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R12.x Defining Inventory Organizations
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Objectives
After completing this lesson, you should be able to:• Understand the structure of an inventory organization.• Understand the multi-organization structure in Oracle
Applications.• Understand how to use the organization reports.• Understand how to set up the organization profile options.• Understand organization implementation considerations.
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Inventory Organizations
Company
Distribution Center
WarehouseAn inventory organization is a facility where you store and transact items. Before you can use Oracle
Inventory, you must define one or more inventory organizations. Inventory organizations represent distinct entities in your enterprise and can be one of the following:
A physical entity such as a manufacturing facility, warehouse, or distribution center.A logical entity such as an item master organization, which you use to define items.An inventory organization may have the following attributes:An inventory organization can have its own location, ledger, costing method, workday calendar, and
items.An inventory organization can share one or more of these characteristics with other organizations.
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Inventory Organization Structure
Organization
Subinventories
Locators
Subinventories are unique physical or logical separations of material inventory, such as raw material inventory, finished goods inventory, or defective goods inventory.
You use locators to identify physical areas where you store inventory items.
You can set up an inventory organization without subinventories; however, you cannot transact items in that inventory organization until it has at least one subinventory.
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Quiz
An inventory organization where you store and transact items can have only one subinventory:a. Trueb. False
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Sample Inventory Organization
Outbound Outbound
Receivingsub
Raw materialssub
Manufacturingsub
Finished goodssub
Inspectionsub
Defectivegoods
sub
Shipping sub
Inbound
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Multi-Organization Structure
What is multi-organization structure?• Applications and database enhancement• Enables you to consolidate your operations under one
installation of Oracle Applications on a single global instance
• Enables you to keep transaction data secure by line of business
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Setting Up Locations
Physical location
Employees Organizations
Define information describing the physical locations of employees and organizations.
Locations are shared between Oracle Inventory, Oracle Purchasing, and Oracle Human Resource Management Systems. Locations flagged as global locations are available to all business groups. You can associate each organization with only one location; however, you can associate more than one organization with the same location.
Physical locations are defined in Oracle Human Resource Management Systems.
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Defining Organizations
InventoryOrganization A
Ledger
Locator Locator Locator Locator Locator
Subinventory Subinventory Subinventory Subinventory
InventoryOrganization B
Operating unit
organization classifications are inventory organization, legal company, and HR organization.
each inventory organization to an operating unit. Each operating unit is associated to a legal entity and a primary ledger
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Quiz
Locations define information about the physical locations of employees and organizations:a. Trueb. False
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Inventory Parameters
The Inventory Parameters tab enables you to:• Set up organization information • Enable related, optional Oracle Applications
Oracle EnterpriseAsset Management
Oracle ProcessExecution
Oracle Warehouse Management
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Costing Parametersתמחיריים פרמטרים
Which costing method is the organization going to use?• Standard• Average• LIFO (last-in-first-out)• FIFO (first-in-first-out)
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Revision, Lot, Serial, and License Plate Number (LPN) Parameters
Item AS5222Serial #5847329
Serial parameters LPN parameters
LPN101
Revision parameters
Revision A
Lot parameters
Lot 403B
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ATP, Pick, Item-Sourcing Parameters
The ATP, Pick, Item-Sourcing Parameters tab enables you to:• Set the available to promise (ATP) default rule for the
organization• Set the picking defaults for the organization• Set the item-sourcing defaults for the organization
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Interorganization Parameters
The Inter-Org Information tab enables you to determine the parameters the organization uses when it transfers material between organizations.
M1 Seattlemanufacturing
M2 Bostonmanufacturing
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Other Account Parameters
You use the Other account parameters tab enables you to set up receiving account information, profit and loss account information, and other additional accounts.
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Warehouse Management Parameters
If you have Oracle Warehouse Management installed you can enter organization parameters that apply only to Oracle Warehouse Management.
Oracle Warehouse Management
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What Is a Subinventory?
Finished goods
Raw materials
Defective items
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What Is a Subinventory?
Receiving Subinventory• Optional• Tracking of goods is
possible• Does not reflect in on
hand quantity• Available if receipt is
made through use of Oracle Warehouse Management and Oracle Mobile Supply Chain Applications
Storage Subinventory• Mandatory• Tracking of goods is
possible• Material reflects in on-
hand quantity
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Defining Subinventories
Subinventory• Physical or logical separation of material• You must define at least one subinventory for each
organization
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Locator Control
Row
Rack
Bin
In coordination with locator settings at the subinventory and item level, you must first specify locator controls at the Organization
level
None: Inventory transactions within this organization do not require locator information.
Prespecified only at item level: Inventory transactions within this organization require a valid, predefined locator for each item.
Dynamic entry allowed: Inventory transactions within this organization require a locator for each item. You can choose a valid, predefined locator, or define a locator dynamically at the time of transaction.
Determined at subinventory level: Inventory transactions use locator control information you define at the subinventory level.
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Dynamic and Static Locators
Dynamic Locators• Generate during a
transaction as needed
Static Locators• Predetermined
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Quiz
Locators may represent the following entities in warehouses:a. Organizations b. Aislesc. Rowsd. Shifts
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Subinventory-Locator Relationship
Subinventory: BULKWith locator control
Subinventory: FROZENWithout locator control
The possible locator control types are:•None•Prespecified•Dynamic entry•Item Level
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Locator Flexfield Structure
M1 Seattle
Row 1A
Rack 1A
Bin 1A
M2 Boston
Row 1A
Rack 1A
Bin 1A
Locator flexfield structure is common across all organizations (sub inventories)
but names should be different
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Interorganization Shipping Networks
Shipping organization
Destination organization
Direct organization transfer
Intransit shipment
Destination organization
moves material to an intermediary
Shipping methodsGL accounts to use in transitMaterial ownership during transfersPlanning lead-timesTransfer charges
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Shipping Method
Shipping methods are the way you ship material
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Additional Setup Steps
Employees
Planners
Freight carriers
Employees who perform cycle and physical inventory counts.
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Quiz
When you set up a shipping network, you must select a transfer type. Select the valid transfer type(s): a. Intransitb. Dockingc. Directd. COD
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Additional Organizational Setups
Organization access Material shortagesThis controls access to organizations based on the user responsibility assigned to a user by the system administrator.
trigger shortage alerts and notifications
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Copying Inventory Organizations
M1 Seattle manufacturing
M2 Boston manufacturing
Copy organization
1. This model organization must be a transactional organization and not an item master organization.
2. You can copy only organizations within the same operating unit.
3. The system creates the new organizations under the same business group to which the model organization belongs, and assigns the new organizations to the same operating unit, legal entity, and ledger as the model organization.
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You can choose to copy the following information from the model organization:
• Organization definition• Shipping networks• Hierarchy assignments• Bills of material and bills of
material parameters• Departments, resources, and
routings• Item information
When you copy a model organization the system automatically copies the following information:
• Subinventories• Locators • Work in Process parameters• Work in Process accounting
classes• Planning parameters• Shipping parameters
Additional Organizational Setups
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Organization Hierarchy
M1 Seattle manufacturing
M2 Boston manufacturing
M3 Dallasmanufacturing
M6 Phoenixmanufacturing
Organization hierarchies enable you to group together organizations and perform operations across all organizations within a hierarchy
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Inventory Reporting
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Organization Reports
Report Description
Item-Subinventory Report Lists items assigned to subinventories.
Locator Quantities Report Shows inventory item quantities stored in specific locators.
Subinventory Quantities Report
Shows inventory item quantities by subinventory.
Freight Carrier Listing Lists the freight carrier codes for the current organization.
Inter-organization Shipping Information Listing
Lists the shipping networks for the current organization.
Locator Listing Lists the locators for the current organization.
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Organization Reports
Report Description
Organization Parameters Listing Lists the organization parameters for the current organization.
Subinventory Listing Lists the subinventories for the current organization.
Organization Hierarchy Exceptions Report
Displays all organizations belong to a legal entity that are not assigned to an organization hierarchy.
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Profile Options
Profile Option Description
INV: Inter-Organization Currency Conversion
Indicates the currency conversion for inter-organization transfers between organizations using different currencies. Available values are: Corporate, Spot, or User.
TP: INV Inter-Organization Transfer form
Indicates the processing control of inter-organization transfers in the Inter-Organization Transfer window. Available values are: Background processing (periodically), Concurrent processing (in parallel), or On-line processing (Default, immediately).
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AdditionalImplementation Considerations
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Additional Implementation Considerations
Products and featuresDo you need to set up additional products or features?
Oracle ProcessExecution
Oracle EnterpriseAsset Management
Oracle Warehouse Management
1. Need to determine if organization is a process or a discrete organization
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Implementation Considerations
Subinventories• Is it necessary to differentiate between receiving and
storage subinventories in your warehouse? • Do you need to link your receipts to a receiving location?• Do you need to track material without it appearing in on-
hand quantity?
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Implementation Considerations
Locator control• Do you need to implement locator control?• Do you need to need to implement locator control for the
organization, for individual subinventories, or at the item level?
• Should locator control be predefined, just-in-time, or both?
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Implementation Considerations
Organization access• Should all responsibilities have access to the organization?• Which responsibilities should have access to the
organization?
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Implementation Considerations
Shipping networks• Do you need to ship material between organizations?• Do you need to track inventory between transfers?• How do you want to ship material between organizations?• Do you ship material to Japan, Korea, or Taiwan?
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Implementation Considerations
Shipping networks• Who owns the material until receipt the shipping
organization or the receiving organization?• Which receipt routing do you use standard, direct, or
inspection required?• Is an internal order required for each shipment?
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Summary
In this lesson, you should have learned how to:• Understand the structure of an inventory organization.• Understand the multi-organization structure in Oracle
applications.• Understand how to use the organization reports.• Understand how to set up the organization profile options.• Understand organization implementation considerations.