand
recommendations
for where to
obtain supply to
fulfill the sales
order.

Oracle Fusion Yes Yes Yes Yes Supply Chain Configuring

Supply Chain Orchestration Supply Chain
Orchestration provides Orchestration
predefined to Support
back-to-back Back-to-Back
processes for all Fulfillment:
supply creation Explained
flows (buy,
make, transfer,
and on hand).

Oracle Yes No No No For each item Configuring

Manufacturing that will be Manufacturing
Cloud solution fulfilled through to Support
back-to-back Back-to-Back
make flow, you Fulfillment:
must set up a Explained
work definition
to describe the
manufacturing
process to build
9
Management
that item. This
definition also
allows automatic
creation of the
work order.

Oracle No Yes No No Enabling

Procurement By default, Procurement
Cloud Procurement is to Support
not configured Back-to-Back
for back-to- Fulfillment:
back fulfillment. Explained
However, you
can set up Automating
Procurement to Purchase Order
support back-to- Creation for
back fulfillment Back-to-Back
to: Items: Explained

• Execute Oracle
buy order Procurement
recommendations
Cloud
through Implementing
purchases Procurement
orders guide
• Automate
purchase
order
creation
for back-
to-back
order
items and
submit for
approval
Also, if you want

to automate
purchase order
creation, you
must create
blanket purchase
agreements
for your back-
to-back order
items.
Oracle Yes Yes Yes Yes There is no Supply Chain

Fusion Order setup required Management
Management beyond the Cloud,
normal order- Implementing
to-cash (OTC) Order
setups. Order Management
Management guide
has predefined
processes for
back-to-back
fulfillment that
are automatically
assigned.

10
Management
Oracle Fusion Yes Yes Yes Yes There is no Inventory

Inventory setup required Management
Management for Inventory documentation
Management
specific to
back-to-back.
However, this
application plays
an important
role in back-to-
back fulfillment.
Inventory
Management
creates transfer
orders for
internal transfers
and reserves
supply against
demand for all
supply creation
flows.

Implementing Back-to-Back Fulfillment

Implementing Back-to-Back Fulfillment: Points to Consider
Back-to-back fulfillment offers organizations a wide range of business benefits. It is best suited for items that organizations
choose not to stock for multiple reasons.
The following table provides points to consider before implementing back-to-back fulfillment.
Consideration Comments
Cost-effective fulfillment for high-cost, Back-to-back fulfillment is best suited for items that your organizations choose not to stock. A
non-stocked, slow-moving products request for supply is created only after a sales order is scheduled for items you have designated for
back-to-back fulfillment. This fulfillment process flow also offers your organizations the flexibility to
extend their product offerings even if they do not directly stock goods.

Prevents loss or misallocation of supply The essence of the back-to-back process flow is the firm link that exists between the demand
document (sales order) and the supply document (purchase order, transfer order, or work order).
This link between sales order and supply document is crucial in preventing misallocation or diversion
of supply for other demands.

Provides organizations with more Fulfillment decisions are controlled centrally for back-to-back flows. This allows your organizations to
centralized control over the fulfillment designate items to be back-to-back enabled and apply sourcing rules to determine supply creation
process options.

Provides 360 degree visibility of the Back-to-back fulfillment allows for visibility to demand, supply, and exceptions in the fulfillment flow.
supply creation and fulfillment process This high-level visibility provides your order fulfillment and supply chain operations managers with

11
Management
Consideration Comments
up-to-date information and enhances their responsiveness to exceptions. Reducing incidence of
fulfillment delays is a key factor in back-to-back fulfillment.

Setting Up Back-to-Back Fulfillment: Roadmap

This topic describes what actions you must take to set up (or configure) Oracle Fusion applications to support back-to-back
fulfillment. You can set up back-to-back processing to coexist with business processes for standard and drop ship fulfillment
flows. These predefined end-to-end flows are highly integrated across the Oracle Fusion applications.
The most important aspect of implementing back-to-back fulfillment is identifying items as back-to-back enabled in Oracle
Fusion Product Model. For those items, a supply request is created only after scheduling of a sales order. This execution
establishes a firm link between the demand document (sales order) and the supply document (purchase order, transfer order,
or work order).
Use the steps in the following table to implement back-to-back fulfillment. The first step is mandatory. You might need
additional setup or configuration depending on your business requirements. Perform the remaining steps as they pertain to
your specific needs.
Action Offering or Application Comments For More Information
1. Enable items for back-to-back Oracle Fusion Product Model This is a mandatory step. Enabling Items for Back-to-Back:
fulfillment. Procedure

2. If you have a business Oracle Fusion Global Order You must set up Global Order Configuring Global Order
requirement to build product for Promising Promising to support all back- Promising to Support Back-to-
back-to-back orders, you must to-back supply creation flows. Back Fulfillment: Explained
configure Oracle Fusion Global Configuring Global Order
Order Promising to support Promising to support back-
make supply creation flows. to-back fulfillment is similar to
configuration for standard order
promising. However, for make
recommendations, you must set
up sourcing rules so that your
manufacturing facilities are set to
local rules.

3. If you have items designated Oracle Manufacturing Cloud Configuring Manufacturing

for back-to-back make flows, solution Manufacturing requires no to Support Back-to-Back
you must create work definitions setup specific to back-to-back Fulfillment: Explained
for those items in the Oracle manufacturing of a standard item
Manufacturing Cloud solution. or configured item. However, Implementing Manufacturing
Work definitions provide the if you have items that are chapter in this guide
operation, resource, and designated as make flows, the
component requirement details standard item or assemble-to-
required for the creation of work order (ATO) model item must
orders. have at least one work definition
defined using a work definition
name that has the Used in
Planning check box enabled.
4. (Optional) Configure Oracle Fusion Supply Chain By default, Supply Chain Configuring Supply Chain
Oracle Fusion Supply Chain Orchestration Orchestration creates an internal Orchestration for Back-to-Back
Orchestration to define whether transfer order in response to Fulfillment: Explained
an internal material transfer a transfer recommendation
12
Management
request that originates from a from Global Order Promising.
back-to-back sales order is to be Optionally, you can define supply
fulfilled by a transfer order or a execution document creation
purchase order. rules to execute the transfer
recommendation through
creation of a purchase order
instead. For example, you
might have financial reasons
for executing internal material
transfers by way of a purchase
order.

5. Set up Procurement to Oracle Fusion Procurement This is a mandatory step to Enabling Procurement to
support back-to-back fulfillment support back-to-back buy Support Back-to-Back
by enabling the Customer Sales recommendations as well as Fulfillment: Procedure
Order Fulfillment feature in the when you have set up internal
Procurement offering. transfer recommendations to
be executed through purchase
orders.

6. (Optional) If you want to Oracle Fusion Procurement NA Automating Purchase Order

automate purchase order Creation for Back-to-Back Items:
creation for back-to-back Procedure
orders, you must create blanket
purchase agreements for each
item you have designated for
back-to-back fulfillment.

7. For Oracle Fusion Order Oracle Fusion Order Order Management comes Supply Chain Management
Management, no additional Management predefined with the following Cloud, Implementing Order
setup or configuration specific orchestration process: Management guide
to back-to-back fulfillment is
necessary. DOO_
OrderFulfillmentGenericProcess

This process is assigned to
sales orders for back-to-back
items. It is recommended that
you familiarize yourself with this
process.

For more information on Order
Management and back-to-back
fulfillment, see the How Order
Management Orchestration
Works in the following Back-to-
Back Fulfillment section.

8. If you plan to outsource Oracle Manufacturing Cloud This highly integrated flow is Configuring Manufacturing
your manufacturing process solution referred to as a back-to-back to Support Back-to-Back
for back-to-back fulfillment, contract manufacturing flow. Fulfillment: Explained
follow instructions for contract
manufacturing. The contract Implementing Contract
manufacturing solution supports Manufacturing chapter in this
complete outsourcing of the guide
manufacturing process to fulfill a
customer sales order.

13
Management
9. If your business requirements Oracle Fusion Configurator NA Oracle SCM Cloud Configurator
include configurable product, Modeling guide
familiarize yourself with
configurator modeling.

How Order Management Orchestration Works in Back-to-Back Fulfillment

This section provides supporting documentation for a step in the Setting Up Back-to-Back Fulfillment roadmap. Order
Management orchestrates three different types (branches) of shipment fulfillment flows (standard, back-to-back, and drop
ship). The back-to-back branch in Order Management is selected after the sales order line is scheduled for shipment from
a warehouse. If the scheduled warehouse has the indicator Enable Back-to-Back Fulfillment set to Yes for the ordered item
(enabled in Product Model), Order Management automatically routes the order line to the back-to-back process branch. For
more information on setting this attribute, see Enabling Items for Back-to-Back Fulfillment: Procedure.
In the back-to-back process branch, Order Management sends the item to Supply Chain Orchestration. Then, Order
Management sends the item, quantity, and ship-from warehouse information to Supply Chain Orchestration so that Supply
Chain Orchestration can make sure there is ample supply available in that warehouse by the scheduled ship date. Order
Management, in turn, receives supply status updates from Supply Chain Orchestration (appears in the Supply Details tab).
For more information about Order Management orchestration and the shipment fulfillment flows, see Supply Chain
Management Cloud, Implementing Order Management guide.
Enabling Items for Back-to-Back Fulfillment: Procedure

The most critical setup that drives the back-to-back process is the Back-to-Back Enabled indicator on the item. During
item creation, organizations must determine if a customer-ordered item in a warehouse or organization is to be fulfilled by the
back-to-back process. The Back-to-Back Enabled indicator is defined for specific items in an organization. By default, the
back-to-back setting is disabled.
The back-to-back setting is used for driving many back-to-back process steps and application logic. For example, Oracle
Fusion Order Management and Oracle Fusion Supply Chain Orchestration use this option to assign the back-to-back
orchestration processes. Oracle Fusion Global Order Promising uses this option to determine when a supply request is to be
sent to Supply Chain Orchestration, and so on.
To enable an item for back-to-back fulfillment, do the following:
1. From the Tasks list in the Product Information Management work area, select Manage Items, and then search for the item
for which you want to enable for back-to-back fulfillment.
3. Select the Specifications tab, and then from Item Organization, select Sales and Order Management.
4. Change the Back-to-Back Enabled check box to Yes. The item is now enabled for back-to-back orders.
Depending on your business requirements, you might also need to set up or configure other Oracle Fusion applications for
back-to-back fulfillment. For more information, see Setting Up Back-to-Back Fulfillment: Roadmap.
14
Management
Configuring Global Order Promising to Support Back-to-Back

Fulfillment: Explained
This topic provides supporting documentation for a step in the Setting Up Back-to-Back Fulfillment roadmap. If you have a
requirement to build products to meet your supply demand for back-to-back orders, you must configure Oracle Fusion Global
Order Promising.
The Global Order Promising Rules tasks that you configure in the Order Promising work area in the Manufacturing and Supply
Chain Materials Management offering are:
• Manage ATP Rules

• Manage Sourcing Rules
• Manage Assignment Sets
Configuring Global Order Promising to support back-to-back fulfillment is similar to configuration for standard order
promising. However, there are additional needs specific to back-to-back order promising. The following table provides the
configuration settings you must apply.
Task Name Settings Comments
Manage ATP Rules NA

Select Supply chain availability search for
the Promising Mode
Manage ATP Rules This is mandatory for back-to-back make

Enable Search Components and recommendations.
Resources
Manage ATP Rules NA

Select the Supply Types you want
supported
Manage ATP Rules If the flow is required to support long-lead

Set the Infinite Availability Time Fence items, set this attribute. Otherwise, make this
Definition to a large value value consistent with the planning time fence
for the enterprise.

Note: If Global Order Promising

doesn't find sufficient supply until
the Infinite Time Fence, it assumes
there is an infinite supply for the
manufactured item. Therefore, Global
Order Promising doesn't generate any
recommendations.

Manage Sourcing Rules Depending on the general setup, ranking of

Choose Local for the Organization sources, and the ability to provide supply
Assignment Type in the required lead time, Global Order
Promising recommends make, transfer, or on
hand supply recommendations.

Manage Sourcing Rules NA

(Optional) Enter the Start Date and End
Date for Sourcing Rule Effective Dates
15
Management
Task Name Settings Comments
Manage Sourcing Rules NA

Define supply sources in the Sources table
Manage Assignment Sets Global Order Promising supports assignment

Provide the following attributes: at multiple hierarchical levels.

• Assignment Level
• Item
• Define the sourcing rule within the
assignment set (in the Sourcing Rule
or Bill of Distribution column)
Tip: For a manufactured item, you must associate the item with a "Make At" sourcing rule specified for the
organization for which the item will be manufactured.
Global Order Promising looks through sourcing to determine what type of supply recommendation to generate at the
fulfillment organization. The following table shows the supply generation recommendations for various scenarios.
Scenario Supply Recommendation
Available-to-promise (ATP) supply Generate ATP (on-hand) recommendation

available at fulfillment organization

Supply available at upstream Generate transfer recommendation

organization defined in the local
sourcing rule

Supply available through components Generate make recommendation

and resources at fulfillment organization

Supply available at supplier defined Generate buy recommendation

in local sourcing rule at fulfillment
organization

For more information about working with these tasks, see ATP Rules, Allocation Rules, and Sourcing Rules: How They Work
Together in the Oracle SCM Cloud Using Global Order Promising guide.
Configuring Manufacturing to Support Back-to-Back Fulfillment:

Explained
This topic provides supporting documentation for a step in the Setting Up Back-to-Back Fulfillment roadmap. Depending on
your business needs, you might need to configure Oracle Fusion Manufacturing for back-to-back fulfillment.
Oracle Fusion Manufacturing does not require setup that is specific to back-to-back manufacturing of standard or configured
items. However, for Oracle Fusion Global Order Promising to recommend a back-to-back make supply source, work
definitions must be defined in Manufacturing and collected by Oracle Fusion Planning. Therefore, for any item that is
designated as a candidate for a back-to-back make flow, you must create work definitions and setup operations that
16
Management
constitute the work definition. The work definition also provides automatic creation of the work order. You configure these
settings using the Work Definition task list in the Manufacturing application.
Make sure to select the Used in Planning check box in the Work Definitions Names task when creating new work definitions
names for back-to-back items. This enables Oracle Fusion Planning Central to plan back-to-back item components and
resources.
Note: You only need to create new work definition names if no applicable names have been defined. For
information about creating new work definitions, see the Implementing Manufacturing chapter in this guide.
Configuring Supply Chain Orchestration to Support Back-to-Back

Fulfillment: Explained
This topic provides supporting documentation for a step in the Setting Up Back-to-Back Fulfillment roadmap. Depending on
your business needs, you might need to configure Oracle Fusion Supply Chain Orchestration for back-to-back fulfillment.
Supply Chain Orchestration processes for back-to-back fulfillment are predefined and are automatically assigned to orders
for items that are back-to-back enabled. For demand-specific supply requests, such as back-to-back, Supply Chain
Orchestration creates supply request documents by combining the demand details from order management with the supply
recommendation from Oracle Fusion Global Order Promising.
Note: A back-to-back process is assigned to orders for the items for which the Back-to-Back Enabled option is
set to Yes. The supply creation flow (make, buy, transfer, on hand) is recommended by Global Order Promising
during scheduling.
Optionally, you can define supply execution document creation rules in the Supply Chain Orchestration application to alter the
behavior of supply demand. These rules determine whether an internal transfer request that originates from a back-to-back
sales order is to be fulfilled by way of a transfer order or a purchase order. The default behavior for an internal transfer (from
one warehouse to another) is a transfer order. However, there are instances (for example, financial reasons) where executing
an internal transfer by way of a purchase order is necessary. For more information about supply execution document creation
rules and how to create them, see the Implementing Supply Chain Orchestration chapter in this guide.
Enabling Procurement to Support Back-to-Back Fulfillment: Explained

This topic provides supporting documentation for a step in the Setting Up Back-to-Back Fulfillment roadmap. You must
enable the customer sales order fulfillment feature in the Oracle Procurement Cloud offering for the back-to-back fulfillment
flow to work within Procurement.
Note: Make sure you have created your suppliers and supplier sites in the Procurement application. For more
information about suppliers and supplier sites, see Oracle Procurement Cloud Using Procurement guide.
By default, Procurement isn't configured for back-to-back fulfillment. Use the following procedure to enable this feature.
1. In the Navigator, click Setup and Maintenance.
2. On the Setup and Maintenance page, click the Procurement offering, and then click the Actions drop-down list and
select Change Configuration.
17
Management
3. On the Configure: Procurement page, click the Features icon.
4. On the Features page, select the Customer Sales Order Fulfillment check box.
5. Click Done.
For more information about configuring the Procurement offering, see the Oracle Procurement Cloud Implementing
Procurement guide.
Optionally, you can automate purchase order creation for your back-to-back orders. For more information, see the Oracle
Procurement Cloud Implementing Procurement guide.
Automating Purchase Order Creation for Back-to-Back Items:

Explained
This topic provides supporting documentation for an optional step in the Setting Up Back-to-Back Fulfillment roadmap.
Automating creation of purchase orders for back-to-back items can save you time and effort, especially when there is a high
volume of transactions. You enable automation controls for purchase order creation in the set up for the governing blanket
purchase agreements.
There are three prerequisite requirements before you can automate purchase order creation for your back-to-back order
items.
• You must have enabled back-to-back fulfillment for Oracle Fusion Procurement. For details, see Enabling
Procurement to Support Back-to-Back Fulfillment: Procedure.
• Suppliers and supplier sites must have been created. Each supplier site must be set up with a Procurement
business unit that is a service provider for the requisitioning business unit that is ordering the item. The supplier's site
assignment page must list the requisitioning business units for the site. For more information on creating suppliers
and supplier sites and creating Procurement business units, see the Oracle Procurement Cloud Implementing
Procurement guide. For more information on managing suppliers and supplier sites, see the Implementing Drop Ship
section in the Supply Chain Management Cloud, Implementing Order Management guide.
After the prerequisite requirements are met, you can create blanket purchase agreements to automate purchase order
creation for back-to-back order items. When creating the blanket purchase agreements, make sure to set the following
automation control options:
• Automatically generate orders. This option enables automated conversion of purchase requisitions to purchase
orders.
• Automatically submit for approval. This option enables automated submission of purchase orders for approval.
For more information on creating blanket purchase agreements, see the Oracle Procurement Cloud Using Procurement
guide.
Back-to-Back Fulfillment Cross-Product Features
18
Management
Cross-Product Features Compatible with Back-to-Back Fulfillment:

Explained
Back-to-back fulfillment provides a variety of cross-product features within the Oracle Fusion application offerings. These
features are available by default.
You can set up back-to-back processing to coexist with business processes for drop-ship and standard fulfillment flows. The
fulfillment method you use for an ordered item is chosen at runtime, based on the available data. These predefined end-to-
end flows are highly integrated across the Oracle Fusion applications.
Feature Description Oracle Fusion Applications Supported
Promising Back-to-Back Orders Allows you to promise orders based on Oracle Fusion Order Management, Oracle
sourcing rules and lead time to make, buy, or Fusion Global Order Promising
transfer the item. Also, you can initiate back-
to-back fulfillment based on item-organization
combination.

Automate Supply Orders Automatic creation of a work order, transfer Order Management, Oracle Fusion Supply
order, or purchase order that is then Chain Orchestration, Oracle Fusion
reserved to the sales order line. This feature Procurement, Oracle Fusion Manufacturing,
provides visibility to the sales order and Oracle Fusion Inventory Management
customer information on the reserved supply.
Additionally, the supply chain manager
has visibility to the sales order to which the
supply order is reserved.

Automatically Reserve Inventory Ability to automatically reserve inventory to Supply Chain Orchestration, Inventory
the sales order when it is put into inventory, Management, Oracle Fusion Logistics
ensuring it can't be used to fulfill another
customer order.

Manage Change in Real-Time Makes adjustments based on supply and Order Management, Supply Chain
demand changes, and gives your supply Orchestration, Procurement, Manufacturing,
chain manager the ability to re-source the Inventory Management
supply if necessary.

Provide Fulfillment Visibility Gives the order manager visibility to work Order Management, Supply Chain
order, transfer order, or purchase order Orchestration, Procurement, Manufacturing.
status and automatically notifies the order Inventory Management, Oracle Fusion
manager when there are issues (such as Receiving
when the supply does not meet customer
request).

19
Management
20
Implementing Manufacturing and Supply Chain Materials Implementing Internal Material Transfers
Management
2 Implementing Internal Material Transfers
Internal Material Transfer: Overview

An internal material transfer is an automated or manual transfer request of materials within or between organizations. Transfer
orders transfer inventory for interorganization, intraorganization, and intercompany flows. Transfer orders represent demand
and supply in a single document. You can transfer material to an inventory destination or an expense destination. The transfer
order serves as the orchestration document representing demand and supply for an internal material transfer. Transfer orders
are routed directly through Oracle Fusion Shipping, or through Oracle Fusion Order Management.
The following diagram provides an overview of internal material transfers.
Back-to-Back Planning
Create Document Price and Tax
Service (SCO) (SFO)
Spreadsheet Min-Max
Upload Planning
Self-Service
Supply Order
Procurement
Web Service Requisition Lines
TO/PO
Mange Item
Quantity - Create
Supply Request
Inventory
Purchase Order Transfer
Order
Order
Management
Shipping
Costing &
Receiving
Accounting
Here's an overview explaining how internal material transfers work:
• Transfer source
Transfer requests can come from multiple sources such as back-to-back, planning, inventory min-max planning,
self-service requisition lines, the Create Supply Request page, Supply Order web service, and spreadsheet uploads.
21
Management
• Determine transfer order or purchase order
Oracle Fusion Supply Chain Orchestration provides visibility to supply and demand, in addition to providing rules to
determine if a transfer order or purchase order is created
• Transfer price and tax calculation
Oracle Fusion Supply Chain Financial Orchestration calculates the transfer price and integrates with tax for tax
calculation.
For requisition lines, Self Service Procurement calls Supply Chain Financial Orchestration directly when creating
transfer orders to get the price to use for approvals and budgetary control purposes.
• Create new transfer order document and fulfill transfer orders
Create your transfer order documents in Oracle Fusion Inventory Management.

• Perform pick, ship, receive, put away, and return processes
You can process transfer orders using the standard pick, pack, ship, deliver, and return processes through Oracle
Shipping, Receiving, and Inventory Management.
• Perform automatic costing and accounting
Oracle Fusion Cost management orchestrates the costing and accounting of internal material transfers automatically.
Note: Optionally, you can fulfill transfer orders using Oracle Fusion Order Management. Order Management
users have visibility to internal and external orders.
Internal Material Transfer Setup Tasks: Explained

An internal material transfer is an automated or manual transfer request of materials within or between organizations.
You can perform your internal material transfer setup in the Setup and Maintenance work area.
The following table describes all of the setup tasks and whether each task is required or optional for the implementation of
internal material transfers.
Set Up Task Offering Required or Optional Description
Manage Supply Chain Financial Supply Chain Financial Required Manage financial orchestration
Orchestration Transfer Pricing Orchestration transfer pricing rules and set
Rules options to determine how the
transfer price is calculated.

Manage Supply Chain Financial Supply Chain Financial Required Create and maintain the financial
Orchestration Flows Orchestration trade agreement to orchestrate
the financial transactions
between trade routes.

Manage Item Cost Profiles Supply Chain Managerial Required Assign cost profiles to items at
Accounting the cost organization and cost
book level.

22
Management
Manage Cost Elements Rules Supply Chain Managerial Required Define the Profit in Inventory cost
Accounting element to track internal profit
earned through internal transfer
flows.

Manage Default Cost Profiles Supply Chain Managerial Required Create and edit cost profiles that
Accounting can be automatically assigned
to items at the cost organization,
cost book, or item category
level.

Manage Supply Order Defaulting Manufacturing Supply Chain Required Create, review, update, and
and Enrichment Rules Materials Management Offering delete rules that default and
enrich supply order attributes.

This is required only if you
plan to fulfill transfer orders
using Oracle Fusion Order
Management.

Manage Supply Execution Manufacturing Supply Chain Required Create, review, update, and
Documentation Creation Rules Materials Management Offering edit rules that determine if an
internal material transfer should
be executed using a transfer
order or a purchase order.

Manage Intersubinventory Manufacturing Supply Chain Required Configure intersubinventory

Parameters Materials Management Offering parameters to perform internal
material transfers between two
subinventories within a single
organization.

This is required only if you are
performing intraorganization
transfers.

Manage Interorganization Manufacturing Supply Chain Required Enable the Transfer Order
Parameters Materials Management Offering Required option to execute
a transfer order between
the source and destination
organization.

Manage Receiving Profile Manufacturing Supply Chain Optional Set receiving profile options to
Options Materials Management Offering use the receipt confirmation
feature.

Manage Consumption Rules Manufacturing Supply Chain Optional Create, review, and update
Materials Management Offering consumption rules for
interorganization transfers
between inventory organizations.

Manage Shipping Lookups Manufacturing and Supply Chain Optional Set up freight cost types before
Materials Management Offering setting up the shipping cost
types used to identify the
additional transfer order charges
23
Management
that can be associated with a
transfer order line.

Manage Shipping Cost Types Manufacturing and Supply Chain Optional Set up shipping cost types to
Materials Management Offering identify the type of charge that
applied to a transfer order line.

Manage ATP Rules Supply Chain Planning Offering Optional

Set up ATP rules to define order
promising behavior. Specify:
• Promising mode to
determine how supply
availability is considered
• Supply and demand
source types to be
considered during
promising
• Usage of advanced
promising features, such
as capable to promise
and profitable to promise
Self Service Procurement Procurement Offering Optional Enable the internal material
Feature transfer feature to create internal
material transfer requisition lines.

Related Topics
• Financial Orchestration Flow: How it Works
• Cost Profiles, Default Cost Profiles, and Item Cost Profiles: Explained
• Consumption Rules: Explained
• Intersubinventory Parameters: Explained
Internal Material Transfer Process Flow: Explained

The life cycle of an internal material transfer spans several tasks and products from initiation of the transfer source through the
costing and accounting of the transfer. The internal material request and fulfillment process ranges from simple processes to
extremely complex processes, spanning multiple legal entities, across geographies, and involving multiple shipment points.
24
Management
The following figure shows the life cycle of internal material transfer and the products responsible for each task.
Transfer Sources
------------------------------------------------------------------------------------------------------------------------------------
Generate Internal
Transfer
Supply Chain Orchestration
Recommendations
------------------------------------------------------------------------------------------------------------------------------------
Supply Chain Orchestration

Enrichment Rules Price and Tax
Supply Chain Financial
Orchestration
------------------------------------------------------------------------------------------------------------------------------------
Inventory Management, Manage Transfer Fulfill Transfer

Order Management Orders Orders
------------------------------------------------------------------------------------------------------------------------------------
Shipping, Receiving, Receive and Put

Pick, Pack, and Ship
Inventory Management Away
------------------------------------------------------------------------------------------------------------------------------------
Costing, Supply Chain Financial Cost

Financial Orchestration Orchestration Accounting
Transfer Sources
You initiate internal material transfers from transfer sources.
The following table shows the transfer sources from which you can create internal material transfers.
Transfer Source Description
Min-max planning Automatically create internal material transfers from min-max planning.

25
Management
Transfer Source Description
Back-to-back Automatically create internal material transfers from back-to-back transfers.

Planning Automatically create, reschedule, and cancel internal material transfers from planning.

Supply Order web service Manually create, update, and cancel internal material transfers through a supply request web
service.

Template upload Manually create, update, and cancel internal material transfers through a supply request file-based
data import spreadsheet template.

Requisitions lines Manually create internal material transfers from requisition lines in Self Service Procurement.

Create Supply Request page Manually create internal material transfers on the Create Supply Request page which you can
access from the Manage Item Quantities page. This allows entry of ad-hoc internal material transfers
directly from Inventory.

Note: You cannot create an intraorganization inventory destination transfer from requisition lines.
Generate Internal Material Transfer Recommendations (Supply Chain

Orchestration)
The process starts with creating a transfer source. Multiple automatic and manual transfer sources are supported including
min-max planning, back-to-back, spreadsheet upload, Supply Order web service, planning, self-service procurement
requisition lines, and the Create Supply Request page from the Manage Item Quantity page.
Sourcing tools enable you to manually create internal material transfer requisition lines in Self Service Procurement and create
supply requests from the Manage Item Quantity page. These sourcing tools provide a default source organization and allow
access to source organization rankings and available to promise quantities. Oracle Fusion Supply Chain Orchestration works
with Oracle Fusion Global Order Promising and Oracle Fusion Inventory Management to identify the source organization
rankings based on pre-established rules.
Enrichment Rules (Oracle Fusion Supply Chain Orchestration)

During the supply creation process, Oracle Fusion Supply Chain Orchestration evaluates the Supply Execution
Documentation Creation Rules to determine if an internal material transfer should be executed using a transfer order or a
purchase order.
Manage and Fulfill Transfer Orders (Oracle Fusion Inventory Management)

A transfer order is created automatically from the various transfer sources. The transfer order represents demand and
supply in a single document. Both interorganization and intraorganization transfers are supported by Oracle Fusion Inventory
Management.
26
Management
Pick, Pack, Ship, Receive, and Put Away (Oracle Fusion Shipping, Receiving,
and Inventory Management)
You can perform processes such as pick, ship, receive, put away, and return against a transfer order document. Warehouse
managers have full visibility to shipments and receipts associated with a transfer order. You can update attributes on a
transfer order such as source organization, requested delivery date, and requested quantity.
You can also use self-service receiving for the receiving of requisition sourced transfer orders.
Financial Orchestration (Oracle Fusion Supply Chain Financial Orchestration)

Oracle Fusion Supply Chain Financial Orchestration (SFO) allows the supply chain controller to model financial flows between
business units involving different pricing and accounting requirements. The Supply Chain Financial Orchestration framework
provides an estimate of the transfer price for creation of transfer orders to transfer goods between internal organizations.
Once the transfer price is calculated, Supply Chain Financial Orchestration calls the tax application to determine the tax
applicable on the transfer price.
For internal material transfer requisition lines, Self Service Procurement calls Supply Chain Financial Orchestration directly
when creating transfer orders to get the estimated price to use for approvals and budgetary control purposes.
Cost Accounting (Oracle Fusion Cost Management)

Oracle Fusion Cost Management has an infrastructure in place to trigger costing and accounting of internal transfers
automatically. Internal material transfer transactions such as Transfer Order Shipment and Transfer Order Receipt are
interfaced to Cost Management. Trade events are interfaced from Supply Chain Financial Orchestration to Cost Management.
Cost Management also provides the ability to analyze the gross margin earned for internal sales transactions separately.
Note: Once the product is shipped and delivered, Cost Management obtains the transfer price at that point in
time and uses it for costing, budgetary control, and encumbrance accounting purposes.
Note: You can optionally fulfill internal material transfers through Oracle Fusion Order Management. Order
Management enables the orchestration of transfer orders across fulfillment systems. Order Managers can
centrally monitor the fulfillment of transfer orders and sales orders, and prioritize shipments across these orders.
Internal Material Transfer Document and Enrichment Rules:

Points to Consider
Oracle Fusion Supply Chain Orchestration provides two setup user interfaces to enable the supply chain orchestration
process:
• Manage Execution Document Creation Rules

• Manage Supply Order Enrichment Rules
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Manage Execution Document Creation Rules

Use the supply execution document creation rules to determine if an internal material transfer should be executed using a
transfer order or a purchase order for an organization.
During the supply creation process, if based on the supply execution document creation rules, it is determined that the supply
document should be a purchase order, the following updates are made:
• Supply type on the internal material transfer request is updated to Buy.
• Supplier and supplier site associated to the source organization is used to create supply documents.
Note: You cannot set up documentation rules to create purchase orders for internal material transfers sourced
from requisition lines. You make the decision on whether or not to create an internal material transfer or
purchase order requisition line at the point of entry of the requisition line in Oracle Self Service Procurement.
Manage Supply Order Enrichment Rules

Use the supply order defaulting and enrichment rules to route shipments of items on an internal material transfer request
through Oracle Fusion Order Management. This allows the order manager to view transfer orders, as well as regular customer
sales orders, on the Order Workbench, and prioritize shipments from the Order Workbench when needed.
You can set up a business rule for your organization that runs at the time of supply creation and sets the value of the order
management shipment option. During transfer order creation, the process evaluates the order management shipment option
to determine if the transfer order line should be directly interfaced to Oracle Fusion Shipping, or if it should pass through
Oracle Fusion Order Management (and from Order Management to Shipping).
Note: Internal material transfer requests that originate from back-to-back sales order demands cannot be
routed through Oracle Fusion Order Management. Also, return transfer orders and intraorganization transfer
orders cannot be routed through Order Management. In addition, expense destination transfers that originate
from a requisition cannot be routed through Order Management.
Related Topics
• Creating a Supply Execution Document Creation Rule: Procedure
• Supply Order Orchestration Defaulting and Enrichment Rules: Explained
Internal Material Transfer Price: How It Is Calculated

You can estimate the transfer price when creating a transfer order to transfer goods between internal organizations.
Settings That Affect The Transfer Price

The transfer price is based on the answers to the following questions:
• Is the transfer order crossing business?
• What are the transfer pricing options?
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• Do the shipping and receiving inventory organizations for the internal material transfer belong to a single business
unit?
How The Transfer Price Is Calculated

The application calculates the transfer price according to the following:
• If the transfer order is crossing business units, the transfer price is calculated based on the transfer pricing method
specified in the configurable transfer pricing rules for the financial route between the shipping organization and the
receiving organization.
• If transfer pricing options are enabled, you can derive the transfer price based on the shipping organizations
transaction cost, Oracle Fusion Pricing, or a third-party pricing service.
• If, for the internal material transfer, the shipping and receiving inventory organizations belong to a single business
unit, then Oracle Fusion Supply Chain Financial Orchestration uses the cost of the item in the source organization as
the transfer price.
• If, the transfer source is a requisition line, Oracle Fusion Self Service Procurement calls Supply Chain Financial
Orchestration directly when creating transfer orders to get the price.
Once the transfer price is calculated, Supply Chain Financial Orchestration calls the tax application to determine the tax
applicable on the transfer price.
Setting Up Interorganization Parameters for Transfer

Orders: Explained
Use the Manage Interorganization Parameters task to configure rules for interorganization transfer orders and define the
relationships between source and destination inventory organizations. Transfer orders represent demand and supply in a
single document. You can transfer material to an inventory destination or an expense destination.
Important interorganization parameters for transfer orders include the following:
• Inventory destination transfer type

• Inventory destination receipt routing
• Transfer order required
• Expense destination receipt required
• Expense destination receipt routing
• Cancel backorders
In the Setup and Maintenance work area, use the Manage Interorganization Parameters task in the Manufacturing and Supply
Chain Materials Management offering to set your interorganization parameters.
Inventory Destination Transfer Type

Specify either direct or in-transit. This option determines how material should be transferred between two inventory
organizations.
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Inventory Destination Receipt Routing

Specify the receipt routing for in-transit inventory destination transfer types. Receipt routing options include Standard, Direct,
and Inspection.
Transfer Order Required

Indicate whether a transfer order is required for each transfer.
Expense Destination Receipt Required

Indicate whether or not a receipt is required in the destination inventory organization for expense destination transfers going
to that destination location. If you select this option, a receipt is required on interorganization expense destination transfer
orders between the from and to organizations. If you do not select this option, then the transfer order is considered received
and delivered at the time of shipment. This field is available for Expense destination types only.

Specify the receipt routing for expense destination transactions. Receipt routing options include Standard, Direct, and
Inspection.
Cancel Backorders
Specify whether or not you want to automatically cancel the remaining quantity on a backordered transfer order line. This
option enables you to cancel the remaining quantity on a transfer order line that would normally be backordered when orders
cannot be filled due to shortages.
The three possible values for the Cancel Backorders option are shown in the following table.
Cancel Backorders Option Description
Cancel remaining quantities Automatically cancel the remaining quantities on transfer order backorders.

Do not cancel remaining quantities Do not automatically cancel the remaining quantities on transfer order backorders.

Default to source inventory organization Use the default set at the inventory source organization level to determine whether or not to
level automatically cancel the remaining quantities on transfer order backorders.

Setting Up Intersubinventory Parameters for Transfer

Orders: Explained
Use the Manage Intersubinventory Parameters task to configure parameters for transferring material between two
subinventories within an organization. You can perform transfer orders for an inventory or expense destination transfer. Set
this attribute on the Manage Intersubinventory Parameters page.
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Important intersubinventory parameters for transfer orders include the following:
• Organization
• Destination type
• Destination subinventory
• Source subinventory
• Receipt required at expense destination
• Receipt routing
In the Setup and Maintenance work area, use the Manage Intersubinventory Parameters task in the Manufacturing and
Supply Chain Materials Management offering to set your intersubinventory parameters.
Organization
Enter the destination organization.
Destination Type
Specify inventory or expense destination. The value in this field identifies how transfer order shipments and receipts are
handled for the two different destination types.
Inventory destination transfer orders require movement to a destination inventory warehouse location. Expense destination
transfer orders allow you to transfer material from an inventory warehouse location directly to your location for immediate
usage.
Destination Subinventory
You must enter a destination subinventory when the destination type is Inventory. This field is available for inventory
destination types only.
Source Subinventory
Enter a source subinventory for inventory destination types. You can optionally enter a value for expense destination types.
The combination of organization and source subinventory must be unique. You also have the option to choose All for the
source subinventory.
If you enter a source subinventory for an expense destination type, then the parameters on this row apply to all
intraorganization expense destination transfer orders sourced from the entered subinventory. If a subinventory is not entered,
than the parameters on this row become the default parameters for the organization, and the parameters are applied to
any intraorganization expense destination transfer order that is sourced from a subinventory that does not have a specific
intersubinventory parameter row defined.
Receipt Required at Expense Destination

Indicate whether or not a receipt is required in the destination inventory organization for expense destination transfer orders
going to that destination location. If selected, then a receipt is required on transfer orders originating from the subinventory on
that parameter row. If this option is not selected, then the transfer order is considered received and delivered at the time of
shipment. This field is available for Expense destination types only.
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Note: If the source subinventory for a intraorganization expense destination transfer order is not found at
shipping time and a default parameter row has not been setup, then the Receipt required at expense
destination option defaults automatically to not selected and the transfer order is considered received and
delivered at the time of shipment.

Specify either direct or in-transit. Determines how material should be transferred between two inventory organizations.
Available for inventory destination types only.
Receipt Routing
Specify the receipt routing for in-transit inventory destination transfer types. This option is also available for intraorganization
expense destination transfer orders if the receipt is required at the expense destination. Receipt routing options include
Standard, Direct, and Inspection.
Setting Up Subinventory Parameters for Transfer Orders:

Explained
Transfer orders represent demand and supply in a single document. When goods are not completely available at the time the
transfer order is being fulfilled, processing can automatically cancel the remaining quantity on a transfer order line that would
normally be backordered.
Use the Manage Subinventories and Locators task to set the Cancel Backorders option at the destination subinventory
level. This option specifies whether the cancel decision is made at this level for transfer orders that are being delivered to a
specific destination subinventory.
The three possible values for the Cancel Backorders option include:


Use next level in hierarchy

Depending on the transfer order type, the inventory organization or interorganization parameter is
used to determine whether or not to automatically cancel the remaining quantities on transfer order
backorders.
• Intraorganization transfer order uses inventory organization

• Interorganization transfer order uses interorganization parameter
FAQs for Implementing Internal Material Transfers
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What's the difference between a physical and accounting only internal

material transfer return?
If the physical return of material is required, the transfer order is interfaced to Oracle Fusion Shipping.
If the physical return is not required (accounting-only internal material transfer return), the transfer order is not interfaced to
Oracle Fusion Shipping.
A transfer order type of Return is created for both scenarios (with or without physical returns).
How can I fulfill transfer orders for items on an internal material

transfer through Oracle Fusion Order Management?
Configure a business rule in the Manage Supply Order Enrichment Rules user interface.
Set up a business rule that runs at the time of supply creation and sets the value of the order management shipment
option. During transfer order creation, the process evaluates the order management shipment option to determine if the
transfer order line should be directly interfaced to Oracle Fusion Shipping, or if it should pass through Oracle Fusion Order
Management (and from Order Management to Shipping).
How can I set up the expense destination receipt required option for
transfer orders?
Set this option on the Manage Interorganization Parameters page for interorganization transfer orders, and on the
Manage Intersubinventory Parameters page for intraorganization transfer orders. Access these pages from the Setup and
Maintenance work area, in the Manufacturing and Supply Chain Materials Management offering.
What's the difference between inventory and expense destination

transfer orders?
Expense destination transfer orders transfer material from an inventory warehouse location directly to the buyer's location
for immediate usage. With expense destination transfers, there is no put away transaction in inventory since the item is
expensed, and the destination inventory is not incremented. Returns are not allowed, and serial and lot numbers are not
tracked in receiving.
Inventory destination transfer orders require movement to a destination inventory warehouse location. With inventory
destination transfers, you have a shipment in the source organization that decrements the source location's inventory, and a
put away transaction in the destination organization that increments the destination location's inventory.
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34
Implementing Manufacturing and Supply Chain Materials Implementing Contract Manufacturing
Management
3 Implementing Contract Manufacturing
Contract Manufacturing: Explained

Contract manufacturing is a business process in which an organization, known as the original equipment manufacturer
(OEM), outsources manufacturing to another organization, known as the Contract Manufacturer, to manufacture a specific
part or a full product. The contract manufacturer manufactures the product to exact specifications of the original equipment
manufacturer's label. The original equipment manufacturer may supply some or all components to the contract manufacturer.
Contract manufacturing enables the original equipment manufacturer to completely outsource their manufacturing process to
the contract manufacturer.
The following figure illustrates the solution overview of contract manufacturing:
In the following image, the business flow for contract manufacturing is explained. Manufacturing, Logistics, Procurement,
Order Management, Supply Chain Planning, and Supply Chain Orchestration all form different parts of a single enterprise
which deal with the various aspects of fulfilling a business flow for production of a work order which is used to complete a
sales order for a customer. The contract manufacturer is an entity outside the enterprise who manufactures only a part of the
production and returns it to the enterprise.
The solution supports outsourcing of manufacturing jobs in a build to plan or build to order manufacturing strategies. The
OEMs can track and monitor the manufacturing process in the contract manufacturer's facility in real time, and also track the
inventories at the contract manufacturer's facility that are owned by them, whether they are components or finished goods.
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Contract Manufacturing Features: Overview

Contract manufacturing is set into motion either when a customer places an order for manufacturing a product with the
original equipment manufacturer (OEM) for back-to-back flow, or from Planning for plan-to-produce flow. The OEM in turn
outsources the customer order to the contract manufacturer. The contract manufacturer manufactures the product and
reports progress. Once the product is manufactured, the contract manufacturer stocks the finished goods and ships them on
request. This completes the life cycle of contract manufacturing.
The following figure illustrates the life cycle of contract manufacturing from start to completion:
The following image describes how a contract manufacturing flow works. The customer places a sales order or there is a
planned order in place. The manufacturing is outsourced partially to a contract manufacturer. The contract manufacturer
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Management
manufactures and reports progress to the original equipment manufacturer. The original equipment manufacturer completes
the rest of the manufacturing and reports stock to the inventory. The final product is then shipped on the customer's request.
Contract manufacturing consists of the following five features:
• Planning and Promising Contract Manufacturing Orders: Enables automatic scheduling and promising a customer
order for a back-to-back contract manufactured item and generates planned orders to a forecast for a plan-to-
produce contract manufactured item. Generates replenishment orders for the OEM supplied components which are
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Management
already positioned at the contract manufacturers' facility, and planned orders for the OEM supplied components
which are supplied to the contract manufacturer per order.
• Automatic Supply Creation and Fulfillment: Creates supplies automatically for the OEM supplied components based
on the contract manufacturing finished good item demand. It also creates supply for the finished good item and
fulfills a customer demand or a planned order demand for a contract manufactured item automatically.
• Track Production Progress: Enables OEMs to track the manufacturing progress in real time and provide visibility to
the inventory that they own.
• Automatic Change Management: Manages automatically any change requests coming from the demand side, and
exceptions from the supply side.
• Plan and Account Costs: Enables users to compare the costs between outsourced and in-house manufacturing.
Cost Accounting enables users to monitor costs at a summary or detail level for each work order using the Review
Work Order Costs user interface. This user interface enables users to review costs for in-house manufactured and
contract manufactured items.
Contract Manufacturing-Modeling of Entities: Explained

For contract manufacturing to work in Oracle Fusion Manufacturing, some of the entities within contract manufacturing are
modeled as explained in the following section:
• Contract manufacturer: Modeled as a regular supplier and supplier site within the Original Equipment Manufacturer's
enterprise. Also modeled as an inventory organization within the original equipment manufacturer's enterprise.
• Contract manufacturing finished good item: Item type is set to Make. The contract manufacturing check box is set
to Yes.
• Contract manufacturing service item: Item type is set to Buy. The contract manufacturing check box is set to Yes.
• Contract manufacturing finished good item Bill of Material (BOM): Components supplied by the original equipment
manufacturer are included in the BOM. The Supply Type of the components supplied by the contract
manufacturer is marked as Supplier.The Supply Type for the components that are supplied by the original
equipment manufacturer is marked as Push. The contract manufacturing service item is also included as a
component in the BOM.
The following figure illustrates how the entities work together in contract manufacturing:
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The following figure explains how various entities work together to complete the contract manufacturing flow. It is explained in
detail in the topic.
Explanation of how these entities work together in contract manufacturing:
1. The original equipment manufacturer (OEM) receives supply creation requests for a contract manufactured item.
2. After the supply creation request is received, the OEM creates a work order on the contract manufacturing finished
good item in the contract manufacturing organization to monitor the manufacturing process in the contract
manufacturer's facility. The contract manufacturing organization is a virtual organization that was created in the OEM
enterprise representing the contract manufacturer to whom the manufacturing is outsourced.
3. The OEM sends a purchase order on the contract manufacturing service time to the contract manufacturer as part of
outsourcing the manufacturing.
4. On receiving the Purchase Order (PO) on the contract manufacturing service item, the contract manufacturer
understands that the PO is to manufacture the contract manufacturing finished good item. The contract
manufacturer understands this because that person would have mapped the contract manufacturing service item to
the contract manufacturing finished good item within their enterprise, based on the agreement with the OEM. This is
achieved either by item cross referencing or any other means within their enterprise which is outside the purview of
contract manufacturing.
5. After the contract manufacturer completes manufacturing, the contract manufacturing finished good item is stocked
in their premises and the contract manufacturer notifies the OEM that production is complete.
6. The OEM initiates a receipt transaction on the PO placed on the contract manufacturer and receives the contract
manufacturing service item into the contract manufacturing virtual organization, and completes the tracking work
order that was created in the contract manufacturing organization. Because the contract manufacturing service
item is one of the components in the Bill of Material (BOM) for the contract manufacturing finished good item, and
the contract manufacturing service item is set for backflush or assembly pull, the contract manufacturing service
item is auto-consumed into the work order. In addition, the inventory for the contract manufacturing finished good
item is created in the contract manufacturing organization and the contract manufacturing service item inventory is
decremented from the contract manufacturing organization.
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Contract Manufacturing Business Flow: Overview

After reviewing how each of the entities is modeled and how these entities work together in this solution, you can understand
the overall business flow for contract manufacturing. The following figure shows a typical contract manufacturing business
flow fulfilling a customer order. The parties involved in this business flow are the customer, the original equipment
manufacturer (OEM), and the contract manufacturer.
The following image shows a contract manufacturing business flow fulfilling a customer order. The topic explains it in further
details.
Explanation of the business flow sequence:
1. A customer places an order for an item with the OEM.

2. The OEM receives the customer order and identifies that the ordered item is a contract manufacturing-enabled item.
3. The OEM sends a purchase order to the contract manufacturer and outsources the manufacturing process for that
item to the contract manufacturer as well.
4. The OEM also creates a work order within their enterprise to track the manufacturing process at the contract
manufacturing facility.
5. The contract manufacturer reports production progress to the OEM on every milestone operation completion in the
manufacturing process. The contract manufacturer also reports any component consumption that is being supplied
by the OEM.
6. The OEM receives the production report from the contract manufacturer, and in turn updates the work order
that was created internally within the OEM's enterprise. The OEM also records any OEM-supplied component
consumption.
7. After the manufacturing is complete at the contract manufacturer's facility, the contract manufacturer stocks the
finished goods in their facility and sends a production completion report to the OEM. The finished good stock at the
contract manufacturer's facility is owned by the OEM. The OEM can track the components supplied by them and the
finished good stock that is lying in the contract manufacturer's facility by reviewing the inventory levels in the contract
manufacturing organization that the OEM has created within their enterprise.
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8. The contract manufacturer ships the finished goods to the OEM's customer on the OEM's request. After the
finished goods are shipped and then received by the customer, the OEM updates the inventories in the contract
manufacturing organization that the OEM has created within their enterprise.
Planning and Promising Contract Manufacturing Orders:

Explained
The Planning and Promising Contract Manufacturing Orders feature in contract manufacturing, helps in planning the
requirement of all the components that are supplied by the original equipment manufacturer (OEM) to the contract
manufacturer.
Contract manufacturing solution supports two flavors for the OEM supplied components. The OEM can do one of the
following:
• Supply the components in bulk at the contract manufacturer's facility.
• Supply components with every order that the OEM places on the contract manufacturer.
In a typical business scenario, the OEM would prefer to supply low-cost components in bulk at the contract manufacturer's
facility and ship the high-cost components on a per order basis.
This feature also helps in planning and promising the contract manufactured items and adds to the business value of an
organization.
Automatic Supply Creation and Fulfillment: Explained

The Automatic Supply Creation and Fulfillment feature in contract manufacturing helps in automating the contract
manufacturing process from the supply creation process for the components that are supplied by the original equipment
manufacturer (OEM), the contract manufacturing finished good item by the contract manufacturer, until the fulfillment of the
customer order or a planned order demand.
The salient points are as follows:
• This feature helps not only to autocreate the supplies for the components that are supplied by the OEM to the
contract manufacturer, but also processes the shipment of the OEM-supplied components to the contract
manufacturer.
• The supply creation requests that come into Supply Chain Orchestration from Inventory Min-Max Planning and the
Planning Central for the pre-positioned components and the components that are supplied per order are processed
in Supply Chain Orchestration. These supply requests result in a supply order, which is fulfilled by transferring from
one of the OEM's warehouses to the contract manufacturer. Supply Chain Orchestration orchestrates the supply
creation process through an Internal Material Transfer flow, and ensures that the components are shipped to the
contract manufacturer.
• This feature also automates the supply creation and the fulfillment process of a contract manufactured finished good
item using a predefined business process.
• As part of this predefined business process flow, a work order is created in the contract manufacturing organization
in the OEM's enterprise to track the production progress at the contract manufacturer. This work order is reserved
against the customer order because the supply is being used to fulfill a customer order. If the supply is being created
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to fulfill a planned order, the supply is not tied to any demand, and the predefined business process does not have
the reservation step.
• After the reservation is created, a Purchase Order (PO) is created for the contract manufacturing service item
and sent to the contract manufacturer. This purchase order has the tracking work order details and the finished
good product details stamped on it. This establishes a link between the contract manufacturing work order and
the purchase order. This helps the contract manufacturer in identifying the contract manufacturing finished good
item and work order details, which in turn helps them while reporting the production progress to the OEM. The
purchase order also carries the work definition document as an attachment by which the work instructions and
the milestone operations on which the contract manufacturer must report the progress are communicated to the
contract manufacturer.
• On every milestone operation completion, the contract manufacturer sends the production progress to the OEM.
This feature enables Manufacturing to receive the production progress from the contract manufacturer.
A contract manufacturer can send the production progress in three ways:
• Operation and material transaction public web services exposed by the OEM: If the contract manufacturer calls the
operation and material transaction public web services that are exposed by the OEM's manufacturing application,
this automatically updates the tracking work order and update the OEM-owned inventories in the contract
manufacturing organization.
• Preformatted spreadsheet given by the OEM: If the contract manufacturer sends the progress in a preformatted
spreadsheet, the spreadsheet can be manually uploaded into OEM's manufacturing application by a production
supervisor, which automatically updates the tracking work order component or finished good inventory levels.
• E-mail or phone: If for some reason the contract manufacturers cannot adapt to the web service technology
or spreadsheet, they can always send the production progress by e-mail or by phone, whereby the production
supervisor in the OEM's enterprise can manually update the tracking work order and material transactions.
With this, the OEM can monitor the production progress at real time by reviewing the work order or operation status. The
OEM owned inventories can always be tracked in the contract manufacturing organization.
After the manufacturing is complete, the contract manufacturer sends the production complete report to the OEM. The
manufacturing application in the OEM's enterprise receives the progress, completes the work order, and notifies Supply
Chain Orchestration when the supply of the contract manufacturing finished good is created. Supply Chain Orchestration in
turn notifies Order Management that the goods are now available for shipping.
Track Production Progress: Explained

The Track Production Progress feature in contract manufacturing enables a 360-degree view of the supply creation process
from capturing the customer order till the fulfillment of the order.
This feature works in the following manner:
• In the original equipment manufacturer (OEM)'s enterprise, Supply Chain Orchestration (SCO) workbench enables
the supply chain operations manager to monitor the progress of supply creation process at any given point in time,
and also to drill down into the manufacturing application to review the work order and operation statuses in real time.
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Similarly, a production supervisor can sign in to the manufacturing application at any time and review the work order
and operation statuses.
• If there are any exceptions reported by the contract manufacturer, they are recorded in the Supply Chain
Orchestration workbench, and the exceptions are notified to the order manager. This enables the order manager to
take appropriate corrective actions to mitigate the exceptions.
• The order manager has supply details such as supply order details, supply availability status and any supply
exceptions that are being reported by SCO displayed on the order fulfillment page. The order manager is also able to
drill down into the Supply Chain Orchestration workbench to review the supply creation process in detail.
• The warehouse manager can track the OEM-owned inventories be it the OEM-supplied components or the finished
goods at any time in the contract manufacturing organization.
The salient features of the Track Production Progress feature are:

• Provides 360-degree view of the production progress.
• Enables you to view any supply exceptions.
• enables you to take corrective actions to mitigate exceptions.
• Provides visibility to OEM owned components and finished goods.
• Enables real time visibility to the contract manufacturing production process.
Automatic Change Management: Explained

The Automatic Change Management feature in contract manufacturing helps in keeping the demand and supply in balance.
The key points of this feature are:
• Automatic change management enables you to handle any changes that originate from the demand side, either from
a customer or a planned order. It enables you to take action on quantity, date changes, or demand cancellations,
and relay that information to the contract manufacturer appropriately. In this process, the feature ensures that the
contract manufacturing work order and purchase order are synchronized. If for any reason the requested demand
changes cannot be met, the order manager is notified of the exceptions.
• Automatic change management also enables a response to any exceptions that originate from the contract
manufacturer. The feature enables you to react to any increase or decrease in quantity, date exception, or supply
cancellation by relaying these exceptions to the order manager. The order manager can initiate corrective action
if necessary. Change management always keeps the contract manufacturing work order and purchase order
synchronized.
• The business value of this feature is that, it enables the original equipment manufacturer (OEM) to efficiently handle all
customer needs and react appropriately to all the supply exceptions in order to meet the customer demand. Supply
chain resilience is increased with this feature to meet with any supply or demand changes.
Plan and Account Costs: Explained

The Plan and Account Cost feature helps cost accountants in all phases of the manufacturing cycle. It helps to estimate and
set costs for components, resources and overheads. The components issues and product completion transactions are used
to calculate the actual costs incurred for each work order.
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The work order costs include the cost of the contract manufacturing service item. The service item cost is also included in
the contract manufacturing work order, just as any other component. If the item is costed using actual cost method, then
the Purchase Order (PO) price is used. However, for average and standard cost method, the current costs are used. The
costs are calculated, and then the necessary distributions and accounting entries are created for all the transactions reported
against this contract manufacturing work order.
Setting Up Supplier for Contract Manufacturing: Explained

In contract manufacturing, the contract manufacturer is modeled as a regular supplier. The original equipment manufacturer
(OEM) must define the following to set up the supplier:
• A contract manufacturer must be defined as a Supplier. To do this, you can search for the task within the offering in
the following manner:
a. In the Setup and Maintenance work area, select your offering.

b. Search for the Manage Suppliers task. Select the task in the Manufacturing Master Data functional area.
• Each contract manufacturer's manufacturing site must be defined as a supplier site. You must assign a procurement
business unit to each site. This is the organization authorized to provide procurement services for the site.
For general details about supplier setup and setup steps common to all SCM offerings, refer to the Oracle Applications Cloud:
Using Functional Setup Manager guide.
Setting Up Inventory Organizations for Contract

Manufacturing: Explained
In Contract Manufacturing, every Contract Manufacturer's manufacturing site is modeled as an inventory organization in the
Original Equipment Manufacturer's Oracle Fusion Applications.
For general details about setting up inventory organizations and setup steps common to all SCM offerings, refer to the Oracle
Applications Cloud: Using Functional Setup Manager guide.
The following table displays the values of the inventory organization's attributes:
Attribute Name Attribute Value
Usage Inventory Management

Location Address The Location Code or Address created in the earlier step for the Contract Manufacturer

Internal or External External

Organization or Manufacturing Plant Yes

External Application Type or Yes

Organization which represents a
Contract Manufacturer
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Supplier Select the Contract Manufacturer (defined as a Supplier)

Supplier Site Select the Contract Manufacturer's Site or Location (defined as a Supplier Site)

You must also specify the following:
• Supply subinventory
• Supply locator (if the supply subinventory is locator controlled)
• Completion subinventory
• Completion locator (if the completion subinventory is locator controlled)
Note: The parameter in the organization definition Auto Associate Serial Numbers to Work Order must be
set to Yes for serial-tracked production, and if the original equipment manufacturer (OEM) supplies serials.
Setting Up Item Inventory Organization in Contract Manufacturing
In contract manufacturing, you must set up item inventory organization to define the items and components. Negative
inventory is not valid in the Contract Manufacturer Finished Goods Server.
The following table describes the attribute values that must be set up for Contract Manufacturer Finished Goods Server and
Contract Manufacturer inventory organization:
Receipt Date Exception Action None

Over Receipt Action None

Note: You must ensure that overreceipt tolerance on the Purchase Order and overproduction tolerances are the
same in Purchase Order and Work Order.
For more details about setting up item inventory organizations and setup steps common to all SCM offerings, refer to the
Oracle Applications Cloud: Using Functional Setup Manager guide.
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Setting Up Item: Explained

The items used in contract manufacturing are created in the Product Information Management work area. The following key
setup tasks are performed within the Product Information Management work area:
• Create Items setup is used to create items such as the contract manufacturing finished goods item and the
contract manufacturing service item. It is also used to set the attributes as required for the contract manufacturing
flow.
• Create Item Structure setup is used to create the bill of material for the contract manufacturing finished good item.
The following table displays items and the attributes for Finished Goods item, original equipment manufacturer (OEM) supplied
components, contract manufacturer supplied components, and contract manufacturing service item (represented as Contract
Manufacturer Finished Goods Server):
Attribute Name Attribute Value Attribute Value Attribute Value Attribute Value
Not Applicable
Finished Goods Server Contract Manufacturer OEM Components Contract Manufacturer
Finished Goods Server Sourced Components
Item Type Make Buy Transfer Transfer

Inventoried Yes Yes Yes Yes

Stockable Yes Yes Yes Yes

Transactable Yes Yes Yes Yes

Back-to-Back Yes No No No

Contract Manufacturing Yes Yes No No

Inventory Planning Not Planned Not Planned Min-Max Planning Not Planned
Method (for pre-positioned
components)

Planning Method Not Planned (for Back-to- Not Planned MRP Planning (for Not Planned
Back) and MPS Planning components supplied per
(for Plan to Produce) order)

Supply Type Push Assembly Pull Push Supplier

For general details about setting up items and setup steps common to all SCM offerings, refer to the Oracle Applications
Cloud: Using Functional Setup Manager guide.
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Setting Up Work Definition in Contract Manufacturing:

Explained
In contract manufacturing,multiple supply scenarios are possible, resulting in a Bill of Materials (BOM) for each of the supply
scenarios. The following are a few supply scenarios:
• Make in-house.
• Purchase from a supplier.
• Alternative Contract Manufacturer Suppliers: CM1or CM3.
• Work definition is set up for each contract manufacturer's manufacturing plant.
• The following section lists the recommendations for setting up a work definition:
◦ Contract Manufacturer Finished Goods Server is defined as one of the components for the last operation
and is an example of a contract manufacturing service item. Define only one Contract Manufacturer Finished
Goods Server as a component, with a BOM quantity of 1 EA.
◦ Set up the supply subinventory and locator (if subinventory is locator controlled).
◦ Dummy work centers are required only for lead-time calculation. It is expected that the Contract Manufacturer
supplier does not report any resource consumption.
◦ Work definition need not be limited to only those operations that the OEM is interested in tracking. Work
definition can include all the operations, and the operations (milestone operations) on which the OEM needs a
progress update from the Contract Manufacturer. Those operations are marked as count point operations.
◦ All the milestone operations are count point operations, and auto-transact operations may exist in a contract
manufacturing work definition.
Setting Up a Blanket Purchase Agreement in Contract

In contract manufacturing, the buyer sets up a blanket purchase agreement with the contract manufacturer supplier. To set
up a blanket purchase agreement, you must use the Create Agreements task in the Purchasing work area.
The following table lists the values a buyer must specify in the blanket purchase agreement:
Group Requisition Headers No

Group Requisition Lines No

The buyer must manually attach the work definition .pdf or XML document to the blanket purchase agreement. It is expected
that the buyer adds this attachment to the purchase agreement, and communicates to the supplier.
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Management
You can search and edit items in the work definition and create attachments using the following steps:
1. In the Setup and Maintenance work area, navigate to the Product Management offering, Items functional
area, and click the Manage Attachment Categories for Product Management task to enable the To Supplier
attachment category for the Items entity ITEM_ENTITY.
2. In the Items functional area, click the Manage Item Classes task, and add a new attachment category for To
Supplier to the Root Item Class or the Item Class in context for the work definition item.
3. In the Product Information Management work area, click the Manage Items task to search for and select the work
definition item.
4. On the Edit Item page, click the Attachments tab to add a new attachment. Select the Attachment Category
created earlier, and select the Work Definition document, as it was printed from work definition.
Setting Up Receiving Parameters in Contract

In contract manufacturing, you can use receipt routing to track and move items through a series of operations that make up a
receipt route. You must set up the receipt routing controls in such a way that the Contract Manufacturing Finished Goods
Server (which is an example of a contract manufacturing service item) has a direct delivery routing.
Setting Up ATP Rules in Contract Manufacturing: Explained

In contract manufacturing, setting up ATP Rules to support the Back-to-Back contract manufacturing flow is similar to how
ATP Rules are set up for standard order promising. However, there are certain points to be noted specifically for Back-to-
Back contract manufacturing order promising, and are as follows:
• The Promising Mode is set as Supply chain availability search.
• The Search Components and Resources is enabled if Make recommendations are required. This is mandatory
for Back-to-Back contract manufacturing Make recommendations.
• ForSupply Types, all required supply types are selected that must be considered during order promising.
• For Demand Types, all required supply types are selected that must be considered during order promising.
• The Infinite Time Fence is set to a large value.
Setting Up Sourcing Rules in Contract Manufacturing:

Explained
In contract manufacturing, you can define sourcing rules that specify how to replenish items in an organization, such as
purchased items in plants. Sourcing rules can also specify how to replenish all organizations.
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Management
Setting up sourcing rules to support the Back-to-Back contract manufacturing flow is similar to how sourcing rules are set
up and assigned for standard order promising. However, there are certain points to be noted specifically for Back-to-Back
contract manufacturing order promising and are as follows:
• The sourcing rule is defined as a Local one.
• The effective Start Date and End Date for the rule is provided. The end date is optional.
• Define a sourcing rule of type Make, and select the Contract Manufacturing Organization in the Organization
field.
The following table describes how you must set up sourcing rules:
Sourcing Rule for Finished Goods or Sourcing Rule

Component
Demand for Finished Goods Server in Transfer from Contract Manufacturer Organization
OEM Organization

Demand for Finished Goods Server in Make in Contract Manufacturer Organization

Contract Manufacturer Organization

Demand for Component (OEM Supplied) Transfer from OEM Organization

in Contract Manufacturer Organization

Contract Manufacturing Setup and Implementation: Critical

Choices
This topic explains certain decision points and some best practices that are crucial for the setup and implementation of
contract manufacturing.
Decision Points
The following decisions must be made before you set up your organization as a contract manufacturing organization.
• The original equipment manufacturer organizations must identify the items for which the manufacturing process is
completely outsourced to a contract manufacturer.
• The original equipment manufacturer organizations must identify which items are outsourced to fulfill a customer
order, and which items are outsourced to fulfill a planned order generated against a forecast. This decision has to be
made taking into account the readiness of the extended supply chain to support the contract manufacturing flows.
The items outsourced to fulfill a customer order is a contract manufactured item, and the item outsourced to fulfill a
planned order is a back-to-back item.
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Management
Best Practices
The following points are some of the best practices that you can keep in mind while setting up your organization as a contract
manufacturing organization:
• Each contract manufacturing site should be modeled as one inventory organization within the original equipment
manufacturer's enterprise.
• For easy identification, name the contract manufacturing organization with the contract manufacturer's name.
• Define one subinventory for tracking the finished good inventory, and another subinventory for tracking the
components supplied by the original equipment manufacturer.
• For easy identification of the contract manufacturing service item, name the service item by suffixing the contract
manufacturer's name or initial to the contract manufacturing finished good item.
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Implementing Manufacturing and Supply Chain Materials Implementing Outside Processing
Management
4 Implementing Outside Processing
Outside Processing: Overview

Outside processing is a business process where one or more operations of a work order are outsourced to a supplier who
provides specialized manufacturing services. These services may vary depending on the nature of the industry.
Outside processing is often adopted as a strategic alternative to in-house manufacturing for the following reasons:
• To lower manufacturing costs due to production costs

• To leverage state of the art manufacturing technology
• To increase capacity to overcome production bottlenecks
• To focus on core competencies
The following figure is an example of outside processing:

The following figure explains a business flow where three operations are required to complete a work order: operation 10
which is machining, followed by operation 20 which is plating, and operation 30 which is assembly. Operation 20 is a supplier
operation which is performed by outside processing.
• An Original Equipment Manufacturer (OEM) performs the first operation in-house and ships the machined parts to a
supplier for plating.
• The supplier performs the plating operation and sends the plated parts to the Original Equipment Manufacturer
(OEM).
• The OEM receives the plated parts and pays the supplier for performing the value added services.
In the entire process, the OEM retains the ownership of the goods that are sent to and received back from the supplier.
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Management
Outside Processing Features in Oracle Supply Chain

Management Cloud: Overview
To support outside processing, Oracle Fusion Supply Chain Management offers many capabilities and enables you to do the
following:
• Differentiate between manufacturing operations that are processed in-house and those that are outsourced to
suppliers.
• Create and manage standard operations of the type Supplier.
• Create and manage work definitions with supplier operations.
• Create and manage work orders with supplier operations.
• Schedule supplier operations based on the processing lead times maintained at the operation level.
• Trigger automatic creation of purchasing documents.
• Trigger generation of shipment lines for shipping and printing shipping documents such as packing slip, bill of lading
that are required in outside processing.
• Record completed quantities at supplier operations after goods are received and delivered to Oracle Fusion
Manufacturing.
• Manage and execute supplier operations with or without serialization-enabled manufacturing.
• Review supplier operation details, manage supply exceptions, and perform receipt-related returns and corrections.
• Manage demand side changes by automatically propagating work order changes referred to as demand side
changes to the associated purchase orders.
• Manage supply side changes by logging supplier operation exceptions to notify changes to purchase orders.
Oracle Fusion Supply Chain Management helps improve operational efficiency in managing outside processing in many ways.
Some of them are as follows:
• Provides enhanced visibility into supply chain execution by displaying purchasing, shipping, and receiving details for
a supplier operation.
• Reduces the manual intervention required to manage supplier operations through automatic creation and approval of
purchasing documents, shipment lines and progression of quantities at a supplier operation upon receipt.
• Enables increased responsiveness in managing demand and supply side changes by providing the ability to
automatically propagate demand side changes and log exceptions to notify supply side exceptions.
• Provides better insight into outside processing costs through the display of receipt and cost accounting distributions
at supplier operations.
Managing and Executing Outside Processing: Explained

This topic details the sequence of steps of the process flow for outside processing. There may be variations to the process
flow depending on the business offering.
The following image illustrates the process flow of outside processing across product offerings in Supply Chain Management:
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Management
This image explains the various steps involved across products to complete an outside processing flow.
The following steps explain the process flow in a sequential manner:
1. Create and release a work order with supplier operations in Oracle Fusion Manufacturing Service. Work orders
are scheduled using the unconstrained logic in Oracle Fusion Planning Central Service and Oracle Fusion Supply
Planning Service.
2. When the work order is released, a request is sent to Oracle Fusion Orchestration Service to create a Purchase
Requisition. Oracle Fusion Orchestration Service in turn creates a Supply Order and triggers the creation of a
Purchase Requisition in Self-Service Procurement.
3. An Outside Processing Purchase Order is created in Oracle Fusion Purchasing Service using the details maintained
in the Outside Processing Blanket Agreement.
4. Execute the work order by reporting quantities as completed at the operation prior to the supplier operation. A
request is then sent to Oracle Fusion Orchestration Service to create a Shipment Line. Oracle Fusion Orchestration
Service in turn creates a Supply Order Line and triggers the creation of a Shipment Line in Oracle Fusion Shipping.
5. A Shipment is manually created for the Shipment Line in Oracle Fusion Shipping which is then Confirmed and
Closed. Based on the options set for the Ship Confirm Rule, the processes to Print Packing Slip and Bill of Lading
are initiated automatically.
6. The next step is to create an Advance Shipment Notice (ASN) in the Supplier Portal for the outside processing
service item. Goods are received in Oracle Fusion Receiving using the ASN and delivered to Oracle Fusion
Manufacturing Service. For a supplier operation that is not serialization enabled, this results in automatic completion
of quantities at the supplier operation.
7. Supplier operations are then managed and tracked in Oracle Fusion Manufacturing Service.
8. The receipt, delivery and operation transactions result in receipt and cost accounting in Oracle Fusion Cost
Management.
Note: Steps to create shipment line and print shipping documents are optional as indicated in the diagram.
ASN creation is required only in the case of consecutive outside processing scenarios.
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Management
Creating and Managing Work Orders with Supplier

Operations: Explained
To support outside processing, Oracle Fusion Manufacturing provides the ability to distinguish between work order
operations that are processed in-house and those that are outsourced to suppliers through the Operation Type attribute.
The Operation Type attribute of an operation is set to Supplier to indicate that the attribute is processed by a supplier. You
can create and manage all types of work orders with one or more supplier operations, define consecutive supplier operations,
and maintain additional details for a supplier operation.
You can also import work orders with supplier operations using the predefined .xlsm template.
Work orders with supplier operations are scheduled using the unconstrained logic in Oracle Fusion Planning Central and
Oracle Fusion Supply Planning taking into account the fixed and variable lead times maintained for the supplier operation.
The fixed and variable lead times specified for the supplier operation are also considered by Oracle Fusion Planning Central
and Oracle Fusion Supply Planning while creating a planned order for an item that includes one or more supplier operations
within its work definition. Additionally, the manufacturing lead time calculation program takes into account fixed and variable
lead times maintained for the supplier operation.
Note: For more information about creating work orders with supplier operations, refer to the Manage Production
chapter of the Oracle Supply Chain Management Cloud Using Manufacturing guide.
Purchasing Documents For Outside Processing: How The

Documents Are Created And Managed
This topic explains how purchasing documents for outside processing are created and managed.
Settings That Affect Purchase Requisition Creation

Purchase requisitions for outside processing are created based on the setting of the Purchase Requisition Trigger plant
parameter.
How Purchase Requisition Is Created

If the Purchase Requisition Trigger plant parameter is set to Work Order Release, purchase requisitions are created for all
supplier operations on a work order when the work order is released.
If the parameter is set to Prior Operation Completion, purchase requisitions are created for a supplier operation on a work
order when quantities are completed at the prior count point operation. If the supplier operation is the first count point
operation, then the purchase requisition for the supplier operation is created when the work order is released.
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Management
In each of these scenarios, Oracle Fusion Manufacturing Service sends a request to Oracle Orchestration Service to create a
purchase requisition.
Oracle Fusion Orchestration Service creates a supply order based on the request received from Oracle Fusion Manufacturing.
It orchestrates the automatic creation of outside processing purchase requisitions in Self-Service Procurement.
An outside processing purchase order is created in Oracle Fusion Purchasing from the purchase requisition based on the
outside processing blanket agreement that is set up for the outside processing service item.
Oracle Fusion Orchestration Service maintains the details of the outside processing purchase requisitions and purchase
orders, and provides drill-down capabilities to review additional details of the outside processing purchase orders
Oracle Fusion Purchasing maintains manufacturing details (such as Work Order, Operation, and Product) for outside
processing purchase orders. It displays the details at purchase order line and schedule levels, and uses the Manufacturing
destination type for outside processing.
Oracle Fusion Purchasing also supports consecutive supplier operation scenarios. In consecutive outside processing, the
Ship to Party, Ship-to Location, and Deliver to Location in the purchase order cut for the first supplier operation correspond to
the Supplier and Supplier Site that services the next operation in sequence.
Shipping Documents For Outside Processing: How The

Documents Are Created And Managed
This topic explains how shipping documents for outside processing are created and managed.
Settings That Affect Shipment Line Creation

Shipment lines for outside processing are created based on the setting of the Generate Shipment attribute of the work order
supplier operation.
How Shipping Documents Are Created And Managed

Oracle Fusion Manufacturing Service sends a request to Oracle Fusion Orchestration Service to create a shipment line when
the goods are reported as complete at the operation prior to the supplier operation to ship the goods to the supplier.
Oracle Fusion Orchestration Service creates a Supply Order Line based on the request sent by Oracle Fusion Manufacturing
and orchestrates the automatic creation of a shipment line of Outside Processing order type in Oracle Fusion Shipping. For
such shipment lines, Oracle Fusion Shipping maintains and displays manufacturing details such as work order, operation, and
end assembly.
The shipment line is then associated with an existing shipment or a new shipment. The shipment is then confirmed and
closed. Based on the options set for the Ship Confirm Rule, the processes to Print Packing Slip and Bill of Lading are initiated
automatically.
Alternatively, these documents can be printed on demand for shipping the goods to the supplier for outside processing.
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Management
Oracle Fusion Orchestration Service maintains and tracks the details of the shipments, such as Shipment Number and
Shipment Line that are related to outside processing.
Receiving and Delivering Goods for Outside Processing:

Explained
To support outside processing, Oracle Fusion Receiving receives and delivers goods processed by the supplier using the
Manufacturing destination type.
After creating the delivery, Oracle Fusion Receiving calls Oracle Fusion Manufacturing to automatically report operation
completions for nonserialized operations. The quantities are then further managed in Oracle Fusion Manufacturing.
For serialization enabled operations, quantities automatically progress from In Process status to Ready. The serials are
reported as Completed either in the Manage Supplier Operations page or by reporting the operation transactions in a
predefined .xlsm template.
Receipts in outside processing can also be recorded using Advance Shipment Notices (ASNs) that are created in Supplier
Portal or in Oracle Fusion Receiving. ASNs are mandatory only if the next count point operation is also a Supplier Operation.
Monitor, Manage, and Execute Supplier Operations in

Oracle Fusion Manufacturing Service enables the monitoring of supplier operation quantities by dispatch status (In Process,
Ready, Complete, Scrap, Reject) in the Manage Supplier Operation page.
The In Process dispatch status represents quantities in supplier operations that are completed in the previous count operation
but have not been received from the supplier after processing. When received, the quantities or serials are further managed
in the Manage Supplier Operation page. You can complete, scrap, reject quantities using the Quick Complete and Complete
with Details actions.
The Manage Supplier Operation page also provides visibility into supplier operation exceptions.
Additionally, for any supplier operation record, the Manage Supplier Operations page enables you to navigate to the work
order details page and the Review Supplier Operation Details page.
You can print work order traveler and product labels directly from the Manage Supplier Operations page.
You can navigate to the Material Transactions page to report Original Equipment Manufacturer-supplied component usage.
Note: The Manage Supplier Operations page displays only Supplier Operation records.
For any given supplier operation, the Review Supplier Operation Details page enables you to monitor and review supplier
operation details by:
• Displaying the purchasing, shipping and receiving details related to a supplier operation.
• Providing links to review additional details of purchase orders, shipments and receipts.
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Management
The Review Supplier Operation Details page provides several actions for production supervisors to manage supply
exceptions. These actions are conditionally enabled and allow production supervisors to do the following:
• Initiate the creation of a purchase requisition in case of supply failures to fulfill the requirement for the deficit quantity.
• Handle issues related to the quality and quantity of the goods delivered to Manufacturing with the ability to correct
receipts, over receipts, and return quantities to supplier or receiving.
Note: For more information about Supplier Operations in Manufacturing, refer to the Manage Production
chapter of the Oracle Supply Chain Management Cloud Using Manufacturing guide.
Planning, Accounting, and Reviewing Outside Processing

Costs: Explained
As part of cost planning, Oracle Fusion Cost Management enables you to define outside processing service item cost and
include it in the rolled up cost of standard costed items.
Oracle Fusion Cost Accounting and Oracle Fusion Receipt Accounting support processing of outside processing
transactions. Accounting distributions are created in Oracle Fusion Receipt Accounting for the receipt of outside processing
service item. Accounting distributions are created in Oracle Fusion Cost Accounting after the outside processing service
item is delivered to Oracle Fusion Manufacturing. The Manufacturing destination type is used to identify receipt of outside
processing items.
In outside processing, there are no changes for managing receipt accounting accruals. Purchase cost is included to work
in process if the cost method of the outside processing item is Average or Actual. If the outside processing item is standard
costed, then the standard cost is used.
Oracle Fusion Cost Management also provides the ability for cost accountants to identify supplier operations while reviewing
work order costs.
Note: For more information about planning, accounting and reviewing outside processing costs, refer to the
Oracle Supply Chain Management Cloud Using Supply Chain Managerial Accounting guide.
Managing Demand and Supply Side Changes in Outside

Processing: Explained
Demand side changes in outside processing refer to changes to a work order with supplier operations.
It can also be a result of reporting transactions at a count point operation prior to the supplier operation which impacts the
associated purchasing and shipping documents. This can be any of the following:
• Work order quantity change

• Work order status change
• Work order date change
• Scrap at prior operation
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Management
• Reversal at prior operation
In such cases, Supply Chain Orchestration propagates the work order changes to the associated purchase orders. Open
shipments, if any, are canceled only on closure or cancellation of the work order.
Note: Failure to propagate work order-related changes results in logging of supplier operation exceptions in
Manufacturing.
Supply side changes in outside processing refer to the changes to an outside processing purchase order in Purchasing. This
can be any of the following:
• PO status change
• PO quantity change
• PO requested date change
• PO schedule split
Order Orchestration reports such change events and notifies Manufacturing. This results in the logging of supply operation
exceptions. Users can review the exception details and directly navigate to the Review Supplier Operation Details page to
take appropriate actions.
Note: For more information about demand and supply side changes for outside processing, refer to the
Manage Production chapter of the Oracle Supply Chain Management Cloud Using Manufacturing guide.
Setting Up Outside Processing: Overview

The key setups required for using the outside processing feature are as follows:
• Purchase Requisition Trigger plant parameter must be set up using the Manage Plant Parameters task in the
Setup and Maintenance work area.
• To derive the Purchase Order Charge Account, rules for the predefined outside processing mapping set must
be defined using the Define Transaction Account Rules and Manage Mapping Sets tasks in the Setup and
Maintenance work area.
• Outside Processing Service Items must be created using the Create Item task in the Product Information
Management work area.
• Suppliers must be created using the Create Supplier task in the Suppliers work area.
• Standard operations can be optionally created using the Manage Standard Operations task in the Work Definition
work area.
• Work definitions must be created using the Manage Work Definitions task in the Work Definition work area.
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Management
Setting Up Plant Parameters for Outside Processing:

Explained
You must review and set up the Purchase Requisition Trigger plant parameter to determine when purchase requisitions
are created for supplier operations of a work order for outside processing.
• If set to Work Order Release, purchase requisitions are created for all supplier operations of a work order when the
work order is released.
• If set to Prior Operation Completion, purchase requisitions are created for a supplier operation of a work order
when quantities are completed at the prior count point operation.
If the supplier operation happens to be the first count point operation, then the purchase requisition for the supplier
operation is created when the work order is released.
Note: For more information about setting up plant parameters for outside processing, refer to the Implementing
Manufacturing chapter of the Oracle SCM Cloud Implementing Manufacturing and Supply Chain Materials
Management guide.
Setting Up Mapping Sets for Outside Processing: Explained

You must define rules for the predefined outside processing mapping set. This enables you to get the purchase order charge
account required for automatic creation of outside processing purchase orders.
You can define rules by using the Define Transaction Account Rules and Manage Mapping Sets tasks in the Setup and
The predefined outside processing mapping set is based on the following attributes:
• Inventory Organization
• Work Order Subtype
• Purchasing Category Code
• Item Number
Setting Up Items for Outside Processing: Explained

In addition to the finished goods and components, you must define an outside processing service item in Product Information
Management to represent the value added service, such as plating.
The service item is used to account for the supplier contribution in the build process. The outside processing item is
referenced in the purchasing and shipping documents, and is used to receive goods against an outside processing purchase
order.
The outside processing service item also represents the outgoing partially completed assembly shipped to the manufacturing
partner. For example, machined partially finished assemblies that are sent to the manufacturing partner for plating.
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Management
The service item also represents the incoming partially finished assembly received from the manufacturing partner. For
example, plated partially finished assemblies received from the manufacturing partner. Receiving the outside processing item
implicitly means receipt of the incoming partially finished assembly.
Note: For more information about setting up items for outside processing, refer to the Oracle Supply Chain
Management Cloud Using Product Master Data Management guide.
Setting Up Suppliers for Outside Processing: Explained

In Oracle Fusion Manufacturing, it is required to define suppliers for the outside processing of an operation.
In the context of outside processing, a supplier refers to an external party that provides specialized manufacturing services,
such as plating to manufacture a product.
Note: For more information about setting up suppliers for outside processing, refer to Manage Supplier
Information chapter of the Oracle Procurement Cloud Using Procurement guide.
Setting Up Blanket Purchase Agreement for Outside

Processing: Explained
In Oracle Fusion Purchasing, you must define an outside processing blanket agreement for the outside processing service
item, to enable automatic creation and approval of purchase orders in outside processing.
In the absence of a blanket agreement, the purchase orders must be manually created from the requisition.
Note: For more information about blanket purchase agreements, refer to the Manage Supplier Agreements
chapter of the Oracle Procurement Cloud Using Procurement guide.
Setting Up Standard Supplier Operations: Explained

In Oracle Fusion Manufacturing, you can optionally define and identify standard operations that are processed in-house, or
by an external supplier. You can also maintain additional details for a standard supplier operation and reuse standard supplier
operation across work definitions and work orders.
Note: For more information about setting up standard supplier operations, refer to the Design Production
Process chapter of the Oracle Supply Chain Management Cloud Using Manufacturing guide.
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Setting Up Work Definition With Supplier Operations:

Explained
In Oracle Fusion Manufacturing, you must define work definitions with supplier operations to create standard work orders with
supplier operations.
Oracle Fusion Manufacturing enables you to:
• Define and manage work definitions with one or more supplier operations
• Maintain additional details for a supplier operation
• Define back to back or consecutive supplier operations
• Manage work definitions with supplier operations using ADF Desktop Integration (ADFdi)
Note: For more information about setting up work definitions with supplier operations, refer to the Design
Production Process chapter of the Oracle Supply Chain Management Cloud Using Manufacturing guide.
Implementing Outside Processing: Explained

The following points must be considered for implementing outside processing:
• To model and track consumption of the Original Equipment Manufacturer (OEM) supplied components, associate
components to a supplier operation with the supply type, such as Push (Operation), Pull (Assembly Pull).
• To inspect goods after they are received from supplier and delivered to Oracle Fusion Manufacturing, create an in-
house operation immediately after the supplier operation to record inspection results.
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Implementing Manufacturing and Supply Chain Materials Implementing Inventory Management
Management
5 Implementing Inventory Management
Implementing Inventory Management: Overview

Inventory Management functionality allows you to manage warehouse activities such as replenishing inventory, counting
stock (both cycle count and physical inventory), moving material within the warehouse, and issuing goods to manufacturing.
Consigned inventory capabilities are supported as well.
Set up Oracle Fusion Inventory Management so that your users can take advantage of the Inventory Management work area
to streamline warehouse operations.
The following table describes the setup tasks in the Define Inventory Management task list.
Setup Task Required or Conditional Description
Manage Subinventories and Locators Conditional Configure parameters related to the transfer
of material between two subinventories.

Manage Interorganization Parameters Conditional Configure interorganization parameters

to define accounting information and
relationships that exist between a shipping
organization and a destination organization.

Manage Account Aliases Conditional Configure account aliases to provide an

easily recognizable name or label for general
ledger account numbers.

Manage Transaction Source Types Conditional Configure inventory transaction sources to

use while performing transactions to classify
transactions according to their origin, such
as purchase order, sales order, account
number, or physical inventory.

Manage Transaction Reasons Conditional Configure inventory transaction reasons to

classify or explain the reason for an inventory
transaction. An inventory transaction
reason can be specified when performing
miscellaneous transactions.

Manage Item Transaction Defaults Conditional Configure item transaction defaults to define
default subinventories and locators for items
for shipping, receiving, and movement
request transactions.

Manage Material Statuses Conditional Configure user-defined material statuses

to control the transactions that can be
performed on the material. Material status
can be assigned either at the subinventory,
locator, lot, or serial number level.

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Management
Manage Pick Slip Grouping Rules Conditional Configure the grouping of picks into pick
slips.

Manage Picking Rules Conditional Configure picking rules to enable the

selection of material based on defined
criteria.

Manage Picking Rule Assignments Conditional Configure the assignment of a picking rule to
any combination of criteria and prioritize the
rule assignment within the organization.

Manage Consumption Rules Conditional Manage rules to determine ownership

change of consigned inventory.

Manage Intersubinventory Parameters Conditional Configure parameters for transferring material

between two subinventories within an
organization.

Manage Lot Grades Conditional Configure lot grades to describe the

particular makeup and quality characteristics
of items in a lot.

Manage Lot Expiration Actions Conditional Configure lot expiration actions to indicate
the action required on a lot when it expires.

Manage Lot and Serial Attributes Mapping Conditional Assign lot and serial number attribute
descriptive flexfield context to an item or item
category.

Manage ABC Classes Conditional Configure ABC classes to identify the value
groupings to which items will be assigned.

Manage ABC Classification Sets Conditional Configure the valuation and scope of the
ABC analysis performed against an inventory
based on quantity, value, or history of the
item.

Manage ABC Assignment Groups Conditional Configure ABC assignment groups and
associate ABC classes to the respective ABC
assignment groups.

Manage Inventory Profile Options Conditional Define profile option settings and values to
control inventory behavior such as Material
Status Support.

Manage Inventory Lookups Conditional Review and maintain lookup values for
Inventory, such as Movement Request, Pick
Slip Print Options, and Lot Origination Type.

Manage Inventory Value Sets Conditional Create and edit inventory value sets.

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Management
Manage Inventory Descriptive Flexfields Conditional Define validation and display properties of
descriptive flexfields for inventory. Descriptive
flexfields are used to add user-defined
attributes to entities.

Manage Inventory Account Alias Key Flexfield Conditional Define the inventory account alias key
flexfield segments and validation for use as
inventory account alias classification keys.
The inventory account alias key flexfield must
be defined for inventory to operate.

Manage Inventory Locator Key Flexfield Conditional Define the inventory locator key flexfield
segments and validation for use as inventory
locator classification keys. The inventory
locator key flexfield must be defined for
inventory to operate correctly.

In the Setup and Maintenance work area, use the Define Inventory management task in the Manufacturing and Supply Chain
Materials Management offering to perform your Inventory Management setup.
Common Tasks That You Perform for Inventory Management

Inventory Management requires that you perform the following common tasks:
• Manage Profile Options

• Manage Lookups
• Manage Value Sets
• Manage Descriptive Flexfields
These tasks are common to most Oracle applications. For details about how to perform them, see the Oracle SCM Cloud:
Implementing Common Features for Oracle SCM Cloud guide.
Manage Subinventories and Locators

Inventory Organizations, Subinventories, and Locators: How They Fit
Together
You can structure the relationship of inventory organizations, subinventories, and locators to match the physical structure of
your warehouse.
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Management
One inventory organization contains two subinventories. One subinventory contains no locators, and the other subinventory
contains two locators.
Inventory Organization
Subinventory Subinventory
Locator Locator
Inventory Organizations
An inventory organization can contain one or more subinventories.
Subinventories
Define at least one subinventory for each inventory organization that you want to transact items into, from, or within.
Locators
A subinventory can contain one or more locators.
Subinventories: Explained
Define at least one subinventory for each inventory organization of item and inventory management usage.
You can create the following kinds of subinventories:
• Storage subinventories
• Receiving subinventories
Storage Subinventories
A storage subinventory is used to store material in the warehouse. Material in a storage subinventory is reflected in on-hand
quantity.
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Management
Receiving Subinventories
A receiving subinventory is used to temporarily store material before placing in a storage subinventory. Material in a receiving
subinventory is not reflected in on-hand quantity. An inventory organization need not contain a receiving subinventory.
Creating Subinventories and Locators: Points to Consider

You should take into account the following when planning to create subinventories and locators:
• Subinventory-locator hierarchy
• Considerations for creating subinventories
• Considerations for creating locators
Creating the Subinventory-Locator Hierarchy

You should consider the following when planning the hierarchy of subinventories and their corresponding locators:
• The importance, for your organization, of creating a subinventory and locator hierarchy that represents the physical
layout of your warehouse.
• Your organization's plan for the movement of item and labor, and utilization of labor and equipment, for put away
and picking.
You should refer to these plans when sequencing the picking order of subinventories and locators.
Considerations for Creating Subinventories

You should consider the following when planning to create subinventories:
• How many storage and receiving subinventories are required in your warehouse.
• Whether you must distinguish between receiving and storage subinventories.
Use storage subinventories for tracking on hand quantities.

• Whether you want to associate items to subinventories and their locators by creating item subinventories.
Considerations for Creating Locators

You should consider the following when planning to create locators:
• Whether you want to allow users to dynamically create locators.

• Whether you want to add items to locators.
• Whether it is necessary to implement locator control.
If you decide to implement locator control, consider whether you must implement locator control for the organization,
for individual subinventories, or at the item level.
• The level of granularity required for locators, such as: "row or rack" or "row or rack or bin".
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PAR Location Attributes: Explained

You can edit the attributes related to PAR location management on the Manage Item Locators page.
These attributes include:
• PAR level
• Par level UOM
• Replenishment count type
• PAR maximum quantity
• Count required
PAR Level
The level at which the quantity is restocked. If the count falls below this quantity, and a PAR maximum quantity has not been
specified, the PAR level calculates the reorder quantity.
PAR Level UOM

The PAR level unit of measure associated with the item.
Replenishment Count Type

The replenishment count type values include Order PAR, On-hand quantity, and Order quantity. If you do not specify a
value for the Replenishment Count Type, the application uses the default replenishment count type specified for the
subinventory.
PAR Maximum Quantity

This value is used to recalculate the reorder quantity if the count falls below the PAR level. If you do not specify a PAR
maximum quantity, the application uses the PAR level.
Count Required
A check mark in this field indicates that the item in the PAR location must be counted.
PAR Location Management: Explained

Periodic Automated Replenishment (PAR) enables facilities that do not store perpetual inventory (such as hospitals) to perform
locator-level replenishment. With PAR location management, organizations can perform locator-level stock counting for both
quantity and non-quantity tracked subinventories. If the stock level falls below the target on-hand quantity for the locator,
inventory generates the appropriate replenishment document based on the item sourcing for the subinventory.
Use the Manage Subinventories and Locators task to set up your inventory organization to use PAR locations. Update these
fields on the Manage Subinventories, Create Subinventories, and Edit Subinventories pages:
• PAR location
• Default replenishment count type
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PAR Location
Select this option to indicate that the subinventory is classified as a PAR location.
Default Replenishment Count Type

The default replenishment count type indicates the count type for the PAR location.
The following table lists possible values for the default replenishment count type.
Count Type Description
Order PAR Generates a replenishment requisition for the PAR level quantity or PAR maximum quantity, if
specified, associated with the locator and item.
For example, if you have a quantity of 10 for the PAR level for the item locator, the reorder quantity is
always a quantity of 10. If you define a PAR maximum quantity, this quantity is used for the reorder
quantity.
You cannot enter a replenishment count quantity when the count type is Order PAR.
Enter the on-hand quantity.

On-Hand Quantity
When you enter an on-hand quantity that is less than either the PAR level quantity or the PAR
maximum quantity, the reorder quantity is the difference between the two. For example, if you enter
an on-hand quantity of 15 and a PAR level quantity of 20, the reorder quantity is 5.

If the on-hand quantity exceeds the PAR level quantity, the reorder quantity is zero.

In the event that the PAR maximum quantity is defined, the reorder quantity is the difference
between the PAR maximum quantity and the on-hand quantity.

Generates a replenishment requisition for the order quantity entered for the replenishment count.
Order Quantity
For example, if you enter an order quantity of 50 and a PAR level quantity of 20, the reorder
quantity is 50, and inventory does not take the PAR level quantity or the maximum quantity into
consideration.

FAQs for Subinventories and Locators

What's a locator?
A locator is a physical area within a subinventory where you store material, such as a row, aisle, bin, or shelf. You can
transact items into and out of a locator.
Why can't I assign locator control options to some subinventories?

You can assign locator control to the subinventory only if an inventory organization's locator control parameter is set to assign
locator control at the subinventory level.
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What happens if I select different locator control options for a subinventory?

Select Dynamic Entry to require entry of a locator for each item; the user can choose a valid predefined locator, or define
a locator dynamically at the time of transaction. Select Item Level to define locator information for specific items. Select
Prespecified to require entry of one of the predefined locators for each item.
Why can't I select a particular subinventory as the item transaction default subinventory
for a particular item?
If the item is associated with one or more subinventories (as one or more item subinventories), you can only select the
subinventories with which the item is associated.
What's an item subinventory?

An item subinventory is an association of an item with a subinventory that is created when you add an item to a subinventory.
You might want to restrict an item to a subinventory to store it with other items that have a similar size, volume, weight,
specific storage requirement such as refrigeration, or the type of labor and equipment used to create the item. You also add
an item to a subinventory to either perform min-max planning on the item, or include the item in an ABC classification set for
ABC analysis.
What's a PAR level?

The level at which the quantity is restocked. If the count falls below this quantity, and a PAR maximum quantity has not been
specified, the PAR level calculates the reorder quantity.
Manage Interorganization Parameters

Enabling Interorganization Transfers: Example
Interorganization transfers enable you to transfer particular items between organizations.
Scenario
You are charged with performing the prerequisites that are necessary for your users to perform interorganization transfers of a
particular item.
To enable interorganization transfers, you perform the following:
1. Ensure that you have created the inventory organization from which the item will be transferred, in addition to the
inventory organization to which the item will be transferred.
2. In the item's attributes, ensure that the item is assigned to the inventory organization from which the item will be
transferred, in addition to the inventory organization to which the item will be transferred.
3. Manage interorganization parameters to define the relationships that exist between the inventory organizations.
4. Ensure that the item has the same unit of measure in each inventory organization.
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Setting Up Interorganization Parameters for Transfer Orders:

Explained
Use the Manage Interorganization Parameters task to configure rules for interorganization transfer orders and define the
relationships between source and destination inventory organizations. Transfer orders represent demand and supply in a
single document. You can transfer material to an inventory destination or an expense destination.
Important interorganization parameters for transfer orders include the following:

• Inventory destination receipt routing
• Transfer order required
• Expense destination receipt required
• Expense destination receipt routing
• Cancel backorders
In the Setup and Maintenance work area, use the Manage Interorganization Parameters task in the Manufacturing and Supply
Chain Materials Management offering to set your interorganization parameters.

Specify either direct or in-transit. This option determines how material should be transferred between two inventory
organizations.
Inventory Destination Receipt Routing

Specify the receipt routing for in-transit inventory destination transfer types. Receipt routing options include Standard, Direct,
and Inspection.
Transfer Order Required

Indicate whether a transfer order is required for each transfer.

Indicate whether or not a receipt is required in the destination inventory organization for expense destination transfers going
to that destination location. If you select this option, a receipt is required on interorganization expense destination transfer
orders between the from and to organizations. If you do not select this option, then the transfer order is considered received
and delivered at the time of shipment. This field is available for Expense destination types only.

Specify the receipt routing for expense destination transactions. Receipt routing options include Standard, Direct, and
Inspection.
Cancel Backorders
Specify whether or not you want to automatically cancel the remaining quantity on a backordered transfer order line. This
option enables you to cancel the remaining quantity on a transfer order line that would normally be backordered when orders
cannot be filled due to shortages.
The three possible values for the Cancel Backorders option are shown in the following table.
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Default to source inventory organization Use the default set at the inventory source organization level to determine whether or not to
level automatically cancel the remaining quantities on transfer order backorders.

FAQs for Interorganization Parameters

What are interorganization parameters?
Interorganization parameters define the relationships that exist between source and destination inventory organizations.
Define these relationships to enable users to create interorganization transfers. One interorganization parameter enables a
one-way interorganization transfer from a source inventory organization to a destination inventory organization. To enable
two-way interorganization transfers between two inventory organizations, create two interorganization transfers, with each
inventory organization functioning as a source inventory organization and a destination inventory organization.
What happens if I select different receipt routing options for the In Transit transfer type?
Select Direct to deliver this item directly to its location at receipt. Select Inspection to receive this item first, inspect it, then
deliver. Select Standard to receive this item first, then deliver without inspection.
What happens if I select the Automatically cancel transfer order backorders check box?
The remaining quantities on backordered transfer order lines are automatically canceled.
Manage Account Aliases

Creating an Account Alias: Example
There are multiple situations for which you might want to create an account alias. The following scenario illustrates an
example of one such situation.
Creating an Account Alias for a Temporary Project

Your company has a temporary project for which costs need to be tracked to a particular account. You create an easily-
recognizable account alias for the account and have your employees cost the project's transactions to this account alias. You
set the account alias to expire when the project ends, so that users cannot cost transactions to this particular project after the
project ends.
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FAQs for Account Aliases

What's an account alias?
An account alias is an alternate name for an account number, and is used to more easily identify an account when performing
a transaction. You can select an account alias as a demand source when performing a reservation; you can also select an
account alias as a transaction source when performing a miscellaneous transaction.
Manage Transaction Sources and Types

Defining a Transaction Source and Transaction Type: Example
The following scenario illustrates how you would define a transaction source and transaction type for a particular business
need:
Scenario
Your organization frequently donates items that you manufacture to charity. You might want to define a transaction source
called "Charity" and a transaction type called "Issue to Charity", using the "Issue from Stores" transaction action. When you
donate an item to charity, you create a miscellaneous transaction using the Issue to Charity transaction type.
Transaction Types: Explained

A transaction type is used to classify transactions. Examples of transaction types are Purchase Order Receipt, Sales Order
Issue, and Inventory Subinventory Transfer. You can define transaction types on the Manage Inventory Transaction Sources
and Types page.
Transaction types are combinations of:
• Transaction sources
• Transaction actions
Transaction Sources
A transaction source is the type of entity against which a transaction is charged. Along with a transaction action, a transaction
source uniquely identifies a transaction type. Examples of transaction sources are Purchase Order, Sales Order, and
Inventory.
Transaction Actions
A transaction action is a system-defined type of material movement or cost update. Examples of transaction actions are
Receipt into Stores, Issue from Stores, and Subinventory Transfer.
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FAQs for Transaction Sources and Types

What happens if I enable status control for a transaction type?
The transaction type for which you enable status control becomes an allowed transaction type for new material statuses that
you create. When material status control is enabled for a transaction type and you are creating or editing a material status,
you can choose to leave transactions of that transaction type as allowed, or disallow transactions of that transaction type.
If you do not enable status control for a particular transaction type, transactions of that transaction type are always allowed.
ABC Analysis
ABC Analysis: Overview
ABC analysis is an inventory categorization technique, which determines the relative value of a group of inventory items based
on a user-specified valuation criterion.
Using ABC analysis you can identify items that will have a significant impact on overall inventory cost, while also identifying
different categories of stock that will require different management and controls. ABC refers to the ranking you assign your
items in order of their estimated importance suggesting that inventories of an organization are not of equal value, such as
items classified as:
• A items are very important for an organization and are very tightly controlled and accurate records are maintained
• B items are important, but less important than A items and more important than C items and are less tightly
controlled and good records are maintained
• C items are marginally important with the simplest controls possible and minimal records are maintained
Typically, you use ABC analysis as the basis for defining the frequency in which items are cycle counted. The frequency
with which you count your items depends upon criticality of the item, cost of the item, lead time of the item, past stock
movements of the item as well as other criteria.
Setting Up ABC Information: Worked Example

This example demonstrates how to set up ABC classes, create ABC classification sets, and perform ABC assignments to
perform ABC analysis. You set up ABC information in the Setup and Maintenance work area.
The following table summarizes the key decisions for ABC analysis:
Decisions to Consider In This Example
How to determine relative ranking of each item? Create an ABC class

How to arrange the items in the decreasing order based on the Create an ABC classification set
defined criteria?

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Decisions to Consider In This Example
How to associate ABC classes with ABC classification sets? Create ABC assignment groups

How to associate items to ABC classes within an ABC assignment Perform ABC assignments
group?

Can we update ABC assignments? Yes

Can we purge an ABC assignment group? Yes

Summary of the Tasks

In the Setup and Maintenance work area, you set up ABC information to perform ABC analysis:
1. Create an ABC class
2. Create an ABC classification set
3. Create ABC assignment groups
4. Perform ABC assignments
5. Update ABC assignments
6. Purge ABC assignment group
Creating an ABC class

You use ABC classes to identify the value groupings to which your items belong. You define these classes using your own
terminology. For example, you might define classes A, B, and C, and later assign your items of highest rank to the A class,
those of lower rank to the B class, and those of lowest rank to the C class. You can add to the list of classes you have
already defined.
To create a new ABC class:
1. In the Setup and Maintenance work area, select the Manufacturing and Supply Chain Materials Management
offering.
2. On the Setup: Manufacturing and Supply Chain Materials Management page, click the Inventory Management
functional area, and then click the Manage ABC Classes task.
3. On the Manage ABC Classes page, click Actions > Add Row.
4. Enter the name in the ABC Class column.
5. Enter a date on which the class becomes active in the Start Date column.
6. Enter a date on which the class becomes inactive in the End Date column.
7. Click Save and Close.
Creating an ABC Classification Set

You define an ABC classification set for your organization or for a specific subinventory within your organization. You select
the classification set criterion, the scope of your analysis, and any additional information that may be conditionally necessary,
based on your classification set criterion.
To create a new ABC classification set:
offering.
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functional area, and then click the Manage ABC Classification Sets task.
3. On the Select Organization dialog box, select an organization and click OK.
4. On the Manage ABC Classification Sets page, click Actions > Create.
5. On the Create ABC Classification Sets dialog box, enter a name for the ABC classification set.
6. Select one of the following values for Content Scope:
Value Context
Organization To evaluate items in the entire organization against the criteria set in the ABC classification set.

Subinventory To evaluate items for their rankings against other items in the subinventory and not the entire
organization. Select the subinventory to which you want to restrict the valuation. Additionally,
select the value for Valuation Scope. If you want to restrict items only to the subinventory, select
the valuation scope as Subinventory, but if you want the ranking done organization wide, select
the valuation scope as Organization.

7. Select a value for Criteria and accordingly set the start date and end dates.
8. Click Submit.
Creating ABC Assignment Groups

You define an ABC assignment group to associate ABC classes with an ABC classification set. You assign items to ABC
classes within a particular group. This allows you to assign items to different ABC classes in different groups.
You use the data on the ABC Classification Set Items page as a guide when assigning items to ABC classes. On the ABC
Classification Set Items page, you analyze the item data and decide which value (sequence, inventory, item percentage, or
value percentage) to specify as the cutoff point of an ABC class.
To create an ABC assignment group:
offering.
functional area, and then click the Manage ABC Assignment Groups task.
3. On the Manage ABC Assignment Groups page, click Actions > Create.
4. On the Create ABC Assignment Group dialog box, enter a name for the ABC assignment group.
5. Select an ABC classification set.
6. In the ABC Classes table, enter the sequence number in which classes are ordered and enter the name of the class
to use with this ABC group.
Note: The lower the sequence number the higher the importance of the class.
Performing ABC assignments

You can assign and update ABC classes to an ABC assignment group where an ABC classification set was also entered.
From the ABC Classification Set page you determine the cutoff points (sequence, inventory, item percentage, or value
percentage) for assigning ABC classes. You can then use the classifications for other purposes such as determining how
often you cycle count a given item.
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To perform ABC assignments:
offering.
3. On the Manage ABC Assignment Groups page, search for the ABC assignment group and click Actions > Perform
ABC Assignments.
4. On the ABC Assignments page, enter the cutoff points for each ABC class. Each ABC class must have at least one
item assigned to it, and all items in the ABC classification set must be assigned to an ABC class. Complete any of
the fields, as shown in this table.
Field Context
Seq The sequence number from the ABC Classification Set page for the last item to be included in
each ABC class.

Inventory Value The cumulative value from the ABC Classification Set page for the last item to include in each
ABC class.

% Items The percentage of number of items from the ABC Classification Set page to include in each class.

% Value The percentage of total value from the ABC Classification Set page to include in each class.

Note: For the Inventory Value, % Item, and % Value fields, if the value entered does not exactly match
any item, the first item with a value greater than the value entered is allocated.
Updating ABC Assignments

You can change the class into which an item falls as a result of the automatic ABC assignment process if it is not appropriate.
You can update an ABC group to include those items that were not a part of the initial ABC classification set. By updating the
ABC group, you can expand the scope of your existing ABC classification sets without having to rerun any processes.
To update ABC assignments:
offering.
3. On the Manage ABC Assignment Groups page, search for the ABC assignment group and search fpr the ABC
assignment group and click Actions > Update ABC Assignments.
4. On the Update ABC Assignments page, enter an inventory item and a valid ABC class.
Purging an ABC Assignment Group

You can purge an ABC group to delete all item assignments to ABC classes for the assignment group, as well as the ABC
group itself. By purging an ABC classification set, you delete all item values and rankings for the ABC classification set, as well
as the ABC classification set itself.
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Note: You can purge an ABC classification set only when no ABC groups are using it.
offering.
3. On the Manage ABC Assignment Groups page, search for the ABC assignment group.
4. Select a row in the search results and click Actions > Purge ABC Assignment Group.
Predefined ABC Information: Explained

When you create a new inventory organization using Quick Setup, the INV_ORG_DEP_SEED_DATA_PUB.create service is
run, which creates predefined ABC classes, an ABC Classification Set, and an ABC Assignment Group. This predefined ABC
information uses criteria common to most companies.
Predefined ABC Classes

The INV_ORG_DEP_SEED_DATA_PUB.create service creates predefined ABC classes for the organization in the selected
language.
These classes can be used for the ABC classification set of the newly created inventory organization.
The following table lists the ABC classes created by the INV_ORG_DEP_SEED_DATA_PUB.create service:
Name Description
Class A High

Class B Medium

Class C Low

Note: You can edit the classes to update the names and descriptions.
Predefined ABC Classification Set

The INV_ORG_DEP_SEED_DATA_PUB.create service creates a predefined ABC classification set. The ABC classification
set is an ordered list of the items in the organization used to make the ABC assignments in the newly created inventory
organization. The predefined ABC classification set is not automatically submitted because you will not have loaded your
inventory items into the application. Once you load your inventory items, you must manually resubmit the ABC classifications
set and then use the ABC assignment group to perform the ABC assignments.
The following table lists the criteria used to create the predefined ABC classification set:
Field Value
Name On-hand Value

Description On-hand value of items in the organization
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Field Value

Content Scope Organization

Criteria Current on-hand value

Predefined ABC Assignment Group

The INV_ORG_DEP_SEED_DATA_PUB.create service creates a predefined ABC assignment group, which is used to link the
ABC classification set with the ABC classes.
The following table lists the ABC assignment group and the linked ABC classification set and ABC classes:
Assignment Group Name ABC Classification Set ABC Class
Assignment Group On-hand Value Class A

Assignment Group On-hand Value Class B

Assignment Group On-hand Value Class C

Manage ABC Classes

ABC Classes: Explained
You use ABC classes to identify the value groupings to which items belong. You can define these classes using your own
terminology. For example, you can define classes High, Medium, Low, and later assign items of highest rank to High, those of
lower rank to Medium, and those of the lowest rank to Low.
Typically, ABC refers to the ranking you assign your items in the order of their estimated importance suggesting that the
inventories of an organization are not of equal value, such as:
• A items are very important for an organization and are very tightly controlled and accurate records are maintained.
• B items are important, but less important than A items and more important than C items and are less tightly
controlled and good records are maintained.
• C items are marginally important with the simplest controls possible and minimal records are maintained.
You can use ABC classes to group items for a cycle count where you count A items more frequently than B items. When you
use ABC classes in this way, you perform an ABC analysis and assign items to classes based on the results of that analysis.
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Deleting ABC Classes: Explained

To delete an ABC class:
Note: You cannot delete an ABC Class that is in use in cycle count or in ABC Assignment Group Classes.
offering.
functional area, and then click the Manage ABC Classes task.
3. On the Manage ABC Classes page, search for a class.
4. Select the ABC class and click Actions > Delete.
What happens when I purge ABC information?

You purge an ABC group to delete all item assignments to ABC classes for the assignment group, as well as the ABC group
itself. Purging an ABC classification set deletes all item values and ranking for the ABC classification set you specify, as well
as the ABC classification set itself.
Note: You cannot purge ABC information that is being used; for example, an ABC classification set is not
purged if it is associated to an ABC assignment group.
Manage ABC Classification Sets

ABC Classification Sets: Explained
You use an ABC classification set to classify some or all of an organization's items based on the scope and criteria specified
in order to divide them into ABC classes for use in ABC analysis and cycle counting.
You can define and compile an ABC analysis for your entire organization or for a specific subinventory within your
organization. You select the criterion, the scope of your analysis, and any additional information that may be conditionally
necessary, based on your criterion. The combination of all these parameters constitutes an ABC classification set, identified
by the ABC classification set name. You use this name to identify any activity pertaining to this ABC analysis.
ABC Classification Set Criteria: Explained

For each ABC classification set, you select one criterion to value and rank each item included in the ABC classification set.
The criterion that you select defines the ranks of items in the ABC classification set.
The following table lists the ABC classification set criteria to value and rank each item included in the ABC classification set.
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ABC Classification Set Criteria Usage
Current on-hand quantity Use the current on-hand quantity of inventory. Assign the sequence number in the descending order
of quantity.

Current on-hand value Use the current on-hand quantity of inventory times the item cost. Assign the sequence number in
the descending order of value.

Current item cost Use the current item cost to rank items based on their individual item cost.

Historical number of transactions Use the historical number of transactions (transaction history) for the specified time period. Assign
the sequence number in the descending order of the number of transactions.

Historical usage quantity Use the historical usage quantity (transaction history) for the specified time period. Assign the
sequence number in the descending order of quantity.

Historical usage value Use the historical usage value (transaction history). This is the sum of the transaction quantities
times the unit cost of the transactions for the specified time period. Assign the sequence number in
the descending order of value.

Previous cycle count adjustment Use the previous cycle count adjustment quantity. This is the sum of the value of all cycle count
quantity adjustments since the last ABC classification set submission date. Assign the sequence number in
the descending order of quantity.

Previous cycle count adjustment value Use the previous cycle count adjustment transaction value. This is the sum of the value of all cycle
count adjustments since the last ABC classification set submission date. Assign the sequence
number in the descending order of value.

For example, if you use Current on-hand quantity as your compile criterion, an item with an on-hand quantity of 10 units is of
higher rank than another item with a quantity of 5 units. If you use the Current on-hand value criterion, and the first item has
a cost of $10 per unit and the second item has a cost of $25 per unit, the second item has a higher value than the first item
because $100 ($10*10 units) is compared to $125 ($25*5 units).
ABC Classification Set Content Scope: Explained

When creating an ABC classification set, you can determine the ranking of items in an ABC classification set by using the
following content scope:
• Organization, where all items in the organization are included in the ABC classification set, which includes the items
with zero cost or zero quantity.
• Subinventory, where you can restrict your ABC classification set to items within a particular subinventory.
Additionally, you can value your items across all subinventories in the organization or just the one for which you have
restricted the ABC classification set.
ABC Classification Set Items: Explained

ABC classification set items are items in the ABC classification set. These items are listed in descending order based on
the criteria associated with the classification set. The item with the highest value is listed first and the subsequent ones in
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the descending order. The information in the ABC Classification Set Items page is different depending on the selected ABC
classification set criteria.
You use the ABC classification set items as a guide when assigning items to ABC classes. On the ABC Classification Set
Items page, you can analyze the sequence numbers of items and decide which sequence number to specify as the cutoff
point of an ABC class. You can specify the cutoff point for the ABC class on the Perform ABC assignments page.
ABC Classification Item Ranking: Examples

The ranking of the same items changes depending on whether you select an individual subinventory or the entire organization
for the content scope, as well as whether the valuation scope is subinventory or organization.
The following scenarios show how the ranking of the same items changes depending on the content and valuation scope. In
all examples, item WIDGET1 has an on-hand quantity of 5 units in subinventory STORES1. The same item also exists in other
subinventories in your organization, for a total on-hand quantity of 30 units in the entire organization. Item WIDGET2, has an
on-hand quantity of 10 units in STORES1 and a total on-hand quantity of 20 units in the entire organization. Item WIDGET3,
has an on-hand quantity of 20 units in STORES2 and a total on-hand quantity of 40 units in the entire organization.
The ABC classification set criteria is Current on-hand quantity.
Content Scope is Organization

If you select the content scope for the ABC classification set as organization, WIDGET1, WIDGET2, and WIDGET3 are
included in the ABC analysis. In the ABC analysis, 40 units for WIDGET3, 30 units for WIDGET1, 20 units for WIDGET2 are
used, and WIDGET3 is ranked higher than WIDGET1 and WIDGET2.
Content Scope is Subinventory

If you select the content scope for the ABC classification set as subinventory STORES1, only WIDGET1 and WIDGET2 are
included in the ABC analysis because they both exist in STORES1. However, the value to use is determined by what you
select in the valuation scope. If you select to restrict valuation to the subinventory, 5 units for WIDGET1 and 10 units for
WIDGET2 are used, and WIDGET2 is ranked higher than WIDGET1. However, if you select to value the same items across
the organization, 30 units for WIDGET1 and 20 units for WIDGET2 are used, and WIDGET1 is ranked higher than WIDGET2.
Resubmitting ABC Classification Set: Procedure

To resubmit an ABC classification set:
offering.
3. On the Manage ABC Classification Sets page, search for the ABC Classification Set.
4. Select a row in the search results and click Actions > Resubmit ABC Classification Set..
Viewing ABC Classification Set Items: Procedure

To view the ABC classification set items:
offering.
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4. Select a row in the search results and click Actions > View ABC Classification Set Items.
The information in the ABC Classification Set Items page is different depending on the selected criteria. After
determining each item's value, all the items in your ABC classification set are ranked in the descending order on the
ABC Classification Set page. You can use this information as a guide in assigning your items to ABC classes.
Purging ABC Classification Set: Explained

To purge an ABC classification set:
Note: You cannot purge an ABC classification set if it is used in an ABC Assignment Group.
offering.
4. Select a row in the search results and click Actions > Purge ABC Classification Set.
What happens when I resubmit an ABC classification set?

When you resubmit an ABC classification set, the items for the classification set are re-sequenced according to current values
of the classification set criteria.
How can I rank items only in a subinventory but base the valuation
ranking on the organization?
To rank the items at the subinventory level but base the valuation ranking on the organization, select the content scope as
subinventory and then select the valuation scope as Organization.
What's the difference between the Historical Usage Quantity and

Historical Usage Value criteria options for ABC classification sets?
Historical Usage Quantity ranks items in the ABC classification set by the quantities that the items have been used
historically, for the period that you specify.
Historical Usage Value ranks items in the ABC classification set by their historical values, which is the sum of the
transaction quantities times the unit cost of the transactions for the time period that you specify.
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Manage ABC Assignment Groups

ABC Assignment Groups: Explained
ABC assignment groups link a particular ABC classification set with a valid set of ABC classes. You selectively reduce or
increase the number of ABC classes you want to use in your item assignments for a particular ABC classification set. For
example, you have five classes, A, B, C, D, and E, defined for your organization where you perform your ABC analysis by
subinventory. The first subinventory is rather small. You need only three classes in which to divide your items. You define
an ABC group, associating the ABC classification set for the first subinventory with the classes A, B, and C. The second
subinventory for which you associate an ABC classification set is much larger. There are five distinct value groupings of items.
You define a second ABC group, associating the ABC classification set for the second subinventory with all five classes
defined for your organization, A, B, C, D, and E.
These groups are used when you automatically assign your items to ABC classes. It ensures that you divide your items into
the exact number of groupings you specified in the ABC group. You can assign the same item to different ABC classes in two
different ABC assignment groups. You must also assign a sequence number to each class associated with the ABC group.
The class with the lowest sequence number is assumed to have the highest rank and will have higher rank items assigned to
that class than the next higher sequence number. Using the A, B, and C classes in the example, you might assign the A class
a sequence number of 1, the B class a sequence number of 2, and the C class a sequence number of 3. (Sequence numbers
10, 20, and 30 would give the same result.) When you later assign your items to ABC classes, the first grouping of items in
the descending value list are assigned to class A, the next to B, and the last to C.
You may update an assignment group to add new classes. However, you cannot delete a class. If you need to delete a class,
you must create a new assignment group with only the desired classes.
You can use ABC assignment groups with cycle counting, for example to specify that A items are counted more frequently
than B items.
Note: An ABC assignment group must have at least one ABC class associated to it.
Editing ABC Assignment Groups: Explained

To edit an ABC assignment group:
offering.
3. On the Manage ABC Assignment Groups page, search for the ABC assignment group and click Actions > Edit.
4. On the Edit ABC Assignment Group dialog box, select the ABC classes you want to add to your item assignments
for the ABC classification set.
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Deleting ABC Assignment Groups: Procedure

To delete an ABC assignment group:
Note: You cannot delete an ABC assignment group if it is used in a cycle count.
offering.
3. On the Manage ABC Assignment Groups page, search for the ABC assignment group and click Actions > Delete.
ABC Assignments: Explained

When you define ABC assignments, you must specify the cutoff point for each ABC class. Each ABC class must have at least
one item assigned to it and all items in the ABC classification set must be assigned to an ABC class.
You need to provide at least one of the four values against the ABC classes. The last ABC class is automatically associated
with the remaining items based on the entries for other ABC classes.
Performing ABC Assignments: Explained

You can assign and update ABC classes to an ABC assignment group where an ABC classification set was also entered.
You can use the ABC Classification Set Items report to assign items to ABC classes and to decide which value (sequence,
inventory, item percentage, or value percentage) to specify as the cutoff point of an ABC class. You can then use the
classifications for other purposes such as determining how often you cycle count a given item.
In the Perform ABC Assignments page, the fields not specified by you are dynamically calculated. The values for the last ABC
class are automatically calculated when you specify a value for the second to last ABC class.
Updating ABC Assignments: Explained

If you are not satisfied with the class into which an item falls as a result of the automatic ABC assignment process, you can
change it. For example, assume you compiled your ABC analysis based on historical usage value. You have a relatively new
item in your inventory that was ranked lower in your ABC Classification Set Items report since it has very little transaction
history on record. Therefore, after the assignment process, this item was assigned to a class of low rank. However, you
know that in the future, this item will have a high usage value and should really be classified as a high rank item. You use the
Update ABC Assignments page to reclassify this item to now be a high rank item.
You can also update an ABC group to include those items that were not a part of the initial ABC classification set. This allows
you to expand the scope of your existing ABC classification sets without having to rerun any processes. For example, if
you start stocking a new item in your inventory, you can make it a part of your existing ABC groupings through the update
process. Otherwise, you would have to start all over by recompiling your ABC analysis and reassigning your items to ABC
classes. With the whole process starting from the very beginning, you also run the risk of losing any changes you might have
made to your item assignments.
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When do I update ABC item assignments??

You update the ABC item assignments when you need to:
• Update the class into which an item falls.
• Include those items that were not included in the ABC classification set items.
• Add items that are new to the company.
Note: This is an optional step and only needs to occur on an as-needed basis.
What happens when I purge an ABC assignment group?

Purging an ABC assignment group deletes all ABC class assignments to the ABC assignment group, as well as the ABC
assignment group itself.
Manage Inventory Transaction Reasons

Inventory Transaction Reasons: Explained
An inventory transaction reason is a standard means of classifying or explaining the reason for a transaction, and can be used
when performing any type of material transaction. For example, you could define the inventory transaction reasons Theft,
Misplaced Items, and Damaged Items for classifying adjustment transactions when performing a cycle count or physical
inventory count.
FAQs for Inventory Transaction Reasons

What happens if I select a reason type and reason context for an inventory transaction
reason?
The transaction reason will only be selectable when you perform an inventory transaction in the reason type and reason
context that you select. For example, if you create an inventory transaction reason with a reason type of Receiving and a
reason context of Change Subinventory/Locator, the user will only be able to select that transaction reason when the user is
in Receiving and moving material to a different subinventory and locator combination.
Manage Item Transaction Defaults
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Item Transaction Defaults: Explained

An item transaction default specifies the default subinventory or locator for a specified item when the specified shipping or
receiving transaction is performed on that item. The default subinventory or locator is included in the item's default shipping
or receiving information. Note that for movement requests, if a user does not specify a locator when transacting an item into
a locator-controlled subinventory that you specify as the item transaction default, the application determines the put-away
locator.
Set up item transaction defaults on the Manage Item Transaction Defaults page.
Manage Material Statuses

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

• Material status transactions
• Cumulative effective status
Material Status Control Levels

You assign material statuses at the subinventory, locator, lot, and serial number levels.
When you assign a material status to a subinventory or locator, items are not assigned the material status of the subinventory
or locator. Instead, items take on the behavior indicated by the material status that is assigned to the subinventory or locator.
To assign a material status to a lot or serial number, you must first enable the item attributes Lot Status Enabled and Serial
Status Enabled on the item in the item master organization.
You can optionally assign a default lot or serial number status to an item in the item master organization. When you do so, the
item retains the lot or serial number status through all inventory transactions, including interorganization transfers.
Material Status Transactions

When you create a material status, you select the allowed and disallowed transaction types for that material status. Note that
you must enable status control for transaction types to make them available to allow and disallow. Transactions types for
which you do not enable status control are always allowed.
Cumulative Effective Status

A cumulative effective status is the combination of all disallowed transactions. If a transaction is disallowed at the serial
number, lot, locator, or subinventory level, the transaction fails. For example, if you have a locator whose status disallows
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miscellaneous issues, and that locator is in a subinventory whose status disallows sales order issues, you cannot perform
transactions of either transaction type for material in that locator.
Creating Material Statuses: Points to Consider

Material statuses provide more flexible control of transacting material. For example, you can create a Damaged material
status to disable damaged material from being shipped to a customer.
Before creating material statuses, you should:
• Determine if material statuses are necessary

• Determine allowed and disallowed transaction types
• Determine material statuses to define
Determining if Material Statuses are Necessary

Consider the needs of your organization, and whether it is necessary to create material statuses.
For example, if your organization operates on a small scale or you want to manage the statuses or items manually, it might
not be necessary to create material statuses. By default, all the material is in Active status, which allows transactions with no
restrictions.
Determining Allowed and Disallowed Transaction Types

Consider the needs of your organization, and the transaction types that should be allowed.
For example, damage to your warehouse's racks is making locations in the racks, and the material in those locations,
inaccessible. You can create a material status to disallow transactions on the inaccessible material. Once the damaged racks
have been repaired, you can create a material status to allow transactions on the material that is once again accessible.
Determining Material Statuses to Define

Consider the needs of your organization, and the material statuses that are necessary to define for your organization.
Following are examples of questions that you can ask when determining material statuses for your organization:
• What are the kinds of items that are handled in the warehouse?
• Does the consumption of material needs to be restricted when it needs to inspected for quality assurance?
• Should users be allowed to ship material, such as food or pharmaceuticals, to customers if the refrigerator storing
the material is broken?
Manage Pick Slip Grouping Rules

Pick Slip Grouping Rules: Explained
By creating pick slip grouping rules, you organize how picking lines for released sales orders, transfer orders, return transfer
orders, and work orders are grouped onto pick slips. For example, if you select Order Number as a grouping criterion, then all
items on the sales order or all components for a work order are grouped onto a single pick slip.
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The following aspects of a pick slip grouping rule can reduce time spent on planning and organizing:
• Group pick slips based on criteria

• Specify effective date for the grouping rule
In the Setup and Maintenance work area, use the Manage Pick Slip Grouping Rules task in the Manufacturing and Supply
Chain Materials Management offering to set up pick slip grouping rules.
Criteria Based Grouping of Picking Lines

Enables you to specify more than one grouping criteria for picking. For example, if you select Shipment and Ship-to Location
as grouping criteria, then all the picking lines grouped together on a pick slip are for the same shipment and ship-to location.
Effective Date
Enables you to specify the date from which you want the pick slip grouping rule to come into effect.
Manage Picking Rules

Picking Rules: Explained
Picking rules enable you to define the criteria that determines how material is consumed. For example, LIFO, FIFO, Lot
Ascending, Locator Ascending. After you create a picking rule, you can enable the rule for usage in various organizations.
In the Setup and Maintenance work area, use the Manage Picking Rules task in the Manufacturing and Supply Chain
Materials Management offering to set up picking rules.
A group of picking rules with different criteria can address the various needs of consuming material in an organization. The
following criteria determine how material should be consumed:
• Material restriction
• Allow partial picking
• Material sort
Material Restriction
The material restriction criteria you must specify:
• Shelf Life Days: Indicates the minimum number of days prior to expiry that the material can be consumed.
For example, if an item with an expiration date of June 30 is assigned to a picking rule that dictates a 60-day shelf life
restriction, then that item must be picked no later than May 1, which is 60 days before its expiration date.
• Enforce Single Lot: The enforcement of a single lot for the specific picking rule.
If not, multiple lots may be picked.
Allow Partial Picking

Enables you to specify if the demand line can be partially picked if the total quantity for the order lines is not available. For
example, the requested quantity is 100 and the quantity available using the picking rule is 60. In this case, allow partial picking
determines if the available quantity of 60 is picked or nothing is picked at all.
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Material Sort
The sort attributes that you can assign priorities to are Lot, Locator, Subinventory, and Revision. You can have only one
priority based on a sort attribute and type such as Locator Ascending, Locator Descending, Revision Ascending, or Revision
Descending. For example, if you assign the sort attribute and type Lot Ascending to priority 1, then you cannot assign the
same sort attribute to another priority in the same picking rule regardless of the sort type being Ascending or Descending.
Material Sort Criteria: Points to Consider

Material sort criteria enable you to specify a priority to the sorting criteria. You can do this by assigning priority levels, with
priority 1 being of highest priority and priority 3 being of lowest priority. The sort criteria can be based on four different
attributes; Lot, Locator, Subinventory, and Revision. Before assigning material sort criteria priorities, consider:
• What sort criteria is relevant to the picking rule you are creating?
Relevance to the picking rule

Consider the relevance of the sort criteria to the picking rule you are creating. For example, if the picking rule you are creating
is primarily aimed at lots, then select sort criteria that will assist you in sorting by lots; Lot number ascending or lot number
descending.
Manage Picking Rule Assignments

Picking Rule Assignments: Explained
Picking rule assignments enable you to assign an organization and sequence to a picking rule. It provides mechanisms to:
• Indicate if a picking rule can be used in an organization.
• Prioritize the various rules available to be used in an organization.
• Define set of criteria when a rule should be activated.
You can then assign certain criteria to the picking rule assignment based on which the material will be picked. Note that the
same picking rule can have multiple rule assignments in an organization.
In the Setup and Maintenance work area, use the Manage Picking Rule Assignments task in the Manufacturing and Supply
Chain Materials Management offering to set up picking rules assignments.
The example in the following table demonstrates how picking rule assignments work for an item that is lot controlled and
expiration enabled.
Picking Rule name Rule details
Rule 1 LOT FIFO

Rule 2 LOT LIFO

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The facility usually follows the FIFO rule and ships the oldest material first. However, for their loyal customers, for example,
Loyal, they would like to follow the LIFO rule and ship the newest material first. The loyal customers are given priority over
their other customers. In order to achieve this, the facility needs to have two picking rule assignments in order of priority.
The following table demonstrates picking rule assignments in order of priority.
Picking Rule name Picking Rule Assignment criteria
Rule 2 Item is specified and customer is specified as "Loyal" as part of the criteria.

Rule 1 Item is specified but customer is not specified as part of the criteria.

According to the way the picking rules are assigned in the earlier picking rule assignments table, the application will first look
at the high priority assignment and apply the picking rule assignment in the manner shown in the following table. The table
describes scenarios and results for both "Loyal" and not "Loyal" customers.
Scenario Result
Demand line for specified item and from Rule 2 is applied and newest material is supplied following LIFO.
customer specified as "Loyal."

Demand line is for specified item and Rule 1 is applied and oldest material is supplied following FIFO.
customer is not "Loyal."

Picking rule assignments provide you the flexibility to:
• Assign sequence to the rule assignment

• Define criteria for the assigned picking rule
Assigning Sequence
Enables you to prioritize the rule assignment with respect to the other rule assignments.
Define Criteria
Enables you to specify the details when a rule on a particular picking rule assignment is activated. For example, if you create
a picking rule that picks lots based on FIFO and select a specific customer in the criteria, then according to the picking rule
assignment, the item is picked for that customer based on FIFO.
FAQs for Picking Rule Assignments

What happens if I select different date type options?
You can enter different values into the Start Date and End Date fields. For example, if you select Week, you can enter 1 to
represent the first week of the year, and 52 to represent the last week of the year. If you select Day of the Month, you can
enter 1 to represent the first day of the month, and 31 to represent the last day of the month.
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Picking Rule Assignment Criteria: Points to Consider

You can select any combination of criteria after assigning a picking rule. Selecting the criteria enables you to specify when
the rule assignment is used. For example, if a picking rule, which allocates lots based on FIFO, is assigned to a particular
customer, then the material picked for that customer is allocated based on FIFO.
Before selecting criteria for picking rule usage consider:
• Which combination of picking rule and criteria will help achieve optimum material selection for your organization?
• What is your organization's preference for picking based on the available criteria?
Specifying criteria for picking rule assignment

You must consider the combination of picking rule and criteria that will meet your requirements on material consumption in
your organization. For example, you have a picking rule that ships material based on Lot FIFO. You can assign that rule to a
particular customer so that material for that customer is shipped based on FIFO.
Specifying criteria based on preference

Before selecting the criteria, you must consider your organization's preference for picking based on the available criteria.
• Customer
Consider your organization's picking order preference on what material to ship to which customer. For example, if
certain kind of material should be picked based on customer requirements, then the rule assignments with customer
as criteria are effective.
• Carrier
Consider your organization's preference on what material to ship based on carrier. For example, if the demand line is
to be shipped via a specific carrier, then the carrier-based rule assignment will be effective.
• UOM class
Consider your organization's preference on what material to ship based on UOM class. For example, if the demand
line to be shipped specifies a UOM that belongs to a particular UOM class, then the UOM class-based rule
assignment will be effective
• UOM
Consider your organization's preference on what material to ship to based on UOM. For example, you have the
following rules. Rule 1 sorts the subinventories in such a way that the item is stored by UOM 'Case' in the top
subinventories. Rule 2 sorts the subinventories in such a way that the item is stored by UOM 'Each' in the top
subinventories. You can sequence the rule assignments such that the correct demand lines with appropriate UOMs
are picked using the appropriate rules.
Consider your organization's preference on what material to ship to from which source subinventory.
Consider your organization's preference on what material to ship to which destination subinventory.
• Item
Consider your organization's preference for particular items. For example, if the material needs to be consumed in
a certain way because of the characteristics of the item, then the appropriate picking rule should be assigned to
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the item criteria. Take the case of milk products that should be consumed within the expiration date. In that case,
a picking rule that has shelf life material restriction and assigned to item criteria "milk products" can work best in
optimizing material selection.
• Item type
Consider your organization's preference to ship material that belong to particular item types. You can select the best
possible combination of a picking rule and item type that will help make selection efficient.
• ABC Assignment Group and Class
Consider your organization's preference on material to ship based on a particular ABC assignment group and class.
• Transaction source type
Consider your organization's preference on material to ship based on a particular transaction source type.
• Transaction type
Consider your organization's preference on material to ship based on a particular transaction type.
• Transaction action
Consider your organization's preference on material to ship based on a particular transaction action.
Manage Inventory Consumption Rules

Consumption Rules: Explained
Consumption rules enable you to specify when the consumption of consigned inventory (ownership change) occurs. You
define consumption rules on the Manage Consumption Rules page based on attributes such as transaction type, item, from
organization, to organization and more. For example, you can specify subinventory transfer, interorganization transfer, or
internal material transfer transactions to trigger ownership changes.
If you create a rule with a higher level of granularity and another rule with a lower level of granularity, the rule that is created at
the highest level of granularity (which is wider in coverage) applies during transactions.
Note: Interorganization transfers trigger consumption (ownership change) by default. If you want the material
to remain consigned, you must set up a consumption rule to specify that consumption does not occur with
interorganization transfers.
Example
This example depicts a consumption rule defined to trigger an ownership change for a transaction type of subinventory
transfer. The following table shows the consumption rule setup which carries attributes such as transaction type, inventory
organization, owning party, from subinventory, to subinventory, and item.
Transaction Type Inventory Owning Party From Subinventory To Subinventory Item

Organization
Subinventory M1-Supplier Allied Supplier FGI Stores CM6000

transfer

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Consigned Inventory: Explained

Consigned inventory refers to items that are in the possession of one party, but remain the property of another party by
mutual agreement.
The process of consigned inventory follows steps between the buyer and seller. You start with a consignment agreement and
end with paying the supplier. The following figure shows the steps of the consigned inventory process flow.
YOU SUPPLIER
Consignment Consignment
Agreement Agreement
Consignment PO Consignment Order
Receive Items Ship Items
Consume Material
Consumption Advice Consumption Advice
Invoice
Pay Supplier
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Consignment Agreement
The consigned inventory process starts with a buyer entering into a consignment agreement with a supplier. The
consignment agreement carries the terms related to the consignment arrangement between the trading partners, items to be
purchased on consignment, and the price associated with the items.
Consignment Order
The buyer periodically generates consignment orders requesting the supplier to ship goods.
The consignment order uses the terms and conditions of the consignment agreement and specifies the delivery details,
quantities, locations, and dates for the consigned goods to be delivered.
Ship and Receive Items

Once the supplier ships goods, and the inventory has been received, the inventory is held as consigned stock. The inventory
is in the possession of the buyer. However, the ownership of the inventory remains with the supplier.
Note: For regular (nonconsigned) inventory, once goods are received, the ownership changes to the buying
party.
Consumption Advice
When the inventory is consumed, a consumption advice is generated based upon a frequency agreed upon between the
buyer and supplier. The consumption advice communicates to the supplier the consumption transactions that occurred within
a given period of time.
Invoice and Pay Supplier

The consumption advice serves as the document to initiate financial settlement for the consumed inventory. You also have
the option to pay-on-use to pay your supplier immediately upon usage of the consigned inventory.
Related Topics
• Consigned Inventory Lifecycle: Explained
Consigned Inventory Consumption: Explained

Ownership changes from the supplier to the buyer when the buying organization consumes the consigned inventory. This
process is referred to as consumption.
These factors are important regarding the consumption of consigned inventory:
• Ownership change
• Explicit or implicit transaction
• Lot and serial
• Consumption transaction pricing
Ownership change
You can define consumption rules to specify whether the transfer of consigned inventory between two inventory locations
triggers an ownership change (consumption). When you execute a transfer between organizations, your previously defined
consumption rules determine whether or not the transfer results in an ownership change.
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There are two types of consigned inventory transactions:
• Transfer to Owned: Transfers consigned inventory to owned inventory. This transaction transfers the ownership of
the inventory from the supplier to the internal organization.
• Transfer to Consigned: Transfers ownership of the inventory from the internal organization to the supplier.
Explicit or Implicit Transaction

You can choose to perform consumption transactions both explicitly and implicitly.
With explicit consumption, you specify the external owning party whose goods will be transferred to the internal organization.
With implicit consumption, consumption is a result of an inventory transaction such as a sales order issue. Most transactions
occur through implicit consumption. You can configure the transaction types that trigger consumption through the setup of
consumption rules.
For implicit consumption, the application generates two separate inventory transactions. The first transaction represents the
consumption (change in ownership). This table shows a Transfer to Owned transaction. This transaction records the change
in ownership between the original owning party (Allied Supplier) and the new owning party (Organization M1).
Transaction Type Item Quantity Owning Party Owning Party
Transfer to Owned 100C 10 Allied Supplier Organization M1

The second transaction represents the movement of inventory. This table shows the transaction to record the movement of
inventory. The consumption rules indicate that ownership changes when Item 100C transfers from source subinventory FGI to
destination subinventory Stores.
Transaction Type Item Quantity Source Subinventory Destination Subinventory
Subinventory Transfer 100C 10 FGI Stores

The two, separate transactions allow the segregation of transactions involving the change in ownership and the movement of
material.
Lot and Serial

You can select lot and serial controlled items for a specific owning party when executing consigned inventory transactions.
Consumption Transaction Pricing

When the consumption transaction takes place, the application uses the terms of the associated consignment agreement to
calculate the price that is in effect at the time of consumption. The calculated price is based on the date of consumption since
this represents the point when ownership transfers from the supplier to the internal organization. Oracle Fusion Inventory
Management interfaces with Oracle Fusion Purchasing to determine the current price from the consignment agreement.
Consumption Advice: Explained

A consumption advice is a periodic summary report of consumption transactions that reports the usage of consigned
inventory to the supplier based upon a consumption advice frequency. The consumption advice stores the details needed to
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communicate information to the supplier such as item quantity and value of the inventory consumed in the warehouse. The
consumption advice also serves as the document to initiate financial settlement for the consumed material.
Related Topics
• Create Consumption Advice Process: Explained
• Consumption Advice Generation Frequency: How It's Calculated
Manage Intersubinventory Parameters

Intersubinventory Parameters: Explained
When material is transferred between two subinventories within an organization, intersubinventory parameters are used to
determine the transfer type and receipt routing. In the Setup and Maintenance work area, use the Manage Intersubinventory
Parameters task in the Manufacturing and Supply Chain Materials Management offering to configure intersubinventory
parameters.
Setting Up Intersubinventory Parameters for Transfer Orders:

Explained
Use the Manage Intersubinventory Parameters task to configure parameters for transferring material between two
subinventories within an organization. You can perform transfer orders for an inventory or expense destination transfer. Set
this attribute on the Manage Intersubinventory Parameters page.
Important intersubinventory parameters for transfer orders include the following:
• Organization
• Destination type
• Receipt required at expense destination
• Receipt routing
In the Setup and Maintenance work area, use the Manage Intersubinventory Parameters task in the Manufacturing and
Supply Chain Materials Management offering to set your intersubinventory parameters.
Organization
Enter the destination organization.
Destination Type
Specify inventory or expense destination. The value in this field identifies how transfer order shipments and receipts are
handled for the two different destination types.
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Inventory destination transfer orders require movement to a destination inventory warehouse location. Expense destination
transfer orders allow you to transfer material from an inventory warehouse location directly to your location for immediate
usage.
Destination Subinventory
You must enter a destination subinventory when the destination type is Inventory. This field is available for inventory
destination types only.
Source Subinventory
Enter a source subinventory for inventory destination types. You can optionally enter a value for expense destination types.
The combination of organization and source subinventory must be unique. You also have the option to choose All for the
source subinventory.
If you enter a source subinventory for an expense destination type, then the parameters on this row apply to all
intraorganization expense destination transfer orders sourced from the entered subinventory. If a subinventory is not entered,
than the parameters on this row become the default parameters for the organization, and the parameters are applied to
any intraorganization expense destination transfer order that is sourced from a subinventory that does not have a specific
intersubinventory parameter row defined.
Receipt Required at Expense Destination

Indicate whether or not a receipt is required in the destination inventory organization for expense destination transfer orders
going to that destination location. If selected, then a receipt is required on transfer orders originating from the subinventory on
that parameter row. If this option is not selected, then the transfer order is considered received and delivered at the time of
shipment. This field is available for Expense destination types only.
Note: If the source subinventory for a intraorganization expense destination transfer order is not found at
shipping time and a default parameter row has not been setup, then the Receipt required at expense
destination option defaults automatically to not selected and the transfer order is considered received and
delivered at the time of shipment.

Specify either direct or in-transit. Determines how material should be transferred between two inventory organizations.
Available for inventory destination types only.
Receipt Routing
Specify the receipt routing for in-transit inventory destination transfer types. This option is also available for intraorganization
expense destination transfer orders if the receipt is required at the expense destination. Receipt routing options include
Standard, Direct, and Inspection.
Manage Inventory Descriptive Flexfields

Descriptive Flexfields for Transfer Orders: Explained
You can define descriptive flexfields for transfer orders at the header, line, and distribution levels. This enables you to
configure the Manage Transfer Order task to extend system functions to meet your specific needs. For example, these
user-defined attributes can enable integrations to support various reporting, labeling, compliance, and analytics requirements.
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You must set up descriptive flexfields for transfer orders in the Manage Inventory Descriptive Flexfields task before you
can use descriptive flexfields for transfer orders.
• Set up the Manage Inventory Descriptive Flexfields task
• Use descriptive flexfields to transfer orders
Set Up the Manage Inventory Descriptive Flexfields Task

Access the Manage Inventory Descriptive Flexfields task from the Setup and Maintenance work area. This task is
included in the Inventory Management functional area inside the Manufacturing and Supply Chain Materials Management
offering.
On the Manage Inventory Descriptive Flexfields page, enter Transfer Orders in the Module field in the search area. Then,
you can edit the header, line, or distribution levels, and add the descriptive flexfields needed for your configuration.
Use Descriptive Flexfields to Transfer Orders

With descriptive flexfields for transfer orders, you can enter user-defined attributes at the following transfer order levels:
• Transfer order header
• Transfer order line
• Transfer order distribution
Access descriptive flexfields from the Additional Information area in the Transfer Order header section of the Edit Transfer
Order page. You can also access descriptive flexfields by clicking the Additional Information columns at the transfer order
line and distribution levels of the transfer order.
Related Topics
• Descriptive Flexfields: Explained
• Managing Descriptive Flexfields: Points to Consider
Manage Item Keyword Search for Inventory

Item Keyword Search for Inventory: Explained
Item keyword search enables you to view and search for items using cross-referenced identifiers across all inventory pages.
Use the Manage Item Keyword Search Attributes task in the Set Up and Maintenance work area to set up the item
relationship attributes. This task is included in the Item functional area inside the Manufacturing and Supply Chain Materials
Management offering. It's mandatory for your Supply Chain Application Administrator to enable the Item Keyword attribute.
With item keyword search, you can search for items and objects on all inventory pages with three standard fields:
• Item
• Item Description
• Item Keyword
The Item Description and Item Keyword fields are hidden by default. Select these fields from the Add Fields button in the
search area on inventory pages.
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Note: Item relationships must be defined during item definition.
Integrating with 3PL and Warehouse Management Systems

Third-Party Logistics and Warehouse Management Systems:
Explained
A third-party logistics (3PL) provider typically specializes in integrated operation, warehousing, and transportation services
that can be scaled and configured to customer need based on market conditions. A warehouse management system (WMS)
is a software application designed to support warehouse or distribution center management and staff. This application
facilitates management of available resources to move and store materials into, within, and out of a warehouse, while
supporting staff in material movement and storage.
Oracle Fusion Applications provide a central integration framework that coordinates communication with a 3PL system or
WMS to support purchase order receipts, returns to suppliers, internal material transfers, inventory transactions, and sales
order shipments. Using Simple Object Access Protocol (SOAP)-based web services, Oracle Fusion Inventory Management
communicates receiving advice and shipment requests to a 3PL provider or external WMS for processing. After completion
of processing in the 3PL system or WMS, Inventory Management accepts receipt confirmations, shipment confirmations, and
inventory transactions from the 3PL system or WMS.
Inventory Management Integration with 3PL and Warehouse

Management Systems: Overview
Oracle Fusion Inventory Management supports a central integration framework for working with third-party logistics (3PL)
providers and warehouse management systems (WMS). The inventory management suite of products include Oracle Fusion
Receiving, Oracle Fusion Inventory Management, and Oracle Fusion Shipping.
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The following figure illustrates how Inventory Management integrates with 3PL and WMS systems. The subsections following
the figure provide more detail for this integration.
Count Cost Inventory

Transactions
Expected Receipts Analyze
Expected Shipments Performance
ORACLE FUSION INVENTORY MANAGEMENT
Receipt Receipt Shipment Shipment Inventory Inventory

Advice Confirmation Request Confirmation Transaction Balances
Warehouse Management
3PL
> Receiving > Inventory > Picking > Shipping
Receiving Integration
Receiving integration addresses the following points:
• Sends a receipt advice to the WMS for the various documents, such as purchase order (POs), advanced shipment
notices (ASNs), and return material authorizations (RMAs).
• Receives and processes receipt confirmations to acknowledge the receipt of material, updates the source
documents and on-hand details for quantities and other related information, such as lots, serials, and external
packing units, and the return of rejected material.
Shipping Integration
Shipping integration addresses the following points:
• Sends the shipment requests to the WMS for the various documents, such as sales orders and transfer orders.
• Receives and processes shipment confirmations to acknowledge the shipment of material and updates the source
documents.
• Updates the on-hand details for quantities and other related information, such as lots and serials and splitting of the
unfulfilled portions.
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Inventory Management Integration

Inventory Management integration addresses the following points:
• Receives and processes various inventory transactions that can happen within a WMS that might affect the material
location and on-hand details. Such inventory transactions include adjustments, miscellaneous receipts and issues,
and transfers.
• Receives and processes inventory balance updates for solving inventory reconciliation challenges.
Related Topics
• Inventory Management Integration with 3PL and Warehouse Management Systems Process Flow: Explained
• External System Inventory Balances Integration: Explained

Management Systems Process Flow: Explained
Oracle Fusion Inventory Management integration with third-party logistics (3PL) and warehouse management systems (WMS)
provides you the ability to outsource part or all of your supply chain management functions.
Using this integration, you can:
• Improve customer service by minimizing total delivery time and costs using a 3PL provider
• Improve visibility to expected shipment and receipt detail to better plan import and customs clearance by way of web
service payloads
• Accept returns from your customers with authorization from the manufacturer by way of receipt advices
• Maintain tighter controls between Inventory Management and the execution system for greater transparency for 3PL
or WMS activities
• Monitor inventory accuracy
The following figure shows a high-level overview of this integration process flow. Details of this flow are provided following the
figure.
Receipt Advice
Shipment Request
Receipt Confirmation
Inventory Inventory Transaction 3PL or WMS
Management Inventory Balances
Shipment Confirmation
The web service Send Receipt Advice, available by way of Oracle Fusion Receiving, enables Inventory Management to
communicate expected shipment lines sent to and received by a 3PL system or WMS. Then, the 3PL system or WMS, by
way of the Receive Receipt Confirmation web service in Receiving, communicates confirmation and receipt details of the
expected shipment lines.
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The web service Material Shipment Line, available by way of the GenerateShipmentRequest operation in Oracle Fusion
Shipping, enables inventory management users to send shipment requests to a 3PL system or WMS. The 3PL system or
WMS can accept and confirm the shipment requests by way of the CreateandConfirm operation on the Material Shipment
web service in Shipping.
Also, within Shipping, you can use the tasks in the Inventory Management work area in the Manufacturing and Supply Chain
Materials Management offering so that you can send a shipment request directly from the Inventory Management work area.
Additionally, when shipment confirmation errors occur from the 3PL system or WMS, you can select a task in the Inventory
Management work area to view the error in a spreadsheet, correct the error, and reprocess the shipment. This action brings
the confirmation details into the shipping tables.
The web service Inventory Transaction Manager enables you to receive material transaction updates made by the 3PL system
or WMS to keep on-hand balances synchronized with Inventory Management.
Supported Roles for Inventory Management Integration with 3PL and WMS Systems
The features for Inventory Management integration with 3PL and WMS systems are predefined, and you can access them
through the following existing job roles:
• Warehouse manager
• Receiving and inspection manager
• Shipping manager
The users roles associated with this feature are:

• Warehouse operator
• Receiving agent
• Shipping agent
Related Topics
• Inventory Management Integration with 3PL and Warehouse Management Systems: Overview
Implementation Decision Points and Setup Best Practices for 3PL

and Warehouse Management Systems Integration: Explained
Oracle provides services required to integrate Oracle Fusion Inventory Management, Oracle Fusion Receiving, and Oracle
Fusion Shipping to a third-party logistics (3PL) provider or external warehouse management system (WMS). These product
areas work together cohesively to support transfer orders, inventory transactions, reconciliation of inventory balances, and so
forth.
Decision Points
Before implementing your external systems integration, consider the following points.
• If you plan to receive material using a 3PL provider or WMS, then use the predefined scheduled processes to
generate receipt advices.
• If you plan to ship material using a 3PL provider or WMS, then use the predefined scheduled processes to generate
shipment requests.
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Setup Best Practices

The following setup best practices are recommended before integrating with external systems.
• Use a 3PL provider or WMS at the inventory organization level. By representing the 3PL provider or WMS as an
inventory organization, virtual tracking and visibility of inventory at the 3PL or WMS location is available to users in
real time.
• For simplicity, set up a receiving subinventory and one subinventory for each material status used in the
implementation of Oracle Fusion Inventory Management. For example, you might set up subinventories for receiving,
quality assurance (QA), rejected, available, and allocated inventory.
• Use security rules to control access to transactions performed in the 3PL or WMS organization.
Additional Considerations
Keep in mind the following additional considerations when planning your 3PL or WMS implementation.
• Do not track locator and packing unit information because this data is not tracked in Inventory Management.
• Process inventory transactions only when the item status has changed or the item is received into or issued out of
Inventory Management. For example, when a third party performs material transactions within locations or packing
units at their facility, these transactions are not tracked in Inventory Management.
• Track inventory transactions for lot and serialized items in Inventory Management. This tracking is a requirement
when lot and serialized items are issued out of inventory to support install base and product genealogy.
Receipt Advice and Receipt Confirmation Processes for External

Systems Integration: Explained
This topic describes the receipt advice and receipt confirmation integration flow between Oracle Fusion Inventory
Management and external systems, such as third-party logistics (3PL) and warehouse management systems (WMS).
Inventory Management communicates receipt advices to the 3PL system or WMS for processing. After completion of the
processing in the 3PL system or WMS, Inventory Management accepts the receipt confirmations from the 3PL system or
WMS.
For receiving, the web service Send Receipt Advice enables Inventory Management to communicate expected shipment lines
to be received by a 3PL system or WMS. Then the Receive Receipt Confirmation service enables the 3PL system or WMS to
communicate confirmation and receipt details of the expected shipment lines that were communicated with the Send Receipt
Advice web service.
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The following figure shows this flow.
1 3 4
Update
Generate Create Update Line
Inventory Receipt
Receipt Receipt Integration
Management Advice Records
Status to
Status
Delivered
Send Receipt Receive Receipt
Advice Web Service Confirmation Web Service
3PL or 2
WMS Receive,
Receive Send
Inspection,
Receipt Receipt
and Put
Advice Confirmation
Away
Explanation of callouts:
1. The scheduled process Generate Receipt Advice publishes an event to notify the 3PL system or WMS that receipt
advices are ready to be interfaced. The web service Send Receipt Advice provides the ability for the 3PL system
or WMS to receive the actual receipt advices with the expected shipment lines for purchase orders (POs), transfer
orders, and return material authorizations (RMAs).
2. After the 3PL system or WMS receives the receipt advices, the 3PL system or WMS performs receiving-related
processes including receiving, inspection, and put away.
3. The web service Receive Receipt Confirmation is initiated, and receipt confirmation is sent to Inventory Management.
This web service provides the ability for the 3PL system or WMS to send the material and receiving details for
the expected shipment lines received. This service also interprets and transforms the message, and creates the
necessary records in Inventory Management. These records carry all the reference information from the external
system to easily identify them for performing any future returns or corrections.
4. Inventory Management validates and processes the receiving transactions by processing the receipt confirmation
messages and by updating the release status and integration status.
You can use the scheduled process Manage Receiving Transactions to automatically validate and process the transactions
received. If an error occurs while processing the transactions, you can review and correct pending and error transactions
using the Review Receipts Interface task in the Inventory Management work area, and resubmit the transactions for
processing. When the transactions have successfully processed, the associated document is updated accordingly. For
example, the status on an associated purchase order document is updated to Closed for Receiving.
You can use the scheduled process Generate Changed Receipt Advice to manage changes. For example, if there was a
change to a purchase order line that was already interfaced but not confirmed, the service sends a changed receipt advice to
communicate the associated change to the 3PL system or WMS.
You can use the Receive Expected Shipments page in the Inventory Management work area in the Manufacturing and Supply
Chain Materials Management offering to perform receiving of expected shipment lines to record various details, such as
integration status. Integration status values include Ready to Interface, Interfaced, and Confirmed.
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Shipment Request and Shipment Confirmation Processes for External

This topic describes the shipment request and shipment confirmation flows between Oracle Fusion Inventory Management
and external systems, such as third-party logistics (3PL) and warehouse management systems (WMS).
1 3 4
Generate
Perform Update Update
Inventory Outbound
Shipping Integration Shipment
Management Shipment
Transactions Status Status
Request
Receive Shipment
Scheduled Process
Confirmation Web Service
2
Process Perform Send
3PL or Pick, Pack, Shipment
Shipment
WMS Lines and Ship Confirmation
1. The outbound shipment request integration process between Oracle Fusion Inventory Management and a 3PL
system or WMS starts with a shipment request. The scheduled process Generate Shipment Request enables
inventory management users to manually send shipment lines to the 3PL system or WMS using the task Create
Outbound Shipment request in the Shipping UI, or they can automate the process using a scheduled process. The
shipment request service Material Shipment Line uses the existing pick wave release rules to provide the criteria for
selecting the shipment lines.
Alternatively, the 3PL system or WMS can initiate the shipment request service voluntarily at specified intervals to
retrieve shipment requests from Inventory Management.
2. After the 3PL system or WMS receives the shipment request, the pick, pack, and ship processes are performed.
3. The web service Material Shipment, when initiated with the required input, receives and processes the shipment
confirmation messages. This service interprets and transforms the message, and creates the necessary records in
the shipping open interface tables. This transformation provides the mechanism for the 3PL system or WMS to send
the material and shipping details for the shipment lines fulfilled.
The scheduled process Perform Shipping Transactions processes the pending transaction records received into the open
interface tables. The process validates the data on the transaction records received from the 3PL system or WMS before
processing them. Any errors from the validation step are recorded, and the transaction records remain in the open interface
tables. The interface records with errors are available for users to view, edit, or resolve the errors, or reprocess.
In the event an error occurs while processing the shipment confirmation messages, users can access the Manage Shipping
Transaction Corrections in Spreadsheet task to manage pending transactions by way of a spreadsheet interface using
Application Development Framework Desktop Integration (ADFdi) technology. This interface supports management of
interface transactions and corresponding errors related to shipment confirmations received from 3PL system and WMS. You
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can access this task in the Inventory Management work area of the Manufacturing and Supply Chain Materials Management
offering.
After the shipment lines are successfully confirmed, the integration status and shipment status are updated accordingly.
Inventory Transaction Processes for External System Integration:

Explained
All internal material transactions that occur within a third-party logistics (3PL) or warehouse management system (WMS) must
be integrated appropriately to keep the inventory picture accurate in Oracle Fusion Inventory Management.
You can use the web service Transaction Manager to maintain inventory accuracy in Inventory Management with the 3PL
system or WMS for the following:
• Miscellaneous account alias issues and receipts
• Subinventory transfers
• Interorganization transfers
• Cycle count adjustments
• Physical inventory adjustments
• Material status updates
This service inserts data into the applicable transaction interface tables and calls the transaction manager to process the rows
that are ready for processing. If the transaction manager completes successfully, you can view the completed transaction
on the Review Completed Transactions page. If the transaction processing fails, you can view the error details as well as
transaction data on the Manage Pending Transaction page. From this page, you can correct the data and resubmit to the
manager for reprocessing. You can access these pages in the Inventory Management work area in the Manufacturing and
Supply Chain Materials Management offering.
Related Topics
• Inventory Transaction Interface
External System Inventory Balances Integration: Explained

Using Oracle Fusion Inventory Management inventory balances integration capabilities, you can outsource warehousing and
manufacturing processes to efficiently lower costs, service local markets, reduce cycle times, and so on.
A central integration framework across Oracle Purchasing Cloud, Oracle Fusion Order Management, and Inventory
Management tracks interactions between the various external systems. You can receive inventory balance details from
external systems, such as third-party logistics providers, warehouse management systems, or contract manufacturers and
use this information to reconcile inventory balances. Inventory on-hand details can include subinventory, locator, lot, serial
number, and external packing unit.
The inventory balances integration feature enables you to:

• Use the Inventory Balance Transactions service to post inventory balance messages from an external system
• Import inventory balance messages in bulk using a SaaS spreadsheet
• Enable users to resolve any processing exceptions
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• Purge inventory balance messages periodically
Note: This feature is automatically available and is included with the shipped job roles (warehouse manager and
inventory manager).
Use the following processes and task to interface with external systems to improve tracking and visibility across your supply
chain, including partners:
• Manage Inventory Balances Processes
• Manage Inventory Balance Messages in Spreadsheet (ADFdi)
• Manage Inventory Transaction Process
• Purge Inventory Balance Messages Process
Manage Inventory Balances Process

This scheduled process processes the imported inventory balance messages in the interface tables.
Manage Inventory Balance Messages in Spreadsheet (ADFdi)

Use this task, in the Inventory Management work area in the Manufacturing and Supply Chain Materials Management offering,
to review and resolve any exceptions while processing the inventory balance messages.
Manage Inventory Transaction Process

This scheduled process processes the necessary adjustment transactions to reconcile the inventory balances.
Purge Inventory Balance Messages Process

Use this scheduled process to purge the historical balance inventory messages collected over time in the interface tables.
Using the processing status parameter, you can purge error, successful, or all messages between a date range.
FAQs for Integrating with 3PL and Warehouse Mangement Systems

Can I synchronize master data with third-party logistics or warehouse management
systems?
Yes. Oracle Fusion Product Hub, Oracle Fusion Purchasing, and the Oracle Sales Cloud integration solutions work together
to provide integration capabilities to support automated integration for items, suppliers, and customers.
Capture Serial Number at Pick

Capturing Serial Number at Pick Confirmation: Overview
For tracking and visibility, you can enter serial numbers at pick confirmation for inventory transactions.
Enter serial numbers at pick confirmation for the following inventory transactions:
• Sales orders
• Transfer orders
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• Transfer order returns
• Movement request issues
• Intraorganization transfer orders to expense destinations
FAQs for Capture Serial Number at Pick

What happens if I enable the Capture Serial Number at Pick feature?
The Entry at inventory pick option is added to the Manage Items > Generation list in Oracle Fusion Product Information
Management. When you select the Entry at inventory pick option, you have to enter the serial number at pick confirmation.
Manage Min-Max Planning

Classifications in Min-Max Planning: Explained
When setting up min-max planning for Oracle Fusion Inventory Management, create classifications to categorize items. You
associate categories with similar item attributes with a classification. Categorizing items with similar attributes enables you to
specify the policies for computing the min-max quantities efficiently.
For example, based on item cost, you can define classifications as high cost, medium cost, or low cost. You can then
associate all of the categories that contain high cost items to a classification called high cost.
You define all of the classifications under the Default classification group, which acts as a placeholder for all of the
classifications. After creating classifications, you associate them with policy profiles at the organization and subinventory levels
using the Manage Min-Max Planning Policy Profile Assignments task
Note: You cannot create a classification group. You can only define classifications under the Default
classification group.
Classification Criteria
After you create a classification, specify the category that you want to add to the classification. You associate the
classification to a classification criterion called Category. You then define the criterion value for the Category by using one of
the following conditions:
• Starts with: Group multiple categories with a single classification
• Equals: Specify the exact category
• Contains: Specify a criteria value the category may contain
• Among: Specify a range of categories
To create a classification and associate it with a classification criterion, do the following:

offering.
functional area.
3. In the Inventory Management task list, click the Manage Min-Max Planning Classification Groups task.
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4. In the Specify Classification section, click the + button to add a new row, and specify a classification name and
description.
5. In the Specify Classification Criteria section, click the + button, and do the following:
a. In the Condition column, select a condition.
b. In the Criteria Values column, click the Edit icon to specify the criteria.
Related Topics
• Setting up Min-Max Planning: Procedure
Policy Profiles in Min-Max Planning: Explained

A policy profile in Oracle Fusion Inventory Management represents a set of rules that define how min-max planning will
calculate quantities.
Create policy profiles to define the policy parameters for min-max planning. Policy parameters refer to a set of attributes for
the minimum, maximum, and Economic Order Quantity (EOQ) quantities. These attributes define how the calculation program
for the inventory policies calculates the min-max quantities to maintain the inventory levels.
Policy profiles work in conjunction with the classifications that you define for min-max planning. After creating a policy profile,
you assign the policy profile to a classification using the Manage Min-Max Planning Policy Profile Assignments task. A policy
profile can be assigned to a classification at the organization and subinventory levels. You can define one policy profile and
assign it to multiple classifications.
Minimum Quantity
Minimum quantity is the inventory level quantity below which min-max planning suggests a replenishment order to bring the
inventory level back to the maximum quantity. When creating policy profiles, you must define the Default Safety Stock Days of
Cover attribute on the Create Min-Max Planning Policy Profile page. Min-max planning uses the Default Safety Stock Days of
Cover attribute to calculate the minimum quantity.
Maximum Quantity and EOQ

Maximum quantity is the inventory level up to which min-max planning recommends a replenishment order. When you specify
the maximum quantity value, the inventory level does not exceed that value. When creating policy profiles, you must define
the Maximum Quantity Calculation Method attribute on the Create Min-Max Planning Policy Profile page. Min-max planning
uses the Maximum Quantity Calculation Method attribute to calculate the maximum quantity.
Additionally, you can define the EOQ attributes to calculate the EOQ and minimize the combined costs of acquiring and
carrying the inventory.
To create policy profiles, do the following:

offering.
functional area.
3. In the Inventory Management task list, click the Manage Min-Max Planning Policy Profiles task.
4. On the Manage Min-Max Planning Policy Profiles page, click the + icon.
5. On the Create Min-Max Planning Policy Profile page, do the following:
◦ Enter a policy name and description.
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◦ Specify the required attributes in the Minimum Quantities, Maximum Quantities, and EOQ Calculation Inputs
sections.
6. Click Save.
Related Topics
Policy Profile Assignments in Min-Max Planning: Explained

Policy profiles contain the input policy parameters to calculate the min-max quantities. Assigning policy profiles is the final
step in setting up min-max planning for Oracle Fusion Inventory Management. After creating policy profiles, you assign policy
profiles to classifications at the organization and subinventories levels. You can assign a policy profile to multiple organizations
and subinventories, and to multiple subinventories under the same organization. If you do not specify a subinventory, min-
max planning calculates the inventory policies at the organization level only.
To define policy profile assignments:
offering.
functional area.
3. In the Inventory Management task list, click the Manage Min-Max Planning Policy Profile Assignments task.
4. On the Edit Policy Profile Assignments: Default page, click the + icon to add a row.
5. In the Classification column, select a classification for the row you added.
6. In the Organizations column, click the Edit icon to add organizations. You can add multiple organizations.
7. In the Subinventories column, click the Edit icon to add subinventories. You can add multiple subinventories.
8. In the Policy Profile column, select a policy profile for the row you added.
9. Click Save.
Managing Policy Profiles

When associating a policy profile with a classification at the organization and subinventory levels, you can view and edit the
parameters of the policy profile. It is recommended that you review the parameters of a policy profile before assigning it. You
can also edit the policy parameters before making the assignments.
To view or edit the parameters of a policy profile:
1. In the Manage Min-Max Planning Policy Profile Assignments task, select an assignment row.
2. Click the Manage Policy Profile button.
Calculating Min-Max Planning Policy Parameters

After setting up the classifications, policy profiles, and policy profile assignments for min-max planning, you can calculate the
min-max policy parameters. You can run the Calculate Min-Max Planning Policy Parameters scheduled process from the
Manage Min-Max Planning Policy Profile Assignments task for one or more classifications.
To calculate the policy parameters:
1. In the Manage Min-Max Planning Policy Profile Assignments task, select the Calculate Policy Parameters check
box corresponding to a classification row.
2. Click the Calculate Min-Max Planning Policy Parameters button.
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Related Topics
Classifications, Policy Profiles, and Policy Profile Assignments: How

They Work Together in Min-Max Planning
Min-max planning in Oracle Fusion Inventory Management enables you to maintain the inventory levels by specifying the
minimum and maximum quantities for an item. When the inventory level is below the minimum quantity that is defined for an
item, min-max planning recommends a replenishment order to bring the inventory level back to the maximum quantity. You
define reusable replenishment profiles that help the calculation program for the inventory policies to calculate the min-max
quantities.
To calculate the min-max quantities for an item using min-max planning, do the following:
• Create classifications to associate items or item categories that have similar attributes.
• Create policy profiles to define the policy parameters.
• Assign policy profiles to classifications.
• Run the Calculate Min-Max Planning Policy Parameters scheduled process.
Classifications
Create classifications under the Default classification group to associate categories with similar item attributes to a
classification. You then associate the classification to a category by specifying the classification criterion.
To create a classification, in the Setup and Maintenance work area, use the Manage Min-Max Planning Classification Groups
task in the Inventory Management functional area.
Policy Profiles
Policy profiles enable you to specify the policy parameters to calculate the min-max quantities. Each policy profile acts as a
placeholder, which contains a set of policy parameters.
To create Policy profiles, in the Setup and Maintenance work area, use the Manage Min-Max Planning Policy Profiles task in
the Inventory Management functional area.
Policy Profile Assignments

Policy profiles assignments enable you to assign policy profiles to classifications at the organization and subinventories levels.
To setup policy profile assignments, in the Setup and Maintenance work area, use the Min-Max Planning Policy Profile
Assignments task in the Inventory Management functional area.
Calculate Min-Max Planning Policy Parameters Scheduled Process

Run the Calculate Min-Max Planning Policy Parameters scheduled process to compute the min-max quantities at the item
organization or item subinventory level.
The min-max quantities are calculated at the item organization level when you:
• Associate one or more categories with a classification.
• Assign a policy profile to the classification at the organization level.
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• Set the Inventory Planning Method to Min-max planning in the Specifications tab of an organization using the
Manage Items task. The Manage Items task is in the Product Information Management work area.
The min-max quantities are calculated at the item subinventory level when you:
• Associate one or more categories with a classification.

• Assign a policy profile to the classification at the subinventory level.
• Select the Min-Max planning check box at the item subinventory level using the Manage Subinventories and
Locators task. The Manage Subinventories and Locators task is in the Inventory Management functional area in the
Related Topics
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Implementing Manufacturing and Supply Chain Materials Implementing Receiving
Management
6 Implementing Receiving
Manage Receiving Parameters

Implementing Receiving: Overview
Oracle Fusion Receiving functionality allows you to manage inbound logistics such as receiving, inspecting, and putting
away material. You can set up receiving so that your users can manage inbound transactions in the warehouse. Define and
maintain setup components for Receiving including receiving parameters, profile options, value sets, and descriptive flexfields.
The following table describes the setup tasks in the Define Receiving task list.
Manage Receiving Profile Options Conditional Define profile option settings and values to
control receiving behavior such as Aging
Period for Extended Receipt Settlement.

Manage Receiving Value Sets Conditional Create and edit receiving value sets.

Manage Receiving Descriptive Flexfields Conditional Define validation and display properties of
descriptive flexfields for receiving. Descriptive
flexfields are used to add user-defined
attributes to entities.

Manage Receiving Parameters Conditional Configure receiving parameters to specify

default receiving options for the organization.

In the Setup and Maintenance work area, use the Define Receiving task in the Manufacturing and Supply Chain Materials
Management offering to perform your Receiving setup.
Common Tasks That You Perform for Receiving

Receiving requires that you perform the following common tasks:
• Manage Profile Options
• Manage Value Sets
• Manage Descriptive Flexfields
These tasks are common to most Oracle applications. For details about how to perform them, see the Oracle SCM Cloud:
Implementing Common Features for Oracle SCM Cloud guide.
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Setting Up General Receiving Parameters: Critical Choices

Receiving parameters define receiving preferences at the organization level. General receiving parameters must be set up
before you can use Oracle Fusion Receiving for recording and transacting receipts.
In the Setup and Maintenance work area, use the Manage Receiving Parameters task in the Manufacturing and Supply Chain
Materials Management offering to set your general receiving parameters.
General Receiving Parameters

This table describes the general receiving parameters.
Receiving Parameter Display Name Effect
Ship-to Exception Action

Determines whether the supplier can put away to a receiving location that differs from the ship-to
location. Select one of the following options:
• None: The receiving location may differ from the ship-to location.
• Reject: No receipts are permitted when the receiving location differs from the ship-to
location.
• Warning: A warning message is displayed, but receipts are permitted when the receiving
location differs from the ship-to location.
ASN Control Action

Determines the action if receiving against purchase order shipments for which an advance shipment
notice (ASN) exists. Select one of the following options:
• None: Does not prevent or warn you when you receive against a purchase order shipment
for which an ASN exists.
• Reject: Gives you a message and prevents you from receiving against a purchase order
shipment for which an ASN exists.
• Warning: Gives you a message informing you that an ASN exists for the purchase order
shipment. It lets you decide whether or not to receive against the purchase order shipment or
its ASN.
Early Receipt Tolerance in Days Sets the maximum acceptable days early for a receipt.

Late Receipt Tolerance in Days Sets the maximum acceptable days late for a receipt.

Receipt Days Exceed Action

Determines the action for when receipts are earlier or later than the allowed number of days. Select
one of the following options:
• None: Receipts may exceed the allowed days early or late.

• Reject: Rejects receipts when the receive date is outside the range defined by the early and
late receipt tolerances.
• Warning: Displays a warning message, but permits receipts outside the selected number of
days early or late.
Over-Receipt Action
Determines how the application handles receipts that exceed the received quantity tolerance. Select
one of the following options:
• None: Receipts may exceed the selected tolerance. No over-receipt tolerance is enforced.
• Reject: Rejects receipts that exceed the selected tolerance. You receive an error message
and cannot receive quantities that exceed the order quantity by more than the over-receipt
tolerance percent.
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• Warning: Receipts may exceed the selected tolerance with a warning. A warning message
appears if you accept receipts over the quantity determined by the over-receipt tolerance
percent. The application does perform the receipt.
Note: You can also set up quantity tolerances for the item at the purchase order level
during purchase order creation. If tolerances are set up at both the purchase order
level and the organization level, the tolerance settings at the purchase order level
override the tolerance settings at the organization level.

Over-Receipt Tolerance Enter the percentage of quantity that can be received in excess of the order quantity.

Receipt Routing
Sets the default receipt routing that you assign goods. You can override this option at receipt time
by changing the destination type for specific suppliers, items, and orders if the Allow Routing
Override user profile is enabled. Select one of the following options:
• Direct Delivery: Receive shipments and put away to a specific location in one transaction.
• Standard Receipt: Receive shipments and put away items in a separate transaction.
• Inspection Required: Requires quality assurance inspection after receipt and before put
away.
Use quality inspection plan If enabled, allows inspection through a quality inspection plan using the Quality Inspection pages.

Allow substitute receipts If enabled, allows the receipt of defined substitutes in place of ordered items. You must define
substitute items on the Item Relationships page before you can receive them. You can override this
option for specific suppliers, items, and orders.

Allow unordered receipts If enabled, allows receipt of an item without documentation. If you select this option, you can later
match the unordered receipt to the appropriate document number. If you enable this option, you
can override it for specific suppliers and items.

Enforce blind receiving If enabled, the quantity due or quantity ordered for each shipment is not visible on the receipt. Blind
receiving helps you ensure that receivers record the exact amount they receive. Oracle Fusion
Receiving ignores all quantity receipt tolerances to help ensure that you can receive the exact
amount that the supplier shipped.

Print receipt traveler If enabled, allows automatic printing of summary reports of receipt performance.

Include closed purchase orders for If enabled, allows receiving of closed purchase orders.
receipts

Allow routing override If enabled, allows overriding the receipt routing at receipt time. You can override this option at
receipt time by changing the destination type for specific suppliers, items, and orders.

Process all lines together If enabled, ensures that individual lines are processed if all expected lines do not arrive.

Print shipping documents for returns to If enabled, requires the printing of shipping documents for return to supplier transactions. This calls
suppliers a two-step return process in which you create the return to supplier transaction in Oracle Fusion
Receiving and then the shipping agent must ship confirm the return shipment in Oracle Fusion
Shipping.

Print shipping documents for drop ship If enabled, requires the printing of shipping documents for drop ship orders. This option creates the
orders shipments for drop ship orders after the supplier creates the ASN for the drop ship order.
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Print shipping documents for return If enabled, requires the printing of shipping documents for return material authorizations. This option
material authorizations creates the shipments for return material authorization orders after RMAs are created in Oracle
Fusion Order Management.

Publish transactional business events If enabled, allows the publishing of all transactional events such as receipt, put away, correction,
and return. Events are published at all times, even without internal integration needs.

Setting Up Receipt Number Receiving Parameters: Critical Choices

Receiving parameters define receiving preferences at the organization level. Receipt number receiving parameters must be
set up before you can use Oracle Fusion Receiving for recording and transacting receipts.
Materials Management offering to set your receipt number receiving parameters.
Receipt Number Receiving Parameters

This table describes the receipt number receiving parameters.
Generation
Defines the receipt number generation method for receipt numbers. Choices include Automatic
and Manual.
Type
Defines the receipt number type that you want to use for receipt numbers. Options include Numeric
or Alphanumeric. If you select the manual receipt number generation option, you can select
numeric or alphanumeric numbers. You can change the receipt number type from numeric to
alphanumeric at any time. You can change the receipt number type from alphanumeric to numeric
only if all of your current receipt numbers are numeric.
Note: These notes apply to the receipt number type:

• If you select automatic receipt number generation, you can generate
only numeric receipt numbers, but you can still import either numeric or
alphanumeric values from another application.
• If you have any alphanumeric documents in your application, you must
select the alphanumeric option as your number type, regardless of your
numbering method.
• The ordering of numeric values in lists of values can appear random when
you use the alphanumeric number type. If you are using alphanumeric
numbering, consider entering all numeric values with the same number of
digits. For example, if you can assume all numeric values contain six digits,
you should enter the first value as 000001.

Next Number Sets the starting value that you want to use for generating unique sequential receipt numbers if you
select the automatic receipt number generation method. The application displays the next receipt
number that will be used for a new receipt creation. You cannot enter this field if you select the
manual receipt generation method.

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Setting Up RMA Receiving Parameters: Critical Choices

Receiving parameters define receiving preferences at the organization level. Receiving parameters for return material
authorizations (RMAs) must be set up before you can use Oracle Fusion Receiving for recording and transacting receipts.
Materials Management offering to set your RMA receiving parameters.
RMA Receiving Parameters

This table describes the RMA receiving parameters.
Receipt Routing
Defines the default RMA receipt routing that you assign goods. Choices include Direct Delivery,
Standard Receipt, or Inspection Required.
RMA Validate Lots

Determines restriction level for RMA. Choices include:
• Restricted: Enter lot numbers that are mentioned on the RMA. If you enter lot numbers that
are different than those on the RMA, the application displays an error message.
• Restricted with warning: Enter lot numbers that are mentioned on the RMA. If you enter
lot numbers that are different than those on the RMA, the application displays a warning
message.
• Unrestricted: Enter any lot number.
Validate Serial Numbers If enabled, restricts the list of serial numbers displayed for an RMA line to valid serial numbers only.

Receiving Parameters for Brazil Organizations: Explained

We use fiscal documents for Brazil inventory organizations to document trade between suppliers and customers. The fiscal
document serves as a bill of lading to detail the quantity of items transported from the supplier to the customer. It also serves
as a proxy invoice from the supplier that documents the material costs, supplier charges, and taxes payable by the customer.
To support the fiscal document, Brazil organizations have the several receiving parameters set by default. The following table
shows the receiving parameters that are set by default.
Parameter Setting
Receipt Routing Automatically set to Standard receipt. You can update this option at receipt time to Inspection
Required or Direct Delivery if the Allow Receipt Routing user profile is enabled.
In the Setup and Maintenance work area, use the Manage Receiving Parameters task in the
Manufacturing and Supply Chain Materials Management offering to set this option.
Not selected. You cannot change this option.

Allow unordered receipts
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Parameter Setting
Automatically selected. You cannot change this option.

Print shipping documents for
returns to suppliers
Receiving determines whether or not an organization is a Brazil organization by checking if the Fiscal Document Generation
feature is enabled for a billing business unit. If the Fiscal Document Generation feature is enabled for an organization, it's
implied that the organization is a Brazil inventory organization.
For more information about Brazil fiscal documents, see the Oracle SCM Cloud: Using Fiscal Document Capture guide.
Related Topics
• Capturing Fiscal Documents: Overview
• Fiscal Document Lifecycle: Explained
• Managing Fiscal Documents: Procedure
Receiving with Early and Late Receipt Tolerances: Examples

Use these scenarios to understand how early and late receipt tolerances work for receiving items.
Receiving with an Early Receipt Tolerance

You enter 3 days as the early receipt tolerance. The promise date is Friday. Therefore, you can receive the item on Tuesday.
You enter 3 days as the early receipt tolerance. You set the Receipt Days Exceed Action parameter to None. You try to
receive a receipt 5 days before the promise date. The application lets you receive the receipt because no receipt date action
is enforced.
You enter 3 days as the early receipt tolerance. You set the Receipt Days Exceed Action parameter to Reject. You try to
receive a receipt 5 days before the promise date, and the application rejects the receipt and displays an error.
You enter 3 days as the early receipt tolerance. You set the Receipt Days Exceed Action parameter to Warning. You try
to receive a receipt 5 days before the promise date. You receive a warning message, but you are permitted to receive the
receipt.
Note: Oracle Fusion Receiving uses regular calendar days (including weekends and holidays) in this calculation.
If the promise date does not exist, the application uses the need-by date.
Receiving with a Late Receipt Tolerance

You enter 2 days as the late receipt tolerance. The promise date is a Monday. Therefore, you can receive the item on
Wednesday.
You enter 2 days as the late receipt tolerance. You set the Receipt Days Exceed Action parameter to None. You try to
receive a receipt 5 days after the promise date. The application lets you receive the receipt because no receipt date action is
enforced.
You enter 2 days as the late receipt tolerance. You set the Receipt Days Exceed Action parameter to Reject. You try to
receive a receipt 5 days after the promise date, and the application rejects the receipt and displays an error.
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You enter 2 days as the late receipt tolerance. You set the Receipt Days Exceed Action parameter to Warning. You try to
receive a receipt 5 days after the promise date. You receive a warning message, but you are permitted to receive the receipt.
Note: Oracle Fusion Receiving uses regular calendar days (including weekends and holidays) in this calculation.
If the promise date does not exist, the application uses the need-by date.
Print Shipping Documents

Print Shipping Documents for RMAs: Critical Choices
You can select whether or not you want to print shipping documents for your customer returns. To print shipping documents
for RMAs (return material authorizations), select the Print shipping documents for return material authorizations option
on the Manage Receiving Parameters page.
Materials Management offering to set access the Manage Receiving Parameters page.
Note: The Print shipping documents for return material authorizations option is a onetime setup step for
your organization. You do not set this up per transaction.

If shipping documents are required, your organization may select the Print shipping documents for return material
authorizations option on the Manage Receiving Parameters page. For example, this can happen when your customer
returns an item through a RMA (return material authorization). The return transaction is then completed in two steps as
follows:
1. Creation of a shipment upon receipt of the RMA in Oracle Fusion Receiving.
Shipment lines are created for each item on the RMA order.
2. Confirmation of the shipment in Oracle Fusion Shipping upon put away of the receipt in Receiving.
This leads to the closure of the shipment. You can now generate shipping documents for the RMA order based on
the shipment number.
Don't Print Shipping Documents

If shipping documents are not required, do not select the Print shipping documents for return material authorizations
option on the Manage Receiving Parameters page. Your customer return is completed in one step and you do not have to
confirm the shipment in Shipping.
Printing Shipping Documents for Drop Ship Orders: Critical Choices

You can select whether or not you want to print shipping documents for drop ship orders. To print shipping documents
for these transactions, select the Print shipping documents for drop ship orders option on the Manage Receiving
Parameters page.
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Note: The Print shipping documents for drop ship orders option is a one-time setup step for your
organization. You do not set this up per transaction. Administrators set this option on the Manage Receiving
Parameters page in the Setup and Maintenance work area in the Manufacturing and Supply Chain Materials
Management offering.
Printing Shipping Documents

If shipping documents are required for your drop ship orders, then your organization selects the Print shipping documents
for drop ship orders option on the Manage Receiving Parameters page. For example, you might select this option when
the supplier for your organization creates an advance shipment notice (ASN) for the drop ship order. This option is a one-time
setup step for your organization and can't be changed for individual transactions. The drop ship order is then completed in
two steps as follows:
1. Creation of the ASN by the supplier in the Supplier Portal. Alternatively, a warehouse manager can enter an ASN by
clicking the Create ASN task from the task panel of the Inventory Management work area.
2. Confirmation of the shipment by the shipping manager for the drop ship order. This confirmation leads to the closure
of the shipment and creation of the shipping documents.
Note: The shipping paperwork for a drop shop order is similar to that of a regular sales order.

If shipping documents are not required, do not select the Print documents for drop ship orders option on the Manage
Receiving Parameters page. Your drop ship order is completed in one step and you don't have to confirm the shipment
Related Topics
• Recording the Shipment of Drop Ship Products to the Customer: Explained
• Using the AP Invoice Option for Drop Ship Purchase Orders: Explained
• Creating an ASN on a Drop Ship Purchase Order: Procedure
Print Shipping Documents for Return to Supplier Transactions: Critical

Choices
You can select whether or not you want to print shipping documents for your return to supplier transactions. To print shipping
documents for these transactions, select the Print Shipping Documents for Returns to Suppliers option on the Manage
Receiving Parameters page.
Materials Management offering to set access the Manage Receiving Parameters page.
Note: The Print Shipping Documents for Returns to Suppliers option is a one time setup step for your
organization. You do not set this up per transaction.

If shipping documents are required, or if several people are involved in the process to ship the product back to the supplier
then your organization may select the Print Shipping Documents for Returns to Suppliers option on the Manage
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Receiving Parameters page. For example, this can happen when your organization's customers return the item to your
organization, and then you must return the items to the supplier. This is a one time setup step for your organization and it
cannot be changed for individual transactions. The return to supplier transaction is then completed in two steps as follows:
1. Creation of the return to supplier transactions in Oracle Fusion Receiving.
2. Confirmation of the return to supplier shipment in Oracle Fusion Shipping. This leads to the closure of the shipment
and creation of the shipping documents.

If shipping documents are not required, do not select the Print Shipping Documents for Returns to Suppliers option on
the Manage Receiving Parameters page. Your return to supplier transaction is completed in one step and you do not have to
confirm the shipment in Shipping.
Return to Supplier Transactions with Shipping Documents: How They

Are Processed
When you need to return items to the supplier, you may choose to print shipping documents for transporting the returned
items back to the supplier. Returns may be needed when a customer rejects an item from their received shipment, a defect
is found internally, and so forth. To print shipping documents for the return, follow the two-step return process that starts in
Oracle Fusion Receiving and continues through to Oracle Fusion Shipping.
Settings That Affect Return to Supplier Transactions

To print shipping documents for your return to supplier transactions select the Print Shipping Documents for Returns to
Suppliers option on the Manage Receiving Parameters page.
Note: The Print Shipping Documents for Returns to Suppliers option is a one-time setup step for your
organization. You do not set this up per transaction.
How Return to Supplier Transactions Are Processed

Return to supplier transactions are processed in two steps:
1. Create the return to supplier transaction in Oracle Fusion Receiving.
The receiving agent has an offline interaction with the supplier to obtain the return material authorization number
for the return. Then, the receiving agent creates the return to supplier transaction by providing details such as the
returned quantity and return material authorization (RMA) number. Finally, the receiving agent submits the transaction
for processing and the transaction moves to Shipping.
2. Create and confirm the return to supplier shipments in Oracle Fusion Shipping.
Shipping treats the items on the return to supplier transaction as a noninventory shipment and stages the items
without creating a shipment. Noninventory shipments do not generate inventory transactions or affect on-hand
balances. Therefore, the application skips actions such as backorder, cycle count, pick release, and record serials,
since these actions are not applicable to noninventory shipments. The shipping manager searches for the return
transactions, assigns the return to supplier lines to shipments, and performs ship confirm. Upon ship confirm,
Shipping generates the shipping documents for the customer, and creates and sends the automatic shipment
notices (ASNs) automatically to the supplier.
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Corrections to Return to Supplier Transactions With Shipping Documents

You can make corrections to return to supplier transactions. The corrections are reflected on shipping documents up until
the returned products are shipped within the Shipping application. If you make corrections after the products are shipped,
the changes are still accepted in Receiving. Receiving maintains automated interfaces with Oracle Fusion Payables, Oracle
Fusion Cost Management, and Oracle Fusion Purchasing to share the corrected quantity information The table explains when
changes are allowed within the Shipping application based on the type of correction to the return to supplier transaction and
the associated shipment status.
Action Status of Shipment in Shipping Shipping Response
Shipped An increase in the quantity is accepted at

The return to supplier transaction sends an the end of shipping and a new delivery line is
update with an increase in quantity. created.

Not shipped Updates are accepted in Shipping.

The return to supplier transaction sends an
update with an increase in quantity.
Partially shipped Updates are accepted in Shipping for the

The return to supplier transaction sends an unshipped lines. Updates for the lines already
update with an increase in quantity. shipped are not accepted.

Shipped No updates are accepted in Shipping.

update with a decrease in quantity.
Not shipped Updates are accepted in Shipping.

update with a decrease in quantity.

The return to supplier transaction sends an unshipped lines. Updates for the lines already
update with a decrease in quantity. shipped are not accepted.

Shipped No updates are accepted in Shipping.

update that reduces the quantity to zero.
Not shipped Shipping accepts the change, but setting

The return to supplier transaction sends an the quantity to zero cancels the shipment in
update that reduces the quantity to zero. Shipping.


The return to supplier transaction sends an unshipped lines. Other lines are not accepted
update that reduces the quantity to zero. because that part of shipment is canceled.

Canceled You cannot make further updates to a

The return to supplier transaction makes transaction that is already canceled. You
further updates after setting the quantity to must create a new return to supplier
zero. transaction.

Example
When your organization's customer initiates a return, they return the item to your organization. Your organization must then
send the items back to the outsourced manufacturer or supplier. Therefore, instead of your customers returning the items
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directly to the suppliers, your customer's items are routed through your organization to your organization's suppliers. In this
instance, you must create shipping documents for transporting the items back to the suppliers.
Related Topics
• What's a noninventory shipment

Explained

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Transactions

3PL
documents.
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and transfers.
Related Topics

service payloads
or WMS activities
figure.
Receipt Advice
Shipment Request
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• Receiving agent
• Shipping agent
Related Topics

forth.
Decision Points
shipment requests.
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real time.

WMS.
Advice web service.
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1 3 4
Update
Inventory Receipt
Status to
Status
Delivered
3PL or 2
WMS Receive,
Receive Send
Inspection,
Receipt Receipt
and Put
Advice Confirmation
Away
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1 3 4
Generate
Inventory Outbound
Management Shipment
Request
Receive Shipment
Scheduled Process
2
Shipment
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offering.

Explained
Related Topics


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inventory manager).






systems?
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Implementing Manufacturing and Supply Chain Materials Implementing Shipping
Management
7 Implementing Shipping
Introduction
Implementing Shipping: Overview
Shipping functionality allows you to manage outbound logistics so that you can process shipments, satisfy customer
demand, and at the same time manage the pick, pack, and ship cycle. You can set up shipping so that your users can
manage and release pick waves, capture freight costs, pack material in containers or onto trucks, and create shipping
documents. You can define and maintain shipping setup, including release sequence rules, ship confirmation rules, shipping
cost types, shipping exceptions, shipping zones, and so on.
Set up shipping so that your users can use the Inventory Management work area in the Manufacturing and Supply Chain
Materials Management offering to streamline picking and shipping:
• Monitor pick and ship activities to manage outbound shipments.

• Use a guided process that helps your users pick, pack, and ship tasks so that Inventory Management can fulfill
orders quickly and accurately.
• Set up shipping so that your users can use the Manage Shipping Exceptions task in the Setup and Maintenance
work area to identify and resolve exceptions and backlogs to efficiently move materials through the warehouse.
Use roles and tasks to optimize the user experience:
• Click links to tasks or search directly from work areas so that your users can access important pick and ship
activities.
• Drill into line details so that your users can perform the next logical action in a guided way.
• Access important information about items during pick and ship transactions. Use visual images, detailed item
specifications, and links to online collaboration tools.
User Roles That You Perform During Shipping: Explained

The shipping flow includes multiple roles that your organization must perform, from receiving the sales order, processing the
shipment, and recording the financials.
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The following figure illustrates the user roles that are involved during the shipping flow.
1. The warehouse manager does the following work:
◦ Receives a sales order from Order Management Cloud.
◦ Does order fulfillment work, including processing the sales order.
◦ Creates a reservation that reserves material for the sales order. This reservation prevents some other demand
source from using this material.
◦ Monitors and releases sales orders that this process can use to pick product in the warehouse.
◦ Creates pick slips that this process can use to pick material for the outbound material movement.
◦
Uses a variety of criteria to create, manage, and release pick waves that results in efficient warehouse
operation.
2. The warehouse operator does the following work:
◦ Pick loads, including monitoring and performing the picking activity, and create pick slips for outbound
shipments, replenishment, and requisition.
◦ Search for a pick slip and confirm the pick slip in a single action. The warehouse manager can also create and
distribute pick slip reports and provide instructions to the warehouse operator regarding material movement.
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3. The shipping agent does the following work:
◦ Process outbound shipments, including packing, creating shipments, and resolving exceptions, confirming
receipt, and doing end-of-day activities.
◦ Create outbound shipping documentation, such as the carrier bill of lading when the agent confirms the
shipment.
◦ Send shipping messages and updates to trading partners, including the contents or a shipment, shipment
status, shipment arrival details, and shipment requests. This capability allows you to integrate shipping with an
external system.
◦ Capture the shipping costs that are associated with the shipment and assign them to a shipment, shipment
line, or packing unit.
◦ Do order fulfillment work, including processing bills and receivables.
◦ Do financial control, including financial reporting and cost accounting.

4. Inventory Management sends shipping information to Order Fulfillment and Cost Management for downstream
processing.
Reserve, Pick, and Confirm Shipments: How It Works

The process that you use to reserve, pick, and confirm shipments begins when Inventory Management receives a sales order
from Order Management Cloud or a source order from a source system, and ends when Inventory Management sends a
confirmation to Order Management that it completed the movement of this material to the customer ship-to location. You can
specify how Inventory Management does this movement.
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The following figure illustrates the reserve, pick, and confirm process.
1 2
3
5 4
6
8 9
1. A user uses an order entry system, such as Order Management Cloud, to enter a sales order.
2. A Warehouse Manager uses Inventory Management to create a movement transaction.
3. Inventory Management creates an approved movement request for the sales order, which is now awaiting
shipping. A movement request is a request to transfer material from the subinventory that stocks the material to
the subinventory that stages this material. You can specify the staging subinventory in Order Management or on
the Manage Shipping Parameters page. Inventory Management allows only one staging subinventory for each pick
wave.
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4. Allocate inventory for the movement request. If the Autoconfirm Pick option on the Create Pick Wave page:
◦ Contains a check mark. Inventory Management allocates inventory for the movement request.
◦ Does not contain a check mark. You must manually allocate inventory from the Confirm Pick Slip page.
Note the following:
◦ You must allocate inventory before you print pick slips.
◦ A movement request uses inventory picking rules to determine how to allocate the material.
◦ Shipping uses the Release Sequence Rule that you enter on the Pick Wave page or that Inventory
Management defaults from the Shipping Parameters page to determine the sequence that fulfills the
movement request.
◦ Shipping sets the default sourcing values for subinventory, locator, revision, lot, and serial number on the
movement request. You can use the Confirm Pick Slip page to modify these default values.
5. Shipping uses the Pick Slip Grouping Rule that you specify on the pick wave or that Inventory Management defaults
on the Shipping Parameters page to determine how to print the pick slips.
6. Confirm the movement request for the pick slips. Note the following:
◦ If the Autoconfirm Picks option on the Create Pick Waves page contains a check mark, or if the Pick
Confirmation Required option on the Inventory Organization Parameters page does not contain a check mark,
then Inventory Management confirms the pick during the picking process.
◦ If Inventory Management does not confirm the pick during Pick Release, then you can use the Confirm Pick
Slip page to confirm the pick.
7. The Pick Confirm transaction moves the material from the stock subinventory to the staging subinventory.
8. Confirm that the shipment is complete. Shipment is complete when Inventory Management loads all lines in the
shipment to the customer ship-to location. A shipment includes a set of shipment lines, grouped according to
common shipping attributes that Inventory Management schedules to ship to the ship-to location on a date and
time. To confirm a shipment, a user in the warehouse selects the shipment on the Manage Shipments page or the
Edit Shipment page, and then selects the Ship Confirm option. Note the following:
◦ You must select a ship confirm rule or specify ship confirm options before you can confirm the shipment.
◦ You must resolve shipping exceptions before you can confirm the shipment.
◦ You must record the lot number and serial number for each item that requires these numbers.
◦You can confirm a shipment only after you confirm that you picked all the shipment lines that the shipment
references.
◦ Confirming a shipment might result in shipment lines that are in a variety of statuses, such as Shipped,
Backordered, Staged, or Cycle Counted. Confirming a shipment is complete only when you record the
quantity picked as Shipped.
9. Inventory Management sends a shipment advice that includes shipment details to Order Management.
Setting up Shipping: Procedure

To set up shipping, you perform the setup tasks in the Shipping functional area in the Manufacturing and Supply Chain
Materials Management offering.
To access the tasks that you must perform to set up Shipping, do the following work:
1. In the Setup and Maintenance work area, select Manufacturing and Supply Chain Materials Management.
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2. On the Setup: Manufacturing and Supply Chain Materials Management page, click the Shipping functional area, and
then select Show All Tasks.
3. Perform the tasks in the Preparation column in the following table in the order presented.
Note: Oracle recommends that you finish the work described in the Preparation column before you start your
implementation. You must perform each task.
Task Preparation
Manage Release Sequence Rules Determined how we will release shipment lines.

Determined the level of priority that we will assign to the order that contains the lines that we will
release.

Manage Ship Confirm Rules Identified the tasks that we will specify with shipment confirmation.

Identified the options that we will provide for shipped quantities that users do not manually enter.

Manage Shipping Cost Types Determined the date range that we will use for the cost type.

Determined the cost type that we will use for each currency.

Manage Transportation Schedules Determined the schedule that we will use to ship and receive shipments.

Manage Shipping Exceptions Determined the types of shipping exceptions that we will define and how we will define them.

Determined whether or not we must modify exception severity levels.

Manage Default Packing Configurations Identified the mode of transport that we most commonly use to deliver shipments.

Determined the storage requirement for the items that we ship.

Manage Shipping Zones Determined the configurations that we require for zones and zone types.

Manage Shipping Parameters Determined how we will create, process, and confirm shipments.

Manage Pick Wave Release Rules Determined how we will select lines for picking.

Determined how we will process and fulfill the selected lines.

Common Tasks That You Perform for Shipping

Shipping requires that you perform the following common tasks:
• Manage Shipping Value Sets

• Manage Shipping Descriptive Flexfields
• Manage Shipping Lookups
• Manage Shipping Document Sequences
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These tasks are common to any Oracle application. Shipping doesn't require specific setup for these tasks, so you can follow
the instructions that you use to perform them for any Oracle application. For details about how to perform these common
tasks, see the guide titled Oracle SCM Cloud, Implementing Common Features for Oracle SCM Cloud.
Setting Up Shipping for Drop Ship Transactions: Explained

Oracle Fusion Applications support drop shipments. Drop ship is an order fulfillment strategy where the seller does not keep
products in inventory, but relies on suppliers to build, store, and ship orders to customers. Material flows directly from the
supplier to the customer.
You can select whether or not you want to print shipping documents for drop ship orders. To print shipping documents
for these transactions, select the Print shipping documents for drop ship orders option on the Manage Receiving
Parameters page in the Setup and Maintenance work area in the Manufacturing and Supply Chain Materials Management
offering. This option is a one-time setup step for your organization. You do not set this up per transaction.
Related Topics
• Printing Shipping Documents for Drop Ship Orders: Critical Choices
Manage Release Sequence Rules

Release Sequence Rule: Explained
Release sequence rule enables you to specify the order in which the picking lines are pick released to inventory. You must
assign a release priority in ascending or descending order to the selected release sequence.
The following aspects of defining a release sequence rule will assist you in releasing picking lines according to your
preference:
• Criteria for releasing picking lines
• Release priority
Criteria for release

You can release picking lines by:
• Sales order
• Initial ship date
• Scheduled ship date
• Outstanding invoice value
• Shipping priority
Release priority
You must assign at least one of the criterion specified above to a release priority in the range of 1 to 5 with 1 being the
highest priority and 5 being the lowest. You must select the order, ascending or descending, in which the specified criterion
will be made effective. For example, if you select the ascending order for the Scheduled date criterion, then the picking lines
with the earliest scheduled date are released first.
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Release Priority: Points to Consider

Release priority impacts the way a picking line is released when a release sequence rule is applied. Before assigning release
priority to a release criteria, consider:
• How you release shipment lines in your organization?

• What is the level of priority your organization assigns to the order in which lines are released?
Releasing shipment lines

Before selecting the release criteria, you must plan how your organization will release shipment lines. Consider the following:
• What is the most commonly used criteria based on which shipment lines are released?
Consider your organization's preferred criteria for releasing shipment lines. It can be based on sales order number,
outstanding invoice value, scheduled date, initial ship date, and shipping priority. This directly impacts how and when
the shipment line is released.
Assigning release priority

Consider the following dependencies before assigning attributes to the release priority:
• You can assign a priority level to one attribute with 1 being the highest and 5 being the lowest.
Consider your organization's usage of a specific attribute.
Note: You can select an attribute only once while deciding the relative priorities.
• You can assign the order, ascending or descending, in which the specified attribute will be made effective.
For example, if you select the ascending order for attribute Sales Order number, the shipment lines are released by
ascending sales order number. Sales Order 1 is released first, then Sales Order 2, Sales Order 3, and so on.
• You cannot assign both the Outstanding invoice value attribute or the Sales Order number attribute to a release
priority in the same release sequence rule.
Manage Ship Confirm Rules

Ship Confirm Rule: Explained
Ship confirm rule enables you to determine how shipments are ship confirmed.
The following aspects of defining a ship confirm rule provide you the flexibility to:
• Specify tasks along with shipment confirmation

• Specify options if shipped quantities are not manually entered
• Specify the document job set
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Specify tasks along with shipment confirmation

You can specify your organization's preference of tasks to be completed along with shipment confirmation, by selecting one
or more of the following check boxes:
• Create shipment for remaining staged quantities
A new shipment will be created for lines with remaining staged quantities. Remaining staged quantity is applicable
when shipped quantity is different from picked quantity on the line.
• Create bill of lading and packing slip
A bill of lading and packing slip is created.
Note: You must define sequences of type "Automatic" for the application and module "Shipping." The
sequences must be assigned to document sequence categories "BOL" or "PKSLP."
• Close shipment
The shipment status is set to closed and as a result all the shipment lines status is set to shipped.
• Defer sending inventory updates to integrated applications
Specify options if shipped quantities are not manually entered

You must specify an option that will be applied during ship confirm if the shipped quantity is not manually entered for a staged
line or lines. For example, consider a scenario where a shipment has 10 staged lines, and the shipped quantity is manually
entered for eight of the lines. The ship confirm rule must indicate what to do with the two lines for which the shipped quantity
is not manually entered. The options are:
• Backorder
The two staged lines are set to Backorder status and are unassigned from the shipment.
• Cycle count
The two staged lines are marked for cycle count, set to Backorder status, and unassigned from the shipment.
Note: The quantities transferred for cycle counting are not considered for selection during the next pick
release.
• Ship requested quantities
The requested quantity on the two staged lines is shipped.

• Stage
The two staged lines remain staged, but are unassigned from the shipment.
Specify the document job set

When a ship confirm rule is used, you can associate the document job set to use during shipment confirmation.
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Ship Confirm Rules: Points to Consider

You must set up all the ship confirm rules in a manner that they are reusable and service varied needs of different
organizations. You can have only one default ship confirm rule per organization and the this rule is associated by the shipping
parameters for the organization.
Before setting up default shipping rules consider:

• Understand shipping processes and anticipate current and future needs of the organization
• Follow naming conventions
• Associate the most commonly used rules while defining shipping parameters
Understand shipping processes

You must understand the shipping processes to be able to evaluate and anticipate current and future needs of your
organization before defining shipping rules. Consider the most commonly used scenario for the business so that the scenario
will be served well with the default rule. This will enable you to create effective rules that optimize performance and reduce the
need for granularity, which in turn reduces maintenance.
Follow naming conventions

You must follow naming conventions so as to minimize chances of confusion resulting out of cryptic naming.
Associate most commonly used rules

You must associate the most commonly used rules while defining shipping parameters. For example, you must associate a
rule that is used most frequently in your organization. This enables you to minimize the need for overriding the default ship
confirm rule.
Manage Shipping Cost Types

Shipping Cost Types: Explained
Shipping cost types are shipment-related costs such as administration fee, duty fee, insurance, handling cost, export fee,
or transportation charge. You can define a cost type within a category with a suggested amount. Shipping costs can be
recorded at any point in time for a shipment, shipment line, or packing unit.
Shipping cost types provide you the flexibility to:
• Defining a uniform shipping cost under a specific category for future reference
• Specifying an effective date range for the validity of the cost type
• Defining a cost type in preferred currency
Define shipping cost

You can define a shipping cost type under a specific category. This ensures uniformity of service charges under the selected
category across the organization for the same service.
Note: You can override the cost type and suggested amount during or after the recording of shipping cost.
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Specify effective date range

You can specify a date range for the validity of the cost type.
Define cost type in preferred currency

You can define a cost type in your functional currency. You can modify the currency at any point in time.
Manage Transportation Schedules

Transportation Schedules: Explained
Transportation schedules enable you to define valid shipping and receiving days and hours for trading partners such as
organizations, suppliers, customers, and carriers.
Transportation schedules enable you to:
• Determine when shipments can be shipped and received.
• Assist Oracle Fusion Global Order Promising in planning valid shipping and receiving days.
Determine shipping and receiving schedule

The shipping and receiving schedules are used to determine when your customers, customer sites, suppliers, supplier sites,
and internal organizations can ship and receive. The ship confirm process uses the defined transportation schedules to warn
you of invalid shipping days and hours. The initial ship date on the shipment is validated according to shipping schedule for
the warehouse and the planned delivery date is validated according to the receiving schedule for the customer or customer
site.
For example, you are shipping a shipment from your warehouse in Florida on Monday, September 12, to arrive at your
customer's site in New York on Wednesday, September 14. In this case, ship confirm checks the warehouse's shipping
schedule and the customer's receiving schedule for the initial ship date and planned delivery date respectively to confirm the
following:
• Monday, September 12, is a valid initial ship date for your warehouse in Florida to ship goods.
• Wednesday, September 14, is a valid delivery date for your customer's site in New York to receive goods.
If the initial ship date or planned delivery date is invalid, then ship confirm displays a message requesting a review of the dates
entered.
Transportation schedules are also used when a pick release process is submitted.
The pick release process also consults your defined transportation schedules and adjusts ship dates as necessary. When you
create a pick wave using the pick release process, you can specify a pick wave release rule that defines the scheduled ship
dates and requested ship dates on the pick wave. If a shipping transportation schedule is defined for your organization, then
the scheduled and requested ship dates on the pick wave are compared against the valid shipping days on the transportation
schedule. If either the scheduled or requested ship date falls on an invalid shipping day for your organization, then the
dates are automatically adjusted to the next valid shipping day specified in the transportation schedule. For example, if your
shipping transportation schedule allows shipments Monday through Friday, and the pick wave release rule calculates a ship
date that occurs on a Saturday, then the ship date is automatically moved to the following Monday.
Note: If the transportation schedules are not defined, then every day and time is assumed to be valid for
shipping and receiving.
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Assist Oracle Fusion Global Order Promising in planning valid shipping and receiving days
Oracle Fusion Global Order Promising uses the transportation schedule assignments when determining supply availability
dates for customer orders.
• Shipping schedule: The shipping schedule indicates the valid working dates for shipping originating from suppliers
and organizations. Oracle Fusion Global Order Promising uses the shipping schedule to determine when material
can be shipped from warehouses to customers.
• Receiving schedule: The receiving schedule indicates the valid working dates for receiving goods at the organizations
or customer sites. Oracle Fusion Global Order Promising uses the receiving schedule to determine when material
can arrive at the customer site.
• Carrier schedule: The carrier schedule indicates the working and nonworking days and times for material that is
in transit using different means of transport. Oracle Fusion Global Order Promising uses the carrier schedule to
determine the transit time from a warehouse to the customer site. For example, a carrier has a transit time of three
days but does not work on weekends. This implies that the carrier can deliver a shipment that was shipped on
Monday afternoon on Thursday afternoon. However, the carrier can deliver a shipment that was shipped on Friday
only on Wednesday since Saturday and Sunday are nonworking days.
• Oracle Fusion Global Order Promising uses shipping, carrier, and receiving schedules to determine when internal
transfers between internal manufacturing sites and warehouses can be scheduled to meet customer demands at a
warehouse.
For example, shipping, receiving, and carrier schedules are used for shipping from an internal organization such as
a plant to another internal organization such as a warehouse. The plant's shipping schedule is open from Tuesday
to Friday. The warehouse's receiving schedule and the carrier schedule are open from Monday to Friday. The transit
time is two days. In this case, the warehouse will receive shipments from the plant on Thursday, Friday, and Monday.
The warehouse will not have shipments arriving on Wednesday since the plant cannot ship on Monday. If supplies
are needed on Wednesday, then Global Order Promising will try to ship from the plant on the previous Friday to
arrive on Tuesday.
Related Topics
• Schedule Components: How They Fit Together
Creating Transportation Schedules: Examples

You can use several combinations of trading partner, schedule name, and schedule usage to create the transportation
schedules suitable for your business requirements.
Examples of creating transportation schedules are discussed for the following scenarios:
• Shipping schedule for a warehouse
• Receiving schedule for a customer
Shipping schedule for a warehouse

You want to set up a shipping schedule for your warehouse so that you can schedule shipments from your warehouse and
calculate shipping and planned delivery dates for your customers. In order to ensure that your warehouse has accurate
shipping days and times, you can create a transportation schedule for an organization from where your goods will be
shipped, and select shipping as your schedule usage for that organization. You can activate the schedule assignment at the
organization trading partner level by selecting the schedule and marking it as active.
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Receiving schedule for a customer

You want to set up a receiving schedule so that you can schedule shipping and receiving days and calculate shipping and
planned delivery dates for your customers. In order to ensure that the customer has accurate receiving days and times,
you can create a transportation schedule for the customer to whom your goods will be shipped, and select receiving as
your schedule usage for that customer. You can activate the schedule assignment at the customer trading partner level by
selecting the schedule and marking it as active.
Site Level Schedules: Explained

Trading partner type can be customer, supplier, carrier, and organization. The schedule usage you define for every trading
partner type determines what the schedule assigned to the trading partner is used for. For example, if shipping is defined
as schedule usage for a trading partner organization, then that schedule is used for shipping. You can define and activate
one or more sites for a trading partner. You can assign a different schedule for each trading partner site. Note that setting up
schedules at the site level is optional. If a schedules is not defined at the site level, then the schedule defined at the trading
partner level is used. For example, a trading partner has 20 ship-from sites and 18 of those sites have the same schedule for
shipping days. In this case, one shipping schedule can be defined for the trading partner and two other shipping schedules
for the sites.
Site level schedules enable you to:
• Determine when shipments can be shipped and received at the site

• Validate shipping and receiving days
Determine site level shipping and receiving schedule

Enables you to define a shipping and receiving schedule for a trading partner site.
For example, a trading partner site (referred to in the following list as customer site) is receiving a shipment on Thursday. In
this case, ship confirm checks the trading partner site schedules to confirm the following::
• The customer site is activated to receive shipments.

• The customer site can receive goods on Thursday.
Validate shipping and receiving days

The ship confirm process consults your defined site level schedules and warns you about invalid shipping days and hours as
necessary.
When you ship confirm a shipment using the ship confirm process, the initial ship date and planned delivery date is checked
in the trading partner site schedule. If a trading partner site schedule is defined for your trading partner site, then the initial
ship date and planned delivery date are compared against the valid shipping and receiving days on the site schedule. If
either the initial ship date or the delivery date falls on an invalid shipping or receiving day for your warehouse and customer
site respectively, then alternative valid dates are suggested. For example, if your shipping site schedule allows shipments
Monday through Friday, and the ship confirm process calculates an initial ship date that occurs on a Saturday, then Monday
is suggested as the alternative initial ship date.
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FAQs for Manage Transportation Schedules

What happens if a transportation schedule is not defined for a trading partner?
If a transportation schedule is not defined, then every day and time is assumed to be valid for shipping and receiving.
Manage Shipping Exceptions

Shipping Exceptions: Explained
Shipping exception is an unexpected event resulting out of a conflict between the requirements of the shipper, customer, or
transportation carrier.
Shipping exception enables you to:
• Define and maintain the three types of shipping exceptions
• View and modify predefined exceptions
• Modify severity levels of exceptions
Define and Maintain New Shipping Exceptions

You can define and maintain new exceptions. The exceptions can be of three types:
• Shipment: exceptions that are logged against shipments.
• Picking: exceptions that are logged during the picking process.
• Batch: exceptions logged to store the messages generated during the automated shipping processes such as
automatically pack and ship confirm.
View and Modify Predefined Exceptions

You can view and use predefined exceptions. You can choose to activate or inactivate predefined exceptions based on their
validity for your organization. You can only modify the severity level for predefined exceptions.
Modify Severity Levels of Exceptions

You can define and maintain the following severity levels of shipping exceptions:
• Error: Requires resolution before the transaction can be closed.
• Warning: Can be superseded and does not require resolution to close the transaction.
• Information: Provides information on a particular transaction. The user is not required to act on the information
exception to close the transaction.
Predefined Exceptions: Explained

Predefined exceptions are already defined in Oracle Fusion Shipping. They are defined for the most common scenarios that
may lead to the creation of an exception.
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Predefined exceptions provide the flexibility to:
• Activate valid exceptions

• Inactivate exceptions
• Modify severity level
Activate Valid Exceptions

You can activate exceptions that are valid for exception scenarios for your organization from a list of predefined exceptions.
This table lists the predefined exceptions available for your organization.
Exception Name Description Severity Level
Requested Quantity Changed Requested quantity changed due to change Error

in order line quantity.

Shipment Grouping Changed One or more shipment grouping attributes Error

were changed.

Scheduled Date Postponed The scheduled date was postponed. Error

Scheduling Attributes Changed One or more scheduling attributes were Error

changed.

Pick Release Error Pick release detailing completed with an Error

expected error.

Shipment Request Error Line has shipment request errors in shipment Error
message interface.

Shipment Line on Hold The shipment line was placed on hold by a Error
shipment request.

Manifest Request Cancellation Accepted Manifest request cancellation accepted by Information

carrier manifesting.

Manifest Request Cancellation Rejected Manifest request cancellation rejected by Information

carrier manifesting.

Backordered at Picking The shipment line was backordered at Information

picking.

On Hold at Picking The line had a hold at picking. Information

Shipment Line Unassigned by Shipment Line unassigned from shipment after Information
Request processing shipment request.

Invalid Packing Items should be unpacked from the packing Information

unit.

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Exception Name Description Severity Level
Change Due to Party Merge Party merge has changed the shipment line Information
or packing unit.

Pick Release Detailing Warning Pick release detailing completed with Information
warnings.

Batch Message This message was logged by a batch Information

program.

Pick Release Warning Pick release completed with warnings. Information

Added by Append Shipments Line added to a shipment through the Warning

append shipments process.

Appended Shipment Could Not Be Marked The shipment could not be updated to Warning
as Planned planned at the end of the append shipment
process.

Inactivate Exceptions
You can inactivate an exception that is no longer in use by your organization.
Modify Severity Level

You can modify the severity level of a predefined exception by selecting one of the following severity levels: Error, Information,
Warning. For example, the predefined severity level for exception "Added by Append Shipments" is Warning but if your
shipping processes require such an exception to be resolved prior to ship confirm, you can set the severity of this exception
to Error.
Note: You can modify the severity level of an exception only if it is not currently in use by a shipment, shipment
line, or packing unit. You cannot modify the severity level for an Error exception.
FAQs for Manage Shipping Exceptions

When do shipping exceptions occur?
Shipping exceptions occur when predefined criteria for shipment creation, processing, and delivery are not met or fail.
Predefined exceptions are logged automatically against shipments, shipment lines, and packing units when specific events
occur.
You can also log shipping exceptions manually for a specific shipment, shipment lines, and packing units.
Can I inactivate an exception?

Yes. Remove the Active check box selection in the Edit Shipping Exception page. You can inactivate a manually defined
exception only if the exception is not currently in use by a shipment, shipment line, or packing unit.
Note: You cannot inactivate a predefined exception.
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Manage Default Packing Configurations

Packing Shipments: Explained
Packing shipments is the process of packing items into packing units for shipping to the customer.
Packing shipments provides the flexibility to:
• Manually pack
• Automatically pack
Manually Pack Shipments

You can pack shipment lines manually by creating packing units and specifying the lines that are packed in each of the
packing units. Packing can be done for items as well as packing units. You can pack items into a packing unit and also pack
those packing units into another packing unit. For example, you can pack items into a box and many boxes onto a pallet.
Automatically Pack Shipments

You can choose to automatically pack shipment lines into packing units by selecting the Automatically Pack option for
the specific lines. The selected shipment lines are grouped by shared attributes, such as the ship-to location, and are then
packed based on the preferred default packing configuration.
Note: You can automatically pack a shipment that is open and has at least one shipment line assigned to it.
You can automatically pack if packing configurations have been defined.
Default Packing Configuration: Explained

Default packing configuration enables you to assign a packing unit type to an item.
Default packing configuration provides you the flexibility to:
• Specify maximum quantity of an item that can be packed into the chosen packing unit type
• Automatically pack shipments
Specify Maximum Item Quantity

You can specify maximum quantity of an item that can be packed into the chosen packing unit. This assists in calculating the
number of packing units required for a shipment line while packing automatically.
Automatically Pack Shipments

You can automatically pack items into packing units, which in turn can be further packed into larger packing units. Examples
of larger packing units are pallet or boxcar.
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Packing Unit: Points to Consider

Packing units are defined in Oracle Fusion Inventory Management. Every packing unit can be classified into a broader packing
unit type meant for a specific kind of packaging and shipping. For example, the airline container packing unit is used to pack
shipments that are delivered by air. Before assigning a packing unit to an item, consider:
• What is the most commonly used mode of transport used to deliver shipments by your organization?
• What is the storage requirement for the items shipped from your organization?
Mode of Transport to Deliver Shipments

Consider which modes of transport are most commonly used by you organization to deliver shipments. Your organization's
preferred modes of transport indicate the packing units most likely to be used during shipping.
Storage Requirement
Consider the weight and volume of the items being shipped from your organization to determine the packing unit to be used.
Manage Shipping Zones

Zone Types and Zones: Explained
You can create zone types and zones for the use of defining boundaries to be used in, for example, tax or shipping zones.
In order to create a zone boundary you need to define the following:
• Zone types
• Zones
Zone Types
Zone types categorize and group zones together, for example, the zone types of Income Tax and Shipping Regions.
Zone types need to be created before you define a zone for the geographical boundary. You can create a zone type which
will contain geographical boundaries from anywhere in the world, or you can create a zone type that will only contain
geographies from within a specified country. When you create a zone type that is bounded by a country you can define which
geography types or geographies you will be able to choose when you create a zone.
Zones
Zones are geographical boundaries for a zone type, for example, the San Jose Tax zone. Zones are based on the master
reference geography hierarchy data.
Zones are created within a zone type, and you can associate geographies to define the zone. For example, for the Shipping
Regions zone type you can create a West Coast zone which has the state of California as one of its geographies. Within a
geography you can specify a postal range. So for the state of California, for example, you can specify that the zone spans
from postal code 90001 to 90011.
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Creating Zone Types and Zones for Shipping and Tax: Worked
Example
This example shows how to create a zone type and zone for shipping and tax.
Create a new zone type which is limited to one country, specify which geography types you want to select for a zone, and
create a zone.
Creating a Zone Type

When you're creating a zone you will need to either create the zone under an existing zone type, or you will need to create
a new zone type and then create the zone. In this example, a suitable zone type doesn't exist in the application, and so you
create a new zone type.
When you're creating a new zone type you can allow zone types to span across countries, however the zone type you are
creating in this example will be limited to geographies within the United States.
1. On the Manage Zone Types page, click Actions and then click New.
2. On the Create Zone Type page, enter a name for the zone type in the Zone Type field.
3. Click the Bounded by country option.
4. In the Boundary section, click the Country list.
5. Click Search.
6. Enter United states in the Name field.
7. Click Search.
8. Select the United States row.
9. Click OK.
10. In the Boundary section, click Zone Created Allowed for the State, County, City, and Postal Code geography
types.
11. Click Save and Close to go back to the Manage Zone Types page.
Creating a Zone
Now that you have created a zone type, you want to create a zone for the zone type. In this example, the zone will contain
State geographies.
1. On the Manage Zone Types page, click Next.

2. Click Actions and then click New.
3. On the Create Zone page, enter a name for the zone in the Zone field.
4. Enter a unique name for the zone in the Code field.
5. Enter the date you want the zone to be effective from in the Start Date field.
6. Enter the date you want the zone to be inactive from in the End Date field.
7. Now you need to enter the geographical boundaries of the zone by adding geographies. In the Associated
Geographies section, click Actions and then click New.
8. Enter State in the Geography Type field.
9. Enter CA in the Geography Name field.
10. Click Search.
11. Highlight the California geography, and click Save and Close.
12. Repeat steps 7 to 11 for every geography you want to enter for the zone.
14. Create as many zones as you require for your zone type.
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15. Click Save and Close on the Manage Zones for Zone Type page.
Manage Shipping Parameters

Managing Shipping Parameters: Points to Consider
Shipping parameters affect how Oracle Fusion Shipping creates and confirms a shipment, and how it interacts with Oracle
Fusion Inventory Management. Consider the following questions when you set shipping parameters:
• How will your organization create, process, and confirm shipments?
• How will Oracle Fusion Shipping update Oracle Fusion Inventory Management?
Creating and Confirming Shipments

Before selecting the shipping parameters, you must plan how your organization will create, process, and confirm shipments.
Consider the following before configuring the shipping parameters for each of your ship-from organizations.
• Which shipment creation criteria to use?
Consider your organization's criteria for creating shipments; if a shipment can be created across sales orders or
must be created from within a sales order.
• Which confirm rule to use?
Consider your organization's usage of a specific confirm rule and decide which can be used as the default rule
during confirmation. Select the commonly used rule in your organization to save time and quickly confirm shipments.
• What weight UOM class and volume UOM class to use?
• What currency to specify?
Consider your organization's range of transactions in a particular currency.
• Whether to enable automatic packing?
Consider your organization's usage of packing shipment lines into packing units. Note that the shipment lines to
be automatically packed are grouped together by shared attributes such as ship-to location and the shipment line
information cannot be changed until the shipment is unpacked.
• Whether to consolidate backordered lines?
Consider your organization's policy on consolidating a line that was split and backordered with other backordered
lines.
• Whether to enforce packing?
Consider your organization's practice of requiring every shipping line in a shipment to be packed.
• Whether to enforce shipping method?
Consider your organization's practice of requiring a record of shipping method for each shipment.
• Whether to enable future ship date?
Consider your organization's policy on recording an actual ship date in the future.
• Whether to enable carrier manifesting?
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Consider if you want to enable carrier manifesting for the shipments in the warehouse.
Updating Oracle Fusion Inventory Management

Consider the following dependencies before configuring your organization's shipping parameters on updating Oracle Fusion
Inventory Management tables.
• Whether to defer sending inventory updates to integrated applications?
Consider your organization's preference on delaying updates to Oracle Fusion Inventory Management tables once
the shipment is confirmed. If you choose to defer sending inventory updates to integrated applications, then the
Shipping interface does not initiate updates to Oracle Fusion Inventory Management interface tables and in turn, the
inventory processor does not pick up or update the inventory tables.
• Whether to defer online processing of inventory updates?
Consider your organization's preference on delaying processing of records in Oracle Fusion Inventory Management.
• How much inventory interface batch size to specify?
Specify the number of records that are selected for processing in a batch in Oracle Fusion Inventory Management.
Consider the maximum number of records your organization would prefer to be processed in a batch. Note that an
optimum batch size reflects inventory updates faster in the application.
Setting Shipping Parameters

Consider the following items when you set a shipping parameter on the Manage Shipping Parameters page in the Setup and
Parameter Description
Appending Limit
Select one of the following values:
• Do Not Append. Do not enable Oracle Fusion Shipping to append a shipment.

• Start of Staging. Enable Oracle Fusion Shipping to append a shipment after it stages at least
one of the fulfillment lines that the shipment references.
• End of Staging. Enable Oracle Fusion Shipping to append a shipment after it stages all
fulfillment lines that the shipment references.
Packing Slip Document Sequence Select a value that specifies the document sequence category to use for the packing slip. You can
Category use this parameter to specify the starting packing slip number, or to specify whether or not the
sequence contains gaps or is continuous without gaps.

Consolidate Backordered Lines If this parameter is selected, Oracle Fusion Shipping consolidates any line that was split and then
subsequently backordered. It consolidates this line with the backordered lines that existed before
the split. Oracle Fusion Shipping searches for existing backorders for the shipment line when a
backorder occurs. If it finds an existing backorder, then it consolidates the current backordered
shipment line with the existing backordered shipment line.

Oracle Fusion Shipping only consolidates backordered lines that are not assigned and not packed.

Required on Packing Slip

Select the options to print on the packing slip:
• Packing Slip Status. Print Draft or Final on the packing slip.

• Shipment Description. Print the description that the user enters for the shipment.
• Transportation Reason. Print the reason for sending the goods that the user enters for the
shipment.
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The options selected for this parameter print on the packing slip. By default, no options are
selected.
Enable Carrier Manifesting

If this parameter is selected, Oracle Fusion Shipping sends shipments to the carrier manifesting
system so that this system can confirm the shipment. Only shipments that are open and that include
lines that are assigned, staged, and packed are sent. Packing is performed prior to manifesting
because Oracle Fusion Shipping can only manifest packed lines.
A shipper can use carrier manifesting to process shipments that use carriers that are integrated with
Oracle Fusion Shipping. The carrier manifesting process does the following work:
• Weigh parcels.
• Calculate freight cost.
• Create shipping documents.
• Send manifest data to systems that third party carriers use.
Publish Transactional Events If this parameter is selected, the shipping transaction event for backordered quantities is always
published.

Trade Compliance Screening Method

Select one of the following values to set the default screening method for all shipment lines:
• None. Shipment lines are not screened for trade compliance.

• Pick confirm. You must submit shipment lines for trade compliance screening as soon as
the lines are picked and staged. However, for outside processing and return to supplier order
types, you must submit shipment lines for trade compliance screening as soon as the lines
are created.
• User initiated. You must manually submit shipment lines for trade compliance screening
after the lines have been picked and staged.
Shipment Grouping Attributes: Points to Consider

Shipment grouping attributes are defined for Ship-from Organization and determine how shipment lines are grouped on a
shipment. Ship-to Location and Ship-from Organization are always applied during grouping of shipment lines into shipments.
Before selecting shipment grouping attributes, consider:
• How would you like to group your shipment line into shipments?
• Do you need to further refine your grouping criteria?
Grouping Shipment Lines

You must consider your organization's business preference for grouping shipment lines into shipments. For example, there
are two types of freight terms; Prepaid and Collect. If you enable the grouping attribute Freight Terms, then the shipment lines
that share the same freight term, Prepaid, will be grouped into one shipment. And the shipment lines that share the freight
term, Collect, will be grouped into another shipment. The following tables illustrate the example and the consequent grouping
of shipment lines into shipments based on selection of the grouping attribute, Freight Terms.
This table shows an example of shipment lines and their attributes.
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Shipment Lines Ship-from Organization Ship-to Location Freight Terms
1234A Organization 1 San Jose Prepaid

1234B Organization 1 San Jose Collect

1234C Organization 1 San Jose Collect

1234D Organization 1 San Jose Prepaid

This table shows an example of how the shipment lines were grouped into a shipment when the grouping attributes were
applied.
Shipment Lines Ship-from Organization Ship-to Location Freight Terms Shipment
1234A Organization 1 San Jose Prepaid Shipment 1

1234B Organization 1 San Jose Collect Shipment 2

1234C Organization 1 San Jose Collect Shipment 2

1234D Organization 1 San Jose Prepaid Shipment 1

When a shipment is created, it inherits the enabled grouping attributes from the lines. For example, Freight Terms is
enabled as a grouping attribute and a shipment is created for the lines with the term Prepaid. In this case, the shipment will
automatically have the freight term, Prepaid upon creation.
When an optional attribute is enabled as a grouping criteria and there are shipment lines that don't have a value specified for
the enabled attribute, then all those shipment lines are grouped together on a separate shipment. You can also choose to not
select any of the optional grouping attributes.
Refining Grouping Attributes

You must consider your organization's preference for assigning Customer, Shipping Method, FOB, and Freight Terms as
grouping criteria for creating shipments.
You can select more than one grouping attribute to further refine your grouping criteria. For example, if you select Customer
and Shipping Method, then shipment lines with the same customer and shipping method will be grouped into one shipment.
Print Shipping Documents for Configured Items: Explained

You can print the details of the model and options selected for configured items on fulfillment documents. This is known
as the sales order view. The application calls a service at the time of shipment confirmation that provides this information.
You can view the details of the configured product on the packing slip and commercial invoice throughout the receiving,
inventory, and shipping processes. This helps avoid confusion when shipping configured products because the contents of
the shipment are indicated on the documents.
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Note: The quantities of the components contained in the configured item display on the documents in terms
of a single unit quantity. This means that the documents show the number of required components when the
configured item quantity equals one.
FAQs for Manage Shipping Parameters

What happens if I select different appending limit options during shipment creation?
Select Do Not Append to prohibit automatic appending to an existing shipment. Select Start of Staging to allow automatic
appending to a shipment till one of the lines is staged. Select End of Staging to allow automatic appending to a shipment till
all the lines are staged.
What happens if I enable carrier manifesting?

Carrier manifesting is a method used by shippers to process shipments that use carriers that are integrated into Oracle Fusion
Shipping. The carrier manifesting process includes weighing parcels, calculating freight cost, generating shipping documents,
and submitting manifest data to third party carrier systems. When you enable carrier manifesting, open shipments with
assigned lines that are staged and packed are sent to be ship confirmed in the carrier manifesting system. Packing is
performed prior to manifesting since only packed lines can be manifested.
Manage Pick Wave Release Rules

Pick Wave: Explained
A pick wave is a batch of shipment lines that are pick released together based on certain business-related criteria.
Examples of when you might want to use pick waves include:
• Fulfilling a particular customer demand
• Optimizing transportation
• Fulfilling backorders to reduce delay in shipment
Fulfilling a Particular Customer Demand

If your organization has customers who have specific quality demands, then you can create a pick wave to perform extra
quality checks or follow special procedures during shipping.
Optimizing Transportation
You can process a batch of shipment lines that are bound by common ship-to location, shipping method, and shipping
priority in order to optimize transportation. If your organization has several customers in one location, then your organization
can choose to collect all the shipment lines for those customers and ship them together through a common carrier. For
example, if an organization has 10 customers in location B, then it can collect all shipment lines for location B and create a
pick wave to ship them together using a common carrier, such as UPS truck service.
Fulfilling Backorders to Reduce Delay in Shipment

If your organization chooses to fulfill backorders by putting them on a faster shipping schedule, then you can create a pick
wave for all the backordered lines and ship them using a faster shipping method, such as Air.
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Pick Wave Release Rule: Explained

Pick wave release rule defines the criteria to determine the order lines to select for pick release and how they need to be
processed. The optional processing includes:
• Creating shipments
• Picking and staging the material
• Packing the material
• Ship confirming the lines
The following criterion based on which you can define a pick wave release rule will assist you in planning and meeting your
organization's needs:
• Effective Start and End Date range
• Demand Selection criteria
• Process criteria
• Fulfillment criteria
Date range
Effective start and end date range for the rule.
Demand Selection Criteria

Enables you to specify criteria pertaining to shipping organization, order, order date, item, and shipping details.
Process Criteria
Enables you to specify the release sequence rule, pick slip grouping rule, ship confirm rule, document job set, and also if the
shipment should be automatically packed among others.
Fulfillment criteria
Enables you to specify the pick-from subinventory and staging subinventory of the shipping organization.
Pick Wave Release Rule: Points to Consider

Pick wave release rule defines the criteria to determine the order lines to select for pick release and how they must be
processed.
Before creating a pick wave release rule consider:

• How you select lines for picking in your organization?
• How do you process and fulfill the selected lines?
Selecting shipment lines

You must consider your organization's preference before selecting lines for picking. Before selecting the order, date, and item
details you must plan how your organization creates a pick wave. Consider the following:
• Which subinventory to use?
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Your choice of subinventory results in the selection of those order lines that are planned to be sourced from the
specified subinventory. The source subinventory is specified for the order lines in the sales order creation stage.
• Which sales order to select?
Determine if the shipment lines to be pick released for a specific sales order.
• Which customer to select?
Determine if the shipment lines to be pick released are for a specific customer.
• Which shipment set to select?
If your organization groups order lines within a sales order based on customer specification to ship together, then
those set of lines are shipped together in the same shipment. You can select the appropriate shipment set number
from where the order lines will be selected.
• Which destination type to select?
Determine if the shipment lines to be pick released for specific geography, zone, or ship-to location.
• What are specified date ranges?
Determine the from and to scheduled ship dates and from and to requested ship dates.
• What item details to specify?
Consider if you are creating a pick wave for a specific item. If yes, then specify the catalog and category name along
with the item name and description.
• What shipping details to specify?
Determine the preferred shipping method. The selected shipping method enables selection of those order lines that
are planned for shipping using the specified shipping method.
Processing shipment lines

You must consider your organization's preference for the way lines are fulfilled and processed. Consider the following:
• What pick-from subinventory and pick-from locator to specify?
Consider your organization's usage of a specific subinventory and locator to pick material from.
Note: This is an optional criterion.
• What staging subinventory and locator to specify?

Consider your organization's usage of a specific subinventory and locator to finally deposit picked material.
• What release sequence rule to specify?
Consider your organization's preference regarding the order in which lines are allocated during pick release.
• What pick slip grouping rule to specify?
Consider your organization's preference regarding how lines grouped onto pick slips.
• What ship confirm rule to specify?
Consider if your organization prefers shipments to be ship confirmed as part of pick release.
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• Whether to automatically confirm pick slips?
• Whether to create shipments?
• Which shipment creation criteria to use?
Consider your organization's criteria for creating shipments; if a shipment can be created across orders or must be
created from within an order.
• Whether to automatically pack shipments?
• Whether to append existing shipments?
Setting Pick Wave Release Rules

Consider the following items when you set pick wave release rule criteria on the Manage Pick Wave Rules page in the Setup
and Maintenance work area.
Criteria Description
Initial Destination Select the initial destination for the shipment and shipment lines for the pick wave. The
transportation shipment must have been planned in a transportation management system.

Trade Compliance Screening Method

Select one of the following values to set the default screening method for all pick wave releases:

• Pick confirm. You must submit shipment lines for trade compliance screening as soon as
the lines are picked and staged. However, for outside processing and return to supplier order
types, you must submit the shipment lines for trade compliance screening as soon as the
lines are created.
• User initiated. You must manually submit shipment lines for trade compliance screening
after the lines have been picked and staged.
Transportation Shipment Select the transportation shipment that represents the shipment and corresponding shipment lines
that are planned to ship together.

Pick Wave Options: Points to Consider

Options criteria impact the way lines are fulfilled and processed. Before selecting the options criteria, consider:
• Fulfillment criteria
• Processing criteria
Fulfillment Criteria
Before you select the fulfillment criteria, you must plan how your organization prefers lines to be fulfilled.
• What pick-from subinventory and pick-from locator will you specify?
Consider your organization's usage of a specific subinventory and locator to pick material from.
Note: This is an optional criteria.
• What staging subinventory and locator will you specify?
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Consider your organization's usage of a specific subinventory and locator to deposit the picked material for staging.
Processing Criteria
Before you select the processing criteria, you must consider your organization's preference for processing lines.
• What release sequence rule will you specify?
Consider your organization's preference regarding the order in which lines are allocated during pick release.
• What pick slip grouping rule will you specify?
Consider your organization's preference regarding grouping of lines onto pick slips.
• What ship confirm rule will you specify?
Consider if your organization prefers shipments to be ship confirmed as part of pick release.
• Will you automatically confirm pick slips?
Consider if your organization prefers pick slips to be automatically confirmed during pick release.
• Will you create shipments?
Consider if your organization prefers shipments to be created during the pick release process.
• Which shipment creation criteria will you use?
Consider your organization's criteria for creating shipments--whether a shipment can be created across orders or
must be created from within an order.
• Will you automatically pack shipments?
Consider if your organization prefers shipments to be automatically packed.

• Will you append existing shipments?
Consider if your organization prefers to append shipment lines to the existing shipments.
Note: Here are the prerequisites for appending shipment lines:

◦ The appending limit must be defined as a value other than Do not append on the Manage Shipping
Parameters page in the Setup and Maintenance work area.
◦ An organization must be specified.
◦ Create shipments functionality must be enabled.
◦ Shipment creation criteria must be defined as across orders.
◦ Autoconfirm pick slips functionality must be disabled.
Integrating Shipping with Transportation and Trade

Management Systems
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Shipping Integration with Transportation and Trade Management

Systems: Overview
Oracle Fusion Shipping provides seamless integration with any transportation management or trade management solution.
Using Shipping with transportation and trade management solutions, you can:
• Avoid fines by complying with the crucial regulatory compliance requirements
• Reduce the risk associated with global shipments
• Reduce costs by shipment optimization and carrier outsourcing
• Improve process flows by managing holistically across businesses and geographies
• Improve customer satisfaction by reducing order cycle time
Note: Although these integrations are available to any third-party solutions, Oracle Fusion Shipping is designed
to work directly with Oracle Transportation Management Cloud and Oracle Global Trade Management Cloud.
For more information about these products, see the Oracle Logistics Cloud documentation available on the
Oracle Help Center.
The integration features for Shipping are predefined, and you can access them through the following existing job roles:
• Shipping agent

Systems: Explained
Oracle Fusion Shipping provides seamless integration with any transportation management or trade management solution.
When you integrate Shipping with a:
• Transportation management system, you can schedule and optimize shipments, and tender shipments to carriers.
• Trade management system, you can ensure compliance by properly screening transactions and managing legal,
regulatory, and corporate requirements for cross-border transactions.
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The following figure shows a high-level overview of this cross-product business process flow.
Order Trade
Management Management
2
Receiving
Return to Vendor
Sales Order
Transfer Order
Inventory
Transfer Order
Work in
Process
Outside Processing
1 2
Transportation Trade
Shipping
Optional integration
1. Order managers can send order lines to a transportation management system for planning. After the order lines are
planned, the transportation details are sent back to Shipping for further processing.
2. Order managers can perform compliance screening directly from both Oracle Fusion Order Management and Shipping.
Order managers can request compliance screening for order lines, and shipping users can check trade compliance for
shipment lines.
The following subsections provide more detailed information about how Shipping integrates with Order Management,
transportation management, and trade management systems.
Shipping Integration with Order Management

Order Management and the Oracle Fusion Inventory Management suite of products (shipping, receiving, and inventory
management) work together to fulfill orders that your users enter directly in Order Management or that you import from some
other source.
You can integrate Order Management with a transportation management system so that it sends sales orders to that system
for transportation planning, and to receive updates at fulfillment milestones, such as plan completion or proof of delivery. For
more information about Order Management integration with a transportation management system, see the Oracle SCM Cloud
Implementing Order Management guide.
Shipping Integration with Transportation Management Systems

Integrating Shipping with a transportation management system enables your order managers to send order lines to that
system for planning. After your order lines are planned, the transportation details are sent back to Shipping for further
processing.
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Some of the advantages of this integration include:
• Shipping automatically receives transportation planning details, such as transportation shipment information,
shipping method details, and shipping dates.
• Warehouse personnel can perform actions on shipment lines collectively based on the associated transportation
shipment.
• The transportation management system is automatically notified of backordered quantities.
• Shipping communicates the final shipment information to the transportation management system, which helps in the
generation of more accurate shipping documents.
• Third-party logistics (3PL) applications and warehouse management systems (WMS) can integrate directly with
transportation management systems, and Shipping communicates directly with the 3PL application and WMS.
For more information about transportation management, see the Oracle Logistics Cloud documentation available on the
Oracle Help Center.
Shipping Integration with Trade Management Systems

Integrating Shipping with a trade management system enables order managers to perform compliance screening directly from
Order Management and Shipping. Order managers can request compliance screening for order lines, and shipping users can
check trade compliance for shipment lines.
Some of the advantages of this integration include:
• Shipping users can request shipment lines to be screened at a stage that's appropriate to your business. For
example, shipping users can request compliance screening when the lines are staged automatically, or manually
before the material is shipped.
• Warehouse personnel can perform actions on shipment lines collectively based on your compliance screening
needs.
• The trade management system is automatically notified of backordered quantities.
• You can communicate the final shipment information to the trade management system, which helps in releasing any
licenses withheld and generating export documentation.
• Third-party logistics (3PL) applications and warehouse management systems (WMS) can integrate directly with a
trade management system, and Shipping communicates directly with the 3PL application and WMS.
Related Topics
• Integrating Order Management with Transportation Management: How It Works
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Systems: Points to Consider
The following are points to consider when integrating Oracle Fusion Shipping with transportation management or trade
management systems.
• Integrations are available for any third-party solutions, however, Shipping is designed to work together with Oracle
Transportation Management Cloud and Oracle Global Trade Management Cloud.
• Visibility is not available within Shipping to determine if shipment lines were previously screened in Oracle Fusion
Order Management.
• Changes from Order Management are rejected for the planned shipment lines.
• Changes from transportation management systems are rejected for the planned shipment lines.
• Shipment lines can't be shipped using Oracle Fusion Inventory Management for organizations controlled by external
systems, such as third-party logistics (3PL) applications or warehouse management systems (WMS). Contract
manufacturing is the exception.
• Printing of shipping documents is performed using the transportation management system.
• Printing of commercial invoices is performed using the trade management system.
Setting Up Shipping for Backordered Shipment Line Notifications:

Explained
With Oracle Fusion Shipping, backordered line notifications are available for the shipment lines you have enabled
for transportation planning and compliance screening. However, if you need these notifications for integrations or
implementations, then you must enable the Publish Transactional Events shipping parameter.
You enable the Publish Transactional Events parameter on the Manage Shipping Parameters page in the Setup and
Maintenance work area in the Manufacturing and Supply Chain Materials Management offering. When this parameter is
selected, the shipping transaction event for backordered quantities is always published.
Notifications for Backordered Shipment Lines: Explained

Oracle Fusion Shipping provides new events that enable you to work with backordered shipment lines and pull shipment
information.
Note: For these events to be available, you must have enabled the Publish Transactional Events shipping
parameter on the Manage Shipping Parameters page in the Setup and Maintenance work area in the
Manufacturing and Supply Chain Materials Management offering.
These events are available by way of Integrated Cloud Service (ICS) and include transportation shipment and trade
compliance screening attributes to assist with such integrations. ICS is an end-to-end integration orchestration platform that
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simplifies how to use and apply product integrations offered within the cloud. Shipping creates a shipment advice event that
is published after confirming a shipment.
When integrating Shipping with a transportation management system, you can keep the transportation shipment up to date
for the backorder quantities. The shipment advice event enables you to also update the transportation shipment incrementally
and complete it in an orderly fashion. After completion, the transportation shipment information is final and accurate so that
you can generate applicable shipping documents.
Transportation Planning Details for Shipment Lines: Explained

Integrating Oracle Fusion Shipping with a transportation management system, you can:
• Receive planning details for shipment lines from transportation applications
• Automatically split shipment lines for partial shipments
• Allow users to review, delete, and resubmit a shipment request if there are issues
Receive Transportation Details for Shipment Lines

You can receive the transportation planning details using the batch method of the Shipment Request public web service.
These details include transportation shipment, transportation shipment line, initial destination, shipping method, and
scheduled ship date. You manage transportation planning details for shipment lines using the Manage Shipment Lines page
in the Inventory Management work area in the Manufacturing and Supply Chain Materials Management offering.
Shipping can receive one transportation shipment at a time. You must split shipment lines if you plan to ship partially on a
transportation shipment. You can review any errors and resubmit the shipment request using the Manage Shipment Message
Interface task in the Inventory Management work area in the Manufacturing and Supply Chain Materials Management offering.
Shipping Support for Transportation Systems

With Shipping support for transportation shipments, you can:
• Group one or more shipments into a single transportation shipment.
When you combine one or more shipments into a single transportation shipment, you can progress the shipment lines
for customers independent of each other, even though the lines belong to the same transportation shipment. Shipping
communicates the shipment information to the transportation management system in an incremental fashion, that is, one
shipment at a time.
• Enable pick release of all shipment lines for a transportation shipment or initial leg destination location.
• Support planned and unplanned lines within a single organization, however, Oracle Fusion Order Management
decides which lines require planning.
• Enable manual updates to transportation attributes on the lines by way of the Manage Shipment Lines page in the
Inventory Management work area.
You manage shipping details for transportation shipments using the Create Pick Wave page in the Inventory Management
work area.
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Screening of Shipment Lines for Trade Compliance: Explained

Oracle Fusion Shipping integration with a trade management system enables you to screen shipment lines for trade
compliance.
You can:
• Publish trade screening request events that are visible in Integration Cloud Service (ICS)
• Enable users to determine which lines to screen
• Enable the trade management system to receive shipment lines and send back screening results
How Compliance Screening Works for Shipment Lines

You can publish a new trade compliance screening event as soon as it's staged or anytime thereafter. This event includes
a list of shipment line identifiers and is available by way of ICS. ICS is an end-to-end integration orchestration platform that
simplifies how to use and apply product integrations offered within the cloud.
The determination of when an event is published for a shipment line is based on the trade compliance screening method
selected for the line. The choices are:
• Pick confirm. You must submit shipment lines for trade compliance screening as soon as the lines are picked and
staged. However, for outside processing and return to supplier order types, you must submit shipment lines for trade
compliance screening as soon as the lines are created
• User initiated. You must manually submit shipment lines for trade compliance screening after the lines have been
pick and staged. You do so by initiating the Check for Trade Compliance action from the Manage Shipments
page or the Manage Shipment Lines page in the Inventory Management work area in the Manufacturing and Supply
Chain Materials Management offering.
Using this screening event, the trade management system pulls the list of shipment lines that are ready for compliance
screening. After screening is complete, the trade management system sends back shipping line updates to Shipping with the
screening results.
Shipping Support for Trade Compliance

Shipping enables the trade management system to receive shipment lines and send back the screening results.
The decision to screen shipment lines for trade compliance is transacted independently within the Shipping application. Any
setup or decisions made about screening in the order management functions does not have an impact in Shipping. You
select the screening method for a shipment line based on the selection made when releasing the line for picking. The trade
compliance screening details are available to be included in the shipping documents.
Impact on 3PL and WMS Integration with Shipping: Explained

Third-party logistics (3PL) applications and warehouse management systems (WMS) enable integration to transportation and
trade management systems directly.
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When integrating Oracle Fusion Shipping with a 3PL application or WMS, Shipping does not communicate with transportation
and trade management systems directly. Shipping facilitates the external applications to perform the necessary integrations
by:
• Communicating fulfillment, transportation planning, and compliance requirement-related attributes to the external
system
• Using the shipment information regardless of the planning and compliance statuses

Explained

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Transactions

3PL
documents.
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and transfers.
Related Topics

service payloads
or WMS activities
figure.
Receipt Advice
Shipment Request
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• Receiving agent
• Shipping agent
Related Topics

forth.
Decision Points
shipment requests.
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real time.

WMS.
Advice web service.
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1 3 4
Update
Inventory Receipt
Status to
Status
Delivered
3PL or 2
WMS Receive,
Receive Send
Inspection,
Receipt Receipt
and Put
Advice Confirmation
Away
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1 3 4
Generate
Inventory Outbound
Management Shipment
Request
Receive Shipment
Scheduled Process
2
Shipment
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offering.

Explained
Related Topics


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inventory manager).





systems?
Shipping Documents
Shipping Documents: Overview
Complex processes involving multiple applications and multiple fulfillment scenarios result in the generation of a series of
shipping documents. These include the distribution of the documents by multiple mechanisms to a variety of trading partners,
the documents required to accompany a shipment, and the documents to be filed with various fiscal agencies.
As a Warehouse Manager or Shipping Manager, you can define sets of shipping documents, called shipping document job
sets, and use them to generate shipping documents at pick release or shipment confirmation.
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Setting up Shipping Document Job Sets: Explained

A shipping document job set is grouping of reports generated at the time of pick release or shipment confirmation. For
example, a shipping document job set could include required shipping paperwork such as the bill of lading, packing slip, and
commercial invoice. Use the Enterprise Scheduler Jobs for Financial and Supply Chain Management and Related Applications
task to create and manage your shipping document job sets. You can define a group of standard or user-defined shipping
reports as document sets or job sets for any business scenario.
Manage Job Sets

A job set is a collection of several jobs in a single process set that you can submit instead of running individual jobs
separately.
You can define the job sets using the Enterprise Scheduler Jobs for Financial and Supply Chain Management and
Related Applications task in the Setup and Maintenance work area > Manufacturing Master Data functional area >
Manage Job Sets tab.
Related Topics
• Managing Job Sets: Explained
Manage Shipping Document Job Set Rules: Explained

You can set up the business rules for selection of the document job set. To determine which shipping documents are
generated use the Manage Shipping Document Job Set Rules task.
Defining Shipping Document Job Set Rules: Procedure

To define shipping documents job set rules:
1. In the Setup and Maintenance work area, select the Manufacturing and Supply Chain Materials
2. On the Setup: Manufacturing and Supply Chain Materials Management page, click Shipping functional area, and
then click the Manage Shipping Document Job Set Rules task.
3. On the Manage Shipping Document Job Set Rules page, click Create New Rule. The page displays the Attributes
and Actions tabs, which display a tree-view of the available values.
4. In the Attributes tab, search for or select the attribute from the tree view, and move it to the IF node to create an IF
rule condition. You can use the following attributes to define a shipping document job set rule:
◦ Ship-from Organization
◦ Ship-to Organization
◦ Customer
◦ Customer Ship-to
◦ Supplier
◦ Supplier Order Type
◦ Customer Country
◦ Carrier
◦ Shipping Method
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The Create Condition dialog box appears, which is used to define the rule.
Note: Alternatively, you can click the New Condition icon in the IF node. The Create Condition dialog
box appears, where you can enter the attribute and the rule condition.
5. Enter the IF rule condition by selecting the operator from the list of operators and entering the value in the text box.
Click OK.
6. Click THEN, select DO, and select Perform an Action.
7. Enter the DO rule action.
The following figure illustrates the document job set rule for organization V1 in the following use case:
IF Ship-from Organization = V1
THEN DO
Document Job Set = Ship Confirm Documents
Publishing a Shipping Document Job Set Rule: Procedure

To publish a shipping documents job set rule:
2. On the Setup: Manufacturing and Supply Chain Materials Management page, click Shipping functional area, and
then click the Manage Shipping Document Job Set Rules task.
3. On the Manage Shipping Document Job Set Rules page, select the rule and click Publish.
4. In the rule dialog box, select Activate Rule and click Save and Close.
The rule is activated.
Manage Shipping Document Output Preferences: Overview

You can automate the delivery of the shipping documents by setting output preferences and the delivery mechanism for the
documents. Use the Manage Shipping Document Output Preferences page to:
• Define shipping document output preference such as email, fax, and printer
• Define output preferences based on user, job role, organization, and subinventory
• Attach shipping documents to a shipment as attachments
You can define output preferences either at the job set level or at the job level. Some job level preferences like format and
layout will default from the Oracle Business Intelligence Publisher server.
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Defining Document Job Set Output Preferences: Procedure

To define document job set output preferences:
2. On the Setup: Manufacturing and Supply Chain Materials Management page, click the Shipping functional area, and
then click the Manage Shipping Document Output Preferences task.
3. On the Manage Shipping Document Output Preferences page, click Actions > Create.
4. In the Create Shipping Document dialog box, select the Job Set Name created using the Enterprise Scheduler
Jobs for Financial and Supply Chain Management and Related Applications task in the Setup and
Maintenance work area > Manufacturing Master Data functional area.
5. Select the values for the following fields:
◦ Job Name
◦ Layout
◦ Format
◦ Start Date
◦ End Date
To enable this document to be automatically attached to the shipment, select Attach Document.
6. Do one of the following:
◦ Click Save and Close to save the new document and close the Create Shipping Document dialog box.
◦ Click Save and Create Another to save the new document and create another document.
7. Search for the shipping documents.
8. Select the shipping document you created in Search Results and in the Output Preferences section, click Actions >
Create.
9. In the Create Output Preferences dialog box, select values for User, Job role, Organization, and Subinventory and
set the following:
◦ To configure the shipping document output as a physical copy, set the values in the Printer section.
◦ To configure the shipping document output as an email, set the values in the Email section.
◦ To configure the shipping document output as a fax, set the values in the Fax section.
For more information on setting up delivery destinations, see the Oracle Fusion Middleware Administrator's Guide for Oracle
Business Intelligence Publisher.
Manage Quick Shipment

Quick Shipment: Explained
For quicker shipment, you can skip pick release and pick confirmation and ship goods on transfer orders and sales orders.
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Enabling Quick Shipment

To enable quick shipment:
offering.
2. On the Setup: Manufacturing and Supply Chain Materials Management page, click Change Feature Opt In.
3. On the Opt In: Manufacturing and Supply Chain Materials Management page, click Features for Shipping.
4. On the Edit Features: Shipping page, select Enable for the Perform a Quick Shipment by Skipping Pick Release and
Pick Confirmation feature.
5. Click Done.
Performing a Quick Shipment

To perform a quick shipment:
1. In the Inventory Management work area, click Manage Shipment Lines from the Shipments Tasks panel.
2. On the Manage Shipment Lines page, search for a shipment line that is in the Ready to release, Backordered,
Not applicable, or Planned status.
3. For the shipment line, enter values for inventory details such as Subinventory, Lot, and Serial. Use Record Serial
Numbers from the Actions menu to enter the serial number.
4. Save the shipment line. The Quick ship status appears as a check box in the shipment line details. The shipment
line is no longer available for pick release or to be sent to your warehouse management system, third-party logistics
provider, or contract manufacturer.
Note: Note: If you enter values incorrectly, select Reset Quick Ship Status from the Actions menu to
reenter the values.
5. Select one of the following from the Actions menu:
Stage Lines
Stage lines in a staging subinventory for packing, compliance screening, or carrier manifesting before you ship
confirm.
Ship Confirm
Shipment lines are automatically created, packed, and the shipment is closed.
6. Close the shipments manually or use the Enterprise Scheduled Process.
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Implementing Manufacturing and Supply Chain Materials Implementing Receipt Accounting
Management
8 Implementing Receipt Accounting
Receipt Accounting: Overview

Oracle Fusion Receipt Accounting is used to create, manage, review, and audit purchase accruals. It includes the following
features:
• Create Receipt Accounting Distributions. Create accounting distributions for receipts of accrue at receipt purchase
orders.
• Review Receipt Accounting Distributions. Review the accrual accounting distributions created by receipt accounting
for purchase order transactions, such as receipts, returns, corrections, and matches of uninvoiced receipts to
purchase orders. You can also review the accounting distributions created by receipt accounting for deliveries that
are expensed rather than stored as inventory.
• Manage Accrual Clearing Rules. Define business rules for the automatic clearing of balances in the purchase order
accrual accounts, set the conditions for each rule, and set the order in which rules must be applied.
• Clear Receipt Accrual Balances. Automatic clearing of accrual balances based on predefined rules.
• Review Receipt Accrual Clearing Balances. Review the General Ledger accounted accrual balances on a periodic
basis.
• Adjust Accrual Clearing Balances. Review uncleared accrual balances and perform adjustments. Manually adjust or
clear accrual balances to inventory valuation for accounts not covered by automatic clearing rules, or reverse such
clearing adjustments.
• Run reports and analytics for Receipt Accounting. The reports available include the following:
◦ Accrual Clearing
◦ Accrual Reconciliation
◦ Uninvoiced Receipt Accrual
◦ Receipt Accounting Period Close
◦ Landed Costs
Related Topics
• Receipt Accrual, Reconciliation, and Clearing: Explained
• Accrual Reversals: Explained
Setting Up Receipt Accounting: Procedure

To set up Receipt Accounting, you perform the setup tasks in the same sequence in which they are displayed in the Setup
and Maintenance work area.
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To Set Up Receipt Accounting

To access the tasks that you must perform to set up Receipt Accounting, complete the following steps.
offering.
2. On the Setup: Manufacturing and Supply Chain Materials Management page, click the Receipt Accounting functional
area.
3. Perform the tasks in the same sequence that the list displays them.
The following table describes the setup tasks for Receipt Accounting.
Setup Task Required or Optional Description
Manage Accounting Methods Required Create and maintain method used to

record the financial impact of subledger
transactions, such as accrual basis, cash
basis, or combined basis accounting.

Manage Subledger Journal Entry Rule Sets Required Define lookup codes for extensible lookup
types.

Manage Account Rules Required Create and maintain the rules that are used
to determine the accounts for subledger
journal entries.

Manage Mapping Sets Required Create and maintain the rule that determines
the segment or entire account value based
on certain transaction attribute values.
Mapping sets are used in account rules.

Related Topics
• Configuring Offerings: Procedure
• Configuring Offerings
• Setting up Offerings
Enabling Legal Entity Time Zones: Procedure

The accounted date of Inventory and Manufacturing transactions determines the accounting period in which the transactions
are booked. You can configure whether cost transactions and accounting entries use the time zone of the server, or the time
zone of the legal entity.
To enable legal entity time zone, perform the following steps.
offering.
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2. On the Setup: Manufacturing and Supply Chain Materials Management page, select the Manage Legal Entity
Configurator Profile Options task.
3. In the Profile Option Code field, query for the option XLE_ENABLE_LEGAL_ENTITY_TIMEZONE.
4. In the Profile Values record, add a new row, and complete the required fields. The fields are described in the
following table.
Field Description
Profile Level Set the profile level to Site. Do not use any other level because it would result in inconsistent data
in Cost Management.

Profile Value
This field is configured using the following options.
◦ Set the profile value to Yes to enable the legal entity time zone for transaction and
accounting dates in Cost Management.
◦ Set the profile value to No to disable the legal entity time zone and to use the server time
zone for transaction and accounting dates in Cost Management.
5. On the Setup: Manufacturing and Supply Chain Materials Management page, select the Manage Legal Addresses
task.
6. Locate the legal entity by querying on the address field.
7. Set the legal entity time zone in the Time Zone field, and save your changes.
Configuring Expense Accruals: Points to Consider

The key policy decision that you need to make for receipt accounting is whether or not you want to accrue at receipt. The
following table outlines the points to consider for each accrual option.
Accrual Setting Points to Consider
Accrue at Receipt • Purchases are accrued at receipt. An accrued liability account is credited when the goods
are received.
• Optional for expense destination purchases, and mandatory for inventory purchases.
• More accounting and more reconciliation than when accruing at period end. The receipt
accounting application provides tools to help reconcile the accrued liability clearing account.
• Accounting is more timely than when accruing at period end.
Accrue at Period End • The accounts payable account is credited when the supplier invoice is processed in accounts
payable. Receipt accounting has a function to accrue uninvoiced receipts at period end.
• Less accounting and less reconciliation than when accruing at receipt.
• Accounting may be less timely than when accrued at receipt, but will be accrued by period
end.
The accrual options are configured in the Procurement offering. For more information on configuring the accrual options, see
the related topics section.
Related Topics
• Common Options for Payables and Procurement: Critical Choices
• Defaults: How They Work in Purchase Order Schedules
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• Closing a Receipt Accounting Period: Video
• Receipt Accrual, Reconciliation, and Clearing: Explained
Implementing Subledger Accounting: Critical Choices

Subledger Accounting provides rules that you can configure and then automatically transform subledger transactions into
detailed subledger journal entries. Flexible rules are available to define accounting policies and generate accounting for legal
and corporate reporting. Reconciling accounting to transaction data enables drill down from general ledger to the underlying
subledgers and standard reports.
Based on your requirement, implement subledger accounting for Cost Accounting and Receipt Accounting using any of these
methods.
Using Predefined Mapping Sets

For using predefined mapping sets, specify transaction attributes and account combinations.
Using Standard Implementation

Do the following to use the standard implementation:
• Create an accounting method.
• Set up user defined journal entry rule sets.
• Assign user defined journal entry rule sets to accounting method.
• Activate journal entry rule sets assignments.
• Preview accounting results.
When you use predefined mapping sets, the commonly used transactional attributes are available to you to define the
accounting rules. Whereas, if you opt for the standard implementation, then you can leverage the full feature set of transaction
attributes for accounting purposes.
Set up tasks are available for implementing subledger accounting for Cost Accounting and Receipt Accounting.
Along with the information provided here, see Oracle Fusion Financials, Implementing Subledger Accounting documentation
for more information on the core features of Subledger Accounting.
Creating an Accounting Method: Explained

Accounting methods group subledger journal entry rule sets. This facilitates the definition of consistent accounting treatment
for each accounting event class, and accounting event type, for all subledger applications. This grouping enables a set of
subledger journal entry rule sets to be assigned collectively to a ledger.
For example:
• A subledger accounting method can be defined to group subledger journal entry rule sets that adhere to and comply
with US Generally Accepted Accounting Principles (GAAP) criteria.
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• By assigning a different subledger accounting method to each related ledger, you can create multiple accounting
representations of transactions.
Accounting rules can be defined with either a top-down, or a bottom-up approach.

• Top-Down: Define the accounting method, followed by components of each rule that must be assigned to it.
• Bottom-Up: Define components for each rule and then assign them as required.
The Create Accounting process uses the accounting method definition with active journal entry rule set assignments to create
subledger journal entries.
When an accounting method is initially defined its status changes to Incomplete. The status will also be Incomplete after
modifying a component of any accounting rule associated with the assigned journal entry rule set.
Caution: The accounting method must be completed, by activating its journal entry rule set assignments, so
that it can be used to create accounting.
The following definitions are used to define the journal entries, and are applied as updates to the accounting method:
• Updates to the predefined accounting method
• Assignment of journal entry rule sets for an accounting event class and accounting event type from the accounting
methods page
• Assignment of accounting methods to ledgers
• Activation of subledger journal entry rule set assignments
Updates on Predefined Accounting Method

You may update a predefined accounting method by end dating the existing assignment and creating an assignment with an
effective start date.
Assignment of Journal Entry Rule Set for Accounting Event Class and
Accounting Event Type
You create the assignment of a journal entry rule set for an accounting event class and accounting event type using the
accounting method page.
The following should be considered for assigning rule sets:

• If the accounting method has an assigned chart of accounts you can use journal entry rule sets that:
◦ Use the same chart of accounts
◦ Are not associated with any chart of accounts
• You can assign to existing journal entry rule sets or create a new one.
Assignment of Accounting Methods to Ledgers

If the accounting method has an assigned chart of accounts, it may only be used by ledgers that use the same chart of
accounts.
If the accounting method does not have an assigned chart of accounts, the accounting method can be assigned to any
ledger.
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Activation of Subledger Journal Entry Rule Set Assignments

You can activate the subledger journal entry rule set assignments from the Accounting Method page. You can also submit the
Activate Subledger Journal Entry Rule Set Assignments process to validate and activate your accounting set ups.
Accounting Method and Accounting Rules

This figure illustrates the relationship of the components used in an accounting method.
InFusion America Inc.

Primary Ledger (USD)
Standard Accrual Accounting Method
Journal Entry Rule Set for Subledger Application
Supporting
Journal Line Rules Account Rules Description Rules
References
Related Topics
• Creating a Subledger Journal Entry Rule Set: Explained
• Journal Line Rule: Explained
• Account Rules: Explained
• Creating Description Rules: Explained
Creating a Subledger Journal Entry Rule Set: Explained

Subledger journal entry rule sets provide the definition for generating a complete journal entry for an accounting event.
Select the option to define the subledger journal entry rule set for a particular accounting event class or accounting event
type.
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If you are using multiple ledgers to meet divergent and mutually exclusive accounting requirements, you can vary journal entry
rule sets by ledger. Each of the subledger journal entry rule sets can meet a specific type of accounting requirements.
For example, use US Generally Accepted Accounting Principles (GAAP) oriented subledger journal entry rule sets for a ledger
dedicated to US GAAP reporting. Use French statutory accounting conventions for a ledger dedicated to French statutory
reporting. These two sets of definitions have differences based on the setup of the various components that make up their
subledger journal entry rule sets.
Predefined subledger journal entry rule sets are provided for all Oracle subledgers. If specific requirements are not met by
predefined subledger journal entry rule sets, create a copy of the predefined definitions, rename, and modify the copied
definitions and their assignments.
Subledger journal entry rule set assignments can be made at two levels, header and line. The following are the
subcomponents of a subledger journal entry rule set:
• Description rules
• Journal line rules
• Account rules
Assignment at Header Level

Header assignments define subledger journal header information and line assignments define journal line accounting
treatment.
A header assignment includes the following:
• Accounting date (required)

• Accrual reversal accounting date (optional)
• Description rule (optional)
Assignment at Line Level

You can define multiple subledger journal entry rule sets for an accounting event class or accounting event type. Using the
line assignment of the journal entry rule set assigned to the accounting event class or type, a single journal entry is generated
per accounting event per ledger.
The following can be assigned to a journal entry line:
• Journal line description rule

• Journal line rule
• Account rule
• Supporting references
Assignment of Description Rules

If a description rule is defined with sources, the sources must also be assigned to the accounting event class that is assigned
to the journal entry rule set. The description rule may be assigned at either the header or line level of the journal entry or to
both levels.
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Assignment of Journal Line Rules

When assigning the journal line rule, you must identify the line type: Gain, Loss, Gain or Loss, Credit, or Debit. The journal line
rule must be assigned to the same accounting event class as the one assigned to the subledger journal entry rule set.
When assigning a journal line rule that is enabled for accounting for a business flow, the account combination and certain
accounting attribute values are copied from its related journal line having the same business flow class as the current line.
Optionally, copy the description rule into the current line instead of assigning a separate description rule.
When assigning a journal line rule that is enabled to copy from the corresponding line within the same journal entry, you have
the option to copy the account combination, the segment value, or the line description from the corresponding line into the
current line.
Assignment of Account Rules

The account rule assignment defines which accounts are used for the subledger journal line. If the account rule is set up with
a chart of accounts, it must have the same chart of accounts as the one assigned to the journal entry rule set. When account
rules are defined with sources, the sources must also be assigned to the accounting event class that is assigned the journal
entry rule set.
There are two types of account rules:

• Account Combination Rule: Assign an account combination rule to derive the account combination.
• Segment Rule: Assign a segment rule to derive a specific segment of an account. For example, a cost center or a
natural account segment.
Assignment of Supporting References

Supporting references may be used to capture transaction values on journal entry lines. A supporting reference can be used
on a journal entry rule set only if it's assigned a source from the event class of the journal entry rule set.
Related Topics
• Journal Line Rule: Explained
• Creating Supporting References: Explained
Creating an Accounting Method: Procedure

To create an accounting method, do the following:
1. Click Navigator > Setup and Maintenance.
2. On the Setup and Maintenance page, click the Manufacturing and Supply Chain Materials Management
offering, and then click Setup.
3. On the Setup: Manufacturing and Supply Chain Materials Management page, based on your requirement,
click the Cost Accounting or the Receipt Accounting functional area.
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The subledger accounting related setup tasks are in the respective functional areas.
4. Click the Manage Accounting Methods task.
5. In the Manage Accounting Methods page, click Actions and then click Create.
6. In the Create Accounting Method page, provide the required information and then click Save and Close.
Note: You can also duplicate the standard accrual accounting method instead of creating a new method.
Viewing Predefined Journal Line Types
In Journal Line Rules, there are various event classes and journal line types for each event class.
To view predefined journal line types:

click the Cost Accounting or Receipt Accounting functional area.
4. Click the Manage Journal Line Rules task.
5. In the Manage Journal Line Rules page, set the Created By Application to Yes, select the event class and
search.
The Search result lists the predefined journal line types for the selected event class.
Setting Up User Defined Account Rules: Procedure

Use account rules to create simple or complex rules to assign general ledger accounts to accounting events.
There are several predefined accounting rules that are available and are easily identifiable by looking at the Created By
Application column. The predefined account rules are not ready-to-use as they are not created in the context of the chart of
accounts. The predefined account rules are provided to help you create your own rules by using them as templates.
For example, create an account rule for identifying the general ledger account rules for the Cost of Goods Sold event class.
4. Click the Manage Account Rules task.
5. In the Manage Account Rules page, search for the predefined account rule for Cost of Goods Sold.
The Cost of Goods Sold event class is discussed here as an example.
To identify the predefined rules, set the Created by Application search parameter to Yes.
6. Click the Duplicate icon to create a duplicate of the predefined account rule for Cost of Goods Sold. Enter a rule
name, a short name (in capital letters) and then select the chart of accounts.
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Once chart of accounts is assigned to an account rule and this task is saved, you cannot modify the assignment.
The Edit Account Rule page is displayed.
8. Specify the account selection criteria in the Rules region; however, do not change any values in the Conditions
region.
9. In the Rules region, the Value Type column has four options.
◦ Source
◦ Constant
◦ Accounting Rule
◦ Mapping Set
Source Value Type
Source is only applicable to the Accrual Account Rule in Receipt Accounting and the Offset Account Rule
in Cost Accounting when the account is retrieved from the purchase order for the Accrual account and from the
Miscellaneous Transaction for the Offset account.
If you select Source as Value Type, then set the value as Code Combination Identifier.
Constant Value Type
If the Value Type is set to Constant, you can select the specific account from the chart of accounts as the default
general ledger account type of the Journal line type.
Accounting Rule Value Type
Use this value type to retrieve values from the accounting rule.
Mapping Set Value Type
A mapping set is useful when you have a matrix of input values that produce distinct output values. For each input
value, specify a corresponding account combination. One or more related pairs of these input values with the
account combination output values form a mapping set. Ensure that a Chart of Accounts is associated with the
mapping set.
Once a mapping set is defined, you can associate the mapping set to an account rule. Copy each predefined
account rule and create a rule.
For more information on these four options, see documentation on Oracle Fusion Financials, Implementing
Subledger Accounting Account Rules.
Setting Up User Defined Journal Entry Rule Sets:

Procedure
To set up journal entry rule sets:
1. Create a journal entry rule set.
2. Copy the predefined journal entry rule sets to associate the user-defined account rules.
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3. Set the Created by Application option to Yes and then click Search.
The predefined journal entry rules sets are displayed.

To create a journal entry rule for associating the user-defined account rules:
1. Create a copy of the predefined journal entry rule set by highlighting the row and clicking the Duplicate icon.
2. Provide information for name, short name, description, and chart of accounts.
4. In the Edit Journal Entry Rule Sets user interface, replace the predefined account rules with the account rules that
you have created.
5. After you have replaced all the account combination rules within the journal entry rule set, click Save and Close.
The original search results are displayed.
Repeat the previous steps to create all the necessary journal entry rule sets.
Assigning User Defined Journal Entry Rule Sets to

Accounting Method: Procedure
To associate the recently created journal entry rule sets to the newly created accounting method:
1. Select the accounting method that you created while performing the activity, Creating an Accounting Method.
2. In the Edit Accounting Method user interface, add the journal entry rule sets that you created.
3. Identify the account class and the event type in the predefined journal entry rule sets that you want to replace with
the new value after you have replaced all the account combination rules within the journal entry rule set you created
earlier. Delete the row that you identified for replacement and add a new row with the same event class and event
type and enter the new value once you have replaced all the account combination rules within the journal entry rule
set. (Optional) Enter the effective start date and save the row.
For example, to replace the Sales Order Issue predefined journal entry rule set after you have replaced all the
account combination rules within the journal entry rule set with the newly created Sales Order Issue 2 journal entry
rule set.
a. Select the predefined journal entry rule set assigned to this subledger accounting method and delete it.
b. Once this is deleted, add the new rule set Sales Order Issue 2 to this accounting method.
c. Click Save and Create Another to replace all the predefined journal entry rule sets with the journal entry rule
sets that you have newly created.
Activating Journal Entry Rule Sets Assignments: Procedure

After the setup is complete, you must activate the journal entry rule sets that are newly assigned to the subledger accounting
method. You can do this directly from the Edit Accounting Method user interface or from the separate task provided.
To run the accounting method activation as a separate process:
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4. Click the Manage Accounting Methods task, and then activate the subledger journal entry rule set assignments.
5. Run this process for the accounting method and subledger application with Incomplete Status Only set to No.
This step is recommended for activating an accounting method especially if many changes were made to the journal
entry rule sets.
6. You can review the status of the process from the Scheduled Processes task.
7. (Recommended) Archive the current accounting rule setup configuration by initiating the Accounting Setups
Report.
Preview Accounting Results: Procedure

To ensure that the correct general ledger accounts are selected:
1. Run Create Accounting.
Once complete, check the results.
Mapping Sets: Explained

Mapping sets provide an efficient way to define a segment or account combination value for one or more transaction or
reference attribute values. Using such input and output mappings is simpler than using complex conditions on account rules.
Based on the value of the source input, a single segment or a full account is derived.
Examples of source input value types:
• Transaction attributes
• Reference attributes
With mapping sets you can:
• Use up to 10 transaction or reference attributes as inputs into a mapping.

• Define default output value to use when actual input values do not match the mappings.
• Use wildcards for multiple input mapping sets to indicate that the value of a particular input should be ignored for
certain mappings.
• Enter the mappings directly on the user interface or use the spreadsheet available in the Export option, and then
import.
Export allows:
◦ Exporting a template to create mappings.
◦ Exporting all mappings created for the mapping set to add or edit the current mappings.
Example
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Assume a business operates in several regions, including:
• East
• South
• West
The business has a Region segment in their chart of accounts.
The region name can be the input for the mappings to derive the value of the region segment. You can create a mapping set
that maps region names to the corresponding region code.
This table contains region names and segment values used in this example.
Input Value (Region Name) Segment Value
East 01

South 02

West 03

Additional transaction information, such as transaction type and salesperson name, could also be used as inputs to help
derive a different segment value for each combination of the input values.
Related Topics
• Defining Mapping Sets: Examples
• Managing Accounting Sources: Critical Choices
Predefined Mapping Sets: Overview

There are predefined mapping sets for all the journal line rules with commonly used sources. For each journal line rule, there
are three to five sources such as Inventory Organization, Sub-Inventory, Item Category, and Item.
The benefits of using predefined mapping sets for implementation include:
• Enabling quick implementation of subledger accounting.

• Providing commonly used transaction source attributes.
• Enabling easy maintenance when compared with defining and maintaining the user-defined account rules.
Unique mapping sets are predefined for each journal line rule. Some of the predefined mapping sets for Cost Accounting are,
Consigned Clearing, Consigned In-Transit, Consigned Inspection, and so on. View Cost Accounting user interface for
the complete list of mapping sets. Predefined Mapping Sets for Receipt Accounting are, Consigned Accrual, Consigned
Clearing, Consigned Inspection, and so on. View the Receipt Accounting user interface for the complete list of mapping
sets.
The mapping set created for each journal line type is added to a predefined account rule.
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Using Predefined Mapping Sets: Procedure

Use predefined mapping sets for Receipt Accounting.
The steps to use predefined mapping sets are:
1. Select chart of accounts.

2. Specify the transaction attributes as input and account combinations as output for every chart of accounts.
Set up input parameters for every chart of accounts. While specifying inputs, you must provide input sources, that is,
provide the transaction attributes.
For example, if you are using the mapping set Consigned Accrual, then you have to provide one or more of the
following input sources.
◦ Inventory Organization Code
◦ Inventory Category Identifier
◦ Item Number
3. For the mapping set Consigned Accrual, provide an account combination as the output type.
4. Automatically enable or disable the account derivations using Effective Dates.
5. (Optional) Set account combinations as default to support subledger accounting activities for which specific rules are
not set up.
6. Use spreadsheet based import and export functionality.
FAQs for Receipt Accounting

How can I create subledger account rules and subledger journal entry
rule sets for receipt accounting?
Create your subledger account rules on the Manage Account Rules page. It is recommended that you highlight the
account rules predefined by Oracle, copy, and modify them as needed.
Create your subledger journal entry rule sets on the Manage Subledger Journal Entry Rule Sets page. It is recommended
that you highlight the journal entry rule sets predefined by Oracle, copy, and modify them as needed. For each journal line rule
specify the copied account combination rule.
In the Setup and Maintenance work area, you can access both the Manage Account Rules task and the Manage
Subledger Journal Entry Rule Sets task in the Manufacturing and Supply Chain Materials Management offering.
Note: You must configure the account rules and journal entry rule sets before proceeding with the setup of
subledger accounting rules for receipt accounting.
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How can I resolve errors in the accounting results?

If the Create Accounting process ends with errors or warnings, you can resolve these errors or warnings using any of the
following methods.
1. Review errors in the Create Accounting Execution report.
2. If you have selected viewing errors for a specific transaction, query the transaction from the Review Cost
Accounting Distributions user interface.
3. Navigate to the Journal Entries tab. If errors are present, then they are listed against each line.
4. Use Advanced Diagnostic. For activating this feature, refer to the Accounting Event Diagnostic Report.
How can I modify predefined mapping sets?

You can modify existing predefined mapping sets by:
• Adding input and output conditions.
• Adding new chart of accounts.
Adding a new source to an existing predefined mapping set is not supported. Use standard implementation for creating
mapping sets with new sources.
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Implementing Manufacturing and Supply Chain Materials Implementing Cost Accounting
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9 Implementing Cost Accounting
Cost Accounting: Overview

Oracle Fusion Cost Accounting is used to plan, manage, review, and analyze inventory and manufacturing costing. It includes
the following features:
• Review Item Costs
• Manage Standard Cost Definitions
• Manage Standard Cost Import Exceptions
• Analyze Standard Purchase Cost Variances
• Manage Accounting Overhead Rules
• Create Cost Accounting Distributions
• Manage Cost Accounting Periods
• Analyze Product Gross Margins
• Review Journal Entries
Setting Up Cost Accounting: Procedure

To set up Cost Accounting and Cost and Profit Planning, you perform the setup tasks in the same sequence in which they
are displayed in the Setup and Maintenance work area.
To Set Up Cost Accounting and Cost Planning

To access the tasks that you must perform to set up Cost Accounting and Cost and Profit Planning, complete the following
steps.
offering.
2. On the Setup: Manufacturing and Supply Chain Materials Management page, click the Cost Accounting functional
area.
3. Perform the tasks in the same sequence that the list displays them.
The following table describes the setup tasks to implement Cost Accounting, and states whether each task is
required or optional.
Manage Costing Key Flexfields Required Define the costing key flexfield segments
and validation for use as costing
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classification keys. The costing key flexfield
must be defined for costing to operate
correctly.

Manage Costing Lookups Optional Define lookup codes for extensible lookup
types.

Manage Costing Descriptive Flexfields Optional Define validation and display properties of
descriptive flexfields for costing. Descriptive
flexfields are used to add attributes to
entities.

Manage Cost Organizations Required Create and edit cost organizations. Cost
accounting setup data policies and user
security policies for cost management are
established in these organizations.

Manage Cost Books Required Create and edit cost books that are used for
inventory transaction accounting.

Manage Cost Organization Relationships Required Associate inventory organizations to cost

organizations and assign cost books to cost
organizations.

Define Cost Accounting Policies Required Specify cost elements, configure mapping
between cost components and cost
elements, and specify cost profiles and
valuation unit structures.

Define Cost Accounting Book Policies Required Configure default cost profiles, item cost
profiles, and valuation units for items.

Manage Cost Organization Data Access for Required Manage cost organization data access for
Users user provisioned roles.

Manage Overhead Expense Pools Required for Cost Planning Create and edit definitions of expense pools
for overhead rules that are used in overhead
Optional for Cost Accounting absorption.

To Set Up Cost Accounting Using Quick Setup

Quick Setup guides you through the setup process, and provides default setup values for some tasks according to
recommended practices. The setup process automatically performs the following setup tasks:
• Manage cost organizations
• Manage cost book
• Manage cost organization relationships
• Manage cost element
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• Manage cost component
• Manage cost component mappings
• Manage valuation structures
• Manage cost profiles
• Manage default cost profiles
To set up Cost Accounting using Quick Setup, complete the following steps.
1. From the Navigator menu, select Setup and Maintenance.

2. On the Setup and Maintenance page, select the Manufacturing and Supply Chain Materials Management offering,
and then click Setup.
3. Click the Quick Setup icon next to Cost Accounting, and follow the on screen instructions.
For more information about using Quick Setup, see Quick Start Guide for Manufacturing and Supply Chain Materials
Management.
Related Topics
Enabling Legal Entity Time Zones: Procedure

The accounted date of Inventory and Manufacturing transactions determines the accounting period in which the transactions
are booked. You can configure whether cost transactions and accounting entries use the time zone of the server, or the time
zone of the legal entity.
To enable legal entity time zone, perform the following steps.
offering.
2. On the Setup: Manufacturing and Supply Chain Materials Management page, select the Manage Legal Entity
Configurator Profile Options task.
3. In the Profile Option Code field, query for the option XLE_ENABLE_LEGAL_ENTITY_TIMEZONE.
4. In the Profile Values record, add a new row, and complete the required fields. The fields are described in the
following table.
Field Description
Profile Level Set the profile level to Site. Do not use any other level because it would result in inconsistent data
in Cost Management.

Profile Value
This field is configured using the following options.
◦ Set the profile value to Yes to enable the legal entity time zone for transaction and
accounting dates in Cost Management.
◦ Set the profile value to No to disable the legal entity time zone and to use the server time
zone for transaction and accounting dates in Cost Management.
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5. On the Setup: Manufacturing and Supply Chain Materials Management page, select the Manage Legal Addresses
task.
6. Locate the legal entity by querying on the address field.
7. Set the legal entity time zone in the Time Zone field, and save your changes.
Managing Cost Organizations and Cost Books
Cost Organizations, Inventory Organizations, and Cost

Books: How They Fit Together
A cost organization structure comprises cost organizations, inventory organizations, and cost books. Your accounting and
business needs determine how you set up your cost organization structure. This structure in turn determines how the cost
processors create cost accounting distributions and accounting entries for inventory transactions.
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This figure illustrates the relationship between profit center business units, cost organizations, inventory organizations, and
cost books.
Legal Entity
Profit Center
Business Unit
Cost Organization
Inventory Inventory Inventory Inventory

Organization Organization Organization Organization
Ledgerless Cost Secondary Cost

Primary Cost book
Book Book
Legal and Management Structures

An organization has:
• A legal structure consisting of legal entities that establish contractual rights across the enterprise.
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• A management structure consisting of the strategic management team and operational business units:
◦ Strategic management is responsible for setting strategic goals and business plans. It is typically at a high level
in the corporate structure and reports directly to the holding company.
◦ The operational business units report to strategic management and are responsible for managing the business
operations and resources, usually organized along product lines or geographic regions. Operational business
units can belong to one or more legal entities.
Profit Center Business Units

A profit center is an operational business unit that:
• Reports to a single legal entity.

• Supports strategic directives on products, pricing, investments, and financial planning.
• May contain one or many inventory organizations and cost organizations.
• Measures contributions by its organizations to enterprise profits, and tracks profit contributions against targets.
• Enters into intercompany and intracompany trade agreements with other profit centers for various supply chain trade
flows, such as customer drop shipments, internal transfers, and global procurement.
• Is a segment in the chart of accounts for financial reporting.
• Is on trade execution documents such as Purchase Orders, Sales Orders, Accounts Payable Invoices, and Accounts
Receivable Invoices.
• Is on costing transactions for operational analysis and management accounting.
Cost Organizations and Inventory Organizations

A cost organization can represent a single inventory organization, or a group of inventory organizations that roll up to a profit
center business unit. You can group several inventory organizations under a cost organization for financial reporting purposes
as long as they all map to a single profit center business unit. Because the inventory organizations that are assigned to a cost
organization must all belong to the same business unit, it follows that they also belong to the business unit's legal entity.
The inventory organizations that are assigned to a cost organization must all belong to the same legal entity.
For each cost organization, define an item validation organization from which the processor should derive the default units
of measure. You can designate one of the inventory organizations assigned to the cost organization to be the item validation
organization, or you can designate the item master organization to be the item validation organization.
Cost Books
A cost book sets the framework within which accounting policies for items can be defined. You can define different cost
books for each of your financial accounting, management reporting, and analysis needs. By assigning multiple cost books to
a cost organization, you can calculate costs using different rules simultaneously, based on the same set of transactions.
Every cost organization must have one primary cost book that is associated with the primary ledger of the legal entity to
which the cost organization belongs. You can also assign secondary ledger-based cost books for other accounting needs,
as well as cost books that don't have an associated ledger, for simulation purposes. For example, you could assign a primary
cost book for financial reporting, a secondary cost book for business analysis, and a third cost book to simulate results using
different cost calculations.
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When you assign a cost book to a cost organization, you can optionally associate it with a ledger. The cost book then inherits
the currency, conversion rate, cost accounting periods, and period end validations of that ledger. If you are assigning a cost
book that is not associated with a ledger, then you define these elements manually.
Related Topics
• Item Master Organization: Explained
Setting Up the Cost Organization Structure: Points to

Consider
Set up your cost organization structure to accommodate your costing and accounting needs. The following discusses
considerations for creating cost organizations, their association with inventory organizations, and their assignment to cost
books.
Creating Cost Organizations

When deciding what cost organizations to set up, consider the following:
• Financial reporting and responsibility accounting. A profit center business unit may contain one or more cost
organizations depending on use case requirements.
• Data security needs. The cost organizations that you create may be determined by the separation of duties and
security requirements for your users.
Using Cost Organization Sets

By assigning cost organizations to a set, the entities defined at the set level can be shared by all the cost organizations
belonging to that set. A cost organization set enables you to streamline the setup process, and helps you avoid redundant
setup by sharing set-level definitions of your cost profiles, valuation structures, cost elements, and cost component groups
across the cost organizations that belong to the set.
You also have the flexibility to assign cost organizations to different sets, for example if they are in different lines of business.
That way you can segregate the definitions that are shared.
Associating Inventory Organizations with Cost Organizations

Your operation may lend itself to a simple configuration of one inventory organization to one cost organization. Or, when there
are many inventory organizations in the same business unit, you may group several inventory organizations under a single
cost organization for any of the following reasons:
• Costing responsibilities. You may want to group inventory organizations that roll up to the manager of a profit center
business unit, or a cost accounting department within the business unit.
• Uniform cost accounting. For example, to define your overhead rules just once and apply them to transactions from
several inventory organizations, you can group those inventory organizations into one cost organization.
• Cost sharing. If there are items in more than one inventory organization for which you want a single average cost,
those inventory organizations must fall under the same cost organization.
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Assigning Cost Books to Cost Organizations

Every cost organization must be assigned one primary cost book that is associated with the primary ledger of the legal entity
to which the cost organization belongs. You may also assign several secondary cost books as needed for other purposes
such as: business analysis and management reporting, local currency accounting, or profit tracking of inventory items.
You can also assign cost books that don't have an associated ledger to a cost organization for simulation purposes.
Setting Up a Cost Profile

Setting Up a Cost Profile: Procedure
This topic describes how to set up a cost profile to define the cost accounting policies for items, including the cost method
and valuation rules. A cost profile must be associated with an item before the item can be costed.
To create a cost profile, perform the following steps.
offering.
area, and then click the Manage Cost Profiles task.
4. Click the Create icon to create a new cost profile, and complete the required fields. The fields are described in the
following table.
Field Description
Cost Profile Set Set ID of a Cost Profile Set. Cost profiles use set-level definitions, and all cost organizations
belonging to a set can share the same cost profile definitions.

Cost Method
Determines how the transaction cost is calculated by the costing application. The following cost
methods are available:
• Standard. Inventory is valued at a predetermined standard value. You track variances for the
difference between the standard cost and the actual transaction cost, and you periodically
update the standard cost to bring it in line with actual costs.
• Actual. Tracks the actual cost of each receipt into inventory. When depleting inventory, the
processor identifies the receipts that are consumed to satisfy the depletion, and assigns the
associated receipt costs to the depletion.
• Perpetual Average. The average cost of an item, derived by continually averaging its valuation
after each incoming transaction. The average cost of an item is the sum of the debits and
credits in the inventory general ledger balance, divided by the on-hand quantity.
Quantity Depletion Method Determines how inventory quantity is depleted when costing inventory transactions. The method
used by the costing application is first in, first out (FIFO).

Processing Negative Quantity

Determines how to treat depletion of inventory when the depletion quantity exceeds inventory on
hand. When receipts are processed which correct the negative inventory state, Cost Accounting will
automatically resolve previously negative inventory. The configuration options are as follows:
• Always. Applies the cost for the entire transaction, including negative balances
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Field Description
• To Zero. Applies cost only for quantity on hand, and holds the remaining shortfall until
inventory is replenished.
• Never. Does not apply cost for the transaction until quantity is sufficient to cover the entire
transaction.
Account Intravaluation Unit Transfers Enable this option to cost and account all transfers, including subinventory and locator transfers.

Provisional Completions
Determines the valuation method used for partial work order completions. For example, a
manufacturing work order for a total quantity of 100 units has completed the first 10 units, and they
are put into finished goods inventory. The cost of the work order will not be known until the entire
work order is completed, but there needs to be a way to value the partially completed quantity.
Once the work order has been completed and closed, the provisional valuation will be adjusted to
the actual cost of the work order. The following options are available:
• Value at Last Actual Cost. Use the cost of the last receipt processed for the same item and
for the same cost organization, cost book, and valuation unit. This option can be used when
the cost method is set to Actual or Perpetual Average.
• Value at Perpetual Average Cost. Use the perpetual average cost that is effective when the
partial work order completion is processed. This option can be used when the cost method
is set to Perpetual Average.
• Value at Standard Cost. Use the standard cost if it has been defined for the item and
valuation unit. If a standard cost has not been defined for the item then the cost processor
will wait until the work order is closed to set the cost. You can use this option to avoid write-
off costs if you don't expect partial completions for your work orders. This option can be
used when the cost method is set to Standard or Perpetual Average.
• Value at work order close. This option is available when the cost method is set to Actual
or Perpetual Average. When this option is used, the cost processor will not process partial
completions until the work order is closed. This option is recommended for work orders that
have a short duration, to avoid estimated provisional costs and cost adjustments.
Provisional Completion settings cannot be changed after the cost profile has been used for cost
processing.
Operation Scrap Valuation

Determines the timing of accounting for scrap items. The following scrap valuation methods are
supported:
• Value at work order close. Use when it is not necessary for you to see approximate scrap
costs in the general ledger and you want to keep entry adjustments to a minimum.
• Value immediately and at work order close. Use when you want to see an immediate
approximation of the scrap cost amount in your general ledger. Once the work order is
complete and actual costs become known, it is possible for the application to compute the
correct scrap cost post adjustments to the previous approximation.
• Value at cost cut off date and at work order close. Determines the boundary for managing
period end. You can avoid generating approximate scrap costs during the period, but for
work orders that are work in process at period end (not completed), Cost Accounting can
generate approximate scrap accounting entries for financial reporting.
Operation Scrap Accounting Determines whether the scrap value is included in the inventory value, or expensed.

Cost component Mapping group Maps incoming cost components to cost elements, which are used to cost transactions.

Receipt Without Cost Specifies that for sales returns without a Return Material Authorization (RMA) reference or missing
incoming cost, the cost processor uses the first or last receipt layer cost.

Referenced RMA Cost Specifies what the cost processor uses for sales returns with an RMA reference. If the sales order
consumed only one FIFO layer from inventory, then the actual cost of the shipment is used. If the
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Field Description
sales order is fulfilled by multiple shipments, or a single shipment that consumed multiple FIFO
layers, then the average cost is used.

Propagate Cost Adjustment Option to propagate cost adjustments down the supply chain to Cost of Goods Sold. This option is
only applicable if the cost method is set to Actual.

Enforce Processing of Costs by

Transaction Date Enable this option to enforce processing of costs by transaction date. This option is available for all
cost methods.
The following Cost Profile options must be set before you can enable the Enforce Processing of
Costs by Transaction Date option:
• The Process Negative Quantity field must be set to Always.

• The Propagate Cost Adjustment option must be disabled.
The following are the default settings for the Enforce Processing of Costs by Transaction Date
option.
• This option is enabled by default for new cost profiles.

• This option is disabled by default for existing cost profiles.
Related Topics
• Standard Cost Method: Explained
• Actual Cost Method: Explained
Setting Up a Default Cost Profile: Procedure

Use this task to create and edit cost profiles that can be automatically assigned to items at the cost organization, cost book,
or item category level. A cost profile must be associated with an item before the item can be costed.
To Set Up a Default Cost Profile

To create a default cost profile, perform the following steps.

2. On the Setup and Maintenance page, click the Manufacturing and Supply Chain Materials Management offering, and
then click Setup.
area, and then the Manage Default Cost Profiles task.
4. Click the Create icon to create a new default cost profile, and complete the required fields. The fields are described
in the following table.
Field Description
New Item Profile Creation

Determines how the default cost profile is assigned to new items for cost processing. The
following settings are available.
◦ Automatic. The preprocessor automatically assigns the default cost profile to new items,
and the new item cost profiles can be used by the cost processor.
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Field Description
◦ Review Required. The preprocessor generates the cost profiles for new items based on the
default cost profile and sets them to Awaiting Approval status. The new item cost profiles
must be reviewed and approved before they can be used by the cost processor.
It is recommended that you set this field to Automatic if you want to use file-based data import or
the ADF Desktop Integrator to import cost data.
Cost Organization Specifies that the associated cost profile will be assigned to all of the items in this cost
organization.

Category Name Specifies that the associated cost profile will be assigned to all of the items in this category.

Related Topics
• Standard Cost Method: Explained
• Actual Cost Method: Explained
Setting Up a Cost Organization Structure: Examples

The following examples illustrate cost organization structures that support different cost accounting needs.
Example 1
Set up three inventory organizations to optimize materials management across three different locations. Because they all
belong in the same business unit and are managed by one cost accounting department, you could group them under a single
cost organization; or you could assign each inventory organization to its own cost organization and then assign all three cost
organizations to the same business unit.
Example 2
Three inventory organizations are geographically dispersed, or have autonomous managers responsible for the location's
profits for internal management purposes. Create three cost organizations, and assign each inventory organization to its own
cost organization.
Example 3
Four inventory organizations are geographically dispersed, or have autonomous managers responsible for the location's
profits for internal management purposes. Two of them fall under one business unit, and two fall under another business unit.
You could group the inventory organizations under two cost organizations corresponding to the two business units; or you
could assign each inventory organization to its own cost organization.
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Example 4
Two inventory organizations in the same business unit need to share a single average cost for some items. These inventory
organizations must belong to the same cost organization.
FAQs for Managing Cost Organizations and Cost Books

What's a set-level definition?
A set-level definition enables you to segment and share your reference data. Entities that are defined at the set level can be
shared by all cost organizations belonging to that set. For example, to segment your cost element reference data by country,
you can define cost elements for each country set; and the cost organizations belonging to the country set can share the cost
elements within that set. You can also use the Common set to share the same reference data across all cost organizations.
This saves you redundant setup, and streamlines the process.
Can I change the legal entity of a cost organization?

No. You cannot change the legal entity of a cost organization once transactions are processed under that cost organization.
How can I create and maintain a cost organization?

You can create, edit, or delete a cost organization in the Oracle Fusion Global Human Resources application, on the Manage
Cost Organization page.
Can I associate an inventory organization with more than one cost

organization?
No. You can associate an inventory organization with only one cost organization.
Can I delete or deactivate a cost book or a cost book assignment to

a cost organization?
Yes. You can delete or deactivate a cost book or a cost book assignment to a cost organization if there are no costing
transactions or other references that depend on the cost book or cost book assignment. Do this by first deleting references to
the cost book in other cost management setup, then delete the cost book. Likewise, first delete references to the cost book
assignment in other cost management setup, then delete the cost book assignment.
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You can deactivate a cost book or cost book assignment to a cost organization at any time. To deactivate a cost book or
cost book assignment, set the effective end date to a current or future date; however, all past assignments remain in effect.
Can I set up a secondary cost book for the purpose of internal

analysis?
Yes, you can set up multiple additional cost books on the Manage Cost Books page for the purpose of internal analysis. If
you want to avoid posting to the general ledger, you can set up a cost book without an assigned ledger.
Can I delete or deactivate the association of an inventory organization

with a cost organization?
Yes. You can delete or deactivate the association of an inventory organization with a cost organization, but only if there are
no costing transactions or other references that depend on the inventory organization and cost organization relationship. Do
this by first deleting all references to the inventory organization and cost organization association in other cost management
setup, then delete the association.
You can also deactivate the association of an inventory organization with a cost organization by setting the effective end date
to a current or future date; however, all past associations remain in effect.
Managing Cost Elements and Analysis Groups

Cost Elements and Analysis Groups: Explained
Map cost elements to analysis codes within analysis groups. This enables you to define alternate views of item costs, and
summarize costs for different reporting needs.
Map cost elements to as many analysis group and analysis code combinations as you need. For example, group cost
elements into fixed and variable analysis groups, or direct and indirect analysis groups.
Using Cost Elements and Analysis Groups

You can assign a cost element to multiple analysis codes. An analysis code must be unique within an analysis group, and
it can be reused in multiple analysis groups. For each analysis group you can set up a default analysis code that is used for
cost elements that are not assigned to an analysis code.
The following table describes examples of cost elements mapped to analysis codes and analysis groups.
Analysis Group Analysis Code Cost Element
AG1 Variable Cost Direct Material

AG1 Variable Cost Inbound Freight

AG1 Variable Cost Material Handling
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Analysis Group Analysis Code Cost Element

AG1 Variable Cost Outbound Freight

AG1 Variable Cost Direct Labor

AG1 Variable Cost Internal Profits

AG1 Fixed Cost Store Supervisor

AG1 Fixed Cost Factory Rent

AG2 Indirect Cost Outbound Freight

AG2 Indirect Cost Internal Profits

AG2 Indirect Cost Store Supervisor

AG2 Indirect Cost Factory Rent

AG2 Indirect Cost Electricity

AG2 Indirect Cost Depreciation

AG2 Direct Cost Direct Material

AG2 Direct Cost Inbound Freight

AG2 Direct Cost Material Handling

AG2 Direct Cost Direct Labor

AG2 Default Miscellaneous Cost

Related Topics
• Can I delete or edit the mapping of a cost component to an analysis group
FAQs for Managing Cost Components and Analysis

Can I delete, deactivate, or edit a user-defined cost component code?
Yes. You can deactivate a user-defined cost component code at any time. You can delete a user-defined cost component
code only if it is not mapped to a cost element or an analysis group, and it is not used in a standard cost definition.
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Can I delete or edit a cost component group mapping?

Yes. You can delete or edit a cost component group mapping only if it is not referenced in a cost profile.
Can I delete or edit the mapping of a cost element to an analysis group?

Yes. You can delete or edit the mapping of a cost element to an analysis group, even if the cost element is mapped to a cost
component group that is referenced in a cost profile.
Defining Cost Accounting Policies

Cost Components, Cost Elements, and Cost Component Groups:
How They Work Together
Cost components are user-defined or come from external sources, and are mapped to cost elements which the costing
application uses to track the cost of items. Use cost component groups to map cost components to cost elements, and
to map source cost elements to destination cost elements when items are transferred from one inventory organization to
another.
This figure illustrates the relationship between cost components, cost elements, cost component groups, and cost profiles.
Cost Components Cost Elements
Cost Component
Group
Item Cost Profile
Cost Components
Cost components are the most granular representation of item costs. Examples of cost components are purchase order item
price, material, freight, tax, and overhead. Cost Components come from different sources:
• Predefined costs from external sources such as Purchasing, Accounts Payable, and Inventory Management
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• Landed cost charges from Oracle Fusion Landed Cost Management.
Cost Elements
A cost element is the level where the costs of an item are tracked through the inventory accounting life cycle. Cost
components are mapped to cost elements, which enables you to calculate item costs at different granularity levels for
different business needs. For example, you may want more granularity for high-value than for low-value items.
You can define cost elements for four types of costs:

• Material cost element type for incoming material cost components.
• Overhead cost element type for costs that are calculated by the cost processor based on user-defined overhead
rules.
• Profit in Inventory cost element type for tracking of internal margins when items are transferred from one inventory
organization to another, including global procurement and drop shipment flows. For cost elements of this type,
indicate the Profit in Inventory organization that incurs the gain or loss due to the transfer of goods.
• Adjustment cost element type for separate tracking of cost adjustments, which provides a more detailed view of item
costs and profit margins.
Cost elements are defined at the set level and thereby have the advantages of set-level definitions for sharing and
segregation. A Profit in Inventory cost element must be assigned to the Common cost element set so that it can be shared
across cost organizations.
The following table gives examples of cost element definitions:
Cost Element Set Cost Element Cost Element Type Inventory Organization
US Metals Material Material Not Applicable

US Plastic Material Material Not Applicable

US Misc Material Material Not Applicable

US Misc Material Adjustment Not Applicable

US Plant Depreciation Overhead Not Applicable

US Equipment Depreciation Overhead Not Applicable

US Freight Charges Overhead Not Applicable

Common Internal Margin Profit in Inventory Seattle

UK Dairy Material Material Not Applicable

UK Misc Material Material Not Applicable

UK Dairy Material Adjustment Not Applicable

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Cost Component Groups

Use cost component groups to define mappings of cost components from external sources to cost elements in the
costing application. These mappings provide flexibility in the granularity level where you track costs. You can map one cost
component to one cost element for a detailed cost breakdown, or several cost components to one cost element for a less
granular view of costs. For cost components and cost elements that are related to landed cost charges, you can choose to
capitalize them into inventory value, or expense them. All other costs are automatically capitalized.
You can also map source cost elements to destination cost elements when transferring items from one inventory organization
to another. This helps to maintain visibility of the item cost structure from the source application and across the supply chain.
You can specify a default cost component mapping to cost element to be used in cases where the source cost element does
not have a matching destination cost element. The default cost component mapping is helpful when:
• The detailed mapping of a cost component to cost element is not required, and you want to map it to a single cost
element.
• The designated mapping for a cost component is missing. If the mapping is missing, the transaction automatically
picks up the default cost component mapping.
Note: If the cost component mapping is missing, the cost processor logs a message in the processing log. If
the cost component mapping is missing and there is no default mapping, you can create the mapping and the
transactions will be processed in the next run. If there is a default mapping, the transaction is processed and you
can review the message log to decide if you want to take further action: you can correct the mapping for future
transactions, and you can create a cost adjustment to reclassify the costs as needed.
Cost component groups are one of the attributes of cost profiles, which the cost processor uses to determine how to
calculate item costs. Cost component groups are defined at the set level and thereby have the advantages of set-level
definitions for sharing and segregation. Cost component groups and cost profiles are both set enabled; therefore, only those
cost component groups belonging to the same set as the cost profile are available to that cost profile.
Example 1: The following table describes mapping of one cost component to one cost element.
Mapping Group Cost Component Cost Element
MG1 PO Item Price Material

MG1 PO Tax Tax

MG1 Profit in Inventory PII

MG1 Interorganization Freight Freight Charges

MG1 Invoice Price Variance IPV

MG1 Exchange Rate Variance ERV

MG1 Tax Invoice Price Variance TIPV

Example 2: The following table describes mapping of cost components to one or more cost elements.
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Mapping Group Cost Component Cost Element
MG2 PO Item Price Material

PO Tax

NR Tax

Invoice Price Variance

Exchange Rate Variance

Tax Invoice Price Variance

MG2 Interorganization Freight Freight Charges

MG2 Profit in Inventory PII

Example 3: The following table describes mapping of source cost elements to destination cost elements in an
interorganization transfer.
Mapping Group Source Cost Element Set Source Cost Element Destination Cost Element Destination Cost Element
Set
MG3 US Material Tax UK Material

MG3 US Freight Charges UK Freight Charges

MG3 US Other UK Other

You have flexibility in how you map cost component groups to items:
• Different items in a cost organization and book combination can have the same or different cost component group
mappings if they use different cost profiles.
• One item can have different cost component group mappings in different cost books.
• Several cost organizations can share the same cost component group mappings if they belong to the same set, or if
they are defined the same way in different sets.
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The following figure illustrates different mappings of cost component groups to items. That is, in a cost organization, Item A
maps to two cost groups, and item B and Item C maps to only one cost group.
Cost Organization
Cost Book 1
Item A Cost Profile 1
Mapping Group1
Cost Book 2
Item B Cost Profile 2
Mapping Group 2
Item C
Cost Profiles, Default Cost Profiles, and Item Cost Profiles: Explained
Cost profiles define the cost accounting policies for items. The cost processor refers to the attributes of a cost profile to
calculate costs and create accounting distributions for inventory and trade transactions. Each item in a cost organization
book requires a cost profile to calculate the inventory transaction costs.
The following describes how to define cost profiles and assign them to items.
Cost Profile Definition

A cost profile has the following attributes:
• Cost profile set. Cost profiles use set-level definitions, and all cost organizations belonging to that set can share the
same cost profile definitions.
• Cost method. Establishes how cost is calculated. The costing application uses the perpetual average cost , actual
cost , or standard cost method.
• Valuation structure. Sets the granularity level at which items are costed, for example Cost Organization level, or
Inventory Organization, Lot, and Grade level.
• Valuation structure type. Asset, Expense, or Consigned type.
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• Cost component group. Maps incoming cost components to cost elements, which are used to cost transactions.
• Costing unit of measure (UOM). Used to cost the item. Some items have primary and secondary units of measure,
and there is no fixed conversion factor between the two. For example, you can calculate the cost of chickens by
chicken or by weight.
• Quantity depletion method. Sets how inventory quantity is depleted when inventory transactions are costed. The
method used by the costing application is first in, first out (FIFO).
• Method for processing negative quantity. Establishes how to treat depletion of inventory when the depletion quantity
exceeds inventory on hand. Options are Always, To Zero, or Never.
• Propagate cost adjustment. Option to propagate cost adjustments down the supply chain, available only if using the
actual cost method.
• Receipt without cost. Specifies that for sales returns without a Return Material Authorization RMA reference or
missing incoming cost, the cost processor uses the first or last receipt layer cost.
• Referenced RMA cost. Specifies what the cost processor uses for sales returns with an RMA reference. For the
Actual cost method, the processor uses the average cost of the original sales issue. For the Average cost method,
the processor uses the current perpetual average cost. For the Standard Cost method, it uses the current standard
cost.
• Accounting distribution basis. Defines accounting for consigned inventory transactions. Options are At Zero, or
Actual Cost.
Cost Profile Assignment to Items

Assign cost profiles to items in each cost organization and book combination where there are item transactions. Cost
organizations can have multiple cost books and the same item can have different cost profiles in different cost books used by
the cost organization. This is useful when you want to use different books for various financial reporting and decision making
purposes, such as statutory reporting, or management reporting.
Items can also use different cost profiles in various cost organization and book combinations, when they require different cost
accounting policies.
Note: An item can have only one Asset, one Expense, and one Consigned cost profile in each cost organization
book. You must assign at least one cost profile to the cost organization book.
You can simplify the effort by assigning default cost profiles at the cost organization book level, or at the item category level
within the cost organization book. Default cost profiles are generally used if the costing policy is the same for all items in the
cost organization book, or in the item category.
Override default cost profiles by assigning specific item cost profiles at the individual item level. You can modify or delete
a default cost profile assignment at any time before transactions have been processed. Once transactions for an item are
processed you cannot change the cost profile of the item.
You can assign cost profiles in three ways:

• Automatic without approval. If the default cost profile has the item profile creation mode set to Auto, the
preprocessor automatically generates and assigns the default cost profile to new items. This means that the cost
processor uses the same cost profile for all items within that cost organization book, or within the item category.
• Automatic with approval. If the default cost profile has the item profile creation mode set to Review Required, you
must review and approve the generated cost profile before the cost processor assigns it to new items.
• Manual. Manually assign the cost profile to a new item before the cost processor processes the first transaction.
This cost profile then remains in effect for subsequent transactions. The manually assigned cost profile always takes
precedence over the default cost profile.
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Note: When you are manually assigning a cost profile to an item, the options available are both:
• Cost profiles belonging to the set that is specific to the cost organization of the item
• Cost profiles belonging to the Common set which spans all cost organizations
Related Topics
• What are the accounting distribution basis options for consigned inventory transactions
Item Cost Profile Creation: Review and Approval Process

One of the attributes of a default cost profile is the creation mode of item cost profiles, which can be set to Auto or Review
Required. The creation mode determines how an item cost profile is created.
Cost Profile Creation Mode Settings

If you set the cost profile creation mode on a default cost profile to Auto, the preprocessor automatically assigns the default
cost profile to new items, and the new item cost profiles can be used by the cost processor. If you set the cost profile
creation mode to Review Required, then you must review and approve the new item cost profiles before they are used.
Review and Approval of Item Cost Profiles

When a default cost profile is in Review Required mode, the preprocessor generates the cost profiles for new items based on
the default cost profile and sets them to Awaiting Approval status.
Review the cost profiles on the Review and Approve Item Cost Profiles page which is accessed from the Manage Default
Cost Profiles page, or from the Cost Accounting work area. After reviewing the cost profiles that are in Awaiting Approval
status, set them to Approved or Rejected status. If you approve them, the creation source becomes Default Cost Profile. If
you reject the cost profiles, you can manually modify them, and the creation source becomes Manual.
Save your changes and rerun the preprocessor for final assignment of the item cost profiles.
Valuation Structures and Valuation Units: Explained

Valuation structures and valuation units define the granularity level at which the cost of an item is maintained. For example,
you can maintain your cost calculations at the lot ID, serial ID, grade, or item level. Under certain circumstances, you can even
have a single average cost for an item spanning more than one inventory organization.
The following describes how to use valuation structures and valuation units.
Valuation Structures
A valuation structure defines the level at which item costs are maintained. It specifies which inventory control attributes are
used to segregate costs, and it is one of the attributes of an item cost profile. When a cost profile is assigned to an item, the
cost processor uses the valuation structure on that cost profile to determine how to calculate the item cost.
The flexfield structure specifies the costing attributes that are enabled for a valuation structure. The costing attributes can be
one or more of the following: Cost Organization (mandatory), Inventory Organization, Subinventory, Locator, Lot, Serial, and
Grade. The costing attributes must be consistent with the inventory attributes, and cannot be at a lower level of granularity
than the inventory on hand.
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Valuation structures are of three types, Asset, Expense, and Consigned. An asset valuation structure is used for receipts of
items that are valued as inventory on the balance sheet. An Expense valuation structure is used to account for receipts to
inventory of items that are expensed rather than treated as assets on the balance sheet. A Consigned valuation structure
is used to account for consigned inventory transactions. A cost profile with an Asset valuation structure becomes an Asset
cost profile, a cost profile with an Expense valuation structure becomes an Expense cost profile, and a cost profile with
a Consigned valuation structure becomes a Consigned cost profile. Define the Asset, Expense, and Consigned valuation
structures on your cost profile; the item then inherits those valuation structures when it is associated with the cost profile.
Valuation structures are defined at the set level and thereby have the advantages of set-level definitions for sharing and
segregation.
The valuation structure mode determines whether the valuation units are created manually, or automatically by the cost
processor, or both:
• Valuation structures that you define as automatic are those that tend to be unlimited and unknowable in advance,
such as lot IDs and serial IDs. With the automatic setting, the cost processor automatically creates a new valuation
unit code as transactions for new lot IDs or serial IDs are processed.
• Valuation structures that you define as manual are those that tend to have a finite list of possibilities, such as grades
or subinventories. Use the manual mode when you want to ensure that transactions that do not meet one of the
expected possibilities will trigger an error condition.
• Valuation structures that you set as both manual and automatic are those cases where you can either define the
anticipated valuation units before they enter the processor, or you can let the processor automatically create the
valuation units if you have not already created them manually.
Valuation Units
A valuation unit is the set of values for the control attributes defined by the valuation structure. For example, valuation unit V1
comprises cost organization A, lot L1, and grade G1, and valuation unit V2 comprises cost organization B, lot L2, and grade
G2. The processor calculates two different costs for the item: a cost for valuation unit V1 and a cost for valuation unit V2.
You can define multiple valuation units under a valuation structure, using different combinations of these costing attributes.
The cost processor will automatically generate these valuation units if the valuation structure mode is set to Auto or Both.
By assigning a valuation unit to a cost organization book you specify the set of values for the inventory control attributes that
are used to cost the item within that cost organization book.
Valuation Structure Rules: Explained

The valuation structure is one of the attributes of an item cost profile which is used to cost inventory items.
Conflicts may arise if the inventory control attributes in the valuation structure do not match the inventory control attributes of
the inventory items.
Valuation Structure Conflict Resolution

In cases where the valuation structure specifies an inventory control attribute that is missing on the item, the cost processor
applies the following rules.
If the inventory control attribute has the Required attribute set to Yes, then the association of the valuation structure to the
item is disallowed. If the inventory control attribute has the Required attribute set to No, then the association of the valuation
structure is allowed, and the valuation unit will have a Null value for that inventory control attribute.
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For example, suppose an item is not lot enabled, whereas lot is an attribute of the valuation structure. In this case, if the
Required attribute is set to No, the valuation structure is considered valid for the item, and the processor applies Null to the
lot value. However, if the Required attribute is set to Yes, the valuation structure is considered invalid.
The Required attribute can be changed from Yes to No at any time to accommodate missing values. However it cannot be
changed from No to Yes if any transactions using that valuation structure have been processed.
Using Valuation Structures to Calculate Item Costs: Examples

The following are examples of how the cost accounting application maintains costs for an item using different valuation
structures.
Assume that a cost organization stocks an item in four stores under two inventory organizations, as given in the following
table.
Cost Inventory Subinventory Lot Item Quantity Cost per Unit Total Cost
Organization Organization
CO-US Retail Store 1 Store 1A A Gadget A 50 50 2500

CO-US Retail Store 2 Store 2B C Gadget A 45 44 1980

CO-US Retail Store 2 Store 2A C Gadget A 60 45 2700

CO-US Retail Store 1 Store 1B B Gadget A 40 48 1920

Example 1
The application calculates and maintains the item cost at the cost organization level. It maintains one cost for the item across
all inventory organizations in the cost organization.
This table describes the cost distribution:
Valuation Structure Unit Average Cost
Cost Organization 46.67

Example 2
The application calculates and maintains the item cost separately for each inventory organization in the cost organization. This
table describes the cost distributions:
Valuation Structure Inventory Organization Unit Average Cost
Cost Organization - Inventory Organization Retail Store 1 49.11

Cost Organization - Inventory Organization Retail Store 2 44.57

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Example 3
The application calculates and maintains the item cost separately for each subinventory in the cost organization.
This table describes the cost distributions:
Valuation Structure Inventory Organization Subinventory Unit Average Cost
Inventory Organization - Retail Store 1 Store 1A 50

Subinventory

Inventory Organization - Retail Store 1 Store 1B 48

Subinventory

Inventory Organization - Retail Store 2 Store 2A 45

Subinventory

Inventory Organization - Retail Store 2 Store 2B 44

Subinventory

Example 4
The application calculates and maintains the item cost separately for each lot under each subinventory and inventory
organization.
Valuation Structure Inventory Organization Subinventory Lot Unit Average Cost
Inventory Organization - Retail Store 1 Store 1A A 50

Subinventory - Lot

Inventory Organization - Retail Store 1 Store 1B B 48

Subinventory - Lot

Inventory Organization - Retail Store 2 Store 2A C 45

Subinventory - Lot

Inventory Organization - Retail Store 2 Store 2B C 44

Subinventory - Lot

Example 5
The application calculates and maintains the item cost separately for each lot under each inventory organization.
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Valuation Structure Inventory Organization Subinventory Lot Unit Average Cost
Inventory Organization - Retail Store 1 Store 1A A 50

Lot

Inventory Organization - Retail Store 1 Store 1B B 48

Lot

Inventory Organization - Retail Store 2 Store 2A C 44.57

Lot

Inventory Organization - Retail Store 2 Store 2B C 44.57

Lot

Managing Costing Units of Measure

Costing Units of Measure: Explained
You can cost an item using different units of measure (UOMs) for different business purposes, such as pricing, reporting or
tracking costs.
The UOM is one of the attributes of a cost profile. You can calculate different costs for an item by assigning it cost profiles
with different UOMs.
Primary and Secondary UOMs

To illustrate the use of a primary or secondary UOM, consider the case of chickens that can be costed by a UOM of each or
of pounds. There is no standard conversion from one UOM to the other. In such a case, the costing UOM depends on how
the chickens are sold, priced, or tracked. It may be more logical to cost the chickens by pound if that is how they are sold.
However it may be more useful to cost them by each for planning and tracking purposes. In this case, the primary UOM could
be each, and the secondary UOM could be pounds.
When an item in a cost organization and book combination is assigned a cost profile that specifies the use of the primary or
secondary UOM, the cost accounting application uses the primary or secondary UOM that is defined in the item validation
organization.
Using Different Units of Measure To Cost an Item: Example

This example illustrates how to calculate costs for an item using different units of measure.
Scenario
Consider a jewelry retail business that sells gold rings. The company purchases the rings in dozens, and maintains inventory
costs in dozens and single units.
Shipment Quantities and Costs

The company receives five shipments of rings as follows.
Shipment No. No. of Rings Total Shipment Cost
1 2 dozen 4,800 USD
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Shipment No. No. of Rings Total Shipment Cost

2 3 dozen 5,400 USD

3 5 dozen 10,500 USD

4 2 dozen 5,400 USD

5 6 dozen 7,200 USD

Analysis
Define a primary unit of measure of dozens and a secondary unit of measure of single units. You can calculate two different
costs for each shipment using the primary unit of measure and the secondary unit of measure.
Resulting Costs in Primary and Secondary Units of Measure

The costs using the primary versus the secondary units of measure are as follows.
Shipment No. Cost in Primary Unit of Measure Cost in Secondary Unit of Measure
1 2,400 USD 200 USD

2 1,800 USD 150 USD

3 2,100 USD 175 USD

4 2,700 USD 225 USD

5 1,200 USD 100 USD

FAQs for Defining Cost Accounting Policies

Can I delete or modify a cost profile, a default cost profile, or an item cost profile?
No. You cannot delete or modify a cost profile after it has been used to cost transactions for an item. However, if a cost
profile has not been used to cost any transactions, you can delete or modify it after you delete references to it in other cost
management setup.
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What happens when I select different options for processing negative inventory
quantities?
The options for processing inventory quantities when the transaction quantity exceeds the quantity on hand are:
• Always: applies cost for the entire transaction, including negative balances. The cost processor costs the transaction
as follows:
◦ If the cost method is perpetual average cost, it applies the average cost for the entire transaction quantity.
◦ If the cost method is actual cost, it applies the FIFO layer cost for the entire transaction quantity, and then
processes a cost variance when the next receipt replenishes inventory.
• To Zero: applies cost only for quantity on hand, and holds the remaining shortfall until inventory is replenished.
• Never: does not apply cost for the transaction until quantity is sufficient to cover the entire transaction.
Defining Overheads Absorption

Expense Pools, Cost Element Groups, and Overhead Accounting
Rules: How They Fit Together
Use expense pools, cost element groups, and overhead accounting rules to calculate overhead absorption for inventory
transactions. Overhead expenses can be absorbed and capitalized into inventory, or they can be absorbed and reclassified
as an expense.
Overhead Costs Expensed or Capitalized

On inbound transactions and inventory transfer transactions, overhead expenses can be absorbed and capitalized into
inventory value, or the absorption can be redirected to an expense account: a credit to an absorption account and a debit to
either an inventory or expense account. On outbound transactions, overhead absorption is redirected to an expense account,
and will be included in the gross margin calculation.
For example, consider a receipt of inventory items that cost $10 each to purchase, and you would like to absorb overhead
cost of $2 each on the inbound transaction. When the item is sold, you would like to absorb additional overhead of $3 each
on the outbound transaction. The total cost of goods sold is $15 each.
Expense Pools
Expense pools represent a collection of general ledger expense accounts that can be absorbed as overhead costs. Expense
pools are defined at the cost organization level. Overhead rules are defined for expense pools, and an expense pool can have
many overhead rules that absorb it.
Expense pools are mapped to a cost element, and a cost element can contain one or more expense pools. When overhead
is absorbed, an accounting distribution is created for each expense pool, so you can define accounting rules crediting the
absorption account at the expense pool level. Once the inbound transaction is in inventory, the application tracks the value of
inventory at the cost element level, so that you can track costs through inventory at the desired level of granularity.
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Cost Element Groups

Cost element groups tell the processor which cost elements to sum when the overhead rule is a percentage of cost. Cost
element groups can be system defined or user defined, and they are set at the cost organization level.
There are two predefined cost element groups, Transaction Cost and Material. You can also define your own cost element
groups.
Overhead Accounting Rules

The application uses the overhead accounting rules that you define to determine when and how overhead costs should be
calculated. Overhead calculations are based on cost element pools or cost element groups.
Overhead accounting rules are defined at the cost organization book level. You can set the calculations to absorb overhead
at the level of the cost organization, inventory organization, item category, or item.
Using Expense Pools and Cost Element Groups to Calculate

Overhead Absorption: Example
This example shows how to use expense pools and cost element groups to define overhead accounting rules, and calculate
overhead absorption for transactions.
Scenario
Your cost organization is a bicycle retail store with:
• Monthly overhead costs of 10,000 USD for rent 500 USD for water, 1,500 USD for electricity, and 1,000 USD for
gas.
• Additional costs of 50 USD freight per incoming receipt; and 10 USD inspection fees per unit.
You want to calculate overhead absorption for 5 transactions during the month:
• 2 receipts of bike X
• 3 receipts of bike Y
Transaction Details
You combine the water, electricity, and gas costs into one utility expense pool of 3,000 USD. Then define the expense pools
on the Manage Overhead Expense Pools page as described in this table.
Expense Pool Cost Element
Rent Warehouse Overhead

Utilities Warehouse Overhead

Freight Freight Overhead

Inspection Warehouse Overhead

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Next, define a Materials cost element group on the Manage Overhead Cost Element Groups page. You use this cost element
group to calculate overhead costs as a percentage of material costs. Your material costs are:
• 500 USD per unit for bike X

• 300 USD per unit for bike Y
Finally, you want overhead costs to include cost organization administrative and inventory organization facilities costs.
Analysis
Define the overhead accounting rules and absorption rates so that, for each month, the total amount absorbed by the
transactions equals the overhead expense pools.
This table describes the overhead accounting rules and absorption rates:
Overhead Transaction Transaction Item or Item Expense Cost Cost Basis Based Rate
Accounting Group Type Category Pool Element On Cost
Rule Element
Group
Rule1 Purchase Purchase Item Bike X Rent Warehouse Per unit Not 150
Order Order Overhead Applicable
Transactions Receipt

Rule2 Purchase Purchase Item Bike X Rent Warehouse Per Not 500
Order Order Overhead transaction Applicable

Rule3 Purchase Purchase Item Bike Y Rent Warehouse Percentage Materials 45%
Order Order Overhead

Rule4 Purchase Purchase Category Utilities Warehouse Percentage Materials 12%

Order Order Bike Overhead

Rule5 Purchase Purchase Category Freight Freight Per Not 50

Order Order Bike Overhead transaction Applicable

Rule6 Purchase Purchase Category Inspection Warehouse Per unit Not 10

Order Order Bike Overhead Applicable

Rule7 Purchase Purchase Category Administrative Warehouse Percentage Materials 5%

Order Order Bike Overhead

Rule8 Purchase Purchase Category Inventory Warehouse Percentage Materials 5%

Order Order Bike Organization Overhead
Transactions Receipt Facilities

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Note: The value type in the Rate column is determined by the Cost Basis column. All Rate values not listed as
percentages are in the currency of the applicable cost book.
Resulting Overhead Costs

The following table describes the overhead cost calculations based on the rules defined.
Transaction Item Quantity Rent Utilities Freight Inspection Cost Inventory

Organization Organization
Administrative Facilities
Costs
1 Bike X 10 2,000 600 50 100 250 250

2 Bike X 15 2,750 900 50 150 375 375

3 Bike Y 10 1,350 360 50 100 150 150

4 Bike Y 15 2,025 540 50 150 225 225

5 Bike Y 10 1,350 360 50 100 150 150

Total Not Not 9,475 2,760 250 600 1,150 1,150

Overhead Applicable Applicable
Absorption

Overhead Accounting Rules: Explained

Overhead accounting rules establish how to absorb overhead costs into inventory value and into cost of goods sold. The
overheads processor checks for the rule based on the type of transaction. If a rule is defined and set to active, the processor
applies overhead absorption to the transaction.
The following describes the overhead accounting rule attributes and cost drivers.
Overhead Accounting Rule Attributes

Associate an overhead accounting rule with a cost organization, cost book, and expense pool. The cost element from the
expense pool definition is displayed automatically.
Also specify the following attributes:
• Transaction group (mandatory) and transaction type (optional). The transaction groups are predefined and they
include one or more transaction types. You can define overhead rules at the transaction group level, or at the
transaction type level. The transaction group options are Interorganization Transfers, Intraorganization Transfers,
Inventory Transactions, Purchase Order Transactions, Sales Order Issues, and Sales Order Returns. The transaction
group controls the transaction type options, which are more granular. If the transaction type detail is not provided,
then the overhead absorption occurs for all transaction types within the transaction group.
• Transaction flow (mandatory). Options are Issue or Receipt.
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• Inventory organization. Required only when absorbing overhead at the level of the inventory organization. If this
attribute is blank, then the overhead is applied to all transactions in all inventory organizations under the cost
organization.
• Category name and item. Required only if you are absorbing overhead at the item category or item level.
Cost Drivers
In addition to the attributes, specify the cost drivers for the rule.
The cost drivers include:
• Cost basis (required). Options are Per Lot, Per Transaction, Per Unit, or Percentage Value. Lot is based on the
standard lot size defined in the item master. The processor divides the per lot overhead rate by the standard lot size
to arrive at the per unit overhead cost. For example, suppose the lot size is 100 units, the overhead rate is $10 per
lot, and the quantity is 150 units; then the overhead cost per unit is $10/100 = $0.1; and the overhead absorbed is
$0.1 * 150.
• Based on. Mandatory if the cost basis is Percentage Value, and it specifies the cost element group that the
percentage is based on.
• Rate (mandatory). Represents either the overhead percentage amount that you want to apply to the predefined cost
element group, or the currency amount that you want to apply per unit or per transaction.
• Absorption type (mandatory). Options are Include in Inventory, and Expense. The following are examples of different
kinds of absorption:
◦ Absorb to inventory value when overhead is applied to incoming transactions, including transfers from other
inventory organizations.
◦ Absorb and redirect as a period expense when overhead is applied to incoming transactions.
◦ Absorb overhead from the expense pool and redirect to cost of goods sold when overhead is applied to
outgoing transactions.
FAQs for Defining Overheads Absorption

Can I delete or deactivate a cost element group?
Yes. You can deactivate a cost element group by first deactivating all rules where it is referenced. However, you cannot delete
a cost element group after it has been used to define an overhead accounting rule because historical records are maintained
for audit purposes.
Can I delete or deactivate an expense pool?

Yes. You can deactivate an expense pool by first deactivating all rules where it is referenced. However, you cannot delete an
expense pool after it has been used to define an overhead accounting rule because historical records are maintained for audit
purposes.
Can I delete or deactivate an overhead accounting rule?

Yes. You can deactivate overhead accounting rules. However you cannot delete overhead accounting rules that have been
used to calculate overhead absorption in any transactions because historical records are maintained for audit purposes.
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Implementing Subledger Accounting

Implementing Subledger Accounting: Critical Choices
Subledger Accounting provides rules that you can configure and then automatically transform subledger transactions into
detailed subledger journal entries. Flexible rules are available to define accounting policies and generate accounting for legal
and corporate reporting. Reconciling accounting to transaction data enables drill down from general ledger to the underlying
subledgers and standard reports.
Based on your requirement, implement subledger accounting for Cost Accounting and Receipt Accounting using any of these
methods.
Using Predefined Mapping Sets

For using predefined mapping sets, specify transaction attributes and account combinations.
Using Standard Implementation

Do the following to use the standard implementation:
• Create an accounting method.

• Set up user defined journal entry rule sets.
• Assign user defined journal entry rule sets to accounting method.
• Activate journal entry rule sets assignments.
• Preview accounting results.
When you use predefined mapping sets, the commonly used transactional attributes are available to you to define the
accounting rules. Whereas, if you opt for the standard implementation, then you can leverage the full feature set of transaction
attributes for accounting purposes.
Set up tasks are available for implementing subledger accounting for Cost Accounting and Receipt Accounting.
Along with the information provided here, see Oracle Fusion Financials, Implementing Subledger Accounting documentation
for more information on the core features of Subledger Accounting.
Define Subledger Accounting Rules

Creating an Accounting Method: Explained
Accounting methods group subledger journal entry rule sets. This facilitates the definition of consistent accounting treatment
for each accounting event class, and accounting event type, for all subledger applications. This grouping enables a set of
subledger journal entry rule sets to be assigned collectively to a ledger.
For example:
• A subledger accounting method can be defined to group subledger journal entry rule sets that adhere to and comply
with US Generally Accepted Accounting Principles (GAAP) criteria.
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• By assigning a different subledger accounting method to each related ledger, you can create multiple accounting
representations of transactions.
Accounting rules can be defined with either a top-down, or a bottom-up approach.

• Top-Down: Define the accounting method, followed by components of each rule that must be assigned to it.
• Bottom-Up: Define components for each rule and then assign them as required.
The Create Accounting process uses the accounting method definition with active journal entry rule set assignments to create
When an accounting method is initially defined its status changes to Incomplete. The status will also be Incomplete after
modifying a component of any accounting rule associated with the assigned journal entry rule set.
Caution: The accounting method must be completed, by activating its journal entry rule set assignments, so
that it can be used to create accounting.
The following definitions are used to define the journal entries, and are applied as updates to the accounting method:
• Updates to the predefined accounting method
• Assignment of journal entry rule sets for an accounting event class and accounting event type from the accounting
methods page
• Assignment of accounting methods to ledgers
• Activation of subledger journal entry rule set assignments
Updates on Predefined Accounting Method

You may update a predefined accounting method by end dating the existing assignment and creating an assignment with an
effective start date.
Assignment of Journal Entry Rule Set for Accounting Event Class and Accounting Event Type
You create the assignment of a journal entry rule set for an accounting event class and accounting event type using the
accounting method page.
The following should be considered for assigning rule sets:

• If the accounting method has an assigned chart of accounts you can use journal entry rule sets that:
◦ Use the same chart of accounts
◦ Are not associated with any chart of accounts
• You can assign to existing journal entry rule sets or create a new one.
Assignment of Accounting Methods to Ledgers

If the accounting method has an assigned chart of accounts, it may only be used by ledgers that use the same chart of
accounts.
If the accounting method does not have an assigned chart of accounts, the accounting method can be assigned to any
ledger.
Activation of Subledger Journal Entry Rule Set Assignments

You can activate the subledger journal entry rule set assignments from the Accounting Method page. You can also submit the
Activate Subledger Journal Entry Rule Set Assignments process to validate and activate your accounting set ups.
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Accounting Method and Accounting Rules

This figure illustrates the relationship of the components used in an accounting method.
InFusion America Inc.

Primary Ledger (USD)
Standard Accrual Accounting Method
Journal Entry Rule Set for Subledger Application
Supporting
Journal Line Rules Account Rules Description Rules
References
Related Topics
• Creating a Subledger Journal Entry Rule Set: Explained
Creating a Subledger Journal Entry Rule Set: Explained

Subledger journal entry rule sets provide the definition for generating a complete journal entry for an accounting event.
Select the option to define the subledger journal entry rule set for a particular accounting event class or accounting event
type.
If you are using multiple ledgers to meet divergent and mutually exclusive accounting requirements, you can vary journal entry
rule sets by ledger. Each of the subledger journal entry rule sets can meet a specific type of accounting requirements.
For example, use US Generally Accepted Accounting Principles (GAAP) oriented subledger journal entry rule sets for a ledger
dedicated to US GAAP reporting. Use French statutory accounting conventions for a ledger dedicated to French statutory
reporting. These two sets of definitions have differences based on the setup of the various components that make up their
subledger journal entry rule sets.
Predefined subledger journal entry rule sets are provided for all Oracle subledgers. If specific requirements are not met by
predefined subledger journal entry rule sets, create a copy of the predefined definitions, rename, and modify the copied
definitions and their assignments.
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Subledger journal entry rule set assignments can be made at two levels, header and line. The following are the
subcomponents of a subledger journal entry rule set:
• Description rules
• Journal line rules
• Account rules
Assignment at Header Level

Header assignments define subledger journal header information and line assignments define journal line accounting
treatment.
A header assignment includes the following:

• Accounting date (required)
• Accrual reversal accounting date (optional)
• Description rule (optional)
Assignment at Line Level

You can define multiple subledger journal entry rule sets for an accounting event class or accounting event type. Using the
line assignment of the journal entry rule set assigned to the accounting event class or type, a single journal entry is generated
per accounting event per ledger.
The following can be assigned to a journal entry line:

• Journal line description rule
• Journal line rule
• Account rule
• Supporting references
Assignment of Description Rules

If a description rule is defined with sources, the sources must also be assigned to the accounting event class that is assigned
to the journal entry rule set. The description rule may be assigned at either the header or line level of the journal entry or to
both levels.
Assignment of Journal Line Rules

When assigning the journal line rule, you must identify the line type: Gain, Loss, Gain or Loss, Credit, or Debit. The journal line
rule must be assigned to the same accounting event class as the one assigned to the subledger journal entry rule set.
When assigning a journal line rule that is enabled for accounting for a business flow, the account combination and certain
accounting attribute values are copied from its related journal line having the same business flow class as the current line.
Optionally, copy the description rule into the current line instead of assigning a separate description rule.
When assigning a journal line rule that is enabled to copy from the corresponding line within the same journal entry, you have
the option to copy the account combination, the segment value, or the line description from the corresponding line into the
current line.
Assignment of Account Rules

The account rule assignment defines which accounts are used for the subledger journal line. If the account rule is set up with
a chart of accounts, it must have the same chart of accounts as the one assigned to the journal entry rule set. When account
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rules are defined with sources, the sources must also be assigned to the accounting event class that is assigned the journal
entry rule set.
There are two types of account rules:
• Account Combination Rule: Assign an account combination rule to derive the account combination.
• Segment Rule: Assign a segment rule to derive a specific segment of an account. For example, a cost center or a
natural account segment.
Assignment of Supporting References

Supporting references may be used to capture transaction values on journal entry lines. A supporting reference can be used
on a journal entry rule set only if it's assigned a source from the event class of the journal entry rule set.
Related Topics
• Creating Supporting References: Explained
Journal Line Rule: Explained

Journal line rules are defined within the context of accounting event classes. A journal line rule can be used in a subledger
journal entry rule set that has the same event class. You may also assign conditions to the journal line rule.
Journal Line Rules

Journal line rules are assigned to journal entry rule sets.
To create a journal line rule, select values for options such as:
• Side (Debit, Credit, Gain or Loss)
For example, when a payables invoice is generated, the liability account should normally be credited. The journal line
rule must therefore specify the Side option as Credit. On the other hand, the payment of the Payables invoice must
be accounted with a debit to the liability account. A separate journal line rule must be defined to create this debit line.
• Merge Matching Lines: To summarize subledger journal entry lines within each subledger entry. Journal entry lines
with matching criteria are merged.
• Accounting Class
◦ Select an accounting class to classify journal entry lines.
◦ For example, when a validated Payables invoice is accounted, the Item Expense and Liability journal lines are
created. In this case, the journal line rules used in the accounting rules are assigned Item Expense and Liability
accounting classes respectively.
• Conditions: To restrict the use of a journal line rule by controlling when a particular journal line rule is used by the
Create Accounting process.
• Accounting Attributes: When creating a journal line rule, accounting attribute assignments are automatically
established. These are based on the default accounting attribute assignments for that journal line rule's accounting
event class. You can override this default mapping of standard sources to accounting attributes. The list of values for
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the source override includes all sources assigned to the accounting attribute, for the event class associated with the
journal line rule.
• Advanced Options
◦ The Subledger Gain or Less Option: Applies only to amount calculations for the primary ledger. Gain or loss
amounts are not converted to reporting currency or nonvaluation method secondary ledgers. If the option is
selected, the journal line holds the gain or loss amounts calculated by the subledger.
The gain or loss amount is calculated as the difference in applied amounts due to fluctuations in conversion
rates, based upon conversion to the ledger currency. Foreign exchange gain or loss amounts occur when
two related transactions, such as an invoice and its payment, are entered in a currency other than the ledger
currency, and the conversion rate fluctuates between the times that the two are accounted.
◦ The Rounding Class Option: Along with transaction rounding, groups journal lines together and calculates
transaction rounding. Subledger transaction rounding differences can occur when a transaction has multiple-
related applied-to transactions, such as a Receivables invoice that has multiple associated receipts.
◦ The Link Journal Lines Option: Determines whether the journal line rule is set up to establish a link between
the accounting of transactions that are related both within the same application, and across applications. The
alternatives are described in this table:
This table contains the Link Journal Line Options and their descriptions.
Link Journal Lines Option Description
None No link is established.

Copy from corresponding line Build account for a journal line using segments from the offsetting entry of the current journal line.

For example, when the business process requires that a cost center incurring an expense must also
bear the invoice liability and cash outlay.

Business flow Link logically related business transactions.

For example, when recording the closing of a loan, you can link to the account that was used to
book the loan origination. Journal line rules that are linked must also be assigned the same business
flow class.

Defining Conditions for Journal Line Rules

You may set conditions to specify whether the journal line rule is used to create a subledger journal entry line. If the conditions
are true, the line rule is used to create a subledger journal entry line. Use sources to create these conditions.
For example, you can set up a condition that creates a journal line to record tax, only if there is tax for an invoice. The line
type and account class mentioned here are examples of sources.
• The condition for a Payables invoice tax journal line rule could be:
◦ Where Line Type = Tax

◦ When this condition is true, there is tax for a payables invoice line. A journal entry line is created to record the
accounting impact of the tax.
• Similarly, the condition for an invoice tax journal line rule could be:
◦ Where Account Class = Tax
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◦ In this case, if there is an account class of Tax, the journal line is used to record the accounting impact of the
tax.
Another example is a condition that creates a journal line for freight when there are freight charges on an invoice.
Journal line rule conditions determine whether a journal line rule and its associated account rules and description rules are
used to create the subledger journal entry line. If the conditions of all the journal line rules assigned to the journal entry rule set
are not met, the transaction is processed without the creation of any subledger journal entries, and the event status is set to
Processed.
Note: Constant values that are used in any Conditions region must not contain the following characters:
• "
• ,
• &
• |
• (
• )
• '
For example, in the condition "Project Type" = ABC (123), the constant value following the equal sign, ABC
(123), contains restricted characters ( ) that enclose 123 and is invalid.
Related Topics
• Creating Conditions: Examples
FAQs for Define Subledger Accounting Rules

How can I create subledger account rules and subledger journal entry rule sets for cost
management?
Create your subledger account rules on the Manage Account Rules page. It is recommended that you highlight the
account rules predefined by Oracle, copy, and modify them as needed.
Create your subledger journal entry rule sets on the Manage Subledger Journal Entry Rule Sets page. It is recommended
that you highlight the journal entry rule sets predefined by Oracle, copy, and modify them as needed. For each journal line rule
specify the copied account combination rule.
In the Setup and Maintenance work area, you can access both the Manage Account Rules task and the Manage
Subledger Journal Entry Rule Sets task in the Manufacturing and Supply Chain Materials Management offering.
Note: You must configure the predefined account rules and journal entry rule sets before proceeding with the
setup of subledger accounting rules for cost management.
Creating an Accounting Method: Procedure

To create an accounting method, do the following:
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4. Click the Manage Accounting Methods task.
5. In the Manage Accounting Methods page, click Actions and then click Create.
6. In the Create Accounting Method page, provide the required information and then click Save and Close.
Note: You can also duplicate the standard accrual accounting method instead of creating a new method.
Viewing Predefined Journal Line Types
In Journal Line Rules, there are various event classes and journal line types for each event class.
To view predefined journal line types:

click the Cost Accounting or Receipt Accounting functional area.
4. Click the Manage Journal Line Rules task.
5. In the Manage Journal Line Rules page, set the Created By Application to Yes, select the event class and
search.
The Search result lists the predefined journal line types for the selected event class.
Setting Up User Defined Account Rules: Procedure

Use account rules to create simple or complex rules to assign general ledger accounts to accounting events.
There are several predefined accounting rules that are available and are easily identifiable by looking at the Created By
Application column. The predefined account rules are not ready-to-use as they are not created in the context of the chart of
accounts. The predefined account rules are provided to help you create your own rules by using them as templates.
For example, create an account rule for identifying the general ledger account rules for the Cost of Goods Sold event class.
4. Click the Manage Account Rules task.
5. In the Manage Account Rules page, search for the predefined account rule for Cost of Goods Sold.
The Cost of Goods Sold event class is discussed here as an example.
To identify the predefined rules, set the Created by Application search parameter to Yes.
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6. Click the Duplicate icon to create a duplicate of the predefined account rule for Cost of Goods Sold. Enter a rule
name, a short name (in capital letters) and then select the chart of accounts.
Once chart of accounts is assigned to an account rule and this task is saved, you cannot modify the assignment.
The Edit Account Rule page is displayed.

8. Specify the account selection criteria in the Rules region; however, do not change any values in the Conditions
region.
9. In the Rules region, the Value Type column has four options.
◦ Source
◦ Constant
◦ Accounting Rule
◦ Mapping Set
Source Value Type
Source is only applicable to the Accrual Account Rule in Receipt Accounting and the Offset Account Rule
in Cost Accounting when the account is retrieved from the purchase order for the Accrual account and from the
Miscellaneous Transaction for the Offset account.
If you select Source as Value Type, then set the value as Code Combination Identifier.
Constant Value Type
If the Value Type is set to Constant, you can select the specific account from the chart of accounts as the default
general ledger account type of the Journal line type.
Accounting Rule Value Type
Use this value type to retrieve values from the accounting rule.
Mapping Set Value Type
A mapping set is useful when you have a matrix of input values that produce distinct output values. For each input
value, specify a corresponding account combination. One or more related pairs of these input values with the
account combination output values form a mapping set. Ensure that a Chart of Accounts is associated with the
mapping set.
Once a mapping set is defined, you can associate the mapping set to an account rule. Copy each predefined
account rule and create a rule.
For more information on these four options, see documentation on Oracle Fusion Financials, Implementing
Subledger Accounting Account Rules.
Setting Up User Defined Journal Entry Rule Sets: Procedure

To set up journal entry rule sets:
1. Create a journal entry rule set.
2. Copy the predefined journal entry rule sets to associate the user-defined account rules.
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3. Set the Created by Application option to Yes and then click Search.
The predefined journal entry rules sets are displayed.
To create a journal entry rule for associating the user-defined account rules:
1. Create a copy of the predefined journal entry rule set by highlighting the row and clicking the Duplicate icon.
2. Provide information for name, short name, description, and chart of accounts.
4. In the Edit Journal Entry Rule Sets user interface, replace the predefined account rules with the account rules that
you have created.
5. After you have replaced all the account combination rules within the journal entry rule set, click Save and Close.
The original search results are displayed.
Repeat the previous steps to create all the necessary journal entry rule sets.
Assigning User Defined Journal Entry Rule Sets to Accounting

Method: Procedure
To associate the recently created journal entry rule sets to the newly created accounting method:
1. Select the accounting method that you created while performing the activity, Creating an Accounting Method.
2. In the Edit Accounting Method user interface, add the journal entry rule sets that you created.
3. Identify the account class and the event type in the predefined journal entry rule sets that you want to replace with
the new value after you have replaced all the account combination rules within the journal entry rule set you created
earlier. Delete the row that you identified for replacement and add a new row with the same event class and event
type and enter the new value once you have replaced all the account combination rules within the journal entry rule
set. (Optional) Enter the effective start date and save the row.
For example, to replace the Sales Order Issue predefined journal entry rule set after you have replaced all the
account combination rules within the journal entry rule set with the newly created Sales Order Issue 2 journal entry
rule set.
a. Select the predefined journal entry rule set assigned to this subledger accounting method and delete it.
b. Once this is deleted, add the new rule set Sales Order Issue 2 to this accounting method.
c. Click Save and Create Another to replace all the predefined journal entry rule sets with the journal entry rule
sets that you have newly created.
Activating Journal Entry Rule Sets Assignments: Procedure

After the setup is complete, you must activate the journal entry rule sets that are newly assigned to the subledger accounting
method. You can do this directly from the Edit Accounting Method user interface or from the separate task provided.
To run the accounting method activation as a separate process:
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4. Click the Manage Accounting Methods task, and then activate the subledger journal entry rule set assignments.
5. Run this process for the accounting method and subledger application with Incomplete Status Only set to No.
This step is recommended for activating an accounting method especially if many changes were made to the journal
entry rule sets.
6. You can review the status of the process from the Scheduled Processes task.
7. (Recommended) Archive the current accounting rule setup configuration by initiating the Accounting Setups
Report.
Preview Accounting Results: Procedure

To ensure that the correct general ledger accounts are selected:
1. Run Create Accounting.
Once complete, check the results.



certain mappings.
import.
Export allows:

Example

• East
• South
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• West
East 01

South 02

West 03

Related Topics
Predefined Mapping Sets: Overview

There are predefined mapping sets for all the journal line rules with commonly used sources. For each journal line rule, there
are three to five sources such as Inventory Organization, Sub-Inventory, Item Category, and Item.
The benefits of using predefined mapping sets for implementation include:
• Enabling quick implementation of subledger accounting.

• Providing commonly used transaction source attributes.
• Enabling easy maintenance when compared with defining and maintaining the user-defined account rules.
Unique mapping sets are predefined for each journal line rule. Some of the predefined mapping sets for Cost Accounting are,
Consigned Clearing, Consigned In-Transit, Consigned Inspection, and so on. View Cost Accounting user interface for
the complete list of mapping sets. Predefined Mapping Sets for Receipt Accounting are, Consigned Accrual, Consigned
Clearing, Consigned Inspection, and so on. View the Receipt Accounting user interface for the complete list of mapping
sets.
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Using Predefined Mapping Sets: Procedure

Use predefined mapping sets for Cost Accounting.
The steps to use predefined mapping sets are:

For example, if you are using the mapping set, Consigned Clearing, then you have to provide one or more of the
following input sources.
◦ Costing Category Identifier
◦ Subinventory Code
◦ Item Number
3. For the mapping set Consigned Clearing, provide an account combination as the output type.
not set up.
FAQs for Subledger Accounting

How can I resolve errors in the accounting results?
If the Create Accounting process ends with errors or warnings, you can resolve these errors or warnings using any of the
following methods.
1. Review errors in the Create Accounting Execution report.
2. If you have selected viewing errors for a specific transaction, query the transaction from the Review Cost
Accounting Distributions user interface.
3. Navigate to the Journal Entries tab. If errors are present, then they are listed against each line.
4. Use Advanced Diagnostic. For activating this feature, refer to the Accounting Event Diagnostic Report.
How can I modify predefined mapping sets?

You can modify existing predefined mapping sets by:
• Adding input and output conditions.
• Adding new chart of accounts.
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Adding a new source to an existing predefined mapping set is not supported. Use standard implementation for creating
mapping sets with new sources.
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Implementing Manufacturing and Supply Chain Materials Implementing Landed Cost Management
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10 Implementing Landed Cost Management
Landed Cost Management: Overview

Oracle Fusion Landed Cost Management gives your organization financial visibility into your supply chain costs, including
transportation and handling fees, insurance, duties, and taxes. These types of charges can compose a significant portion
of the cost of an item. Landed Cost Management enables you to incorporate the charges accurately into overall financial
processes and decision-making activities. Landed Cost Management initially estimates these costs and later updates
them with actual amounts as they become known, allocating them to shipments, orders, and products. This enables you
to maximize profits, improve visibility into outstanding liabilities, enhance competitiveness, and ensure that complex trade
activities are compliant with regulatory mandates.
Landed Cost Management performs three main tasks:
• Capture Charges: Landed Cost Management provides the capability to capture charges such as freight, insurance,
and so on. These charges are captured and grouped under an entity called trade operation. A trade operation is a
logical entity that denotes a single instance of a business transaction or process in which you would like to capture
all the charges. An example of this is a single shipment or container.
• Perform Allocations: Material PO schedules are associated to charges. This denotes the PO schedules that are part
of the trade operation or that are impacted by this trade operation. After the PO schedules are referenced to charges
on the trade operation, the charge amount is distributed and allocated to the respective PO schedules and further on
to the receipts that are performed on those schedules.
• Create Accounting: The final step is to account for all the charges that were incurred. This is done by transferring all
the charge information to Receipt Accounting and Cost Accounting.
Landed Cost Management interfaces with the following applications:
• Oracle Fusion Purchasing: Landed Cost Management receives the material purchase order (PO) information. The
trade operation charges are associated with the PO schedules and allocated proportionately to the PO schedules
and receipts.
• Oracle Fusion Receipt Accounting: Tasks performed when managing landed costs use data from Receipt
Accounting, and Receipt Accounting will create the accounting entries to accrue landed cost charges.
• Oracle Fusion Cost Management: Charges from Landed Cost Management are absorbed as part of the item cost in
Cost Management. After the goods are delivered to inventory, the landed cost charges are absorbed into inventory
valuation.
• Oracle Fusion Tax: Taxes may be applicable on the charges coming from Landed Cost Management. The charges
are defined in Landed Cost Management. Taxes are automatically calculated, when applicable, by calling the Tax
application.
• Oracle Fusion Payables: In most cases, suppliers send invoices for the services they provide (particularly for freight).
When these invoices relate to charges defined in a landed cost Trade Operation, it is possible to automatically
associate an invoice amount to a landed cost charge applied to a receipt. For example, when a receipt of items
is performed, the bill of lading number from the freight supplier is specified in the receipt. Then when the freight
supplier invoice is processed, the invoice line references that bill of lading number. When the freight supplier invoice
is interfaced to the landed cost application, the bill of lading number that is common to the receipt and invoice
lines is automatically associated. As a result, the landed cost application compares the estimated amount of freight
charge in the receipt to the actual amount of freight charge billed in the invoice, and adjusts the cost of the receipt
for any calculated cost variance.
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Implementing Oracle Fusion Receipt Accounting is a prerequisite for Landed Cost Management. Implementing Oracle Fusion
Cost Accounting is optional. If you implement Cost Accounting, the landed cost charges are also visible in Cost Accounting.
Several options are available for implementing Landed Cost Management, based on the source of these landed cost charges.
You can implement a combination of one or more of these options where the source of the landed cost charges can be:
• A payable invoice from a service provider or supplier
• A supplier purchase order for the service
• An estimate provided by a supplier or any other source
Related Topics
• Creating Estimate Landed Costs: Procedure
• Analyzing Landed Costs: Procedure
Setting Up Landed Cost Management

Setting Up Landed Cost Management: Procedure
To set up Landed Cost Management, you perform the setup tasks in the same sequence in which they are displayed in the
To Set Up Landed Cost Management

To access the tasks that you must perform to set up Landed Cost Management, complete the following steps.
offering.
2. On the Setup: Manufacturing and Supply Chain Materials Management page, select the Landed Cost Management
functional area.
3. Perform the setup tasks in the order in which they are listed.
The following table describes the setup tasks to implement Landed Cost Management, and states whether each task is
required or optional.
Manage Charge Names Required Define landed cost charges and configure
default attributes. These charges are regular
expenses that are incurred while transporting
material from the supplier to a receiving
location. For example, freight, taxes, duties,
handling fee, and so on.

Manage Landed Cost Reference Types Optional Define charge reference types representing
unique business documents and other
references which drive a trade operation.

Manage Routes Optional Define routes for classifying similar trade

operations into a higher level entity.

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Related Topics
Setting Up Landed Cost Management: Points to Consider

When setting up Landed Cost Management, consider the following:
• Map landed costs to cost components in Cost Accounting
• Create trade operation templates
Map Landed Costs to Cost Components in Cost Accounting

In the Setup and Maintenance work area, use the Manage Cost Component Mappings task in the Manufacturing and Supply
Chain Materials Management offering to map landed costs to cost elements in cost accounting, and to capitalize landed
costs.
Cost elements are the level where you want to track costs through inventory. Use cost component mappings to define cost
component groups, which map cost components to cost elements, and to map source cost elements to destination cost
elements when items are transferred from one inventory organization to another. The mapping group is referenced later by
item cost profiles, which are used to specify cost policies for items.
Create Trade Operation Templates

A trade operation is used to capture and allocate the landed cost charges that are incurred for material shipments. Trade
operations can be modeled on a single shipment or a group of shipments. A trade operation template can be used to create
trade operations quickly, in cases where a business performs similar trade transactions and makes regular shipments.
Use the Create Trade Operation Template page to set up the most frequently incurred charges, and the amounts for
these charges. When you create a trade operation by using the template, all of the charges and related information are
automatically copied onto the trade operation.
Managing Charge Names

Landed Cost Charge Names: Explained
The landed cost of purchased items includes their material cost as well as supplier and third-party charges incurred to
deliver them to their final destination. In the Setup and Maintenance work area, use the Manage Charge Names task in the
Manufacturing and Supply Chain Materials Management offering to define landed cost charge names that are used to capture
and analyze landed cost charge amounts.
User-defined landed cost charges can include the following examples:
• Freight and transportation costs, from the supplier to the buyer's ultimate location.
• Costs associated with the physical preparation of the goods in order for them to be transported such as labeling,
picking, packaging and packing goods, including all inventory, distribution center, and warehouse costs.
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• Loading and unloading costs, loading penalties, and other surcharges.
• Haulage, storage, and detention fees.
• Equipment and container fees.
• Sales tax and value added tax (VAT).
• Import and export charges, import VAT fees, customs brokerage fees, and excise taxes.
• Port or pier fees, cargo handling fees, and harbor maintenance fees.
• Currency revaluations, with currency fluctuations and multiple currency conversions.
FAQs for Managing Charge Names

What are landed costs?
Landed costs are the sum of the material costs and the additional landed cost charges associated with the purchasing and
receipt of material.
What's a landed cost charge?

Landed cost charges are additional material supplier charges and third party charges that are incurred in the process of
receiving material into ownership or possession, including consigned scenarios where custody may be with another party.
Can I modify a Landed Cost charge name?

Yes, you can modify a charge name before it is associated with a PO schedule or a trade operation. However, you cannot
modify a charge name after it is associated with a PO schedule or a trade operation.
Managing Landed Cost Reference Types

Landed Cost Reference Types: Explained
Landed Cost charge reference types are unique references of trade documents executed as a part of a trade operation.
In the Setup and Maintenance work area, you can access the Manage Charge Names task in the Manufacturing and Supply
Chain Materials Management offering. Use the Manage Charge Names task to:
• Set up Landed Cost charge names.

• Configure default charge attributes.
• Define applicable tax attributes, reference types, and analysis groups.
Charge reference types are associated to a landed cost charge during setup to indicate the default business documents
that generally drive the charge. The reference types associated to a charge name during charge definition will default to a
trade operation charge and to the invoice line when it is classified with a Landed Cost charge name. You can associate one
or multiple default reference types to charge names. You can leverage reference types to facilitate invoice association by
assigning an appropriate reference type to a charge.
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FAQs for Managing Reference Types

What's a reference type in Landed Cost Management?
Reference types are business documents, such as bills of lading, that are associated with landed cost charges in trade
operations to provide an audit trail of the charges. Reference types are also matched with invoices to capture actual charge
amounts.
What's a trade operation?

A trade operation is an entity that is used to group landed cost charges expected to be incurred for material shipments. You
can create a trade operation for an upcoming shipment to capture the landed cost charges incurred for that shipment. You
can also create the trade operation after the actual shipment.
Managing Routes
Landed Cost Routes: Explained
In the Setup and Maintenance work area, use the Manage Routes task in the Manufacturing and Supply Chain Materials
Management offering to define routes through which materials will be transported. Defining routes enables you to group
trade operations and analyze global shipping costs. For example, if you assign trade operations to routes, you can answer
questions such as what the total costs are to ship goods from China to Singapore and then to the warehouses in India,
Australia, and the United States.
Note: Defining routes in Landed Cost Management is an optional setup task.
FAQs for Managing Routes

What's a route?
Landed Cost Management routes are setup entities that you can use to group multiple trade operations. This helps in
analyzing the cost of trade operations from a geographical region.
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Implementing Manufacturing and Supply Chain Materials Implementing Subledger Accounting for France
Management
11 Implementing Subledger Accounting for

France
Subledger Accounting for France: Overview

Subledger accounting for France provides secondary accounting entries to support accounting events for inventory,
manufacturing, purchasing and sales to meet French regulatory accounting requirements. For the French accounting
features, all purchases are considered as expenses, and none of the transactions affect the on-hand inventory account.
Parallel accounting is supported for analysis purposes, in addition to regulatory accounting. The Cost Management Subledger
Accounting application provides seed data to create the additional accounting entries for French accounting. Mapping sets
can be used to accelerate the setup of the Subledger Accounting for France features.
Related Topics
• Mapping Sets: Explained
Setting Up Subledger Accounting for France: Procedure

To set up Subledger Accounting for France, you perform the Subledger Accounting set up tasks in the same sequence in
which they are displayed in the Setup and Maintenance work area.
The following tasks are used to set up the subledger accounting for France features.
• Manage Accounting Methods
• Manage Subledger Journal Entry Rule Sets
• Manage Journal Line Rules
• Manage Account Rules
• Specify Ledger Options
• Manage Mapping Sets
Prerequisites
The Cost Accounting and Financials modules should be set up before setting up the Subledger Accounting for France
features.
To Set Up Subledger Accounting for France

To set up Subledger Accounting for France, complete the following steps.
2. On the Setup and Maintenance page, select the Manufacturing and Supply Chain Materials Management offering,
and then click Setup.
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area.
4. Select the Manage Accounting Methods task.
5. Search for the Accounting Method where the Name is Standard Accrual and the Created By Application value is set
to Yes.
6. Select the Standard Accrual record and click on the Duplicate icon
7. Complete the Create Accounting Method fields using the examples provided in the following table.
Field Value
Name Standard Accrual (France)

Short Name STANDARD_ ACCRUAL_FR

Description Subledger accounting method for France


9. Click on the Accounting Method just created. The Edit Accounting Method page is launched.
10. Select the Standard Accrual (France) accounting method on the Journal Entry Rule Set Assignments page and Click
Activate.
11. When the activation process completes verify that the status of all of the records updates to Active.
12. On the Journal Entry Rule Set Assignments page, delete the Resource Absorption rule set record described in the
following table.
Field Value
Event Class WIP Resource Transaction

Event Type Resource Absorption

Rule Set Resource Absorption

13. Create the replacement Rule Set described in the following table.
Field Value
Event Class WIP Resource Transaction

Event Type Resource Absorption

Rule Set Resource Absorption (France)

14. Repeat steps 12 and 13 for each event type that you want to use.
15. Select the Standard Accrual (France) accounting method on the Journal Entry Rule Set Assignments page and Click
Activate.
16. Select Specify Ledger Options.
17. In the Subledger Accounting section set the Accounting Method to Standard Accrual (France).
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18. Configure the seeded mapping sets or create new account rules. For more information on mapping sets, see the
topic Using Seeded Mapping Sets.
19. (Optional) To verify that the accounting distributions have been set up correctly, run the Create Accounting process
on the Cost Accounting page, setting the Accounting Mode to Draft.
Related Topics
• Mapping Sets: Explained



certain mappings.
import.
Export allows:

Example

• East
• South
• West
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East 01

South 02

West 03

Related Topics
Predefined Mapping Sets for Subledger Accounting for

France: Overview
There are predefined mapping sets for all the journal line rules with commonly used sources, there are three to five sources
for each journal line rule, such as Inventory Organization Code, Subinventory Code, Costing Category Identifier,
Work Order Sub Type, and Item Number.
The benefits of using predefined mapping sets are as follows:

• Provides an out-of-box approach to implement subledger accounting.
• Enables quick implementation of subledger accounting.
• Provides commonly used transaction source attributes and these sources are assigned to the predefined mapping
sets.
• Enables easy maintenance when compared with maintaining user-defined account rules.
Unique mapping sets are predefined for each journal line rule. Predefined mapping sets specific to Subledger Accounting for
France are Expense Bridging, Bridging, Work In Process Bridging, and In-transit Bridging. View Cost Management
user interface for the complete list of mapping sets.
Using Predefined Mapping Sets for Subledger Accounting

for France: Procedure
To use predefined mapping sets for implementing Subledger Accounting for France, do the following:
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For example, if you are using the mapping set, Bridging, then you have to provide one or more of the following input
sources.
◦ Costing Category Identifier
◦ Item Number
3. For the mapping set Bridging, provide an account combination as the output type.
not set up.
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Implementing Manufacturing and Supply Chain Materials Implementing Intrastat Reporting
Management
12 Implementing Intrastat Reporting
Intrastat Reporting: Overview

Intrastat is the system for collecting and producing trade statistics for movement of goods within the member countries of the
European Union (EU). Intrastat Reporting, within the Manufacturing and Supply Chain Materials Management offering, enables
companies to collect, record, and report statistics related to trade as per their respective government legislations.
The EU developed the Intrastat system to collect information directly from enterprises about dispatches and arrivals of
commodities among member countries. This system is based on basic EU regulations that apply to all countries; however,
the practical application differs within the individual countries. Each country has its own handbook of what and how this
works.
An Intrastat declaration must be made whenever goods cross from one country to another within the EU. However, instead of
completing a form at the borders, Intrastat declarations are typically submitted monthly. The information that is tracked by the
Intrastat system is based strictly on the actual physical movement of goods between member countries of the EU.
Note: Intrastat information does not apply to the movement of monetary amounts or the placement of orders
between member countries.
Setting Up Intrastat Reporting: Procedure

Intrastat Reporting, provided in the Manufacturing and Supply Chain Materials Management offering, provides a tool for
gathering basic information about the Intrastat transactions between countries of an economic zone. You must define
Intrastat Reporting rules to set up the features that derive key Intrastat Reporting attributes based on country-specific
legislation requirements. Oracle's Intrastat Reporting provides predefined country-level attributes for several European Union
(EU) countries. For information about managing country characteristics, see Manage Intrastat Country Characteristics:
Explained.
Intrastat Reporting setup is based on country characteristics, rules, and parameters enabled at the legal reporting unit
and country levels. This task enables you to collect various transactions from Oracle Fusion products (such as Inventory
Management, Shipping, Receiving, and Distributed Order Orchestration) and then validate for exceptions. Ultimately, you
report and print the validated transactions or export them for processing with external software.
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The following figure shows the tasks associated with setting up Intrastat Reporting. The numbered steps are described in
detail in the procedure that follows the figure.
1 2 3
Prerequisite Manage Legal

Manage Legal Manage Tax
Reporting Unit
Tasks Reporting Unit Registrations
Registrations
4 5 6 7
Manage Intrastat
Manage Intrastat Manage Intrastat Manage Intrastat
Country
Lookups Rules Parameters
Characteristics
Note: The first three tasks are performed in the Financials offering functional work areas; whereas the
remaining tasks are performed in the Intrastat Reporting functional area on the Setup: Manufacturing and Supply
Chain Materials Management page.
To set up Intrastat Reporting, perform the tasks described in the following table in the order presented.
Setup Task Name Prerequisite Task? Description Offering or Product Area For More Information
1. Manage Legal Yes Define legal reporting Legal Entity Configurator Oracle Financials Cloud
Reporting Unit units such as branches, product in the Financials Implementing Enterprise
divisions, establishments, offering Structures and General
inventory organizations, Ledger guide
and physical locations,
which are components of
legal entities.

Legal reporting units,
together with their tax
registration number, are
the units that Oracle
Financials Cloud creates
automatically when
creating a new legal
entity. Legal reporting
units are required for
the purpose of tax
calculations related to a
legal entity.

2. Manage Legal Yes Define the identity- Legal Entity Configurator Oracle Financials Cloud
Reporting Unit related details of a legal product in the Financials Implementing Enterprise
Registrations reporting unit with the offering Structures and General
appropriate government Ledger guide
or legal authorities for
the purpose of claiming
and ensuring legal or
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Setup Task Name Prerequisite Task? Description Offering or Product Area For More Information
commercial rights and
responsibilities.

3. Manage Tax Yes Create and maintain tax Tax product in the Oracle Financials Cloud
Registrations registration information Financials offering Implementing Tax guide
related to a party's
transaction tax or
withholding tax obligation
with a tax authority for a
tax jurisdiction where it
conducts business.

4. Manage Intrastat No Review and maintain Supply Chain Localization Chapter on defining
Lookups lookup values, such applications core
as modes of transport, configuration in the
delivery terms, port of Oracle SCM Cloud
loading or unloading, flow Implementing Common
indicator, and son on. Features for Oracle SCM
Cloud guide

5. Manage Intrastat No Configure the Intrastat Supply Chain Localization Manage Intrastat
Country Characteristics reporting characteristics Country Characteristics:
that apply to a particular Procedure topic
country within an
economic zone, such as
the EU.

6. Manage Intrastat Rules No Configure rules for nature Supply Chain Localization Manage Intrastat Rules:
of transaction code, Procedure topic
statistical procedure
code, fiscal regime
code, supplementary
UOM rules, and attribute
validation rules, as well
as freight factor for
statistical value and
exclusion criteria.

7. Manage Intrastat No Enable Intrastat reporting Supply Chain Localization Manage Intrastat
Parameters for a particular legal Parameters: Procedure
reporting unit. topic

Manage Intrastat Country Characteristics

Manage Intrastat Country Characteristics: Explained
The European Union (EU) has developed a statistical system, known as Intrastat, to collect information directly from
enterprises about dispatches and arrivals of commodities among member countries. At the country setup level, you can
configure the data attributes that are required for reporting Intrastat transactions in a specific country.
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Each Intrastat member country in the EU has an official reporting currency and a group of commodity codes expressed in
Intrastat Common Nomenclature. The commodity codes are defined in the individual Intrastat catalogs for each member
country. Individual country characteristics define the catalog used, invoicing advice, currency and weight rounding rules, and
the methods for processing returns, kit reporting, and triangular trade transactions.
You must initiate an Intrastat declaration whenever goods cross from one country to another within the EU. However,
instead of completing a form at the borders, you submit Intrastat declarations (typically on a monthly basis). The information
that is tracked by the Intrastat system is based strictly on the actual physical movement of goods between member countries
of the EU.
Note: Intrastat information does not apply to the movement of monetary amounts or the placement of orders
between member countries.
As of 2015, there are 28 countries within the EU. Intrastat Reporting provides predefined country characteristics for the
following countries:
• Belgium
• France
• Germany
• Italy
• Netherlands
• Portugal
• Spain
• United Kingdom
Manage Intrastat Country Characteristics: Procedure

Manage Intrastat Country Characteristics is a setup task in the Manufacturing and Supply Chain Materials Management
offering. This task enables you to configure the Intrastat reporting characteristics that apply to a particular country within an
economic zone, such as the European Union (EU).
Predefined country-level characteristics for several countries are available for your use. The characteristics are based on
the current Intrastat guidelines for each member country, but you can modify these characteristics to comply with the latest
regulations. You can also define Intrastat characteristics for any other country in the EU or for a new country that joins the
EU community in the future. For a list of the currently predefined countries, see Managing Intrastat Country Characteristics:
Explained.
The following procedure is a step in Setting Up Intrastat Reporting.
To configure the attributes of an EU country, do the following:
offering.
2. On the Setup: Manufacturing and Supply Chain Materials Management page, click the Intrastat Reporting functional
area, and then click the Manage Intrastat Country Characteristics task.
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3. On the Manage Intrastat Country Characteristics page, do one of the following:
• If you want to modify a predefined EU country, click that country, and then select Edit to change the attributes for
that country. Click Save and Close .
• If you want to add a new EU country, select Create, enter the country and the attributes for that country based on
the latest legislations, and then click Save and Close.
Some of the key country characteristics are provided in the following table in alphabetic order. A section for the required
arrival and dispatch attributes follows the table.
Country Characteristic Description
Conversion Rate Type Type of conversion rate between currencies for the same period. You can use different rate types for
different business needs.

Intrastat Catalog A group of items with common characteristics in the context of Intrastat transactions.

Reference Period
The date a movement transaction occurred, either the invoice date or the shipment date. Choices
are:
• Invoice. The date the transaction is invoiced.

• Shipment. The date the transaction takes place.
By default, the reference period is Shipment.
Because tax regulations can differ among the EU countries, the interpretation of the reference period
is not consistent and varies throughout the EU. For example, France, Denmark, and the UK have
different rules for assigning the reference period.
Required Attributes A required set of attributes for arrivals and dispatches that you must report in the Intrastat report for
an individual country. For detailed information, see the Required Attributes section later in this topic.

Triangulation Method
A method for specifying how triangular trade transactions will be analyzed for the generation of
Intrastat reports of an individual country. Choices are:
• Invoice. A triangulation trade transaction is reported in the Intrastat report based on the
issue of an invoice. A record is created based on the invoice rather than the physical
movement of goods.
• Shipment. A triangulation trade transaction is reported in the Intrastat report based on the
physical movement of goods. A record is created based on the physical movement of goods
rather than the invoice.
If you anticipate transactions between three trading partners in three countries, and at least two of
these three partners are within the same economic zone, then you must specify the triangulation
method.
You can also specify who declares the transaction when the seller is the same country as the
shipper and the customer to avoid duplication of records in the Intrastat report.
For scenarios for using triangulation, see the using triangulation method examples topic.
UOM The unit of measure for the reporting weight.

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Required Attributes
The Intrastat authority of an individual country requires that a specific set of attributes be included in the Intrastat report for
both arrival and dispatch of materials.
Before selecting the required attributes, consider the following:
• What is the required set of attributes for the individual country for arrival of materials?
• What is the required set of attributes for the individual country for dispatch of materials?
The available attributes for arrival and dispatch of materials are provided in the following table. All descriptions are applicable
to both arrival and dispatch unless otherwise noted.
Required Attribute Description
Commodity description A description of the commodities arriving in the country.

Freight terms Freight terms or Incoterms applicable for the transaction.

Mode of transport Mode of transport for each transaction.

Region of destination Details of the region within the destination or receiving country where the goods will be consumed.
This attribute is applicable only to arrivals.

Country of origin Details of the dispatch country from where the goods originated.

Region of origin The details of the region within the dispatching country from where the goods are dispatched. This
attribute is applicable only to dispatches.

Nature of transaction code Details of the transaction. Nature of transaction code is published by an individual country's Intrastat
authority and can vary based on country.

Fiscal regime The fiscal regime details for the transaction. This attribute is often provided in addition to the nature
of transaction code.

Statistical procedure The statistical procedure code details for the transaction. This attribute is often provided in addition
to the nature of transaction code.

You can provide either the fiscal regime attribute or the statistical procedure attribute.

Net mass The net mass is the quantity of items multiplied by the unit weight of the item.

Invoice amount The actual invoice amount created for the transaction.

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Using Triangulation Method: Examples

You can specify how triangular trade transactions will be analyzed for the generation of Intrastat report of an individual
country.
You can report triangular trade transactions by:

• Invoice- A triangular trade transaction is reported in the Intrastat report based on the issue of an invoice. A record is
created based on the invoice and not the physical movement of goods.
• Shipment- A triangular trade transaction is reported in the Intrastat report based on the physical movement of goods.
A record is created based on the physical movement of goods and not the invoice.
You can also specify who declares the transaction when the seller is the same country as the shipper and the customer to
avoid duplication of records in the Intrastat report.
Examples of the how triangular trade transactions are reported are discussed for the following scenarios:
Shipment based triangular trade transactions

Your company based in Italy receives an order from a German company. To fulfill the order, you order goods from your
supplier in the France. The goods are delivered from the French company to the German company.
The following transactions are created as a result of this triangular trade:

• You send a sales order to your customer in Germany
• You invoice your customer in Germany
• You create a purchase order to your supplier in France
• Your supplier in France sends you an invoice
• France creates a shipment to Germany, fulfilling the sales order
If you have selected Shipment as your triangulation method, then no record is generated for inclusion in the Intrastat report
since no physical movement of goods occurred in Italy. However, Germany is required to declare the arrival of goods from
France.
Invoice based triangular trade transactions

Considering the example of the triangular trade transaction scenario given above, if you have selected Invoice as your
triangulation method, then:
• A sales order or dispatch record is generated from Italy to Germany with the following information:
◦ Movement Amount: zero (no movement of goods took place between these countries)
◦ Movement Quantity: zero (no movement of goods took place between these countries)
◦ Extended Value: calculated as the invoice quantity multiplied by invoice price
◦ Dispatch Country: Italy
◦ Destination Country: Germany
◦ Triangulation Country: France
Note: Germany is required to declare the arrival of goods from France.
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• A purchase order or arrival record is generated in Italy for France with the following information:
◦ Movement Amount: calculated as the receipt quantity multiplied by unit price
◦ Movement Quantity: zero (no movement of goods took place between these countries
◦ Extended Value: is calculated as the receipt quantity multiplied by unit price
◦ Dispatch Country: France
◦ Destination Country: Germany
Note: Germany is required to declare the arrival of goods from France.
Manage Intrastat Rules

Manage Intrastat Rules: Procedure
Manage Intrastat Rules is a setup task in the Manufacturing and Supply Chain Materials Management offering. This task
enables you to configure rules for nature of transaction code, statistical procedure code, fiscal regime code, freight factor for
statistical value, exclusion criteria, supplementary UOM, and validation rules.
You use Intrastat rules to configure Intrastat reporting as per the requirement of an individual country. These rules enable you
to define the guidelines and validations that are applicable for creating the Intrastat declaration. You can share these rules
across legal reporting units or keep them specific to just one legal reporting unit.
To configure Intrastat rules, do the following:

offering.
2. On the Setup: Manufacturing and Supply Chain Materials Management page, click the Intrastat Reporting functional
area, and then click Manage Intrastat Rules. Note that you might need to select Show All Tasks for this task to
appear.
3. On the Manage Intrastat Rules page, do one of the following:
• If you want to modify an existing rule, click the rule set for which you want to make changes, select Edit, and then
make the appropriate changes.
• If you want to add a new rule, select Create, and then enter the attributes.
• If you want to delete a rule, select it, and then select Delete.
The following table provides descriptions of the predefined Intrastat rule types. You can reconfigure these rules or add new
ones.
Intrastat Rule Type Description
Validation
Validation rules enable you to define the criteria for validating the collected and manually entered
Intrastat transactions. You can report only those transactions that are validated successfully as per
the specified criteria in the Intrastat declaration. You define validation rules for a combination of
source transaction and Intrastat reporting attribute.
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Validation rules provide the:
• Required attribute to be reported for a particular source transaction.

• Value set that you must use for validating the values of the specific attributes.
If an attribute is defined as required for a source transaction, then an exception is logged if the
collected transaction does not have that attribute.
Supplementary UOM Supplementary UOM rules enable you to define the requirement for reporting Intrastat transactions
in a supplementary unit of measure other than the weight UOM. The movement of goods or specific
items is reported in an UOM other than the weight UOM. For example, use this rule type to specify
that movement of an oil commodity must be reported in Barrels.

Supplementary UOM rules are defined for a category code under the Intrastat catalog. And that
category code, in turn, defines the UOM in which the Intrastat transaction is reported. Whenever
there is an item in an Intrastat transaction that belongs to the specific category code, then the
supplementary UOM rule is applied. The quantity of the item is thereby derived in supplementary
UOM based on the UOM conversion factor.

Nature of transaction code Nature of transaction code is used to define the category of the Intrastat transaction. The nature of
transaction codes is published by the Intrastat authority of an individual country, and therefore differ
based on country. The codes can be either in single digit or double digits.

The nature of transaction code rules enable you to define the nature of transaction code applicable
based on source transaction, inventory organization, item, and trading partner attributes of the base
transaction. The rules defined at a specific or granular level are given priority over rules defined at
a higher level. For example, given there are two rules; one for a source transaction and another for
a source transaction and item. In this case, the rule for source transaction and item is given higher
priority wherever applicable.

Fiscal regime code Fiscal regime code is used in some countries in addition to nature of transaction code to categorize
transactions. Fiscal regime rules define the fiscal regime code applicable based on source
transaction, inventory organization, item, and trading partner attributes of the base transaction.
Similar to the nature of transaction code rules, the fiscal regime code rules defined at a specific or
granular level are given priority over rules defined at a higher level.

You can only define either a fiscal regime code or a statistical procedure code for a particular
transaction.

Statistical procedure code Statistical procedure code is used in some countries of the European Union (EU) in addition to
nature of transaction code to categorize transactions. Statistical procedure code enables you
to define the statistical code applicable for deriving the statistical procedure of the collected
transaction. This is based on source transaction, inventory organization, item, and trading partner
attributes of the base transaction.

You can only define either a statistical procedure code or a fiscal regime code for a particular
transaction.

Statistical value calculation Statistical value calculation rules enable you to specify the freight factor that is included in the
statistical value. Freight factor is defined in percentage and indicates the component of freight
charge to be included in the statistical value.

You can define this rule based on country, organization, item, freight terms, and mode of transport
of the base transaction. You can then specify the freight factor, which is a percentage of the freight
charge. This freight factor is included while calculating the statistical value. For example, when you
want to calculate the freight charge only up to a country's border, you specify the statistical value
calculation by defining a freight factor that accounts for the freight charge only up to that country's
border.
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In cases where freight charges are applicable for shipments across two countries within the EU, you
are required to only include the freight charge for moving the goods from the establishment to the
border of that establishment's country.

Exclusion Exclusion rules enable you to define the criteria to exclude specific goods movement transactions
from collections. You can exclude a specific item that you do not want to be reported in the Intrastat
collections by defining the exclusion criteria in the rule. For example, you don't require service items
to be included in the collection. You can define this rule based on source transaction, organization,
category code, item, and trading partner of the base transaction. You can specify the exclusion
criterion that includes the source transaction, category code, and item details of the transaction
containing the service items. This ensures that the specified items are not included in the collections.

Manage Intrastat Parameters

Manage Intrastat Parameters: Procedure
Manage Intrastat Parameters is a setup task in the Manufacturing and Supply Chain Materials Management offering. You can
enable Intrastat reporting for a particular legal entity or legal reporting unit and define the parameters for gathering data on
Intrastat transactions.
You can define Intrastat parameters only for the legal reporting units for which you have defined country characteristics. If
you define Intrastat parameters for a secondary legal reporting unit, then you must associate the secondary legal reporting
unit with an inventory organization. You enter Intrastat parameters for each combination of legal entity, legal reporting unit,
economic zone, and country. These parameters define the details of the Intrastat authority, location, reference, and address
to which declarations must be submitted for each member nation. Several predefined legal reporting units are available for
your use.
To configure Intrastat parameters, do the following:

offering.
2. On the Setup: Manufacturing and Supply Chain Materials Management page, click the Manage Intrastat Parameters
task.
3. On the Manage Intrastat Parameters page, do one of the following:
• If you want to modify attributes for an existing legal reporting unit, click the legal reporting unit for which you want to
make changes, select Edit, and then make the appropriate changes.
• If you want to add a new legal reporting unit, select Create, and then enter the attributes. Click Save and Close.
Some of the key Intrastat parameters are provided in the following table in alphabetic order.
Branch Reference Name of the legal entity branch. This reference is printed on the European Union Intrastat
Declaration.

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Economic Zone Economic zones where you conduct business, such as the European Economic Community (EEC)
and the North American Free Trade Association (NAFTA). The economic zones for Oracle Fusion
Intrastat Reporting are applicable to the EEC.

Exclusion Rules Optional rule that excludes specific Intrastat transactions from collections.

Fiscal Regime Rules Fiscal regime details of a transaction. This parameter is mandatory when arrival and dispatch
country characteristics are selected.

Nature of Transaction Code Rules Nature of transaction code details of a transaction. This parameter is mandatory when arrival and
dispatch country characteristics are selected. Nature of transaction codes are published by an
individual country's Intrastat authority and can vary based on country.

Reporting Calendar Calendar for reporting Intrastat transactions. The calendar you use for Intrastat reporting purposes is
independent of the accounting calendar for your organization.

Statistical Value Calculation Rules Freight factor that is included in the statistical value. (Freight factor is defined in percentage and
indicates the component of freight charge that is included in the statistical value.)

Supplementary UOM Rules Rules governing the supplementary unit of measure as applicable to certain classes of products.

Tax Office Code Tax office code of the tax office to which your legal entity reports.

Tax Office Name Name of the tax office to which your legal entity reports.

Tax Office Location Location of the tax office to which your legal entity reports.

Validation Rules Rules that define the criteria for validating the collected and manually entered Intrastat transactions.

VAT Registration VAT registration number that you are registered with to pay VAT. VAT is a value-added tax or goods
and services tax (GST) that is considered a consumption tax.

For more information about legal reporting units, VAT, and taxes, see the Financials implementation guides.
FAQs for Setting Up Intrastat Reporting

What's Intrastat?
European Union (EU). The EU developed the Intrastat system to collect information directly from enterprises about dispatches
and arrivals of commodities among member countries. The information that is tracked by the Intrastat system is based strictly
on the actual physical movement of goods between member countries of the EU. Note that information that is tracked by
Intrastat does not apply to the movement of monetary amounts or the placement of orders between member countries.
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Can I define Intrastat parameters for any legal reporting unit?

No. You cannot define Intrastat parameters for every legal reporting unit. You can only define Intrastat parameters for the legal
reporting units where the country characteristics are defined for the country of the legal reporting unit. If you define Intrastat
parameters for a secondary legal reporting unit, then you must associate the secondary legal reporting unit with an inventory
organization.
Can I configure Intrastat according to individual country guidelines?

Yes. You can use Intrastat rules to configure Intrastat reporting as per the guidelines of an individual country of the European
Union (EU). You specify the validations that are applicable for creating the Intrastat declaration. Predefined country-level
characteristics for several countries are provided for your use. The characteristics are based on the current Intrastat
guidelines for each member country, but you can modify these characteristics to comply with the latest regulations.
Can I identify exceptions in the Intrastat collected transactions?

Yes. You can use an Exception Validation rule to identify exceptions in the collected transactions. The exception validation
process uses validation rules to identify if there are any exceptions in the transactions that might cause noncompliance issues
during submission of declarations.
Can I use the supplementary UOM Intrastat reporting requirements

for specific item categories?
Yes. You use supplementary UOM rules to define Intrastat reporting requirements for certain commodity codes or item
categories in alternate UOMs other than the weight UOM. For example, you might be required to report liquids in liters.
Can I use the statistical value calculation for including freight values in
the statistical value for Intrastat reporting?
Yes. You can use statistical value calculation to represent an approximate freight factor for a set of qualifiers, such as mode
of transport, item category, and so on. For example, some countries require that you include the freight cost incurred within
the country of reporting in the statistical value. In this case, you can use the statistical value calculation to specify the freight
values in your Intrastat report.
How often must I generate Intrastat reports?

A detailed Intrastat declaration is typically required on a monthly basis.
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What's the deadline for submission of Intrastat declarations?

The deadline for submission of Intrastat declarations is country-specific, however, timing is typically the 15th of every month
following the referenced month.
How can I print or export Intrastat reports?

You can print or export Intrastat reports in the following formats: HTML, PDF, RTF, Excel (MHTML), and Data. If you export
your reports to external software, you must export comma-separated values (CSV) files.
Can I include information about the movement of monetary amounts

or placement of orders in the Intrastat declaration?
No. You can only provide information in the Intrastat declaration that applies to the physical movement of goods between
member countries of the European Union (EU).
What's the prerequisite for collecting and validating Intrastat

transactions through the Oracle Enterprise Scheduler?
The corresponding arrival and dispatch transactions must have completed before collecting the Intrastat transactions.
What happens if I validate an intrastat transaction?

When a transaction is selected for validation:
1. Checks are performed on it based on the rules applicable for the legal reporting unit.
2. One of the following validation statuses is set:
◦ Not validated: The transaction hasn't yet been validated.
◦ Error: The transaction contains exceptions indicated by the number in the Exceptions column.
◦ Validated: The transaction is validated.
Note: Only validated transactions are reported in the declaration.
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Implementing Manufacturing and Supply Chain Materials Implementing Manufacturing
Management
13 Implementing Manufacturing
Setting Up Manufacturing: Procedure

To set up Oracle Fusion Manufacturing, you perform the setup tasks specified in the Manufacturing and Supply Chain
Materials Management offering on the Setup and Maintenance work area.
Manufacturing is an optional functional area in the Manufacturing and Supply Chain Materials Management Offering, and
must be selected for implementing Oracle Fusion Manufacturing. The Manufacturing functional area consists of the following
hierarchy:
• Manufacturing Master Data

• Structures
This topic lists the manufacturing setup tasks under the following three categories:
• Manufacturing Master Data Functional Area

• Structures Functional Area
• Common Setup Tasks
Manufacturing Master Data Functional Area

There are some tasks that may be included in the Manufacturing Master Data functional area, and if the tasks are required
or optional. For more information about adding tasks to the Manufacturing Master Data functional area, see Implementing
Manufacturing chapter of the Implementing Manufacturing and Supply Chain Materials Management guide.
The following table describes some tasks in the Manufacturing Master Data functional area with their descriptions and
whether the tasks are required or optional:
Task Required or Optional Description
Manage Plant Parameters Required Configure parameters at a plant level that

are relevant to manufacturing setup, work
definition, and work execution.

Manage Production Lookups Optional Create and maintain lookups that are used
in manufacturing setup, work definition, and
work execution.

Manage Work Areas Required Create and maintain work areas to represent
the specific regions in the plant where work
activities are executed.

Manage Work Centers Required Create and maintain work centers to

represent the grouping of resources where
work is performed and is composed of
resources having similar capabilities.

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Manage Production Resources Optional Create and maintain resources to model the
labor or equipment and to track their usages
during production execution.

Manage Manufacturing Plant Data Access for Required Manage manufacturing plant data access for
Users user provisioned roles.

Note: Although you are required

to provide data access to the
manufacturing plant, you can follow the
common procedure to do so.

The setup tasks specified in the Manufacturing Master Data functional area that do not require specific setup for
manufacturing are listed under the Common Tasks section.
Structures Functional Area

None of the setup tasks specified in the Structures functional area requires any specific setup for manufacturing. Therefore,
they are listed under the Common Tasks section.
Common Tasks
Some tasks are included in the Manufacturing Master Data or Structures functional area, but do not require specific setup for
manufacturing:
The following table lists the tasks in the Manufacturing Master Data functional area which require no specific setup:
Manage Manufacturing Plant Profiles Required Review and maintain profile values for
manufacturing facilities.

Manage Production Value Sets Optional Create and maintain production value sets.

Manage Work Setup Descriptive Flexfields Optional Define validation and display properties of
the descriptive flexfields for work setup.
Descriptive flexfields are used to add user-
defined attributes to entities.

Manage Work Execution Descriptive Optional Define validation and display properties of
Flexfields the descriptive flexfields for work execution.
Descriptive flexfields are used to add user-
defined attributes to entities.

Manage Enterprise Scheduler Jobs for Optional Manage Oracle Enterprise Scheduler
Manufacturing Applications jobs and their list of value sources for the
Manufacturing applications.

Define Basic Product Structures Optional Create and edit structures for the items.
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Manage Structure Header Descriptive Optional Create and edit item structure type
Flexfields descriptive flexfield attributes.

Manage Item Structure Type Details Optional Create and edit structure type details.

Manage Structure Component Descriptive Optional Create and edit item structure component
Flexfields descriptive flexfield attributes.

These tasks are common to any Oracle Cloud application. Manufacturing does not require any specific setup for them, so you
can follow the instructions that you use to perform them for any Oracle application. For details about how to perform them,
see the Oracle Applications Cloud: Using Functional Setup Manager guide.
Setting Up Manufacturing Plant: Explained

The manufacturing plant parameters are analogous to system parameters and they enable you to specify various functionality
of a manufacturing plant. Before setting up the plant parameters, you must set the organization as the manufacturing plant.
Setting a Manufacturing Plant

A manufacturing plant is a type of inventory organization and can be further categorized into: in-house manufacturing plant
and contract manufacturing plant.
To set an organization as a manufacturing plant, perform the following steps:
1. In the Manage Inventory Organizations page, select an existing organization or create a new one from the Search
Results region. Then, click the Manage Inventory Organization Parameters button to edit the organization
settings.
2. In the Manage Inventory Organization Parameters page,
◦ Select the Organization is a manufacturing plant check box to set an organization as in-house
manufacturing plant.
◦ Select the Organization represents a contract manufacturer check box to set an organization as contract
manufacturing organization.
Note: If the organization is set as a contract manufacturing plant, you must also provide the supplier and
supplier site information for the plant.
Setting the Manufacturing Plant Parameters

Once an organization is set as manufacturing plant, you can set the parameters that determine the various functionalities of
the plant.
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Setting Up Plant Parameters: Critical Choices

This topic discusses the manufacturing plant parameters in details. It provides information about the parameters, their
acceptable values, and the default values if any.
Plant Details Parameters

The following table discusses the plant details parameter:
Parameters Required Description
Manufacturing Calendar Yes Refers to the schedule or calendar to be

used in the manufacturing plant.

Note: Changing the Manufacturing

calendar or deleting the calendar in the
Setup and Maintenance work area can
lead to data corruption and unwanted
consequences in the work order
scheduling and lead time calculations.

Material Parameters
The following table discusses the material parameters:
Default Supply Subinventory Yes For work definitions:

Specifies the default supply subinventory
for work definition operation item if there is
no supply subinventory defined for the work
center or item master.

For work orders:

Specifies the supply subinventory to be used
when backflushing components that do not
have default values defined at the work order
operation item or the inventory item level.

For orderless transactions:

Specifies the supply subinventory to be used
when backflushing components that do
not have default values defined at the work
definition operation item or the inventory item
level.

Default Completion Subinventory Yes For work orders:

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Specifies the completion subinventory to be
used for storing the completed product if a
default is not defined at the work order level.


Specifies the completion subinventory to be
used for storing the completed product if a
default is not defined at the work definition
level.

Default Supply Locator No For work definitions:

Specifies the default supply locator for work
definition operation item if there is no supply
locator defined for the work center or item
master.

For work orders:

Specifies the supply locator to be used when
backflushing components that do not have
default values defined at the work order


Specifies the supply locator to be used when
backflushing components that do not have
default values defined at the work definition

Default Completion Locator No For work orders:

Specifies the completion locator to be used
for storing the completed product if a default
is not defined at the work order level.


Specifies the completion locator to be used
for storing the completed product if a default
is not defined at the work definition level.

Default Pick Slip Grouping Rule No For work orders:

Specifies the grouping rules that are
defaulted from Inventory and are used as the
basis to group the pick slips for work order
material picking.

Print pick slips No For work orders:

Specifies whether or not to print the pick
slips that are generated when the Pick
Materials for work Orders scheduled process
is run and movement request is created
to move materials from the warehouse to
either directly issue to a work order or to a
destination subinventory.
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Include pull components for pick release No For work orders:

Specifies whether or not to allow materials
with the supply type operation pull and
assembly pull to be considered for the pick
release activity.

Issue push components on pick release No For work orders:

Specifies that when a pick slip is confirmed
for the work order materials the materials
with supply type push will be directly issued
to the work order.

Work Definition Parameters

The following table discusses the work definition parameter:
Starting Operation Sequence No Specifies the default sequence number for

the first operation in a work definition and
work order.

The value must be a positive integer.

Operation Sequence Increment No Specifies the incremental value by which the

sequence of the operation is to be increased
in the work definition and work order.


Phantom Operation Inheritance No

Specifies whether the phantom components
and resources are inherited at the same
operation that the phantom is assigned in the
parent item work definition.
The valid values are:
• Material Only: On selecting this value,

when creating the work order, all
of the phantom components are
inherited at the same operation that
the phantom is assigned in the parent
item work definition.
• Material and Resources: On selecting
this value, when creating the work
order, all of the phantom components
and resources are inherited at the
same operation that the phantom
is assigned in the parent item work
definition.
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The default value is Material Only.
Work Execution Parameters

The following table discusses the work execution parameter:
Work Order Prefix No Specifies the prefix to use when

autogenerating the work order names when
creating the work orders.

A maximum length of 30 characters is
allowed.

Work Order Starting Number Yes Specifies the initial number to pass in to the
document sequence which is created when a
record is saved.

The value must be a positive integer greater
than zero. The default value is 1000.

This field becomes read only after the work
order document sequence for the plant is
created.

Default Overcompletion Tolerance No Specifies the percentage of assemblies that

Percentage you can over complete on work orders if not
defined at the work order level.

The value must be between 1 and 100. The
default value is Null.

Default Transaction Mode No

Specifies whether the materials and
resources are defaulted from the work order
operation when reporting the material or
resource transactions.
• All: On selecting this value, all the

components and resources that
are associated to the work order
operation are defaulted and you can
transact against them.
• Entered: On selecting this value,
the components and resources
that are associated to the work
order operation are not defaulted
and you are required to enter the
specific component or the resource to
transact.
The default value is All.
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Default Transaction Quantity No

Specifies whether the transaction quantity
is to be defaulted as that of the required
quantity during the material or resource
transactions in a work order. However,
you are allowed to make changes to the
defaulted quantity.
• None: On selecting this value, the

transaction quantity is not defaulted as
that of the required quantity during the
material or resource transactions in a
work order.
• Material: On selecting this value, the
transaction quantity is defaulted as
material transactions in a work order.
• Resources: On selecting this value,
the transaction quantity is defaulted as
resource transactions in a work order.
• Both: On selecting this value, the
transaction quantity is defaulted as
material and resource transactions in
a work order.
The default value is Both.
Allow Quantity Changes During Backflush No

Specifies whether changing the transaction
quantity is allowed or not.
• None: On selecting this value, during

backflushing, you cannot modify
the transaction quantity of the pull
components required in an operation
and cannot report the consumption of
the ad hoc material. During automatic
charging, you cannot modify the
charge quantity of the automatic
resources required in an operation
and cannot report the usage of the ad
hoc resources.
• Material: On selecting this value,
during backflushing, you can modify
the transaction quantity of the pull
components required in an operation
and can report the consumption of
charging, you cannot modify the
charge quantity of the automatic
resources required in an operation
and cannot report the usage of the ad
hoc resources.
• Resources: On selecting this value,
during backflushing, you cannot
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modify the transaction quantity of
the pull components required in an
operation and cannot report the
consumption of the ad hoc material.
During automatic charging, you can
modify the charge quantity of the
automatic resources required in an
operation and can report the usage of
the ad hoc resources.
• Both: On selecting this value, during
backflushing, you can modify the
transaction quantity of the pull
components required at an operation
and can report the consumption of
charging, you can modify the charge
quantity of the automatic resources
required at an operation and can
report usage of ad hoc resources.
The default value is None.
Default Work Order Traveler Template No Specifies the name of the template to be
used for printing the work order traveler or
the labels for the plant.

You may use your own BI publisher
templates by specifying the file path and file
name of your templates in this parameter.
If the parameter is left blank, the default
template defined in the BI publisher report
definition settings is used for all the plants.

A maximum string length of 400 characters is
allowed.

Default Label Template No Specifies the name of the template to be

used for printing the work order traveler or
the labels for the plant.

You may use your own BI publisher
templates by specifying the file path and file
name of your templates in this parameter.
If the parameter is left blank, the default
template defined in the BI publisher report
definition settings is used for all the plants.

A maximum string length of 400 characters is
allowed.

Print product labels using external No Indicates whether product labels are printed
applications using external printing applications. When
selected, the native printing functionality into
PDF is suppressed and a print product label
business event is generated. External printing
applications can listen to the business event
to generate labels externally.

Include component yield in material No Indicates whether the component yield

requirements is factored into the work order material
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requirements and the component quantities
during the material transactions.

You deselect this parameter to avoid
rounding the decimal quantities. The
rounding can inflate transaction quantities
causing inaccurate representation of
requirements.

Automatically associate serial numbers during No Indicates whether the serial numbers are to
work order import be automatically generated and associated
when importing a work order.

Capture Level for Serialization-Enabled No

Operations Level at which start or pause events are
captured for serialization-enabled operations.
The valid values are as follows:
• Operation: When you select this value,

start or pause events are captured
for serialization-enabled operations
at an operation level. This is a default
option.
• Item Serial: When you select this
value, start or pause events are
captured at individual serial units for
serialization-enabled operations.
Trigger Purchase Requisition No

Timing of creation of the purchase requisition
for outside processing. The valid values are
as follows:
• At Work Order Release: Purchase

Requisition is created at the time of
releasing a work order.
• At Operation: Purchase Requisition
is created at the time of completing
quantities at an operation prior to a
Supplier Operation. This is the default
value.
Material Reporting Level for Serialization- No

Enabled Operations Level at which operators report materials for
serialization-enabled operations. The valid
values are as follows:
• Operation: When you select this value,

material reporting would be enabled
only at the operation level. This is a
default option.
• Item Serial: When you select this
value, material reporting would be
enabled at individual serial units for
serialization-enabled operations.
Lot Selection During Backflush No

Specifies whether lots should be manually
entered or defaulted during backflush. This
is applicable for both Report Operation
Transactions (Complete with Details) as well
as Report Orderless Completion user flows.
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• Manual: Lots are not defaulted and

need to be manually entered. This is
the default setting.
• Lot FIFO: Lots are defaulted using the
receipt date or first in first out (FIFO)
basis.
• Lot FEFO: Lots are defaulted using the
expiration date or first expiration first
out (FEFO) basis.
Setting Up Lookups for Manufacturing: Explained

Lookups in applications are used to represent a set of codes and their translated meanings. For instruction on setting up
lookups that are common to any Oracle application, you can refer the Oracle Applications Cloud: Using Functional Setup
Manager guide.
In addition to the common lookups, Oracle Fusion Manufacturing uses some specific lookups.
The following table lists the lookups specific to Oracle Fusion Manufacturing and descriptions of the lookup codes which you
can populate accordingly:
Lookup Name Lookup Code Description
Resource Class ORA_ WIS_ RESOURCE_ CLASS Enables you to group resources into resource
group for the planning activities.

Work Center Resource Group ORA_ WIS_ WC_ RESOURCE_ GROUP Enables you to group resources for the work
center planning activities.

Work Order Operation Transaction Reason ORA_ WIE_ REASON_CODE Captures the reason codes for scrap and
Codes reject transactions.

Work Order Sub Type ORA_ WIE_ WO_SUB_TYPE Captures the work order subtype that
describes the specific nature of work being
performed. The predefined values are
Standard Production, Prototype, Repair, Pilot
Lot, and Test Lot. You can add additional
lookup values as needed.

Work Definition Operation Resource Activity ORA_ WIS_ RESOURCE_ ACTIVITY Captures the activity name of the work
definition operation resource. The predefined
values are Setup, Run, and Tear Down. You
can add additional lookup values as needed.

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Manage Work Areas: Explained

A work area is the specific region in a manufacturing plant where the production activities are executed. In other words, a
work area identifies a physical, geographical or logical grouping of work centers.
At least one work area must be defined for a manufacturing plant. However, a plant can have one or more work areas defined
within it. A work area consists of one or more work centers within it. The Production Operators can report material, resource,
and operation transactions performed at work centers that belong to a specific work area.
The Manage Work Areas page in the Work Definition work area serves as a starting point to create, edit, and delete the
work areas. However, based on your security privileges, you may have to manually add the Manage Work Areas task in the
following manner:
then click Setup.
3. On the Setup: Manufacturing and Supply Chain Materials Management page, click the Manufacturing Master Data
functional area, and then click the Manage Work Areas task.
Creating, Editing, and Deleting a Work Area

You create a work area by providing a unique name and code for the work area.
A work area is deactivated or reactivated by updating the Inactive On field. When a work area is deactivated, it is not available
for further use until it is reactivated.
You can delete or deactivate a work area only if no work center is associated with it.
Note: You can query for a work area using a REST API.
Related Topics
• Manufacturing Plant: Overview
Manage Work Centers: Explained

Work centers are specific production units that consist of people or equipment with similar capabilities. Each work center is
associated with a valid work area and can be used for capacity requirement planning and detailed scheduling.
The Manage Work Centers page in the Work Definition work area serves as a starting point to perform the following
tasks:
• You can create, edit, and delete work centers.
• You can add resources to a work center and allocate resources to different shifts.
• You can view and manage exceptions associated to the resources.
However, based on your security privileges, you may have to manually add the Manage Work Centers task in the following
manner:
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click Setup.
3. On the Setup: Manufacturing and Supply Chain Materials page, click the Manufacturing Master Data functional area,
and then click the Manage work Centers task.
Creating, Editing, and Deleting a Work Center

You create a work center by providing a unique name and code for the work center, and a valid work area to which the work
center is associated.
A work center is deactivated or reactivated by updating the Inactive On field.
You cannot delete a work center if:
• There is any resource associated with the work center.

• The work center is being referenced in work definition operation.
• The work center is being referenced in work order operation.
Note: You can query for a work center using a REST API.
Adding Resources to a Work Center and Allocating Resources to a Shift

After creating a work center, you can add resources to it and then allocate shift hours to each resource.
The following table lists all the fields on the Manage Work Centers page and the descriptions of those fields to help you
choose the required value for each field.
Field Description
Resource The unique identifier of the resource. This is a required field.

Inactive On The date on which the resource becomes inactive.

Default Units Available Number of resource units available in a work center. This is a required field.

Available 24 Hours Indicates whether a resource is available 24 hours a day. A resource that is not available 24 hours is
available only during the shifts assigned to it.

Check Capable To Promise Indicates whether the Global Order Promising engine considers the capacity of this resource during
order promising.

Utilization The percentage of the resource time available for the task. This is a required field.

Efficiency The percentage of the time a resource takes to complete a task. This is a required field.

Utilization and Efficiency Percentages:
The utilization and efficiency percentages are by default set to 100 percent. When these percentages are set to less than
100, they extend the scheduled duration of the resource during work order scheduling. For example, if 2 hours of work is
required to be done using resource LATHE1 starting from 9 AM on a specific work order, and if its efficiency is 50 percent,
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and utilization is 50 percent, then the scheduler will determine the end time for this resource as 5 PM. This is calculated as 2/
(0.5*0.5) = 8 hours.( the efficiency percentage of the resource and the utilization percentage of the resource is multiplied to
get a value. Then the number of hours required to be done by the resource is divided by the derived value to determine the
number of hours from the start time of a resource.)
Resource Allocation:
A resource is available in shifts if the Available 24 Hours field is not selected. When a shift-based resource is associated to
a work center, the default units of the resource are automatically assigned to all the shifts of the plant. You can update the
availability of resource units across the shifts as required.
For example, consider that you have defined two 8 hour shift for the work center WC1: Day Shift and Night Shift. You
associate two units each of four resources R1, R2, R3, and R4 to the work center WC1. The following table shows the
various possibilities of associating shifts to resources in a work center and the ways to implement the solutions:
Scenario Implementation
You want the resource R1 available for

24 hours a day. Consideration: You have not associated the resource R1 to the work center WC1 yet.

Solution: Select the Available 24 Hours check box when associating the resource R1 to the work
center WC1. Now, the two units of resource R1 are available 24 hours a day and you cannot assign
any shift for it.
You want two units of the resource R2

available for the Day Shift only. Consideration: You have already associated the resource R2 to work center WC1 with Available 24
Hours check box deselected.
Solution: In the Resource Availability region, in the Day Shift column, enter 2 against the
resource R2. Now, the two units of resource R2 is available for Day Shift. For the Night Shift, the
resource R2 has zero or Null value.
You want one unit of the resource R3

available for Day Shift and one unit of Consideration: You have already associated the resource R3 to work center WC1 with Available 24
resource R3 available for Night Shift. Hours check box deselected.

resource R3 and in the Night Shift column, enter 1 against the resource R3. Now, one unit of
resource R3 is available for the Day Shift and one unit of resource R3 is available for the Night Shift.
You want all the units of resource R4

available for both the Day Shift and Consideration: You have already associated the resource R4 to work center WC1 with Available 24
Night Shift. Hours check box deselected.

resource R4 and in the Night Shift column, enter 2 against the resource R4. Now, two units of
resource R4 is available for both the Day Shift and the Night Shift.
Viewing and Managing Resource Exceptions

You use the work center resource calendar to view and manage the exceptions related to the resources. In case of a conflict,
the exceptions granted in the work center resource calendar override the exceptions granted in production calendar.
Related Topics
• Manage Work Center Resource Calendars: Explained
• Create a Resource Exception: Worked Example
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Manage Resources: Explained

The resources are the labors, equipment, and tools allocated to a work center. Resources can be categorized into two types:
Labor and Equipment.
The Manage Resources page in the Work Definition work area serves as a starting point to search, create, edit, and
delete the resources.
However, based on your security privileges, you can also access the Manage Resources task in the following manner:
2. On the Setup and Maintenance page, Click the Manufacturing and Supply Chain Materials Management offering,
and click Setup.
3. On the Setup: Manufacturing and Supply Chain Materials page, click the Manufacturing Master Data functional area,
and then click the Manage Resources task.
Creating, Editing, and Deleting Resources

You must create a resource with unique name and code. Additionally, you must define the resource type and usage UOM of
the resource at the time of creation.
You cannot change the usage UOM of a resource once associated with a work center. You cannot edit the resource type
when a resource instance is associated. However, you can edit all other resource attributes at any time. You can schedule a
resource in a work definition and work orders only if the usage UOM belongs to the UOM class as defined in the profile SCM
Common: Default Service Duration class.
Note: The usage UOM field indicates the unit of measure for the planned and actual usage of a resource.
A resource is deactivated or reactivated by updating the Inactive On field. When a resource is deactivated, it is not available
for further use until reactivated. You can delete a resource only if the resource is not assigned to any work center.
Note: You can query for a production resource using a REST API.
Resource Instances
Resource instances are granular representations of a resource in the Manufacturing application. One or more resource
instances can be associated to a resource. You can identify a resource by a unique code known as the identifier, and a
name.
You can also optionally assign a primary work center to the resource instance to identify the department or location that the
resource instance primarily works in.
Tip: Assigning a primary work center to a resource instance helps in quick assignment of the resource instance
in work orders and work execution transactions.
You can deactivate or reactivate a resource instance by updating the Inactive On field. When a resource instance is
deactivated, it is not available for further use until reactivated. You can delete a resource instance only if it is not used in work
execution.
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Associating Labor Resource Instances

A labor resource instance represents the names of actual people working in the manufacturing shop floor. A labor resource
instance can be optionally associated to a person record available in the Oracle Trading Community Architecture. Such
associations are unique within a plant.
Note: Oracle Trading Community Architecture represents a repository of person and organization parties
identified through their party usages. Manufacturing allows the subset of Oracle Trading Community Architecture
person party records to assign person type resource instances.
Person types in Oracle Trading Community Architecture that can be associated to a resource instance and can be any of the
following:
• Employee
• Contingent Worker
• Partner Contact
You can define persons of types Employees or Contingent Workers in Oracle Human Capital Management (HCM) and are
automatically propagated to the Oracle Trading Community Architecture through the HCM- Oracle Trading Community
Architecture auto-sync process.
You can set up persons of type Partner Contact in the Oracle CRM application, which are automatically available in the Oracle
Trading Community Architecture.
Associating Equipment Resource Instances

An equipment resource instance represents the names of actual machines being used in the manufacturing shop floor. An
equipment resource instance can optionally associated to an Asset Number defined in Maintenance cloud. Such associations
are unique within a plant.
Assets must be defined in a location corresponding to the plant and a location type work center in order to be eligible for
association to the equipment resource instance.
Related Topics
Manufacturing and Oracle Social Networking: Explained

This section explains the details for Oracle Fusion Manufacturing business objects that can be enabled in Oracle Social
Network to collaborate as social objects.
In the Setup and Maintenance work area, use the Manage Oracle Social Network Objects for Supply Chain Management task
in the Manufacturing and Supply Chain Materials Management offering to configure the manufacturing business objects so
that they are enabled for Oracle Social Network integration.
The following table lists the attribute details for Common Work Setup module and Work Definition business object:
Attribute Attribute Details
Item Work definition item, as set up in the item organization
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Description Item description

Structure Name Item structure name

Name Work definition name

Version Work definition version

Start Date Work definition version start date

End Date Work definition version end date

Production Priority Production priority of the work definition

The following table lists the attribute details for Common Work Execution module and Work Order business object:
Work Order Work order number

Start Date Work order start date

Completion Date Scheduled completion date of the work order

Actual Completion Date Actual completion date of the work order

Status Work order status

Item Work order assembly item number

Description Assembly item description

Quantity work order quantity

UOM Unit of measure of work order quantity

Customer Customer name, as applicable, for the work order

The following table lists the attribute details for Common Work Execution module and Exception business object:
Exception Number Unique identifier of the production exception
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Reported By User reporting the production exception

Reported On Date on which the production exception was reported

Expected Resolution Date Expected date for the production exception to be resolved

Expected Downtime in Minutes Expected time duration when the production activity is stopped or likely to be stopped as a result of
the reported exception

Description User description of the production exception

Exception Type User determined classification of the production exception

Resource Resource for which production exception is reported

Component Component for which the production exception is reported

Work Center Work center for which the production exception is reported

Work Area Work area for which the production exception is reported

Exception Status Status of the production exception, either Open or Closed

Severity
User determined severity of the production exception and the following severity values are
predefined:
• Critical
• High
• Medium
• Low
You can share all the attributes for a given business object, or selectively enable the individual attributes, so that only a few
selected attributes are available on the social object wall.
Note: For more information about how to share a business object, refer to the Social Network chapter in the
Oracle Applications Cloud Using Common Features guide.
Note: For manufacturing scenarios involving external users such as contract manufacturers, refer to the
Collaborating Through Social Networking for Outside Users chapter in the Oracle Cloud Using Oracle Social
Network guide.
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Configuring Human Tasks for Manufacturing: Explained

This topic explains how you set up the human task associated with the Oracle Fusion Manufacturing business objects.
You must use the Manage Task Configurations for Supply Chain Management task from the Setup and Maintenance
work area to configure the human tasks:
The following table lists the human tasks you must configure:
Human Task Name Description
QualityIssueHumanTask Human task to notify users for production exceptions.

StructureChangeFYIHumanTask FYI Human Task Flow to notify users of item structure changes completed in the Product
Information Management work area.

Note: For more information about configuring human tasks, refer to the chapter, Configuring Human Tasks
of the Developing Business Processes with Oracle Business Process Management Studio guide. This guide
is intended for process developers who use the Business Process Studio application to create and implement
business processes including the configuring of human tasks.
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Implementing Manufacturing and Supply Chain Materials Implementing Supply Chain Orchestration
Management
14 Implementing Supply Chain Orchestration
Supply Chain Orchestration Introduction

Supply Chain Orchestration: Overview
Oracle Fusion Supply Chain Orchestration provides a business process-based interface to execute and manage complex
supply-creation processes across multiple products. You can use Supply Chain Orchestration with applications from the
Oracle Applications Cloud, such as Manufacturing, Procurement, and Logistics, to establish consistent and comprehensive
supply execution processes.
Using Supply Chain Orchestration, you can:

• Receive supply requests from multiple Oracle Fusion applications, such as Planning Central, Inventory Min/Max
Planning, Order Management, and Global Order Promising (GOP).
• Launch and manage complex business processes.
• Automate change management to match supply to demand.
• Observe a 360 degree view of the supply-creation process.
• Create rules for business process management.
• Enable central control and decentralized execution.
• Scale process monitoring and exception management.
Supply Chain Orchestration supports standard business processes to create supply in warehouse and fulfill demands. You
can create supply through the predefined Back-to-back (make, buy, or transfer), Contract manufacturing, or Internal Materials
Transfer business process.
For demand-specific supply requests, such as back-to-back, Supply Chain Orchestration creates supply request documents
by combining the demand details from Oracle Fusion Order Management with the supply suggestion from Global Order
Promising (GOP).
Supply Chain Orchestration provides end-to-end visibility into the supply-creation process with status updates. Supplies
at risk are characterized as errors, exceptions, and jeopardy. When changes occur in demand or supply, Supply Chain
Orchestration uses automated change management to maintain balance of quantity and fulfillment dates. In case of a supply
exception, predefined rules reduce excess inventory, and find alternate supply sources. Automated change management is
used to manage:
• Changes in supply quantity by supply providers such as manufacturing plants and suppliers.
• Changes in supply completion date by supply providers.
• Changes in demand quantity of a sales order.
• Changes in need-by date of a sales order.
• Cancellation of a sales order, purchase order, transfer order, or work order.
• Splitting of a sales order, purchase order, or transfer order.
Supply Chain Orchestration also provides the ability to access supply execution documents, such as manufacturing work
order or purchase order, to identify the cause of supply exceptions. After a supply risk is resolved, it is possible to resubmit a
supply order. If a supply risk cannot be resolved, it is possible to cancel the supply flow.
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The following process flow diagram provides an overview of the Supply Chain Orchestration application components and
processes. The supply requests received from supply requesting applications are directed to the Decomposition component
to assign and launch orchestration processes. The Orchestration component executes business processes to manage tasks,
which send requests to execution systems and record the response to provide run-time status. The execution systems
process the requests received and update the execution documents. These processes are discussed in detail in a later topic.
Supply Chain Orchestration Overview
Planning OM/GOP Inventory

Requests
Supply Availability/
Supply
Exceptions
Load SCO Interface Tables

Assign & Launch
Decomposition
Identify &
Enrich Data
Validate Launch
and Create
Interface Data Orchestration
Supply Order
Process
Orchestration
Start Task
Update Task Status
Execution
Identify
Task Layers
Enrich/ Connector: Listen to

Target Process/
Chunk Data Envoke Events/Callback
System Record
Execution from Execution
Response Data
System Service Systems
Fusion Applications
Execution
Systems
Inventory Inventory
Purchasing Manufacturing Shipping Receiving
Transfer Orders Reservations
Supply Chain Orchestration Components: How They Work Together

The Oracle Supply Chain Orchestration Cloud forms a link between the applications requesting supply and those fulfilling
supply.
Supply requests may be received from various applications, such as Planning, Global Order Promising (GOP), Order
Management, and Inventory. Supply fulfilling applications can be applications from the Oracle Applications Cloud, such as
Purchasing, Manufacturing, Shipping, and Receiving.
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Based on the process and actions performed, the Supply Chain Orchestration application components are:
• Decomposition
• Orchestration
• Enterprise Integration Layer (EIL)
• Task Layers
The following table describes the internal processes and actions of the supply chain orchestration components.
Supply Chain Orchestration Components Internal Process Actions
Supply Requesting Applications Requests recorded in Supply Chain

Supply requests received: Orchestration interface tables.

• Planning: Planned recommendations
• GOP, OM: Back-to-back orders
• Inventory: Internal Transfer Requests
for Min/Max replenishment
Decomposition • Supply Order documents created

Requests are processed:
• Launches orchestration process
1. Reads payloads from the interface
table.
2. Creates a Supply Order document,
used by Supply Chain Orchestration
to create supply.
3. Transforms payload attributes to
enterprise-specific attributes, if
required.
4. Interprets execution rules to determine
if special processing is needed for
transfer order requests.
5. Applies defaulting rules
6. Assigns and launches orchestration
process. The assigned process
determines how supply is created,
such as back-to-back or contract
manufacturing.
Orchestration • Each supply order tracking line sent to

Orchestrates supply: task layer for processing.
• Enables runtime process viewing
• Executes the determined business
process.
• Uses business services layer (EIL) to
launch tasks.
• Manages the tasks.
• Manages and calculates cost of
change.
• Runtime process view.
EIL N/A
As part of Orchestration layer, EIL:
1. Creates payload and invokes
appropriate supply execution systems
to request services.
2. Supply execution systems notify
Supply Chain Orchestration in case
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Supply Chain Orchestration Components Internal Process Actions
of changes. EIL accepts notifications,
processes them, and manages
exceptions.
Task Layers 1. Identifies target service or execution • Send request to execution systems.
system that will fulfill current requests. • Record status response from
2. Transforms the data using execution systems and process
connectors. downstream tasks.
• Record any exceptions in the
execution systems and notify supply
requesting applications.
Execution Systems Creates, updates or cancels supply

Execution systems: execution documents in response to
Supply Chain Orchestration requests to
• Inventory Transfer Orders communicate request status and execution
• Inventory Reservations document fulfillment updates.
• Purchasing
• Manufacturing
• Shipping
• Receiving
Processes execution document related

create, cancel, or update requests received
from Supply Chain Orchestration task layer.
The various entities that are created and managed during supply orchestration are:
• Supply Order: Contains all supply order lines created to fulfill a specific supply request.
• Supply Order Line: Contains information about individual supply requests.
• Supply Order Tracking Line: The tracking line monitors the process needed to fulfill a supply request with a specific
supply type.
• Supply Transfer Order Details: Contains information for transfer supply requests. Captures Transfer Order execution
document details from Inventory when the tracking line supply type is Transfer.
• Supply Buy Order Details: Contains information for buy supply requests. Captures Purchase Order execution
document details from Purchasing when the tracking line supply type is Buy.
• Supply Make Order Details: Contains information for make supply requests. Captures Work Order execution
document details from Manufacturing when the tracking line supply type is Make.
Back-to-back Business Process

In back-to-back fulfillment, a supply request is created only after scheduling of a sales order. It is best suited for items that
organizations choose not to stock. It offers organizations the flexibility to expand their product offerings even if they do not
directly stock goods.
The essence of a back-to-back flow is a firm link between the demand document (sales order) and the supply document
(purchase order, transfer order, or work order). This ensures that supply cannot be allocated incorrectly or diverted to fulfill
another demand. The back-to-back flow is effective in ensuring on-time order fulfillment and a higher customer satisfaction.
Fulfillment decisions in back-to-back are controlled centrally. Organizations can designate an item to be back-to-back
enabled in Product Information Management and set up sourcing rules in GOP to determine supply creation options. The
process provides visibility into demand, supply, and exceptions in the flow.
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Contract Manufacturing Processing

For contract manufacturing fulfillment, a manufacturing work order is created in the enterprise and a matching purchase order
is created in the contract manufacturer.
• The purchase order serves as an agreement between the enterprise and manufacturer.
• The work order in the enterprise is used to track progress of supply in the contract manufacturer's plant.
• The work order and purchase order documents are linked to ensure that the document parameters and progress are
synchronized. This synchronization is facilitated by Supply Chain Orchestration.
• Supply Chain Orchestration provides visibility into the contract manufacturing processes. Automated exception
management is used to balance supply and demand, and avoid excess or short supply.
Outside Processing
In outside processing, a one or more manufacturing operations in a work order are outsourced to external service providers.
The Original Equipment Manufacturers (OEM) handle selective manufacturing operations in-house and outsource some
manufacturing operations to one or more external service providers, who are referred to as Manufacturing Partners (MP) and
are paid for performing the value-added services.
On receiving an outside processing supply request from Manufacturing cloud, the Supply Chain Orchestration Cloud:
• Initiates purchase requests for the outside processing items.
• Notifies the Manufacturing cloud about the purchase requisition or purchase order details. Attributes include PO
Number, PO Line Number, and Supplier.
• Initiates shipment requests for partially finished assemblies (PFAs).
• After confirmation of shipping, notifies the Manufacturing cloud about shipment details.
• Handles automatic change management.
• Tracks and monitors the outside processing operations.
On the Supply Lines Overview page, the supply orders with outsourced manufacturing operations are indicated in the
Outside Processing column.
Supply Chain Orchestration Setup: Overview

As part of Oracle Supply Chain Orchestration Cloud setup, you must define rules that govern the creation of supply
documents and the processes used to manage a supply request. Supply Chain Orchestration implementation provides a
set of predefined, ready-to-use supply-related data. You can modify the predefined implementation data according to your
requirements.
To set up Supply Chain Orchestration, in the Setup and Maintenance work area, select the Manufacturing and Supply
Chain Materials Management offering, click Setup, and select the Supply Chain Orchestration functional area.
The following table lists the tasks available to set up Supply Chain Orchestration.
Setup Tasks Description
Manage Supply Orchestration Lookups You can edit only the names of those predefined lookups for which extensibility is enabled.

Manage Supply Orchestration You can create attachment categories if required by your business processes. The available
Attachment Categories predefined attachment categories support the predefined business processes in the Oracle Fusion
SCM cloud.
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Manage Supply Order Defaulting and You can create rules to determine when a transfer order is routed through the order management
Enrichment Rules system.

Manage Supply Execution Document You can create supply execution rules to determine when a purchase order must be created for a
Creation Rules transfer order request. By default, a transfer transaction is used.

Manage Supply Orchestration Lookups

Setting up Supply Chain Orchestration Lookups: Overview
Oracle Fusion Supply Chain Orchestration provides a set of predefined lookups. Additional setup is not required for Supply
Chain Orchestration lookups.
To view the predefined lookups:
1. In the Setup and Maintenance work area, select your offering.
2. On the Setup: Manufacturing and Supply Chain Materials Management page, click the Supply Chain
Orchestration functional area, and then click the Manage Supply Orchestration Lookups task..
3. On the Manage Supply Orchestration Lookups page, enter search criteria to search and view available lookups.
You must not edit any existing lookup values. If required, you can edit the Meaning attribute for a lookup.
Predefined Lookups in Supply Chain Orchestration: Explained

This topic lists the predefined lookups available for Oracle Fusion Supply Chain Orchestration.
The following table displays the Supply Chain Orchestration predefined lookup types and their usage, values, and meanings.
Lookup Type Usage Lookup Value Meaning
ORA_ DOS_ DOCUMENT_TYPE • Displays in Supply Chain ORA_ASN Advance shipping notice
Orchestration work
bench in the Execution ORA_ATP Available to promise
Documents tab
• Extension possible ORA_IR Internal requisition

ORA_ISO Internal sales order

ORA_PO Purchase order

ORA_PR Purchase requisition

ORA_RCPT Receipt

ORA_RSV Reservation

ORA_SH Shipment document

ORA_TO Transfer order
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Lookup Type Usage Lookup Value Meaning

ORA_WO Work order

ORA_ DOS_ INTERACTION_ • Not displayed in UI ORA_BATCH Batch

TYPE • System lookup
ORA_ SCHEDULED_ PROCESS Scheduled Process
• No extension possible

ORA_SERVICE Service

ORA_ DOS_ SUPPLY_ • Displays supply type ATP Available to promise

ORDER_TYPE options in work bench
• System lookup BUY Buy

MAKE Make

TRANSFER Transfer

UNASSIGNED Unassigned

ORA_ DOS_ TARGET_ • Not displayed in UI ORA_EXTERNAL External

SYSTEM_TYPE • System lookup
ORA_ORACLE_EBS Oracle E-Business Applications
• Extension possible
Suite
ORA_ ORACLE_FUSION
Oracle Fusion Applications

ORA_ DOS_ SUPPLY_ • Displays supply status CANCELED Canceled

LINE_STATUS options shown for supply
line and tracking line CANCEL_PENDING Cancel pending
• System lookup
CHANGE_PENDING Change pending

CLOSED Complete

DOS_INPROC In process

DOS_PARTIAL Partially complete

ORA_ DOS_ SUPPLY_ • Displays supply order CANCELED Canceled

ORDER_STATUS status
• System lookup CLOSED Closed

DOS_INPROC In process

DOS_PARTIAL Partially complete

NOT_STARTED Not started

ORA_ DOS_ SUPPLY_ • Source system search DOO Oracle Fusion Order
ORDER_SOURCE criteria Management
• System lookup INV
Oracle Fusion Inventory
YPS Management

Oracle Fusion Planning Central

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Manage Supply Orchestration Attachment Categories

Supply Orchestration Attachment Categories: Explained
Oracle Supply Chain Orchestration Cloud provides a set of predefined attachment categories. Additional setup is not required
for attachment categories.
To view the predefined attachment categories:

Orchestration functional area, and then click the Manage Supply Orchestration Attachment Categories task.
3. On the Manage Supply Orchestration Attachment Categories page, enter search criteria to search and view
available attachment categories.
It is recommended to not edit any existing attachment categories.
Manage Supply Order Defaulting and Enrichment Rules

Supply Order Orchestration Defaulting and Enrichment Rules:
Explained
You can use the Supply Order Defaulting and Enrichment rules to monitor the progress of transfer orders in the Oracle Fusion
Order Management application work bench.
Using the rules framework, you specify which transfer orders must be tracked. If a supply order meets the rule criteria you set,
an internal sales order is created in Order Management. This internal sales order is used to track shipping progress from the
Order Management work bench.
Points to consider:
• You can track items that are high in value or low in supply and need targeted monitoring throughout.
• By default, transfer order shipments are not tracked in Order Management.
• Setting up the Defaulting and Enrichment rules is optional. If you want to monitor an item, you must create a rule.
Creating a Supply Order Defaulting and Enrichment Rule: Procedure

You can use this procedure to set up tracking of supply orders in Oracle Fusion Order Management.
Points to consider:
• The procedures explained in this topic use different attributes depending on the supply type. In the Make flow, the
work order status ID is used for work orders, and in the Transfer flow, the DOO Shipment status is used for back-to-
back transfer orders
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• By default, supply order tracking does not extend to the processes in Oracle Fusion Order Management. That is,
there are no predefined supply order defaulting and enrichment rules.
• Route only the items that are high-value and in short supply.
To create a supply order defaulting and enrichment rule for back-to-back transfer orders:
Orchestration functional area, and then click the Manage Supply Order Defaulting and Enrichment Rules
task.
3. On the Manage Supply Order Defaulting and Enrichment Rules page, click Create New Rule. The page
displays the Attributes and Actions tabs, which display a tree-view of the available values.
4. In the Attributes tab, search for or select the attribute from the tree view, and drag it to the IF node to create an IF
rule condition. The Create Condition dialog box appears, which is used to define the rule.
Note: Alternatively, you can click the New Condition icon in the IF node. The Create Condition
dialog box appears, where you can enter the attribute and the rule condition.
5. Enter the IF rule condition specified in the following table.
Attribute Operator Value
Requested Supply Type is equal to Transfer

6. Click THEN, select DO, and select Perform an Action. The Create Action dialog box appears, which is used to
define the action.
7. Enter the DO rule action specified in the following table.
Action Parameter Operator Value
Ship Through Order dooShipmentFlag is equal to Yes

Management

8. Enter other rules according to your requirement. You can use the attributes listed in the following table to create the
rules.
Supply Order Entity Attributes
Supply Header Supply Order Source

Supply Line Destination Organization Code

Destination Business Unit

Item Number

Supply Tracking Line Destination Organization Code


Supply Tracking Line Details Shipping Priority

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Transfer Price

Ship To Party Id

Organization Code

Business Unit

To create a supply order defaulting and enrichment rule for work orders:
Orchestration functional area, and then click the Manage Supply Order Defaulting and Enrichment Rules
task.
3. On the Manage Supply Order Defaulting and Enrichment Rules page, click Create New Rule. The page
displays the Attributes and Actions tabs, which display a tree-view of the available values.
Requested Supply Type is equal to Make

6. Click THEN, select DO, and select Perform an Action. The Create Action dialog box appears, which is used to
define the action.
Action Parameter Operator Value
Set Work Order Status Work Order Status is equal to Released

8. Enter other rules according to your requirement. You can use the attributes listed in the following table to create the
rule.



Item Number


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Transfer Price

Ship To Party Id

Organization Code

Business Unit

Manage Execution Document Creation Rules

Supply Chain Orchestration Supply Execution Document Creation
Rules: Explained
Supply Execution Document Creation rules determine the type of supply transfer requested between two inventory
organizations. Using these rules, you can define the business processes and the document types executed between the
organizations.
By default, the supply between two inventory organizations is executed as a transfer order. If due to legal or business
considerations, you need to specify all goods transfers between specific inventory organizations as Buy transactions, you
must define a Supply Execution Document Creation rule. This ensures that purchase orders are created and executed instead
of transfer orders in the Oracle Fusion Supply Chain Orchestration application.
Using the Supply Execution Document Creation rules, you can:

• Set up rules to determine if a transfer between two inventory organizations is executed by a transfer order or a
purchase order. By default, a recommended transfer is executed as a transfer.
• Automatically apply the execution rules during supply creation.
• Automate the rules and ensure that transfers comply with business and legal requirements. Automation also
provides extensibility and configurability to accommodate expansion, reorganization, and mergers and acquisitions.
Automating the rules improves accuracy and reduces cost by eliminating manual intervention.
• Reduce the cost of material transfer across various organizational entities within a company.
You can create and manage document creation rules using the Manage Execution Document Creation Rules page. The page
uses the Oracle Business Rules (OBR) framework as the underlying technology to provide a business-process based interface
to business analysts for modifying and storing rule logic without the need for programming assistance and without interrupting
business processes.
Creating a Supply Execution Document Creation Rule: Procedure

You can use this procedure to setup the supply type between two organizations as Buy. A purchase order is used to execute
supply between the organizations.
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Points to consider:
• By default, supply orders are executed as transfer orders. That is, there are no predefined supply execution
document creation rules.
• The rules must be used to create purchase orders for transactions between specific source and destination inventory
organizations or warehouses.
To create a supply execution document creation rule:

Orchestration functional area, and then click the Manage Supply Execution Document Creation Rules task.
3. On the Manage Supply Execution Document Creation Rules page, click Create New Rule. The page displays
the Attributes and Actions tabs, which display a tree-view of the available values.
Requested Supply Type = Transfer

6. Click THEN, select DO, and select Perform an Action.

Supply Type = Buy

8. Enter other rules as per your requirement. The common attributes used for this rule are listed in the following table.



Item Number




Transfer Price
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Ship To Party ID

Organization Code

Business Unit

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Implementing Manufacturing and Supply Chain Materials Implementing Supply Chain Financial Orchestration
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15 Implementing Supply Chain Financial

Orchestration
Introduction
Supply Chain Financial Orchestration: Overview
Oracle Fusion Supply Chain Financial Orchestration enables you to run financial orchestration flows and define business rules
for financial orchestration. Using Oracle Fusion Supply Chain Financial Orchestration, you can:
• Manage intercompany transactions and intracompany flows. Intracompany flows are present when a financial
orchestration exists between two different profit center business units that belong to the same legal entity. You can
separate the physical part of this transaction from the financial part of the transaction.
• Support complex global structures without compromising supply chain efficiency.
• Model your corporate tax structures in a global environment efficiently without impacting the physical movement of
goods. You can deliver goods and services to your customers as quickly as possible, and lower your total supply
chain costs at the same time.
• Optimize operational efficiency by centralizing sourcing and order management functions.
• Reduce implementation costs and cycle time.
• React effectively to corporate reorganizations or acquisitions.
The following figure illustrates an example of an intercompany transaction for the Vision Corporation.
Vision Corporation
Vision Distribution Vision Operations,

Center, Singapore Ownership North America
Transfer
Physical Ownership
Shipment Transfer
Retailer in the
United States
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In this example, a financial orchestration flow exists between the Vision Distribution Center, located in Singapore, and Vision
Operations, located in North America. The Vision Distribution Center sends the physical product that is involved in the
transaction to retailers. It also sends the financial information and transfers ownership of the product in the financial books
for the transaction to Vision Operations in North America. Each organization is a separate legal entity in Vision Corporation.
However, these organizations are located in different countries. They require separate accounting and tax reporting. You can
use Oracle Fusion Supply Chain Financial Orchestration to capture, process, and perform an accounting of the events. The
events occur during an intercompany transaction in an enterprise that is similar to Vision Corporation. For example, you can
use it to do the following:
• Create documentation and accounting rules that specify the type of accounting documentation to create.
For example, whether or not to create an intercompany invoice, to track profits in inventory, or to track trade
distributions.
• Create transfer pricing rules that specify whether to use the transaction cost, a purchase order price, or the sales
order price as the basis to calculate the intercompany transfer price between the seller and the buyer. You can
create transfer pricing rules that apply a markup or markdown percentage on the internal sale.
• Create intercompany buyer profiles and intercompany seller profiles that Financial Orchestration uses to create the
intercompany invoice. You can specify the business units that provide the following:
◦ Procurement and payables invoicing for the profit center business unit.
◦ Business unit that provides receipt accounting information.
◦ Bill-to business unit and bill-to locations.
◦ Procurement business unit.
• Create financial orchestration qualifiers that specify when and under what conditions to run a financial orchestration
flow. For example, you can create a rule to run an orchestration flow only if a particular supplier is involved in the
transaction.
• Create financial orchestration flows. You can specify the following:
◦ Legal entities and business units that are involved in a flow.
◦ Financial orchestration qualifiers that control when to use the flow.
◦ Financial routes to use for the flow.
◦ Transfer pricing rules and documentation accounting rules.
◦ Date when the flow goes into effect.
• Specify a priority among different flows.
In general, the term financial orchestration is used to describe the Financial Orchestration work area and the related tasks.
This work area is part of the Manufacturing and Supply Chain Materials Management offering.
Financial Orchestration Flow: How it Works

A financial orchestration flow automates the execution of the components within a financial flow once the movement of goods
or fulfillment of services happens in the supply chain flow.
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The following figure describes a typical financial orchestration flow.
Other Oracle
Fusion
Applications
6
1
Inventory 2 Web Services Costing
Receive
Supply Chain Identify Flow
Receiving Events 3 Receivables
Create Flow Web

Instance Services
Shipping 4 7 Payables
Create Tasks
Oracle Oracle
5
Fusion Fusion
Application Application
Monitor
Execution
8
Oracle Fusion Supply Chain Financial

Orchestration
Components of the Flow

A financial orchestration flow is triggered when an Oracle Fusion Supply Chain application sends a notification that a supply
chain event occurred, such as a shipment transaction. The applications can be Oracle Fusion Inventory, Oracle Fusion
Receiving, and so on. The financial orchestration flow includes the following steps:
1. Receive the supply chain event.

2. Identify the financial orchestration flow to use in reply to the event. It uses the configuration that you specify to
identify this flow:
◦ Manage Supply Chain Financial Orchestration Qualifiers
◦ Manage Supply Chain Financial Orchestration Flows

3. Create an instance of the financial orchestration flow identified in the previous step.
4. Create the tasks to run the instance.
5. Interact with one or more Oracle Fusion applications. It can exchange information about the instance with these
applications automatically, so you need not do any configuration to enable these interactions. It can interact with the
following Oracle Fusion applications while the instance runs:
◦ Oracle Fusion Distributed Order Orchestration: Provides the orchestration order information for shipment
flows.
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◦ Oracle Fusion Procurement: Provides the purchase order information for procurement flows. It confirms
whether a financial orchestration flow that does validation is available when it creates or updates a global
procurement purchase order.
◦ Oracle Fusion Product Information Manager: Provides information about the products that financial
orchestration uses for each supply chain transaction.
◦ Oracle Fusion Financials: Using the advanced global intercompany that you specify during its setup, Oracle
Fusion Financials provides information about the supplier and customer that financial orchestration associates
with each legal entity. Financial orchestration interfaces the intercompany receivables and payables invoices to
Oracle Fusion Financials.
◦ Oracle Fusion Materials Management and Logistics: Sends a notification indicating that a transaction
occurred in the physical supply chain, such as a shipment or a receipt. It also sends other details about the
transaction.
◦ Oracle Fusion Managerial Accounting: Tracks cost elements.
6. Financial Orchestration uses various web services to interact with other Oracle Fusion applications that provide and
store costing, receivables, and payables data.
7. Check the Monitor Financial Orchestration Execution page for any issues that occur during the execution of a
financial orchestration flow.
Implementing Supply Chain Financial Orchestration: Procedure

This topic describes how to implement Oracle Fusion Supply Chain Financial Orchestration.
1. Sign in to Oracle Fusion.
Ensure you use a login that enables you to add a new implementation project that includes the Manufacturing and
Supply Chain Materials Management product offering. Contact Help Desk to determine the login that you must use.
2. Create an implementation project:
a. In the Setup and Maintenance work area, click Implementation Projects.

b. On the Implementation Projects page, click Actions, and then click Create.
c. In the Name field, enter a value that describes your project, and then click Next.
For example, enter My Financial Orchestration Project.
• On the Create Implementation Project: Select Offerings to Implement page, include the
Manufacturing and Supply Chain Materials Management offering, and then click Save and Open
Project.
The application creates an implementation project that you can use to modify the financial orchestration
flow.
Financial Flows functional area, and then click the Manage Supply Chain Financial Orchestration System
Options task.
5. Complete the Manage Supply Chain Financial Orchestration System Options task and click Done.
6. Complete the tasks in the following sequence:
◦ Manage Supply Chain Financial Orchestration System Options
◦ Manage Supply Chain Financial Orchestration Documentation and Accounting Rules
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◦ Manage Supply Chain Financial Orchestration Transfer Pricing Rules
◦ Manage Profit Center Business Unit Party Relationship
◦ Manage Supply Chain Financial Orchestration Qualifiers
◦ Manage Supply Chain Financial Orchestration Flows
◦ Manage Drop Ship Financial Flows.
Note: Oracle recommends that you follow the tasks in the specified sequence. Some tasks depend on
the completion of a previous task in the sequence. For example, you must create a transfer pricing rule
first, so that you can specify this rule when you create a financial orchestration flow.
7. Import the business units, customers and suppliers required to create relationships for intercompany invoices.
This information is required to create the profit center business unit to party relationship. During the Export and
Import Application Setup process, ensure that you import the business objects of the Financials offering first before
you import the business objects of Manufacturing and Supply Chain Materials Management offering.
Manage Documentation and Accounting Rules

Accounting Rule Currency Options: Explained
You can define the currency to use in the financial orchestration flow. For example, you can use the same currency as the
seller or the legal entity. You can set the currency option while creating or updating an accounting rule. The currency options
that you can set are:
• Selling Node: Use the same currency that the seller uses. For example, if the seller uses the US dollar and if the
buyer uses the Euro, then the supply chain financial orchestration process uses the US dollar throughout the entire
transaction. This includes invoice data.
• Buying Node: Use the same currency that the legal entity uses in the primary ledger. This legal entity resides in the
business unit.
• Source document: Use the currency that the source document uses.
You can select the Currency Option in the Documentation and Accounting Rules dialog box.
Accounting Rule Conversion Types: Explained

Define a conversion type if there are different currencies involved in the supply chain financial orchestration process. A
conversion type is used to calculate the transfer price automatically. You can specify a conversion type while creating or
updating a documentation and accounting rule.
You can select a conversion type from the Documentation and Accounting rules dialog box that appears when you create or
edit a documentation rule. Select a conversion type from the list of values in the Conversion Type field.
Related Topics
• Creating Conversion Rate Types: Critical Choices
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Accounting Rule Trade Distributions: Explained

Oracle Fusion Cost Management uses trade distributions when it does the cost accounting distributions for the transactions
that financial orchestration sends. These are the accounting distributions that Oracle Fusion Cost Management uses for
intercompany accrual, intercompany cost of goods sold, and so on.
Track Profits in Inventory: Explained

You can now track intercompany profit in the physical inventory's item costs in a separate cost element type.
For example, lets assume Vision Operations, an inventory organization, owns inventory valued at 10.00 USD which was
transferred from another inventory organization, Vision Manufacturing. Vision Manufacturing added a markup of 1.50 USD
to its item cost of 8.50 USD to arrive at a sales price of 10.00 USD to Vision Operations. In Vision Operation's item cost,
the intercompany profit in inventory of 1.50 USD is tracked in a separate cost element type with the cost element as Vision
Manufacturing, the source organization which incurred this gain.
Tracking Profit in inventory separately enables you to eliminate the intercompany profits in the inventory valuation during
financial consolidation process. You can enable or disable this feature using the Track Profit in Inventory option while
creating the Documentation and Accounting rule.
Related Topics
• Cost Components, Cost Elements, and Cost Component Groups: How They Work Together
Intercompany Invoices in Financial Orchestration: Explained

If you use the Intercompany invoice option on the Manage Documentation and Accounting Rules page to include
intercompany invoices, then Financial Orchestration creates the following intercompany invoices during the transaction:
• Accounts payable invoice. A transaction that records the payable accounting when one business unit buys goods or
services from another business unit.
• Accounts receivable invoice. A transaction that records the receivable accounting for the shipping business unit in an
intercompany flow. It records journal entries in accounts receivables for the seller, it records revenue, and it records
tax and freight charges. It adds journal entries to the inventory asset account and the cost of goods sold account for
the shipping warehouse.
If you specify to not include intercompany invoices, then Financial Orchestration does not create any intercompany invoices
during the transaction. An intercompany invoice is not required. For example, an intracompany trade that occurs between
business units that belong to the same legal entity might not require an intercompany invoice. In this situation, a trade
distribution in cost accounting handles the accounting for the receivables and payable balances.
For all transactions except nonshippable sales, generation of intercompany invoices is optional. This option can be configured
in the documentation and accounting rules.
Note: For nonshippable sales, you must deselect the Trade Distributions option, and enable Inter Company
Invoices on the Create Documentation Accounting Rules page.
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Manage Supply Chain Financial Orchestration Transfer

Pricing Rules
Accounting Transfer Price: Explained
Accounting transfer price is the intercompany transfer price that financial orchestration uses for the documents and
transactions created in a financial orchestration flow. You can specify the account transfer price on the Transfer Pricing Rules
dialog box.
The following table gives the options available for accounting transfer price. You can select one of these options.
Option Description
Transaction Cost Basis

Use the production cost that the seller incurs to produce the product.
• Nonshippable Sales: This price basis is not supported for internal transfers.
Source Document Price Basis

Use the price in the sales order or a purchase order based on the business process type.
• Procurement: Use the price in the purchase order line.

• Shipment: Use the selling price from the sales order line.
• Internal Transfer: This price basis is not supported for internal transfers.
• Drop Ship: Use the line price in the purchase order line. Use the check box to select the sales
order price instead of the purchase order price.
Note:

Financial Orchestration excludes the shipping charges in the sales order line from the selling price
when it calculates the transfer price. It also treats a recurring charge on a sales order line as a one-
time charge when it calculates the transfer price. Financial Orchestration does not support a sales
order line that includes a recurring charge.
Transfer Pricing Markup Percentage: Explained

You can use the Markup Percentage on the Manage Supply Chain Financial Orchestration Transfer Pricing Rules
page to enable the seller to earn a profit or to incur a loss on an intercompany transaction. To determine the intercompany
transfer price, Financial Orchestration multiples the Markup Percentage with the value of the Accounting Transfer Price.
For example, if an item costs 1.00 USD, and if you set Markup Percentage to 15, then Financial Orchestration sets the
transaction price for this item to 1.15 USD.
You can also enter a negative value to incur a loss. For example, assume the Singapore Distribution Center must mark down
the items that it sells to retailers by 15%. So, if an item costs 1.00 USD, and if you set Markup Percentage to -15, then
Financial Orchestration sets the intercompany transfer price for this item to 0.85 USD.
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Manage Supply Chain Financial Orchestration System

Options
Financial Orchestration System Options: Explained
You can specify the following financial orchestration system options on the Manage Supply Chain Financial
Orchestration System Options page. Financial Orchestration uses the following options to process a financial orchestration
flow:
• Item Validation Organization: Specify the organization that financial orchestration uses to validate each item
according to the qualifiers that you create.
• Service Item: Specify the service item that various financial orchestration tasks use.
• Maximum Number of Records per Batch: Specify the number of records that financial orchestration gets when it
processes supply chain events. You can use this value to tune the performance of your server environment.
Manage Profit Center Business Unit Party Relationships

Profit Center Business Units: Explained
A profit center business unit is a part of a company that you treat as a separate business. Your organization calculates the
profits and losses for this profit center separately from other parts of the organization.
Intercompany Buyer Profile: Explained

An intercompany buyer profile must be defined for profit center business units that act as a buyer in a buy and sell
relationship. A buyer profile consists of two sections:
• Setup for the buyer's payable invoice and purchase order
• Customer locations for the seller's receivables invoice and sales order
Setup for Buyer's Payable Invoice and Purchase Order

Procurement and Payables Invoicing are business functions. A business unit acting as a shared service center can provide
these services to a profit center business unit. You can define this relationship in the setup for the Buyer's Payable invoice
and PO. The procurement business unit and the bill-to business units defined here are used to create intercompany
payables invoices in the buying business unit. The bill-to business unit is also used to derive the attributes required for receipt
accounting in Oracle Fusion Cost Management. Hence, the procurement and bill-to business unit have to be defined even
when intercompany invoices are not expected to be created for the buy and sell relationship.
Customer Locations for Seller's Receivables Invoice and Sales Order

The profit center business unit that acts as a buyer in a buy and sell relationship also must be defined as a bill-to location.
This bill-to location is used to create intercompany receivables invoices in the selling business unit. The bill-to location
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associated with a buying business unit should belong to the customer account associated with the Buying business unit's
Legal Entity in the Manage Intercompany Supplier Customer association task.
The customer bill-to locations belongs to a reference data set called customer address set. The buying profit center business
units are represented by customer bill-to locations. The customer bill-to locations belong to a reference data set called
customer address set. The selling profit center business unit can use the bill-to locations belonging to the customer address
set to which it has subscribed to. The bill-to location representing the buying profit center business unit must be available
in the customer address set subscribed by the selling business unit. The customer locations need not be associated if
intercompany invoices are not expected to be created for the buy and sell relationships.
Intercompany Seller Profile: Explained

You can specify the intercompany seller profile in the Profit Center BU Profiles section of the Create Profit Center
BU to Party Relationship page. You must specify it for a profit center business unit that acts as a seller in a buy and sell
relationship. You can use the following sections:
• Business Unit for Seller's Receivables Invoice. In the Receivables Business Unit list of values, select the
profit center business unit where Financial Orchestration sends the receivables invoice.
• Supplier Site for Buyer's Payables Invoice and Purchase Order. You can use the following list of values:
◦ Buyer's Procurement Business Unit. Select the profit center business unit that acts as the seller in the buy
and sell relationship.
◦ Buyer's Bill to Business Unit. Select the business unit where Financial Orchestration sends the bill.
◦ Supplier Site. Select the supplier site that Financial Orchestration uses to create the intercompany payables
invoice.
FAQs for Manage Profit Center Business Unit Party Relationships

What happens if I modify the supplier or customer for the legal entity?
If you define an intercompany seller profile, and then at some later point you modify this profile, then Financial Orchestration
displays an error message that describes that you updated the supplier profile and that you must also update the seller
profile with new supplier information. To fix this error, you must use the Profit Center BU Profiles section of the Edit Profit
Center BU to Party Relationship page to modify the seller profile. If you do this modification, then this page displays
the name of the supplier that you modified in the Supplier field. You must also do similar work if you modify the buyer. For
example, if you modify the intercompany buyer profile, then you must also modify this profile with the new buyer information.
When can I delete an intercompany buyer or seller profile?

You can delete an intercompany buyer or seller profile based on the profit center business unit. The profit center business unit
must not be a buying business unit in any financial route of a supply chain financial orchestration flow.
Manage Supply Chain Financial Orchestration Qualifiers
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Financial Orchestration Qualifiers: Explained

A financial orchestration qualifier is a rule that specifies when to run one of the financial orchestration flows that you create
in the Manage Supply Chain Financial Orchestration Flows task. If you do not create any qualifier, then Financial
Orchestration runs the financial flow for all the transactions that it receives.
This table lists all the qualifiers used for each of the business process type in the Supply Chain Financial Orchestration
Qualifier Flow.
Business Process Type Qualifiers
Procurement • Inventory Asset Value

• Purchasing Category
• Ship to Organization
• Supplier
• Supplier Country
• Supplier Site Code
Shipment • Inventory Asset Value

• Financial Orchestration Category
• Ship From Organization
• Order Type
Internal Transfer • Inventory Asset Value

• Ship From Organization
• Ship to Organization
Drop Shipment • Inventory Asset Value

• Purchasing Category
Nonshippable Sales

• Asset Item
• Item
• Item Class
• Sold to Party
• User Item Type
• Order Type
Manage Supply Chain Financial Orchestration Flows

Financial Orchestration Flows: Explained
You can use a financial orchestration flow to do the following:
• Manage the internal trade relationships that exist between two entities. These entities might reside in the same
organization but in widely dispersed physical locations, including in different countries.
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• Define the trade relationship that exists between two entities, including business rules, internal controls, regulatory
compliance, and other terms and conditions. You can use these controls to run, monitor, and evaluate the
transactions that occur in the trade relationships that exist between two entities.
• Orchestrate supply chain events that occur as the result of a transaction that is associated with a financial
orchestration flow. This includes events that this flow receives from an external source application.
• Start tasks in an external application that is part of the financial orchestration flow.
• Create a series of financial movements of goods that can provide equitable distribution of the product margin to the
countries and tax jurisdictions that are involved in a transaction.
• Set a date that indicates when to start using a financial orchestration flow. This dating enables you to configure
Financial Orchestration so that it creates transactions that are associated with a source document that occur before
the date when the modified financial orchestration flow goes into effect. Financial Orchestration can also associate
transactions with this flow when your source system creates the source document after this date.
Primary Routes
A primary route indicates an agreement to transact goods and services between the two primary profit center business units.
The start node represents the internal seller and end node represents the internal buyer. A financial orchestration flow can
have more than one primary route. The terms and conditions of financial settlement are defined as part of financial route. In
the primary route in a financial orchestration flow, you can specify the start and end business units.
The start and end business units of a primary route may differ based on the business process type of the financial
orchestration flow.
The following table lists the start and end business units of a primary route.
Business Process Type Start Business Unit End Business Unit
Procurement Sold to Business Unit Receiving Business Unit

Shipment Shipping Business Unit Selling Business Unit

Internal Transfer Shipping Business Unit Receiving Business Unit

Each primary route may have one or more financial routes. During the financial orchestration process, a primary route is first
identified for each source order. If a financial orchestration flow does not have multiple intermediary financial organizations
under the primary routes, you can use a simplified view in the Create Financial Orchestration page. This is the default view.
You can use a combined table to define the primary and financial routes.
If a financial orchestration flow has multiple intermediary financial organizations under the primary routes, select the Separate
Primary and Financial route check box to view the primary and financial routes separately in the Create Financial
Orchestration page.
Financial Routes
A financial route contains the terms and conditions that determine the nature of the intercompany transaction, such as the
documentation, accounting and pricing rule to use.
Each primary route must have at least one financial route. You could optionally specify the sell side and buy side tax
determinants. This is used to calculate the taxes in the intercompany receivables invoice and intercompany payables invoice
respectively. You must provide a receivables invoice type, a credit memo type and payment terms when intercompany
invoices have to be created between the selling and buying business unit of the financial route. There can be more than one
financial route for a primary route when one or more intermediary business units are expected.
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Registering a Third-Party Transfer Price Calculation Web Service for

Supply Chain Financial Orchestration: Procedure
In some scenarios, you may want to use a third-party pricing web service to calculate the transfer price used in a Supply
Chain Financial Orchestration flow. To do so, you must first register the web service.
To register a third-party transfer price web service:
1. Sign in to Oracle Supply Chain Management Cloud as an Application Implementor or Administrator.
3. On the Setup: Manufacturing and Supply Chain Materials Management page, click the Supply Chain Financial
Flows functional area, and then click the Register Financial Orchestration Third-Party Transfer Pricing
Service task.
4. Enter the URL of the third-party web service in one of the following formats:
◦ If you are using the predefined Service Name (FinancialOrchestrationTransferPriceCustomService) and Port
Name (FinancialOrchestrationTransferPriceCustomPort), use the syntax given in the following table.
Syntax Example
{HTTP_ Protocol}: //{HostName}: https://abc. com: 8888/ ws/ FinancialOrchestrationTransferPriceCustomService/ 10

{Port}/ {ServiceName}

◦ If you are using a modified Service Name and Port Name, use the syntax given in the following table.
Syntax Example
{HTTP_ Protocol}: // https://abc. com: 8888/ ws/ FinancialOrchestrationTransferPriceCustomServiceVS/

{HostName}: {Port}/ 10CustomFinancialOrchestrationTransferPriceServiceName
{ServiceName}CustomServiceName CustomFinancialOrchestrationPortName
CustomServicePort

5. Select a security policy from the following options:

◦ oracle/wss10_username_token_with_message_protection_client_policy
◦ oracle/wss11_username_token_with_message_protection_client_policy
◦ oracle/wss_http_token_over_ssl_client_policy
◦ oracle/wss_saml_token_over_ssl_client_policy
◦ oracle/wss_username_token_over_ssl_client_policy
6. Enter a User Name and Password.
7. Enter a Keystore Alias.
Note: Use the predefined specifications while creating the web service specifications. Specifications, such as
the input and output parameters and data types and the operation name, are not configurable.
The WSDL template to use for the web service is as follows:

<wsdl:definitions
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name="FinancialOrchestrationTransferPriceCustomService"
targetNamespace="http://xmlns.oracle.com/apps/scm/fos/orchestrationProcesses/transferPrice/
transferPriceCustomService"
xmlns:wsdl="http://schemas.xmlsoap.org/wsdl/"
xmlns:tns="http://xmlns.oracle.com/apps/scm/fos/orchestrationProcesses/transferPrice/
transferPriceCustomService"
xmlns:xsd="http://www.w3.org/2001/XMLSchema"
xmlns:mime="http://schemas.xmlsoap.org/wsdl/mime/"
xmlns:soap="http://schemas.xmlsoap.org/wsdl/soap/"
xmlns:soap12="http://schemas.xmlsoap.org/wsdl/soap12/"
>
<wsdl:documentation>
<name>Compute Custom Transfer Price</name>
<docCategories>
<category>None</category>
</docCategories>
</wsdl:documentation>
<wsdl:types>
<xs:schema version="1.0" targetNamespace="http://xmlns.oracle.com/apps/scm/fos/orchestrationProcesses/
transferPrice/transferPriceCustomService/proxy/types"
xmlns:xs="http://www.w3.org/2001/XMLSchema">
<xs:complexType name="customTransferPriceResponse">
<xs:sequence>
<xs:element name="description" type="xs:string" minOccurs="0"/>
<xs:element name="errorsExistFlag" type="xs:boolean" minOccurs="0"/>
<xs:element name="unitPrice" type="xs:decimal" minOccurs="0"/>
</xs:sequence
</xs:complexType>
<xs:complexType name="customTransferPrice">
<xs:sequence>
<xs:element name="agreementFTRId" type="xs:long" minOccurs="0"/>
<xs:element name="currencyCode" type="xs:string" minOccurs="0"/>
<xs:element name="customerDeliverToLocationId" type="xs:long" minOccurs="0"/>
<xs:element name="customerShipToLocationId" type="xs:long" minOccurs="0"/>
<xs:element name="eventId" type="xs:long" minOccurs="0"/>
<xs:element name="flowInstanceId" type="xs:long" minOccurs="0"/>
<xs:element name="fromBusinessUnitId" type="xs:long" minOccurs="0"/>
<xs:element name="fromLegalEntityId" type="xs:long" minOccurs="0"/>
<xs:element name="inventoryItemId" type="xs:long" minOccurs="0"/>
<xs:element name="lineTypeCode" type="xs:string" minOccurs="0"/>
<xs:element name="purchaseOrderDestination" type="xs:string" minOccurs="0"/>
<xs:element name="purchasingCategory" type="xs:string" minOccurs="0"/>
<xs:element name="quantity" type="xs:decimal" minOccurs="0"/>
<xs:element name="quoteModeFlag" type="xs:boolean" minOccurs="0"/>
<xs:element name="requisitionOrganizationCode" type="xs:string" minOccurs="0"/>
<xs:element name="shipFromOrganizationCode" type="xs:string" minOccurs="0"/>
<xs:element name="sourceDocumentId" type="xs:string" minOccurs="0"/>
<xs:element name="sourceDocumentType" type="xs:string" minOccurs="0"/>
<xs:element name="supplierSiteId" type="xs:long" minOccurs="0"/>
<xs:element name="toBusinessUnitId" type="xs:long" minOccurs="0"/>
<xs:element name="toLegalEntityId" type="xs:long" minOccurs="0"/>
<xs:element name="transactionDate" type="xs:dateTime" minOccurs="0"/>
<xs:element name="unitOfMeasure" type="xs:string" minOccurs="0"/>
<xs:element name="CtoSalesRows" minOccurs="0" maxOccurs="unbounded">
<xs:complexType>
<xs:sequence>
<xs:element name="configItemId" type="xs:long" minOccurs="0"/>
<xs:element name="inventoryItemId" type="xs:long" minOccurs="0"/>
<xs:element name="subItemType" type="xs:long" minOccurs="0"/>
<xs:element name="lineId" type="xs:long" minOccurs="0"/>
<xs:element name="parentLineId" type="xs:long" minOccurs="0"/>
<xs:element name="unitQty" type="xs:decimal" minOccurs="0"/>
<xs:element name="unitUom" type="xs:string" minOccurs="0"/>
</xs:sequence>
</xs:complexType>
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</xs:element>
</xs:sequence>
</xs:complexType>
</xs:schema>
<schema xmlns="http://www.w3.org/2001/XMLSchema" targetNamespace="http://xmlns.oracle.com/apps/scm/fos/
orchestrationProcesses/transferPrice/transferPriceCustomService"
xmlns:xsd="http://www.w3.org/2001/XMLSchema" xmlns:tns="http://xmlns.oracle.com/apps/scm/fos/
orchestrationProcesses/transferPrice/transferPriceCustomService"
xmlns:ns1="http://xmlns.oracle.com/apps/scm/fos/orchestrationProcesses/transferPrice/
transferPriceCustomService/proxy/types">
<import namespace="http://xmlns.oracle.com/apps/scm/fos/orchestrationProcesses/transferPrice/
transferPriceCustomService/proxy/types"/>
<xsd:complexType name="computeCustomTransferPrice">
<xsd:sequence>
<xsd:element name="arg0" type="ns1:customTransferPrice"/>
</xsd:sequence>
</xsd:complexType>
<xsd:element name="computeCustomTransferPrice" type="tns:computeCustomTransferPrice"/>
<xsd:complexType name="computeCustomTransferPriceResponse">
<xsd:sequence>
<xsd:element name="return" type="ns1:customTransferPriceResponse"/>
</xsd:sequence>
</xsd:complexType>
<xsd:element name="computeCustomTransferPriceResponse" type="tns:computeCustomTransferPriceResponse"/>
</schema>
</wsdl:types>
<wsdl:message name="computeCustomTransferPriceInput">
<wsdl:part name="parameters" element="tns:computeCustomTransferPrice"/>
</wsdl:message>
<wsdl:message name="computeCustomTransferPriceOutput">
<wsdl:part name="parameters" element="tns:computeCustomTransferPriceResponse"/>
</wsdl:message>
<wsdl:portType name="FinancialOrchestrationTransferPriceCustom">
<wsdl:operation name="computeCustomTransferPrice">
<wsdl:input message="tns:computeCustomTransferPriceInput" xmlns:ns1="http://www.w3.org/2006/05/addressing/wsdl"
ns1:Action=""/>
<wsdl:output message="tns:computeCustomTransferPriceOutput" xmlns:ns1="http://www.w3.org/2006/05/addressing/
wsdl"
ns1:Action=""/>
</wsdl:operation>
</wsdl:portType>
<wsdl:binding name="FinancialOrchestrationTransferPriceCustomSoapHttp"
type="tns:FinancialOrchestrationTransferPriceCustom">
<soap:binding style="document" transport="http://schemas.xmlsoap.org/soap/http"/>
<wsdl:operation name="computeCustomTransferPrice">
<soap:operation soapAction=""/>
<wsdl:input>
<soap:body use="literal"/>
</wsdl:input>
<wsdl:output>
<soap:body use="literal"/>
</wsdl:output>
</wsdl:operation>
</wsdl:binding>
<wsdl:service name="FinancialOrchestrationTransferPriceCustomService">
<wsdl:port name="FinancialOrchestrationTransferPriceCustomPort"
binding="tns:FinancialOrchestrationTransferPriceCustomSoapHttp">
<soap:address location="http://localhost:7101/FinancialOrchestration-FosTransferPriceService-webapp/
FinancialOrchestrationTransferPriceCustomService"/>
</wsdl:port>
</wsdl:service>
</wsdl:definitions>
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Setting Priorities for Financial Orchestration Flows: Explained

You can set the Priority of a financial orchestration flow to specify which flow to use when more than one flow is available for
two primary trade partners. The lower the number you use, the higher the priority. For example, if you set the Priority to 1
for Flow A, and 2 for Flow B, then financial orchestration will use Flow A. In a more detailed example, assume the following
situation exists:
The following table gives an example to describe the use of priority for a financial orchestration flow.
Financial Orchestration Priority Shipping Business Unit Selling Business Unit Qualifier Rule
Flow
1 10 BU A BU B Category = Category B

2 20 BU A BU B Category = Category A

3 30 BU A BU B None. Applicable to all

documents.

The following table summarizes how to set up the priority for each financial orchestration flow in this example.
Source Document Financial Orchestration Flow Priority Result
DOO fulfillment line 1 Flow 1 Priority for Flow 1 is 10. Priority Financial Orchestration assigns
for Flow 3 is 30. Flow 1 the highest priority.

DOO fulfillment line 2 Flow 2 Priority for Flow 2 is 20. Priority Financial Orchestration assigns
for and Flow 3 is 30. Flow 2 the highest priority.

DOO fulfillment line 3 Flow 3 Only Flow 3 is assigned. Financial Orchestration does not
use the Priority.

Supply Chain Financial Orchestration Validations for Brazil: Explained

If the buyer business unit is located in Brazil, internal material transfers must comply with specific requirements.
The Brazil-specific requirements are as follows:
• Transfer of ownership on shipment
• All fiscal documents must be in Brazilian Real (BRL)
• No tax calculation in intercompany invoices
To comply with these requirements, Oracle Supply Chain Financial Orchestration Cloud provides additional validations for all
internal material transfer related financial orchestration flows. For example, a buyer business unit in Brazil must indicate the
following:
• In the Manage Documentation and Accounting Rule page, the currency option is set to Buying node.
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• In the Manage Documentation and Accounting Rule page, the ownership change event for forward flow, Internal
Transfer, is set to Interorganization Shipment.
• In the Manage Supply Chain Financial Orchestration page, the Transaction Business Category is set in Sell Side
Tax Determinants, and is passed to the intercompany receivables invoice and Oracle Fusion Tax. Oracle Fusion Tax
is configured to not apply taxes for this transaction business category.
Creating Financial Orchestration Flows

Creating Financial Orchestration Flows: Worked Example
This example demonstrates how to create a financial orchestration flow for Vision Corporation, a multinational company that
makes and sells computerized toys.
It describes how to create a financial orchestration flow between the following units:
• Vision Operations: The selling business unit located in the United States.
• Vision Distribution Center: The financial intermediary business unit located in Singapore.
• Vision China: The shipping business unit located in China.
• Schatze Toy Company: A retailer with locations in Germany.
The following figure illustrates the financial orchestration flow for Vision Corporation discussed in this example. It
demonstrates how this flow separates the physical flow of goods from the financial flow for this transaction.
Vision
Vision Vision
Distribution
Manufacturing, Operations,
Ownership Center, Ownership
China North America
Transfer Singapore Transfer
Physical Ownership
Shipment Transfer
Retailer in
Germany
The following table summarizes the key decisions for this example.
Decisions to Consider In this Example
Flow Type Shipment

Selling business unit Vision Operations

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Decisions to Consider In this Example
Customer Schatze Toy Company

Shipping business unit Vision Manufacturing

Intermediary business unit Vision Distribution Center

Qualifier All asset items

Sales order currency USD (United States Dollar)

Sales order price 100.00 USD

Intercompany transfer price Vision Manufacturing, Vision Distribution Center: Cost plus 15%

Vision Distribution Center, Vision Operations: Sales order price less
10%

Intercompany trade currency Vision Manufacturing, Vision Distribution Center: SGD

Vision Distribution Center, Vision Operations: USD

Intercompany invoice Vision Manufacturing, Vision Distribution Center: Required

Vision Distribution Center, Vision Operations: Required

Track profit in inventory Vision Manufacturing, Vision Distribution Center: Yes

Vision Distribution Center, Vision Operations: Yes

Summary of the Tasks

The tasks involved to create a financial orchestration flow are:
1. Creating documentation and accounting rules

2. Creating transfer pricing rules
3. Creating profit center business unit party relationships
4. Creating financial orchestration qualifiers
5. Creating financial orchestration flows
6. Setting financial orchestration system options
7. Testing your financial orchestration flow
Creating Documentation and Accounting Rules

In this example, we create two documentation and Accounting rules:
1. Vision Manufacturing Documentation and Accounting Rule

2. Vision Distributions Documentation and Accounting Rule
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Creating the Vision Manufacturing Documentation and Accounting Rule

For the trade between Vision Manufacturing and Vision Distributions, Vision Manufacturing is the seller. It uses the currency
of the buyer, Vision Distributions and it uses the standard currency rate that Vision Corporation uses. Vision Manufacturing
uses trade distributions, tracks profits in inventory, and requires an intercompany invoice. To create the documentation and
accounting rules, do the following:

Financial Flows functional area, and then click the Manage Supply Chain Financial Orchestration
Documentation and Accounting Rules task.
3. On the Manage Documentation and Accounting Rules page, click Actions, and then click Create.
4. On the Create Documentation and Accounting Rule page, set the values listed in the following table.
Field Value
Name Vision Operations Documentation and Accounting Rule

Currency Option Buying Node

Conversion Type Corporate

Trade Distributions Selected

Track Profits In Inventory Selected

Intercompany Invoices Selected

Effective Start Date Today's date

Creating the Vision Distributions Documentation and Accounting Rule

For the trade between Vision Distributions and Vision Operations, Vision Distributions is the seller. It uses the currency of the
sales order and it uses the standard currency rate that Vision Corporation uses. Vision Distributions uses trade distributions,
tracks profits in inventory, and requires an intercompany invoice. To create the documentation and accounting rules, do the
following
Financial Flows functional area, and then click the Manage Supply Chain Financial Orchestration
Documentation and Accounting Rules task.
3. On the Manage Documentation and Accounting Rules page, click Actions, and then click Create.
4. On the Create Documentation and Accounting Rule page, set the values listed in the following table.
Field Value
Name Vision Distributions Documentation and Accounting Rule

Currency Option Source Document
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Field Value

Conversion Type Corporate

Trade Distributions Selected

Track Profits In Inventory Selected

Intercompany Invoices Selected


Creating Transfer Pricing Rules

In this example, we will create two transfer pricing rules:
1. Vision Manufacturing Transfer Pricing Rule.

2. Vision Distributions Transfer Pricing Rule.
Creating the Vision Manufacturing Transfer Pricing Rule

Vision Manufacturing must use the production cost that it incurs to produce computerized toys as the transfer pricing rule.
It requires a 15% markup on this cost so that it can realize a profit when it sells products to internal buyers. To create the
intercompany transfer price between Vision Manufacturing and Vision Distributions, do the following:
1. On the Implementation Project page, in the Task list, click Go To Task next to Manage Supply Chain
Financial Orchestration Transfer Pricing Rules.
2. On the Manage Transfer Pricing Rules page, click Actions, and then click Create.
3. On the Create Transfer Pricing Rule dialog box, set the values listed in the following table.
Field Value
Name Vision Manufacturing Transfer Pricing Rule

Accounting Transfer Price Cost Basis.

Markup Percentage 15

Effective Start Date Today's date.

4. Click Save and Close, and then click Done.
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Creating Vision Distributions Transfer Pricing Rule

Vision Operations is the selling business unit. It retains a 10% margin on the sales order price when it sells products to
external sellers. To create the intercompany transfer price between Vision Distributions and Vision Operations, do the
following work:
1. On the Implementation Project page, in the Task list, click Go To Task next to Manage Supply Chain Financial
Orchestration Transfer Pricing Rules.
2. On the Manage Transfer Pricing Rules page, click Actions, and then click Create.
3. On the Create Transfer Pricing Rule dialog box, set the values listed in the following table.
Field Value
Name Vision Distributions Transfer Pricing Rule

Accounting Transfer Price Source Document Price Basis

Markup Percentage -10

Effective Start Date Today's date.

4. Click Save and Close, and then click Done.
Creating Profit Center Business Unit Party Relationships

In this example, we will create the profit center BU Party relationship for the following business units:
1. Intercompany buyer profile for Vision Operations
2. Intercompany seller and buyer profile for Vision Distributions
3. Intercompany seller profile for Vision Manufacturing
Creating Intercompany Buyer Profile for Vision Operations

To create the party relationship for the Vision Operations profit center business unit, do the following:
1. On the Implementation Project page, in the Task list, click Go To Task next to Manage Profit Center
Business Unit Party Relationships.
2. On the Manage Profit Center BU to Party Relationships page, click Actions, and then click Create.
3. On the Create Profit Center BU to Party Relationships page, set the values listed in the following table. Leave all
other fields at their default value.
Field Value
Profit Center Business Unit Vision Operations

Default Trade Organization V1

Ship-to Location Leave empty

Vision Operations is an intercompany buyer. It buys the goods from an internal organization, Vision Distribution
Center.
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4. In the Profit Center BU Profiles section, edit the Intercompany buyer profile.
5. In the Bill to BU for Payables Invoice and PO, set the values listed in the following table. Leave all other fields at
their default value, and then click OK.
Field Value
Procurement Business Unit Vision Operations

Bill to Business Unit Vision Operations

6. In the Customer Locations for Seller's Receivable Invoice and Sales Order, set the values listed in the
following table. Leave all other fields at their default value, and then click OK.
Field Value
Seller's Customer Address Set Vision Operations

Bill-to location CDRM_112

7. On the Create Profit Center BU to Party Relationships page, click Save and Close.
Creating Intercompany Seller and Buyer Profile for Vision Distributions

To create the party relationship for the Vision Distributions profit center business unit, do the following:
1. On the Implementation Project page, in the Task list, click Go To Task next to Manage Profit Center Business
Unit Party Relationships.
Field Values
Profit Center Business Unit Vision Distributions

Default Trade Organization D1

Ship to Location Leave Empty

Vision Distributions is an intercompany seller. It sells the goods to an internal organization, Vision Operations.
Field Values
Receivables Business Unit Vision Distributions

Customer Address Set Vision Distribution Set

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6. In the Supplier Site for Buyer's Payable Invoice and PO, set the values listed in the following table. Leave all
other fields at their default value, and then click OK.
Field Values
Buyer's Procurement Business Unit Vision Operations

Buyer's Bill to Business Unit Vision Operations

Supplier Site VDB_ SUPPLIER_SITE

Vision Distributions is also an intercompany buyer. It buys the goods from an internal organization, Vision
Manufacturing.
Field Values
Procurement Business Unit Vision Distribution

Bill to Business Unit Vision Distribution

9. In the Customer Locations for Seller's Receivable Invoice and Sales Order, set the values listed in the following table.
Leave all other fields at their default value, and then click OK.
Field Values
Seller's Customer Address Set Vision Manufacturing Set

Bill-to location CDRM_236

Intercompany Seller Profile for Vision Manufacturing

To create the party relationship for the Vision Manufacturing profit center business unit, do the following:
1. On the Implementation Project page, in the Task list, click Go To Task next to Manage Profit Center Business
Unit Party Relationships.
Field Value
Profit Center Business Unit Vision Manufacturing

Default Trade Organization C1
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Field Value

Ship-to location Leave Empty

Vision Manufacturing is an intercompany seller. It sells the goods to an internal organization, Vision Distributions.
Field Value
Receivables Business Unit Vision Manufacturing

Customer Address Set Vision Manufacturing Set

6. In the Supplier Site for Buyer's Payable Invoice and PO, set the values listed in the following table. Leave all other
fields at their default value, and then click OK.
Field Value
Buyer's Procurement Business Unit Vision Distributions

Buyer's Bill to Business Unit Vision Distributions

Supplier Site VMG_ SUPPLIER_SITE

Creating Financial Orchestration Qualifiers

You must create the financial orchestration qualifiers that configure Financial Orchestration to run the financial orchestration
flow for Vision Operations only when the C1, a warehouse that belongs to the Vision Manufacturing ships an asset item. To
create these qualifiers, do the following:
Financial Orchestration Qualifiers.
2. On the Manage Financial Orchestration Qualifiers page, click Actions, and then click Create.
3. On the Create Financial Orchestration Qualifier page, set the values listed in the following table. Leave all other
fields at their default value.
Field Value
Name Vision Operations Qualifiers

Description Asset Item = "Yes" AND ship-from organization = "C1"

Business Process Type Shipment

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4. Click Actions, Add Before, and then set the values listed in the following table.
Field Value
Parameter Asset Item

Operator Equals

Value Yes

5. Click Actions, Add Before, and then set the values listed in the following table.
Field Value
Parameter Ship-from organization

Operator Equals

Value C1

C1 is a warehouse that belongs to Vision Manufacturing.

Creating Financial Orchestration Flows

You must create a financial orchestration flow. To create this flow, do the following:
Financial Orchestration Qualifiers.
2. On the Create Financial Orchestration Qualifier page, set the values listed in the following table Leave all other
fields at their default value.
Field Value
Name Vision Operations Financial Orchestration Flow

Business Process Type Shipment

Priority 1


3. On the Create Financial Orchestration Flow page, in the Primary Routes section, click Actions, click Add
Row, and then set the values listed in the following table. Leave all other fields at their default value.
Field Value
Shipping Business Unit Vision Manufacturing

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Field Value
Shipping Legal Entity Vision China

Selling Business Unit Vision Operations

Selling Legal Entity Vision Operations


Field Value
Selling Business Unit Vision Manufacturing

Selling Legal Entity Vision China

Buying Business Unit Vision Distributions

Buying Legal Entity Vision Singapore

Selling Trade Organization Leave empty.

Buying Trade Organization D1

Transfer Pricing Rule Vision Manufacturing Transfer Pricing Rule

Documentation and Accounting Rule Vision Manufacturing Documentation and Accounting Rule

Receivables Invoice Type Intercompany

Receivables Credit Memo Type Credit Memo

Payment Terms Immediate

Field Value
Selling Business Unit Vision Distributions

Selling Legal Entity Vision Singapore

Buying Business Unit Vision Operations
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Field Value

Buying Legal Entity Vision Operations

Selling Trade Organization Leave empty.

Buying Trade Organization V1

Transfer Pricing Rule Vision Manufacturing Transfer Pricing Rule.

Alternatively, you can define the transfer pricing rules in Oracle Fusion Pricing and associate the
Transfer Pricing Rule attribute to the value Pricing Strategy.

There is a new predefined value 'Pricing Strategy' for the Transfer pricing Rule attribute in the
financial flow. If the transfer pricing rule is set as 'Pricing Strategy', Oracle Fusion Pricing derives
the transfer pricing for the node.

Documentation and Accounting Rule Vision Distributions Documentation and Accounting Rule

Receivables Invoice Type Intercompany

Receivables Credit Memo Type Credit Memo

Payment Terms Immediate

6. Click Save.
Setting Financial Orchestration System Options

You must set the Financial Orchestration system options. To create these options, do the following:
Financial Orchestration system options.
2. On the Manage Financial Orchestration system options page, click Actions, and then click Create. Enter the
values listed in the following table.
Field Value
Item Validation Organization V1

Service Item RR_RP_Item24

Maximum Number of Records per 100

Batch

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Testing Your Financial Orchestration Flow

Perform the following steps to make sure your financial orchestration flow works correctly:
1. Sign in to your order capture system, and then use it to create a sales order that will start the financial orchestration
flow that you configured in this example.
2. Make sure the order includes an asset item that a warehouse belonging to the Vision Manufacturing must ship to
the Schatze Toy Company. The values listed in the following table are examples that will start this flow. Your order
capture system might use different field.
Field Value
Business Unit Vision Operations

Ship-to customer Schatze Toy Company

Warehouse C1

3. Pick Release and ship the sale order line.

4. Verify Financial Orchestration Execution.
◦ Navigate to the Financial Orchestration work area, and then the Monitor Financial Orchestration
Execution page.
5. Issue a query that locates the order. For example, in the Sales Order field, enter the Orchestration Order number that
you noticed in step 1, such as 181094.
6. Verify that the Search Results shows the sales order and its status. The financial orchestration flow created by you
has been used for financial orchestration execution. Click View Tasks to show the list of financial orchestration tasks
that will be created for this sales order.
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Implementing Manufacturing and Supply Chain Materials Implementing Maintenance
Management
16 Implementing Maintenance
Setting Up Maintenance: Procedure

To set up Oracle Maintenance Cloud, you must perform the setup tasks specified in the Manufacturing and Supply Chain
Materials Management offering on the Setup and Maintenance work area.
Maintenance Management is an optional functional area in the Manufacturing and Supply Chain Materials Management
Offering and must be enabled for implementing Oracle Maintenance Cloud. In the Setup and Maintenance work area, select
the Manufacturing and Supply Chain Materials Management offering. On the Configure: Manufacturing and Supply Chain
Materials Management page, select Enable for Implementation check box against Maintenance Management offering.
The following are the tasks in the Maintenance Management functional area that require specific setup for maintenance.
Tasks Required or Optional Description
Manage Plant Parameters Required Configure plant parameters that are relevant
to maintenance organization.

Manage Maintenance Lookups Optional Create and maintain lookups that are used
in maintenance asset definition and work
management.

Manage Maintenance Work Areas Required Create and maintain work areas to represent
specific regions where maintenance activities
are executed.

Manage Maintenance Work Centers Required Create and maintain work centers
to represent specific location where
maintenance work is performed and is
comprised of resources having similar
capabilities.

Manage Maintenance Resources Optional Create and maintain resources to model the
labor or equipment used in a maintenance
work center and operation and to track
usages during maintenance execution.

Common Tasks That You Perform for Maintenance Management

The setup tasks specified in the Maintenance Management functional area that do not require specific setup for maintenance
management are listed in the Common Tasks section. These tasks are common to most Oracle applications. For details
about how to perform them, see the Oracle SCM Cloud: Implementing Common Features for Oracle SCM Cloud guide.
The following are the tasks in the Maintenance Management functional area that does not require any specific setup for
maintenance.
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Tasks Required or Optional Description
Manage Maintenance Value Sets Optional Create and maintain maintenance value sets.

Manage Maintenance Descriptive Flexfields Optional Create attributes for the maintenance
entities, define related validation, and display
properties of descriptive flexfields for work
management.

Setting Up Maintenance Organization: Overview

A maintenance organization is basically an inventory organization enabled for maintenance activities.
To set an organization as a maintenance organization, perform the following steps:
1. In the Manage Inventory Organizations page, select an existing organization or create a new one from the
Search Results region. Then, click the Manage Inventory Organization Parameters button to edit the
organization settings.
2. In the Manage Inventory Organization Parameters page, on the General tab, in the Additional Usages
region, select the Organization performs maintenance activities check box. Now, the organization is set as a
maintenance organization.
Setting the Maintenance Plant Parameters:
You can set the plant parameters for a maintenance organization that determines the various functionality of the organization.
How can I define the default maintenance organization?

To define the default maintenance organization, perform the following tasks: In the Setup and Maintenance work area, select
the Manufacturing and Supply Chain Materials Management offering and click the Setup button. On the Setup: Manufacturing
and Supply Chain Materials Management page, select Manufacturing Master Data. In the Manufacturing Master Data region,
from the Show drop-down list, select: All Tasks. Then, click the Manage Plant Profiles tasks. On the Manage Plant Profiles
page, select: RCS_DEFAULT_MFG_PLANT_ORG.
Setting Up Maintenance Plant Parameters: Critical Choices

You can set the plant parameters to define the functionality of a maintenance organization.
The following sections discuss the parameters and their acceptable values in detail:
• Plant Details Parameters

• Materials Parameters
• Work Definition Parameters
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Plant Details Parameters

The following table discusses the parameter for the maintenance organization:
Parameters Description
Manufacturing Calendar Refers to the schedule or calendar to be used in the maintenance organization.

Material Parameters
The following table discusses the parameters for the material in the maintenance organization:
Default Supply Subinventory For maintenance work definitions:

Specifies the default supply subinventory for the maintenance work definition operation item if there
is no supply subinventory defined for the maintenance work center or item master.

For maintenance work orders:

Specifies the supply subinventory to be used when backflush components that do not have a
default defined at the maintenance work order operation item or the inventory item level.

Default Completion Subinventory For maintenance work orders:

Specifies the completion subinventory to be used for storing the completed product if a default is
not defined at the maintenance work order level.

Default Supply Locator For maintenance work definitions:

Specifies the default supply locator for the maintenance work definition operation item if there is no
supply locator defined for the maintenance work center or item master.

For maintenance work orders:

Specifies the supply locator to be used when backflush components that do not have a default
defined at the maintenance work order operation item or the inventory item level.

Default Completion Locator For maintenance work orders:

Specifies the completion locator to be used for storing the completed product if a default is not
defined at the maintenance work order level.

Work Definition Parameters

The following table discusses the parameters for the maintenance work definition in the maintenance organization:
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Starting Operation Sequence Specifies the default sequence number for the first operation in a maintenance work definition and
maintenance work order. The value must be a positive integer.

Operation Sequence Increment Specifies the incremental value by which the sequence of the operation is to be increased in the
maintenance work definition and maintenance work order.


Phantom Operation Inheritance

Specifies whether the phantom components and resources are inherited at the same operation that
the phantom is assigned in the parent item maintenance work definition.
• Material Only: If selected, when creating the maintenance work order, all of the phantom
components are inherited at the same operation that the phantom is assigned in the parent
item maintenance work definition.
• Material and Resources: If selected, when creating the maintenance work order, all of the
phantom components and resources are inherited at the same operation that the phantom is
assigned in the parent item maintenance work definition.
The default value is Material Only.
Work Order Prefix Specifies the prefix to use when automatically generating the work order names when creating the
maintenance work orders.

You can enter a maximum length of 30 characters.

Work Order Starting Number Specifies the initial number to pass in to the document sequence which is created when a record is
saved.

The value must be a positive integer greater than zero. The default value is 1000.

This field becomes read only after the maintenance work order document sequence for the
maintenance organization is created.

Default Overcompletion Tolerance Specifies the percentage of assemblies that you can complete over the quantity specified on the
Percentage maintenance work order.

The value must be between 1 and 100. The default value is blank.

Default Transaction Mode

Specifies whether the materials and resources are defaulted from the maintenance work order
operation when reporting the material or resource transactions.
• All: If selected, all the components and resources that are associated with the maintenance
work order operation are defaulted and you can transact against them.
• Entered: If selected, the components and resources that are associated with the
maintenance work order operation are not defaulted and you are required to enter the
specific component or the resource to transact.
The default value is All.
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Default Transaction Quantity

Specifies whether the transaction quantity is to be defaulted as that of the required quantity during
the material or resource transactions in a maintenance work order. However, you can make
changes to the default quantity.
• None: If selected, the transaction quantity is not defaulted as that of the required quantity
during the material or resource transactions in a maintenance work order.
• Material: If selected, the transaction quantity is defaulted as that of the required quantity
during the material transactions in a work order.
• Resources: If selected, the maintenance transaction quantity is defaulted as that of the
required quantity during the resource transactions in a maintenance work order.
• Both: If selected, the transaction quantity is defaulted as that of the required quantity during
the material and resource transactions in a maintenance work order.
The default value is Both.
Allow Quantity Changes During

Backflush Specifies whether you can change the transaction quantity or not.

• None: If selected, during backflush, you cannot modify the transaction quantity of the pull
components required in an operation and cannot report the consumption of the ad hoc
material. During automatic charging, you cannot modify the charge quantity of the automatic
resources required in an operation and cannot report the usage of the ad hoc resources.
• Material: If selected, during backflush, you can modify the transaction quantity of the
pull components required in an operation and can report the consumption of the ad hoc
material. During automatic charging, you cannot modify the charge quantity of the automatic
resources required in an operation and cannot report the usage of the ad hoc resources.
• Resources: If selected, during backflush, you cannot modify the transaction quantity of the
pull components required in an operation and cannot report the consumption of the ad hoc
material. During automatic charging, you can modify the charge quantity of the automatic
resources required in an operation and can report the usage of the ad hoc resources.
• Both: If selected, during backflush, you can modify the transaction quantity of the pull
components required at an operation and can report the consumption of the ad hoc material.
During automatic charging, you can modify the charge quantity of the automatic resources
required at an operation and can report usage of ad hoc resources.
The default value is None.
Default Work Order Traveler Template Specifies the name of the template to be used for printing the maintenance work order traveler or
the labels for the maintenance organization.

You may use your own BI publisher templates by specifying the file path and file name of your
templates in this parameter. If the parameter is blank, the default template defined in the BI publisher
report definition settings is used for all the maintenance organizations.

maximum string length of 400 characters.

Default Label Template Specifies the name of the template to be used for printing the maintenance work order traveler or
the labels for the maintenance organization.

You may use your own BI publisher templates by specifying the file path and file name of your
templates in this parameter. If the parameter is blank, the default template defined in the BI publisher
report definition settings is used for all the maintenance organizations.

You can enter a maximum string length of 400 characters.
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Include component yield in material Indicates whether the component yield is factored into the maintenance work order material
requirements requirements and the component quantities during the material transactions.

You deselect this parameter to avoid rounding the decimal quantities. The rounding can inflate
transaction quantities causing inaccurate representation of requirements.

Automatically associate serial numbers Indicates whether the serial numbers are to be automatically generated and associated when
during work order import importing a maintenance work order.

Manage Lookups for Maintenance: Explained

The lookups in an application are used to represent the set of codes and their translated meanings. For instruction on setting
up lookups that are common to any Oracle application, refer to the Implementing Common Features for Oracle SCM Cloud
guide.
In addition to the common lookups, you can optionally set up the lookups specific to Oracle Maintenance Cloud as required.
To set up lookups for Maintenance Cloud, in the Setup and Maintenance work area, use the Manage Maintenance Lookups
setup task in the Maintenance Management functional area of the Manufacturing and Supply Chain Materials Management
offering.
The Maintenance Cloud application uses the following lookups that can be populated optionally as required.
Maintenance Work Definition Status ORA_ MNT_ WORKDEF_ VERSTATUS Enables you to list all the active or inactive
maintenance work definitions.

Print Work Order Material List Sort Options ORA_ MNT_ WO_GCL_SORT Enables you to sort the options for printing
the maintenance work order material list.

Maintenance Work Order Type ORA_ MNT_WO_TYPE Indicates if the work order performed against
an asset is preventive or corrective.

Maintenance Work Order Subtype ORA_ MNT_ WO_SUB_TYPE Indicates the condition under which a work
order must be performed against an asset.

Work Order Completion Search Options ORA_ MNT_ WO_CMPL_SRCH Enables you to search for the work orders
based on whether the work order is
completed on time or completed late.

Asset Work Order Time Period ORA_ MNT_ ASSET_ WO_ TIME_PERIOD Captures the time periods during which the
work orders are aggregated for an asset.

Landing Page Graph Legend ORA_ MNT_ GRAPH_LEGEND Captures the legends for graphs displayed in
the maintenance overview page.

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Search Object Type ORA_ MNT_ SEARCH_OBJECT Enables you to search for the object types
from the maintenance work area. Examples
of the object types are asset, work order,
work definition, and so on.

Work Areas, Resources, and Work Centers: How They Fit

Together
In a maintenance organization, the maintenance activities are carried out in the work centers within the work areas using the
resources. So, the required work areas, resources, and work centers must be set up in a maintenance organization before
the day to day maintenance activities can be commenced.
This figure illustrates the recommended order to perform the setup. First, create the work areas, then resources, and finally
the work centers. Then, add the resources to the work centers and allocate shifts to the resources.
Create the Work Areas
Create the Resources
Create the Work Centers
Add Resources to the Work Centers and

Allocate Shifts to the Resources
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Work Areas
First, you must create the required work areas for the maintenance organization. A work area is a specific region allocated for
performing the maintenance activities. Every maintenance organization must have at least one work area. However, you can
create multiple work areas as per your requirement.
Resources
After creating the work areas, you must create the resources that you need for the maintenance organization. The labor and
equipment that you need for performing the maintenance activities are accounted as the resources.
Work Centers
After creating the work areas and resources, you must create the work centers. The production unit consisting of people or
equipment is referred as a work center. Add the resources to the work centers where you want to use the resources. You
must then allocate shifts for the resources. You can also manage the work center calendars for the resources.
Managing Maintenance Work Areas: Explained

A work area is the specific region in a maintenance organization where the maintenance activities are executed. In other
words, a work area identifies a physical, geographical, or logical grouping of work centers.
At least one work area must be defined for a maintenance organization. However, a maintenance organization can have one
or more work areas defined within it. A work area consists of one or more work centers within it. The Maintenance Technician
can report material, resource, and operation transactions performed at work centers that belong to a specific work area.
The Manage Work Areas page serves as a starting point to create, edit, and delete the work areas. On the Maintenance
Overview page, in Tasks pane, click the Manage Maintenance Work Areas link in the Maintenance Setup to open the Manage
Work Areas page. In the Setup and Maintenance work area, use the Manage Maintenance Work Areas setup task in the
Maintenance Management functional area of the Manufacturing and Supply Chain Materials Management offering.
Creating, Editing, and Deleting the Work Areas

You create a work area by providing a unique name and code for the work area.
A work area is deactivated or reactivated by updating the Inactive On field. When a work area is deactivated, the work area is
not available for further use until it is reactivated.
You can delete or deactivate a work area if either of the following is true:
• The work area has no associated work center.

• The work area has no active work center associated with it.
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Managing Maintenance Resources: Explained

The resources are the labors, equipment, and tools allocated to a work center. Resources can be categorized into two types:
Labor and Equipment.
The Manage Resources page serves as a starting point to create, edit, and delete the resources. On the Maintenance
Overview page, in the Tasks pane, click the Manage Maintenance Resources link to open the Manage Resources page. In
the Setup and Maintenance work area, use the Manage Maintenance Resources setup task in the Maintenance Management
functional area of the Manufacturing and Supply Chain Materials Management offering.
Creating, Editing, and Deleting the Resources

You must create a resource with unique name and code. Additionally, you must define the resource type and usage UOM of
the resource at the time of creation. You cannot change the usage UOM of a resource once the resource is associated with a
work center. However, you can edit all other resource attributes at any time.
Note: The usage UOM field indicates the unit of measure for the planned and actual usage of a resource. A
resource can be used in the work definitions and work orders only if the usage UOM belongs to the UOM class
as defined in the profile SCM Common: Default Service Duration class.
A resource is deactivated or reactivated by updating the Inactive On field. When a resource is deactivated, the resource is not
available for further use until it is reactivated. You can delete a resource only if the resource is not assigned to any work center
and the resource is not associated with any active resource instance.
Managing Maintenance Resource Instances: Explained

A resource instance is granular representation of a resource and is represented by a unique code and name. A resource
instance may or may not be associated with a work center. A resource instance can be of labor type or equipment type
based on the resource with which it is associated.
On the Resource Instances tab of the Edit Resource page, you can create, edit, and delete the resource instances.
You can access the Edit Resource page using either of the following steps:
• On the Maintenance Overview page, in the Tasks pane, click the Manage Maintenance Resources link. On the
Manage Resources page, click the resource name to open the Edit Resource page.
• In Maintenance Management functional area of the Manufacturing and Supply Chain Materials Management offering,
click the Manage Maintenance Resources setup task link or Manage Resource Instances setup task link. On the
Manage Resources page, click the resource name to open the Edit Resource page.
You can create a resource instance with a unique identifier and a name. Optionally, you can select the primary work center
for the resource instance. This facilitates quick assignment of the resource instance in work orders and work execution
transactions. You can also deactivate or reactivate a resource instance by updating the Inactive On field. When a resource
instance is deactivated, the resource instance is not available for further use until it is reactivated.
For an equipment type of resource instance, you can provide the asset number and asset description to associate the
resource instance with the asset. For a labor type of resource instance, you can provide the person type and person name to
associate the resource instance with a worker.
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Managing Maintenance Work Centers: Explained

The work centers are specific production units that consist of people or equipment with similar capabilities. Each work center
is associated with a valid work area and can be used for capacity requirement planning and detailed scheduling.
The Manage Work Centers page serves as a starting point to create, edit, and delete a work center. On the Maintenance
Overview page, in the Tasks pane, click the Manage Maintenance Work Centers link to open the Manage Work Centers
page. In the Setup and Maintenance work area, use the Manage Maintenance Work Centers setup task in the Maintenance
Management functional area of the Manufacturing and Supply Chain Materials Management offering.
Creating, Editing, and Deleting a Work Center

You create a work center by providing a unique name and code for the work center, and a valid work area to which the work
center is associated.
A work center is deactivated or reactivated by updating the Inactive On field.
You cannot delete a work center if:
• The work center has any resource associated with it.

• The work center is being referenced in a work definition operation.
• The work center is being referenced in a work order operation.
Adding Resources to a Work Center and Allocating Resources to a Shift

After creating a work center, you can add resources to it and then allocate shift hours to each resource.
You can add a resource to a work center by selecting from or entering values for the following fields:
Field Description
Resource The unique identifier of the resource.

Inactive On The date on which the resource becomes inactive.

Default Units Available Number of resource units available in a work center.

Available 24 Hours Indicator whether a resource is available 24 hours a day. A resource that is not available 24 hours is
available only during the shifts assigned to it.

Check Capable To Promise Indicator whether the Global Order Promising engine considers the capacity of this resource during
order promising.

Utilization The percentage of the resource time available for the task.

Efficiency The percentage of the time a resource takes to complete a task.

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Utilization and Efficiency Percentages:
The utilization and efficiency percentages are by default set to 100%. When these percentages are set to less than 100%,
they extend the scheduled duration of the resource during work order scheduling. For example, if 1 hour of work is required
to be done using the resource R1 starting from 10 AM on a specific work order, and if its efficiency is 50%, and utilization is
50%, then the scheduler determines the end time for this resource as 2 PM, calculated as following:
1 / ( 0.5 * 0.5 ) = 4 hours
Resource Allocation:
A resource is available in shifts if the Available 24 Hours field is not selected. When a shift-based resource is associated with a
work center, default units of the resource are automatically assigned to all the shifts of the maintenance organization. You can
update the availability of resource units across the shifts as required.
For example, consider that you have defined two 8-hour shifts for the work center WC1: Day shift and Night shift. You
associate two units each of four resources R1, R2, R3, and R4 to the work center WC1. The following table shows the key
scenarios and their implementations:
Scenario Consideration Solution
You want the resource R1 available for 24 You have not associated the resource R1 to Select the Available 24 Hours check box
hours a day. the work center WC1 yet. when associating the resource R1 to the
work center WC1. Now, the two units of
resource R1 are available 24 hours a day and
you cannot assign any shift for it.

You want two units of the resource R2 You have already associated the resource R2 In Resource Availability region, in the Day
available for the Day shift only. to work center WC1 with Available 24 Hours shift column, enter 2 against the resource
check box deselected. R2. Now, the two units of resource R2 are
available for Day shift. For the Night shift, the
resource R2 has zero or blank value.

You want one unit of the resource R3 You have already associated the resource R3 In Resource Availability region, in the Day
available for Day shift and one unit of to work center WC1 with Available 24 Hours shift column, enter 1 against the resource R3
resource R3 available for Night shift. check box deselected. and in the Night shift column, enter 1 against
the resource R3. Now, one unit of resource
R3 is available for the Day shift and one unit
of resource R3 is available for the Night shift.

You want all the units of resource R4 You have already associated the resource R4 In Resource Availability region, in the Day
available for both the Day shift and Night to work center WC1 with Available 24 Hours shift column, enter 2 against the resource R4
shift. check box deselected. and in the Night shift column, enter 2 against
the resource R4. Now, two units of resource
R4 are available for both the Day shift and the
Night shift.

Viewing and Managing Resource Exceptions

You use the work center resource calendar to view and manage the exceptions related to the resources. In case of a conflict,
the exceptions granted in the work center resource calendar override the exceptions granted in production calendar.
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Managing Maintenance Organization Relationships:

Explained
The steps to set up the maintenance organization relationships are:
offering.
2. Click Setup.
3. Select the Maintenance Management functional area.
4. In the Maintenance Management region, from the Show drop-down list, select: All Tasks.
5. Select the Manage Maintenance Organization Relationships link.
6. On the Manage Maintenance Organization Relationships page, search for the organization.
7. Search for the organizations that you want to view.
8. Select the organization. The Organization Relationship Details pane shows the organization relationships for the
selected organization.
9. On the Organization Relationship Details pane, you can view, add, and remove the organization-to-organization
relationships for the selected organization.
Setting Up Electronic Signatures and Electronic Records for

Maintenance Exception Closure: Explained
You must enable the ability to capture the Electronic Signatures and Electronic Records for maintenance exception closure.
Steps for setting up maintenance exception closure:
click Setup.
3. On the Setup: Manufacturing and Supply Chain Materials Management page, click the Facilities functional area.
4. Select Change Feature Selection.
5. On the Edit Features: Facilities page, select the Enable check box for Capture electronic records and Electronic
signatures for SCM Transactions, if not selected already. Then, click Done.
6. In the Facilities functional area, click the Configure Electronic Signature Preferences task.
7. Select the organization. You can also add an organization using the Add icon. Then, for the Maintenance Exception
Closure transaction, select the Signature Enabled check box.
Steps for setting up the business process rule:
click Setup.
3. On the Setup: Manufacturing and Supply Chain Materials Management page, click the Facilities functional area, and
then click the Manage Task Configurations for Supply Chain Management task.
4. Search for ExceptionClosureApprovalHumanTask and click the task.
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5. Select the Assignees tab. On the tab, click Maintenance Exception and then select Go to Rule.
6. Select the ExceptionClosureApprovalSingleRule.
7. Click the Add icon and then expand the newly added row.
8. Search for ExceptionClosureApprovalHumanTaskPayloadType and select the task.
9. Select organizationCode.
10. Enter the organization code. Then, click Add Approver and select Resource.
11. Enter MNT_QA in the Users field.
12. Select Rule and Click Validate.
13. Click Save and then click CommitTask.
Note: For more information about implementing E-Signatures and generating E-Records, refer to the
Implementing E-Signatures and E-Records chapter of the Oracle SCM Cloud Implementing Manufacturing and
Supply Chain Materials Management guide.
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Implementing Manufacturing and Supply Chain Materials Implementing Supply Chain Collaboration
Management
17 Implementing Supply Chain Collaboration
Supply Chain Collaboration Introduction

Supply Chain Collaboration: Overview
Oracle Fusion Supply Chain Collaboration is a collaboration platform that manages cross-company planning and execution
processes for Oracle Fusion Supply Chain Management (SCM). You use Supply Chain Collaboration with Oracle SCM Cloud
Services to get timely updates from your key suppliers and contract manufacturers on important supply chain decisions.
Supply Chain Collaboration supports the following processes:
• Supply planning collaboration to collaborate on order forecasts with tier 1 and tier 2 suppliers. The supply chain
planners publish order forecasts to suppliers. The suppliers can view and analyze the order forecasts and commit to
supply the requested item quantities over the planning horizon. The collaboration planners can review and adjust the
supplier's commits if necessary. The commits flow to Oracle Fusion Planning Central Cloud Service or Oracle Supply
Chain Planning, where they are used as supplier capacity.
• Contract manufacturing collaboration to share supplier's (contract manufacturer's) production progress. The
suppliers can also view previously submitted updates for their projects. Once uploaded, production reports are
automatically submitted to Oracle Manufacturing Cloud, and the completion status and materials usage status of the
contract manufacturing work order is updated.
• Business to Business (B2B) message monitoring to see the number of failed or undelivered messages. You can
monitor messages for all processes, including order-to-cash and source-to-settle. The administrators can investigate
the details and reprocess the failed messages when appropriate.
Supply Planning Collaboration

Supply Planning Collaboration: Overview
You can use the Supply Chain Collaboration work area to view open collaboration tasks and monitor order forecast commit
status. You can also view exceptions that potentially need attention.
In the Oracle Fusion Supplier Portal Overview work area, suppliers can participate in supply planning collaboration by
reviewing and responding to order forecasts.
Use supply planning collaboration to:
• Publish supply plans from Oracle Fusion Planning Central Cloud Service or Oracle Supply Chain Planning, which can
be analyzed and shared with suppliers as order forecasts.
• Allow suppliers to view and analyze the order forecasts and commit by using Supplier Portal, Business to Business
(B2B) messaging, or web services.
• Allow Supply Chain Collaboration Planners to review all published forecasts and commits by using the Manage Order
Forecasts and Commits page.
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• Manage exceptions by using the Supply Chain Collaboration work area. The exceptions may be due to:
◦ Past due commits, where the supplier has not committed by the agreed commit due date established in the
Service Level Agreement (SLA).
◦ Forecast changes, where the current cycle forecast quantity has changed from the previous cycle.
◦ Commit mismatches, where the committed quantity is less than the forecast quantity for a given date.
• Manage a trading partner network by using the Manage Supply Collaboration Network page.
Supply Planning Collaboration Components: How They Work

Together
The supply planning collaboration process provides you with a seamless flow of information by bringing together supply
planning, order forecasts, and supplier commits.
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This figure provides an overview of the supply planning collaboration components:
Supply Planning Collaboration
Planning Central Supply Chain

Cloud Planning Supplier capacity
Supply Plan
Creation
Supply plans
Interface Supply Chain Collaboration Interface Tables

Tables
Validate interface
data
Create order
Decomposition forecast
Launch
Orchestration
process
Orchestration Start task execution Forecast commits
Fusion Applications
Execution Supply Chain Collaboration Messaging
Systems Supplier Portal
Collaboration Framework
Based on the process and actions performed, the supply planning collaboration components are:
• Decomposition
• Orchestration
• Execution systems
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The following table describes the supply planning collaboration components, the internal processes, and the corresponding
actions.
Supply Planning Collaboration Components Internal Process Actions
Supply plan creation applications • Record the supply plans in the Supply
Supply plans are created in Oracle Supply Chain Planning tables
Chain Planning or Oracle Fusion Planning
• Record the supply plan data in the
Central Cloud Service.
Supply Chain Collaboration interface
tables after the scheduled process is
The Publish Order Forecast scheduled run
process filters the supply plan data by:
• Supply plan
• Organization for supply planning
• Planner, which is the Supply Demand
Planner ID
• Category
• Item, which is the enterprise item ID
• Supplier
• Supplier site
Interface Tables The data is ready for collaboration. Store supply forecast and commit data in the
Supply Chain Collaboration interface tables

Decomposition • Create order forecasts

The Supply Planning Collaboration
• Update order forecast mid-cycle
Decomposition scheduled process:
• Launch orchestration process
• Reads the payloads from the interface
tables
• Evaluates forecast exceptions
• Creates or updates an order forecast,
used by Supply Chain Collaboration to
publish to suppliers
• Assigns and launches the
orchestration process
Order forecast quantities are sent and stored

in daily time buckets. However, they are
displayed in weekly, monthly, or period
aggregations.
Orchestration • Publish forecasts to Oracle Fusion

Orchestrates supply by: Supplier Portal and Supply Chain
Collaboration
• Assigning an orchestration process
• Send B2B messages
and starting orchestration
• Running the determined business
process
• Grouping Business to Business (B2B)
messages by supplier site per plan
Execution systems Suppliers use the Supplier Portal to process • Supplier provides commits
commits for the order forecasts received • Contract Manufacturer reviews order
from Supply Chain Collaboration. forecasts for their upstream suppliers
• Collaboration planner reviews order
Collaboration planners use the Supply Chain forecasts and provides commits
Collaboration to process commits on behalf
of suppliers.
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Supply Planning Collaboration Components Internal Process Actions

The entities that are created and managed during collaboration are:
• Supply plans: Contain the supply orders created for a supply request, which are published to Supply Chain
Collaboration. These plans are created in Supply Planning or Planning Central.
• Collaboration plans: Contain the order forecasts based on the supply plans that are eligible for collaboration for a
specified collaboration period. These plans are created in Supply Chain Collaboration.
• Order forecasts: Contain the forecast and commit quantities by the suggested date that is used to create the time
bucket.
Supply Planning Collaboration Flow: Explained

The supply planning collaboration process flow includes the following steps:
1. A Supply Chain Planner uses Oracle Fusion Applications, such as Oracle Supply Chain Planning or Oracle Fusion
Planning Central Cloud Service to create supply plans.
2. The Supply Chain Planner decides which supply plan data to send to Oracle Fusion Supply Chain Collaboration. The
data can be filtered by attributes such as suppliers, items, and so on.
3. Supply Chain Collaboration receives the supply plans and stores the supply plans in interface tables.
4. Supply Chain Collaboration decomposition process decomposes the supply plans and creates order forecasts.
5. The orchestration process publishes the order forecasts to the suppliers through Oracle Fusion Supplier Portal, B2B
Messaging using Oracle Fusion Collaboration Messaging Framework, or web services.
6. The Supply Chain Collaboration Planners and the Supplier Demand Planners can view the open collaboration tasks.
7. The Supply Chain Collaboration Planners and the Supplier Demand Planners can view the exceptions that potentially
need attention arising due to various reasons, such as past due commits, forecast changes, and forecast commit
mismatches.
8. The Supplier Demand Planners can review each time bucket request and commit to supply the requested item
quantity in Supplier Portal. The Supply Chain Collaboration Planners can search and view all the published order
forecasts and commits on the Manage Order Forecasts and Commits page. The Supply Chain Collaboration
Planners can also update order commits on behalf of a supplier.
9. The orchestration process triggers decomposition of the order commits from suppliers and stores the order commits
in interface tables.
10. The Supply Chain Planners can pull supplier commits back into Oracle Supply Chain Planning or Oracle Fusion
Planning Central Cloud Service as supplier capacity.
Related Topics
• Publish Order Forecast: Explained
• Receiving Supplier Commits: Explained
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Supply Planning Collaboration User Roles: Explained

The following table describes the supply planning collaboration user roles:
User Role Description
Supply Chain Planner • Manages supply plans in Oracle Fusion Planning Central Cloud Service or Oracle Supply
Chain Planning
• Releases order forecasts to suppliers requesting order commits
Supply Chain Collaboration Planner • Reviews order forecasts and supplier commits
• Reviews and manages exceptions around supply planning commits
• Updates commits on behalf of a supplier
Supplier Demand Planner • Reviews order forecasts

• Provides commits to order forecasts using supplier portal, collaboration messaging, or direct
web services
Supply Chain Application Administrator • Manages supply collaboration network

• Manages collaboration plans
• Manages collaboration planners
• Defines aggregation schedules
• Enables and reviews Business to Business (B2B) messages
Contract Manufacturing Collaboration

Contract Manufacturing Collaboration: Overview
Contract manufacturing collaboration enables suppliers and the original equipment manufacturers (OEMs) to manage
production reports and manufacturing transactions.
Contract Manufacturing Collaboration with Suppliers: Explained

The contract manufacturing collaboration process enables suppliers (contract manufacturers) to manage production reports.
In the Oracle Fusion Supplier Portal Overview work area, the supplier can:
• Navigate to the collaboration area and upload production reports to update manufacturing progress. The
transactions uploaded by the supplier are automatically submitted to manufacturing so that the completion status
and materials usage status of the contract manufacturing work order can be updated.
• Search and view completed production reports for their assigned purchase orders.
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Contract Manufacturing Collaboration with Original Equipment

Manufacturers: Explained
The contract manufacturing collaboration process enables the original equipment manufacturers (OEMs) to track contract
manufacturer's manufacturing progress.
OEMs can navigate from Oracle Fusion Supply Chain Collaboration, the Supply Chain Collaboration work area or Oracle
Fusion Supply Chain Orchestration, the Supply Lines Overview work area to:
• Search for and view the supplier-provided updates for the in-progress contract manufacturing purchase orders.
• Resubmit a report to manufacturing if the automatic submission fails.
Contract Manufacturing Collaboration Flow: Explained

The contract manufacturing collaboration process flow includes the following steps:
1. The Supply Chain Operations Manager can view the contract manufacturing production reports submitted by
suppliers (contract manufacturers) in Oracle Fusion Supply Chain Collaboration, the Supply Chain Collaboration work
area or in Oracle Fusion Supply Chain Orchestration, the Supply Lines Overview work area.
2. The Supply Chain Operations Manager can view the supply orders that are in jeopardy and navigate to the
manufacturing application to view the details of the supply order.
3. The Supply Chain Operations Manager can contact the supplier for more information about the supply order in
jeopardy.
4. The Supplier Inventory Manager can navigate to the Manage Production Reports page to upload production reports
to update manufacturing progress in Oracle Manufacturing.
5. The Supply Chain Operations Manager can view the updated production report by using Supply Chain Collaboration
or Supply Chain Orchestration.
Contract Manufacturing Collaboration User Roles: Explained

The following table describes the contract manufacturing collaboration user roles:
User Role Description
Supply Inventory Manager

This role is assigned to suppliers (contract manufacturers) to:
• Access Oracle Fusion Supplier Portal

• View summary reports
• Navigate to the collaboration area and provide manufacturing or production report updates
Supply Chain Operations Manager

This role is assigned to original equipment manufacturers (OEMs) to:
• View supplier-provided updates for the in-progress contract manufacturing purchase orders
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B2B Messaging
Monitor B2B Messages: Overview
Business to Business (B2B) messages exchange information among trading partners about key transactions in the planning
collaboration, order-to-cash, and source-to-settle processes. Oracle Fusion Supply Chain Collaboration uses Oracle Fusion
Collaboration Messaging Framework to better manage B2B communications with large numbers of suppliers. For a supplier
to exchange B2B messages, you must enable the supplier site for B2B collaboration and select the service providers and
B2B messages that apply to them.
Using the Supply Chain Collaboration work area, the collaboration planner can:
• View a count of the failed and undelivered messages.

• View details of the failed and undelivered messages.
• Contact the B2B administrator to investigate the failed and undelivered messages and reprocess them.
Supply Chain Collaboration Setup

Supply Chain Collaboration Setup: Overview
You can define the configuration settings for Oracle Fusion Supply Chain Collaboration in the Setup and Maintenance work
area.
The following table describes the tasks to set up Supply Chain Collaboration:
Manage supply chain collaboration You can manage the settings for Supply Chain Collaboration
settings

Manage supply chain collaboration You can create your own messages, but it is recommended to use the predefined messages and
messages edit the messages

Manage supply chain collaboration You can edit only the names of those predefined lookups for which extensibility is enabled
lookups

Manage Supply Chain Collaboration Settings
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Manage Supply Chain Collaboration Settings: Overview

Oracle Fusion Supply Chain Collaboration allows you to configure additional data access for the enterprise users.
Data Access: Overview

Oracle Fusion Supply Chain Collaboration users work with external suppliers and require additional data access that is not
generally available in other Oracle Fusion applications. The data access provides the collaboration planner the ability to
manage order forecasts for the relationships that is either supplier or supplier site.
Data access controls only the order forecast data. The administration data, such as collaboration relationships will be visible
to all administrators.
For example, the following table lists the supplier and their supplier sites:
ID Supplier Supplier Site
266 Celesta Dallas

544 CV_SuppA00 Seattle

753 CV_SuppA00 Atlanta

272 Pittsburgh Electronics Pittsburgh

269 Pittsburgh Electronics Bloomington

The following table lists the collaboration planner configuration:
Name Context Context Value
User 1 Full Access NA

User 2 Supplier CV_SuppA00

User 2 Supplier Site Bloomington

User 3 Supplier Site Pittsburgh

User 4 Not setup as a collaboration planner NA

You can enable data security and specify the default access mode being inclusive or exclusive:
• If the data access is inclusive (Allow full access if no data access is assigned is set to Yes), the collaboration planners
have access to all supplier sites explicitly granted to them and the supplier sites that do not have at least one other
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collaboration planner assigned. You use the inclusive access mode if the majority of relationships are accessible to all
planners and only a few relationships are confidential.
This figure illustrates the configuration of collaboration planners with inclusive data access.
Access When Inclusive
CV_SuppA00 Pittsburgh Electronics Celesta
Bloomington Pittsburgh
Seattle Atlanta Dallas
User 1 User 3 User 4

User 2
Supplier: CV_SuppA00 No Access
Full Access Supplier Site: Pittsburgh
Supplier Site: Bloomington
◦ User 1 has access to all the supplier sites
◦ User 2 has access to order forecasts for relationships 544, 753, 269, and 266
◦ User 3 has access to order forecasts for relationship 272 and 266
◦ User 4 has access to order forecasts for relationship 266
• If the data access is exclusive (Allow full access if no data access is assigned is set to No), the collaboration planners
have access only to the supplier sites explicitly granted to them. The exclusive access mode is restrictive. You use
the exclusive access mode if all the relationships are confidential and you need to explicitly grant access to a few
relationships to the collaboration planner.
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This figure illustrates the configuration of collaboration planners with exclusive data access.
Access When Exclusive
CV_SuppA00 Pittsburgh Electronics Celesta
Bloomington Pittsburgh
Seattle Atlanta Dallas
User 1 User 3 User 4

User 2
Supplier: CV_SuppA00 No Access
Full Access Supplier Site: Pittsburgh
Supplier Site: Bloomington
◦ User 1 has access to all the supplier sites
◦ User 2 has access to order forecasts for relationships 544, 753, and 269
◦ User 3 has access to order forecasts for relationship 272
◦ User 4 has does not have access to any order forecasts
Note: A collaboration planner with full access has access to all the supplier sites even though they are not
explicitly granted to them.
Configuring Data Access: Procedure

To configure the data access in Oracle Fusion Supply Chain Collaboration:
2. On the Setup: Manufacturing and Supply Chain Materials Management page, click Supply Chain Collaboration
functional area, and then click the Manage Supply Chain Collaboration Settings task.
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3. On the Manage Supply Chain Collaboration Settings page, set the Enable data access security option to one
of the following values:
◦ No to disable access to manage collaboration planners, search for relationships by collaboration planner, or
restrict access to enterprise users by using supplier or supplier site. This is the default value.
◦ Yes to enable access to manage collaboration planners, create and edit collaboration planners, search for
relationships by collaboration planner, and restrict access to enterprise users by using supplier or supplier site.
4. If the Enable data access security option is set to Yes, set Allow full access if no data access is assigned to
one of the following values:
◦ No to enable collaboration planners access to supplier sites explicitly granted to them. This is the default
value.
◦ Yes to enable collaboration planners access to all supplier sites explicitly granted to them and to supplier sites
that do not have at least one other active collaboration planner assigned.
Manage Supply Chain Collaboration Messages

Setting up Supply Chain Collaboration Messages: Overview
Oracle Fusion Supply Chain Collaboration provides a set of predefined messages. You can create additional Supply Chain
Collaboration messages or edit the existing messages in the Setup and Maintenance work area.
Creating New Supply Chain Collaboration Messages: Procedure

To create a new message:
functional area, and then click the Manage Supply Chain Collaboration Messages task.
3. On the Manage Supply Chain Collaboration Messages page, click Actions > New.
4. On the Create Message page, enter the message details.
Editing Supply Chain Collaboration Messages: Procedure

To view and edit the predefined messages:
functional area, and then click the Manage Supply Chain Collaboration Messages task.
3. On the Manage Supply Chain Collaboration Messages page, select Supply Chain Collaboration in the
Application field, and click Search. The available messages appear.
4. Select a message row and click Actions > Edit.
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5. On the Message Properties page, edit the Short Text attribute for the message.
Note: You must not edit any existing message values.
Manage Supply Chain Collaboration Lookups

Viewing Supply Chain Collaboration Lookups: Procedure
Oracle Fusion Supply Chain Collaboration provides a set of predefined lookups. Additional setup is not required for Supply
Chain Collaboration lookups.
To view the predefined lookups:
functional area, and then click the Manage Supply Chain Collaboration Lookups task.
3. On the Manage Supply Chain Collaboration Lookups page, search for the available lookups.
Note: You must not edit any existing lookup values. If required, you can edit the Meaning attribute for
a lookup.
Predefined Lookups in Supply Chain Collaboration: Explained

The following table lists the predefined lookups available for Oracle Fusion Supply Chain Collaboration:
Lookup Name Usage Lookup Value Description
ORA_ VCS_ AGGREG_LEVEL • This is a list of bucket • ORA_VCS_WEEK_DAY • Aggregation of data by

forecast aggregation • ORA_VCS_PERIOD_DAY a week and a day in the
levels that are displayed in pivot table
• ORA_VCS_PERIOD_WEEK
the pivot table • Aggregation of data for a
• System lookup defined period and a day
• No extension possible in the pivot table
• Aggregation of data for
a defined period and a
week in the pivot table
ORA_ VCS_ COLLAB_ • This is a list of ORA_ VCS_ SUPPLY_PLAN Collaboration on supply forecast
TYPE_CODE collaboration type codes with external partners
that are allowed
• System lookup
ORA_ VCS_ PLAN_ • This is a list of bucket • ORA_VCS_DAILY • Daily bucket

BUCKET_TYPE types that are allowed • ORA_VCS_WEEKLY • Weekly bucket

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Lookup Name Usage Lookup Value Description
• System lookup • ORA_VCS_MONTHLY • Monthly bucket
ORA_ VCS_ PLAN_ • This is a list of options • ORA_VCS_CURRENT_FORECAST_VAL

• Populate the committed
EDIT_OPTIONS that are available to • ORA_VCS_PREVIOUS_COMMIT_VALquantity for all selected
perform a mass update to records with the forecast
• ORA_VCS_INPUT_VAL
a forecast document value
• System lookup • Populate the committed
• No extension possible quantity for all selected
records with the previous
committed value
• Populate the committed
quantity for all selected
records with the value
provided
ORA_ VCS_ PLAN_ WATCHLIST • This is the collaboration ORA_ VCS_ PLAN_ ENT_ Collaboration plan search saved
plan watch list category USER_SAVED by a user
• System lookup
ORA_ VCS_ PROCESS_ • This is a list of statuses of • SUCCESS • Status if all records are
STATUS the forecast commitment • FAILURE processed successfully
process • Status if no records are
• PARTIAL SUCCESS
• System lookup processed successfully
• IN_PROCESS
• No extension possible • Status if some records
are processed
successfully
• Status if some records
are currently being
processed
ORA_ VCS_ PUBLISHER_ • This is a list of publisher • ORA_VCS_SUPPLY_FORECAST • Forecast to supplier

ORDER_CODE order codes that are • ORA_VCS_SUPPLY_COMMIT • Commitment from
allowed supplier
• System lookup
ORA_ VCS_WEEKDAY • This is a list of allowed • ORA_VCS_WEEKDAY_SUNDAY • This is Sunday

weekdays in the correct • ORA_VCS_WEEKDAY_MONDAY • This is Monday
order • ORA_VCS_WEEKDAY_TUESDAY• This is Tuesday
• System lookup • ORA_VCS_WEEKDAY_WEDNESDAY
• This is Wednesday
• No extension possible • ORA_VCS_WEEKDAY_THURSDAY
• This is Thursday
• ORA_VCS_WEEKDAY_FRIDAY • This is Friday
• ORA_VCS_WEEKDAY_SATURDAY
• This is Saturday
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Implementing Manufacturing and Supply Chain Materials Implementing E-Signatures and E-Records
Management
18 Implementing E-Signatures and E-Records
Electronic Signatures and Electronic Records: Overview

You can use the Oracle Fusion E-Signatures and E-Records to securely capture, store, retrieve, and print e-records and e-
signatures.
Critical transactions governed by the US Food and Drug Administration's (FDA) good manufacturing practices requirements
have inbuilt validations that necessitate the use of e-signatures and e-records. In E-Signatures and E-Records, the validations
are available for critical supply chain management business events for Oracle Fusion Manufacturing, Oracle Fusion Inventory
Management, and Oracle Fusion Quality Inspection Management.
Using E-Signatures and E-Records, you can search for, view, and download e-records that contain information about
transactions and their e-signature history. You can also specify the supply chain management transaction types for which e-
signatures are required, and set up the approval process flows that must be followed.
E-Signatures and E-Records Process Flow: Explained

Oracle Fusion E-Signatures and E-Records facilitates secure transactions for business events in Oracle Fusion Manufacturing,
Oracle Fusion Inventory Management, and Oracle Fusion Quality Inspection Management.
The e-signatures and e-records approval processes can be of the following types:
• Inline approval process: In this process, approvals must be obtained before a transaction is saved. You cannot save
a transaction if the record is rejected.
• Deferred approval process: In this process, transactions are saved in Pending Approval status before initiating the e-
signature process. The transaction is updated to Approved status after the approvals are obtained.
Inline E-Signature Approval Process

The inline approval process workflow is as follows.
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The following figure provides an overview of the inline e-signatures and e-records process, including its integration with the
applications requesting approvals using e-signatures.
E-Signatures and E-Records Overview
Fusion Applications
Inventory Quality Inspection
Manufacturing Shipping Receiving
Supply Chain
Management
Applications
Create/Update E-Signature Save Discard

No
Transaction Enabled? Transaction Transaction
Yes
Yes
No
Approved?
Generate
and E-Records
E-Signatures
E-Records
Initiate Store E-Record

Signature and Signature
Process History
Oracle Business
Management
Process
Get Notify Capture Approvals

Approvers Approvers and E-Signatures
The following steps provide an overview of the inline e-signatures and e-records process:
1. A user initiates the approval process for a transaction from one of the integrated supply chain management
applications.
2. The E-Signatures and E-Records process is used to determine if an e-signature is required.
3. If an e-signature is required, the Oracle BPM approval task flow is invoked with a task payload.
4. The E-Signature page opens and displays the e-record details and status.
5. If the user is also an initiator, the user enters the e-signature details and approves the e-record.
6. A notification is sent to other approvers through Oracle notifications.
7. Other approvers view the Pending Notifications in Oracle applications, and click the notification to open and approve
the E-Signature page.
8. On the E-Signature page, the other approvers read the e-record, enter their user ID and password, and approve it.
Approvers can refresh the E-Signature page to update the e-record status displayed on the page.
9. On receiving the approval from E-Signatures and E-Records, the user changes the transaction status, and commits
the transaction.
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Deferred E-Signature Approval Process

The deferred approval process workflow is as follows.
The following figure provides an overview of the deferred e-signatures and e-records process, including its integration with the
applications requesting approvals using e-signatures.
Deferred E-Signatures and E-Records Overview
Create/Update E-Signature Update

No Transaction to
Transaction Enabled?
(Draft Status) Approval Status
Yes
Supply Chain
Management
Applications
Update
Update Transaction to
Yes
Transaction to Draft Status
Pending
Approval Status
No
Initiate Signature Approved?
Process
and E-Records
E-Signatures
Generate Store E-Record and

E-Records Signature History
Management
Business
Process
Oracle
Get Notify Capture Approvals

Approvers Approvers and E-Signatures
The following steps provide an overview of the deferred e-signatures and e-records process:
1. A user initiates the approval process for a transaction from one of the integrated supply chain management
applications.
2. The E-Signatures and E-Records API is called to determine if an e-signature is required.
3. If an e-signature is required, the Oracle BPM approval task flow is invoked with a task payload and the transaction is
set to Pending Approval status.
4. Notifications are sent to all approvers through Oracle notifications.
5. The approvers view the Pending Notifications in the Oracle applications, and click the notification to view the
approval page.
6. On the approval page, the approvers read the e-record, enter their user ID and password, and approve it or reject it.
7. When all required approvals are obtained the transaction is set to Approved status. If the record is rejected, the
transaction is set to Draft status.
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Electronic Signatures and Electronic Records Setup:

Explained
Use the Oracle Fusion E-Signatures and E-Records setup tasks to specify the supply chain management transactions types
for which e-signature approvals are required. You can also specify the users with approval permissions, and set up the
approval process flows to be followed.
Enabling the Electronic Records and Electronic Signatures Feature

The e-signatures and e-records feature is disabled by default. When enabled, the e-signature approval process is initiated
and approvers are required to authenticate transactions.
You can enable E-signatures and E-records using the Manufacturing and Supply Chain Materials Management or the
Product Management offering.
To enable the e-signatures and e-records feature using the Manufacturing and Supply Chain Materials Management
offering:
1. In the Setup and Maintenance work area, right-click the Facilities functional area, and select Change Feature
Selection. The Edit Features: Facilities page opens.
2. For the Capture Electronic Records and Electronic Signatures for SCM Transactions feature, select the
check box in the Enable column.
To enable the e-signatures and e-records feature using the Product Management offering:
1. In the Setup and Maintenance work area, right-click the Item Organizations functional area, and select Change
Feature Selection. The Edit Features: Item Organizations page opens.
2. For the Capture Electronic Records and Electronic Signatures for SCM Transactions feature, select the
check box in the Enable column.
Setting up Electronic Records and Electronic Signatures

Before beginning setup, for each of your inventory organizations, determine the transactions that require e-signatures, and the
business events that initiate the e-signature process. You must also identify the list of approvers and any rules that you would
like to set up for the workflow.
You can set up e-signatures and e-records using the Manufacturing and Supply Chain Materials Management or the
Product Management offering.
To set up e-signatures and e-records using the Manufacturing and Supply Chain Materials Management offering:
Management offering
2. Click Setup, and select the Facilities functional area. The tasks to set up e-signatures and e-records display.
To set up e-signatures and e-records using the Product Management offering:
1. In the Setup and Maintenance work area, select the Product Management offering
2. Click Setup, and select the Item Organizations functional area. The tasks to set up e-signatures and e-records
display.
Note: Select All Tasks in the Show field to view all the tasks available for a functional area.
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The following table lists the tasks available to set up e-signatures and e-records.
Setup Task Description
Configure Electronic Signature You can specify the supply chain management transactions for which to use e-signatures and e-
Preferences records.

Manage Task Configurations for Supply You can specify the workflow to be followed to approve a supply chain management transaction.
Chain Management

Manage Approval Groups You can specify the approvers for a supply chain management transaction workflow.

Configuring E-Signature Preferences: Procedure

To start configuring e-signatures for your inventory organizations, you must first determine the transactions that require e-
signatures and the business events that will initiate the e-signature process.
To configure e-signature preferences:
1. In the Setup and Maintenance work area:
◦ Select the Manufacturing and Supply Chain Materials Management offering, click Setup, and select the
Facilities functional area.
◦ Select the Product Management offering, click Setup, and select the Item Organizations functional area.
2. Click Configure Electronic Signature Preferences.
3. The Configure E-Signatures Preferences page opens. It displays the supply chain management transactions that
support the use of e-signatures. You can select the inventory organization for which to view the transactions.
4. Select the check box in the Signature Enabled column for the transactions for which to activate e-signatures.
Note: You cannot disable e-signatures for work definitions if one or more work definitions exist in pending
approval status.
Enabling Audit for E-Signatures and E-Records: Explained

When you enable an attribute for audit, any changes made to it are tracked and saved. This makes it possible to trace all
changes and provide complete information to auditors on demand.
You can enable the Electronic Signature Preferences business object for audit. The associated attribute, Signature Enabled,
is by default selected for audit. Any changes made to the e-signature preferences in an application instance are tracked and
recorded.
To enable audit, you must have the Application Administrator job role. To view audit reports, you must have the Internal
Auditor job role.
You can enable or disable the audit of the Electronic Signature Preferences business object as follows:
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3. On the Setup: Manufacturing and Supply Chain Materials Management page, click the Applications Extensions
functional area, and then click the Manage Audit Policies task.
Note: If you are unable to view the Manage Audit Policies task, select All Tasks from the Show drop-
down list on the Setup: Manufacturing and Supply Chain Materials Management page.
4. On the Manage Audit Policies page, click the Configure Business Object Attributes button for Oracle Fusion
Applications.
5. On the Configure Business Objects Attributes page, select E-Signatures and E-Records in the Product field. It
shows the business objects that are available for auditing.
6. In the Objects region, select the Electronic Signature Preferences business object. The associated attributes, by
default selected for audit, are displayed in the Audited Attributes region.
7. In the Audited Attributes region, click the Create icon or select Actions > Create from the menu to add additional
attributes for audit.
8. In the Select and Add Audit Attributes dialog box, search for and select the attribute to add for the audit and click
OK. The selected attribute displays in the Audited Attributes region on the Configure Business Objects Attributes
page.
Related Topics
• Oracle SCM Cloud: Implementing Common Features for SCM guide
Task Configurations for Supply Chain Management:

Overview
The Manage Task Configurations for Supply Chain Management setup task provides you access to the BPM Worklist page in
Oracle Business Process Management Studio.
Using the BPM Worklist page, you can define the approval process flow to be followed for a transaction type. For example,
you can specify approvers in a sequence or in parallel. When an approval process flow constitutes multiple approvers in
parallel, a predefined voting policy applies. Based on it, a process flow requires 100% consent from all approvers for its
approval; dissent by 1% of approvers leads to rejection. You cannot modify this voting policy.
You can use the BPM Worklist page to set up e-signature task configurations.
To set up e-signature task configuration:
2. Click Manage Task Configurations for Supply Chain Management. The BPM Worklist window opens and
displays the Task Configuration tab.
3. Select the task you want to configure and edit as required. For information about how to configure tasks, see the
Configuring Human Tasks topic.
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Related Topics
• Configuring Human Tasks
Defining Approval Rules for Inventory Transactions:

Procedure
To define approval rules for inventory transactions:
1. In the Setup and Maintenance work area do one of the following:
◦ Select the Manufacturing and Supply Chain Materials Management offering, search for, and then click
Manage Task Configurations for Supply Chain Management.
◦ Select the Product Management offering, search for, and then click Manage Task Configurations for
Supply Chain Management.
2. The BPM Worklist page opens and displays the Task Configuration tab from where you can create or edit a rule.
3. Search for and open MtlManagementEresInlineTask from the Tasks to be configured list.
4. Click the Assignees tab and then click the Go to Rule icon for the participant type you want.
5. Select a condition attribute and then any payload that you want to use.
You can use one or more of the following attributes in the task payload to define rules to get approvers for the transactions.
Attribute Description
Organization Code The code of the inventory organization where the transaction is created.

Product Code An attribute, the internal code of the product, that is used with hard-coded values:

Transaction Type The inventory transaction type.

The hard-coded values for the different inventory transaction types are:

MISC_TXN is applicable for all the transactions initiated from the Create Miscellaneous Transaction
page.

You can't configure an approval rule specific to a particular miscellaneous transaction type such as
Account Alias Issue Transaction. After you configure an approval rule for miscellaneous transactions,
the configuration applies to all the transaction types that you create on the Create Miscellaneous
Transaction page.

Approval Groups: Overview

The Manage Approval Groups setup task provides you access to the BPM Worklist page in Oracle Business Process
Management Studio.
You can use the BPM Worklist page to set up e-signature approvers and approval groups. You must define approval rules to
set up the workflow process. The approvers are sent workflow notifications using Oracle notifications. Approvers can enter
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comments when accepting or rejecting a transaction, and must enter their password to complete the e-signature verification
process.
To set up e-signature task configuration:
2. Click Manage Approval Groups. The BPM Worklist window opens and displays the Approval Groups tab.
3. Select the approver group you want to configure and edit as required. For information about how to configure
approver groups, see the Configuring Human Tasks topic.
Related Topics
• Configuring Human Tasks
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Oracle SCM Cloud Glossary
Management
Glossary
3PL
third-party logistics. A buyer and supplier association with a third party outsourced for product delivery services and supply
chain expertise.
account rule
The rule that processing uses to derive complete accounts or segment values on a subledger journal entry. Conditions can be
defined within the rule to derive a different account based on specific attributes of the transaction.
accounting attribute
Predefined fields that map to components of subledger journal entries. Sources are assigned to accounting attributes.
accounting event class

Categories that classify transaction types and group event types for accounting rules.
accounting event type

Represents a business operation that may have an accounting impact.
actual cost
A cost method that tracks the actual cost of each receipt into inventory. When depleting inventory, the processor logically
identifies the receipts that are consumed to satisfy the depletion, and assigns the associated receipt costs to the depletion.
backorder
An order or an order line that is withheld from processing until inventory becomes available.
chart of accounts
The account structure your organization uses to record transactions and maintain account balances.
cost book
A view or method of cost accounting for inventory transactions. You can create multiple cost books and assign them to a
cost organization for different financial and management reporting purposes.
cost component
User-defined costs, or incoming costs from external sources such as Purchasing, Accounts Payable, Inventory Management,
and Landed Cost Management. Examples of cost components are purchase order item price, freight, and overhead.
cost component group

Mapping of cost components to cost elements. Cost component groups use set-level definitions, and are one of the
attributes of item cost profiles.
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cost element
A cost that you can associate with an item so that you can monitor the cost through the inventory and accounting life cycle.
For example, you can monitor the material cost, overhead cost, and tax cost of an item. You can monitor each of these costs
as a separate cost element.
cost element group

A grouping of cost elements that is used as the basis for calculation of overhead costs, such as materials cost element group,
or freight cost element group.
cost organization
A grouping of inventory organizations that indicates legal and financial ownership of inventory, and which establishes common
costing and accounting policies.
cost organization book

Designates which cost book a cost organization uses for different costing and reporting purposes. For example, the
Canada cost organization may use a perpetual average cost book and a primary cost book. In this case, there are two cost
organization books: Canada-Perpetual Average, and Canada-Primary.
cost profile
Defines the cost accounting policies for items, such as the cost method and valuation structure.
default cost profile

Simplifies the effort of assigning cost profiles to items. Items can automatically inherit the default cost profile, if there is no
manually-defined cost profile.
description rule
The rule that defines description content that can appear on the subledger journal header and line.
documentation and accounting rule

A type of rule that determines how financial orchestration creates intercompany invoicing, uses financial routes, and uses
different routes in reply to the different supply chain events that might occur during a transaction.
drop ship order

A drop ship order is one where material flows directly from a supplier or contract manufacturer to the customer.
expense pool
A grouping of similar costs representing one or more general ledger expense accounts, such as warehouse or freight
expense pools. Expense pools are used in the definition of overhead accounting rules.
external system or external application

A system or application that is external to and not part of Order Management. An order capture system that resides upstream
of Order Management is an example of an external system. A fulfillment application that resides downstream of Order
Management is an example of an external application.
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FIFO
Abbreviation for first in, first out. A material control technique of rotating inventory stock so that the earliest inventory units
received or produced are the first units used or shipped. The ending inventory therefore consists of the most recently
acquired goods.
financial orchestration flow

A flow of information that defines a trade relationship between two different entities. It tracks and stores data that involves
financial instruments such as accounts receivables, accounts payable, billing, and so on.
financial orchestration qualifier

A rule that specifies when to run one of the financial orchestration flows that you create in the Manage Supply Chain Financial
Orchestration Flows task. If you do not create any qualifier, then financial orchestration runs the flow for all transactions that it
receives
financial orchestration system option

A type of option that affects all financial orchestration flows.
fulfillment system
A system that resides downstream of Order Management Cloud that is responsible for fulfilling a sales order. For example, a
fulfillment system is responsible for shipping the physical goods to the customer, such as shipping a laptop computer from a
warehouse to a customer location.
Incoterms
Incoterms are a series of international sales terms that represent international commercial transportation practices and are
used in contracts for the sale of goods. These terms help clarify and divide transaction costs, risks, and responsibilities
between buyer and seller.
intercompany buyer profile

A type of profile that specifies information about the buyer that Financial Orchestration uses to create the intercompany
invoice.
intercompany invoice
Invoices created by financial orchestration to account for the intercompany trade resulting from complex supply chain
transactions between internal organizations. The internal organizations can belong to the same or different legal entities.
intercompany seller profile

A type of profile that specifies information about the seller that financial orchestration uses to create the intercompany invoice.
intercompany transaction
Transactions resulting from intercompany trade of goods or services between internal organizations of an enterprise. These
organizations are defined as profit center business units and they can belong to the same legal entity or to different legal
entities.
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intercompany transfer price
A type of price that financial orchestration uses during an intercompany transaction for accounting and taxation purposes. It
determines how financial orchestration allocates profits and losses among different parts of an enterprise when these parts
use different tax systems.
Intrastat
European Union (EU).
Intrastat Reporting
Oracle Fusion Intrastat Reporting allows companies within the European Union (EU) to collect, record, and report statistics
related to trade as per their respective government legislations.
inventory organization
A logical or physical entity in the enterprise that tracks inventory transactions and balances, stores definitions of items, and
manufactures or distributes products.
item cost profile

Cost accounting method assigned to an item. Items in a cost organization book can use different cost profiles. For example,
you can use a cost profile to calculate average cost at the lot or serial level, and another cost profile to calculate average cost
at the cost organization level.
item master
A collection of data that describes items and their attributes recorded in a database file.
item subinventory
An association of an item with a subinventory that is created when you add an item to a subinventory.
item validation organization

An inventory organization whose primary or secondary unit of measure is used as the costing unit of measure for the item in
the cost organization to which that inventory organization belongs. The item master organization can also be designated as
the item validation organization.
journal entry
Point of entry of business transactions into the accounting system. Chronological record, with an explanation of each
transaction, the accounts affected, and the amounts to increase or decrease each account.
journal line
An element of journal entries consisting of account combinations and credit or debit amounts. Optionally, contains statistical
quantities, currency information for multicurrency journals, and additional information.
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journal line rule
A rule that includes options to convert transactional data into a subledger journal line. Conditions can be defined within the
rule so it's only used based on specific attributes of a transaction.
locator
A physical area within a subinventory that is used to store inventory items, such as a row, aisle, bin, or shelf.
order fulfillment
The part of the order management lifecycle that fulfills a sales order. Order fulfillment typically begins after the user submits a
sales order in Order Management Cloud. Order Management schedules, ships, and bills a sales order during order fulfillment.
Order Management communicates with a downstream fulfillment system during order fulfillment.
PAR
Abbreviation for periodic automated replenishment.
perpetual average cost

The average cost of an item, derived by continually averaging its valuation after each incoming transaction. The average cost
of an item is the sum of the debits and credits in the inventory general ledger balance, divided by the on-hand quantity.
pick wave
A batch of shipment lines that are pick released together based on certain business-related criteria.
profit center business unit

A part of a company that you treat as a separate business, where your organization calculates the profits and losses for this
center separately from other parts of the organization.
receipt layer
Unique identification of delivery or put away of an item into inventory.
RMA
Abbreviation for return material authorization.
role
Controls access to application functions and data.
sales order
A contractual document between a sales organization and a customer. You create a sales order in the Order Management
work area. Order Management also transforms a source order it receives from a source system into a sales order that it can
submit to order fulfillment.
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set-level definition
Enables you to segment and share your reference data. Entities that are defined at the set level can be shared by all cost
organizations belonging to that set. You can also use the Common set to share the same reference data across all cost
organizations.
source
Contextual and reference information from subledger applications used in conjunction with accounting rules to create
source document
The document that financial orchestration uses as the input to the transaction. A fulfillment line from an order in Distributed
Order Orchestration is an example of a source document. A line in a purchase order in Procurement is another example of a
source document.
source order
An order that you import into Order Management from a source system. Order Management transforms a source order to a
sales order when you import it from a source system.
source system
System where the sales order was created. Order Management Cloud and an order capture system are each an example
of a source system. A source system provides business application information to an Oracle application. Oracle can use this
information to extract fulfillment data and planning data into data files.
standard cost
An inventory valuation method in which inventory is valued at a predetermined standard value. You track variances for the
difference between the standard cost and the actual transaction cost, and you periodically update the standard cost to bring
it in line with actual costs.
subinventory
A physical or logical grouping of inventory such as raw material, finished goods, defective material, or a freezer compartment.
subledger
A low-level ledger that stores and manages the details that substantiate the monetary value stored in the general ledger.
Oracle Fusion Receivables and Oracle Fusion Payables are examples of subledgers.
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subledger journal entry
A detailed journal entry generated for a transaction in a subledger application.
subledger journal entry line

An individual debit or credit line that is part of a subledger journal entry.
subledger journal entry rule set

A set of rules defining how to generate a complete journal entry for an accounting event.
transaction action
A system-defined type of material movement or cost update, such as Receipt into Stores, Issue from Stores, and
Subinventory Transfer.
transaction source
An entity against which an Oracle Fusion Inventory Management transaction is charged.
transaction type
A combination of a transaction source and transaction action that is used to classify transactions.
transfer pricing rule

A type of rule that calculates the intercompany transfer price according to the information that is associated with an
intercompany transaction. The transfer pricing rules determine how to price an international transaction that occurs in a
multinational company so that each country receives the correct share of taxation.
valuation structure
Defines inventory control attributes that are used to calculate the cost of an item. For example, the valuation structure of an
item can be inventory organization and subinventory, or lot, or grade.
valuation unit
Defines the set of values for the control attributes that are used to calculate the cost of an item. For example, valuation unit V1
is defined by cost organization A, item I1, and lot L1.
WMS
warehouse management system. A system that supports warehouse or distribution center personnel with warehouse
processes and activities, such as receiving, picking, and shipping.
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Implementing Manufacturing and Supply Chain Materials Management

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Oracle SCM Cloud

Implementing Manufacturing and

Release 13 (update 18C)

Release 13 (update 18C)

1 Implementing Back-to-Back Fulfillment 1

2 Implementing Internal Material Transfers 21

3 Implementing Contract Manufacturing 35

4 Implementing Outside Processing 51

5 Implementing Inventory Management 63

6 Implementing Receiving 115

7 Implementing Shipping 135

8 Implementing Receipt Accounting 183

9 Implementing Cost Accounting 199

10 Implementing Landed Cost Management 245

11 Implementing Subledger Accounting for France 251

12 Implementing Intrastat Reporting 257

13 Implementing Manufacturing 271

14 Implementing Supply Chain Orchestration 291

15 Implementing Supply Chain Financial Orchestration 305

16 Implementing Maintenance 333

17 Implementing Supply Chain Collaboration 347

18 Implementing E-Signatures and E-Records 361

Using Oracle Applications

• Training: Take courses on Oracle Cloud from Oracle University.

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Comments and Suggestions

1 Implementing Back-to-Back Fulfillment

Back-to-Back Fulfillment: How It Works

1. Creation of a customer sales order (source of demand).

3. Shipment of sales order from the fulfillment warehouse to the customer.

Order Capture and

2. Global Order Promising performs two key functions:

Back-to-Back Supply Creation Flows: Explained

Supply Creation Flow Supply Document Description

Purchase Order Procurement from an external supplier.

Work Order Production or assembly at an internal

Transfer Order Transfer from another warehouse.

Request Reservation Only Reservation of on-hand supply (in cases

Back-to-Back Supply Creation Buy Flow

Back-to-Back Supply Creation Make Flow

Back-to-Back Supply Creation Transfer Flow

Ship TO Receive Ship

Back-to-Back Supply Creation On-Hand Flow

Supply Create Request

Oracle Fusion Applications That Support Back-to-Back Fulfillment:

Oracle Fusion Yes Yes Yes Yes Supply Chain Configuring

Oracle Yes No No No For each item Configuring

Oracle No Yes No No Enabling

Also, if you want

Oracle Yes Yes Yes Yes There is no Supply Chain

Oracle Fusion Yes Yes Yes Yes There is no Inventory

Implementing Back-to-Back Fulfillment

Setting Up Back-to-Back Fulfillment: Roadmap

Action Offering or Application Comments For More Information

3. If you have items designated Oracle Manufacturing Cloud Configuring Manufacturing

6. (Optional) If you want to Oracle Fusion Procurement NA Automating Purchase Order

How Order Management Orchestration Works in Back-to-Back Fulfillment

Enabling Items for Back-to-Back Fulfillment: Procedure

To enable an item for back-to-back fulfillment, do the following:

Configuring Global Order Promising to Support Back-to-Back