Procurement Implementation Guide
11g Release 1 (11.1.2)
Part Number E20383-02
This chapter contains the following:
Define Common Purchasing Configuration
Define Procurement Configuration Options
Define Procurement Agents
These examples demonstrate why the line type feature is an important part of the purchase order. It enables you to clearly differentiate orders for goods from those for services.
Use quantity-based line types when you want to specify the quantity, unit of measure, and unit price for the items you are ordering. Oracle Fusion Purchasing provides Goods as an initial quantity-based line type. You can modify this line type or create new quantity-based line types to satisfy your business needs.
You can use fixed price-based line types when you want to order general business services by a fixed amount. Oracle Fusion Purchasing provides Fixed Price Services as an initial fixed price-based line type. You create an order for fixed price service by selecting a fixed price services line type, category, item description, and total amount of the service. You can receive and match fixed price services by amount.
Fixed Price Services
Purchase order document styles allow organizations to control the look and feel of the purchasing document in the application to match its business usage. Through reusable document styles, organizations can turn on or off various procurement features, thereby simplifying the user interface. In addition, document styles provide the ability to define purchasing document names that align more closely with the naming conventions of your organization's business.
When a purchasing document is created using a document style disabled features are hidden. For example, if price breaks are not allowed on the document style then agreements using this style will not display the price break region.
You can create a document style for a specific commodity such as services. This document style optimizes field labels and presentation for that commodity, thereby simplifying purchase order entry.
You can enable a document style for use with blanket purchase agreements. This document style could be used to limit the use of price breaks or customize the document name. For example, a construction company might name their agreement styles Equipment Agreement and Supply Agreement to easily separate the two types of agreements.
You can enable a document style for use with contract purchase agreements utilizing the naming convention of your organization.
A change order template is a set of guidelines that enables an organization to specify what constitutes an internal change and what constitutes an external change to a procurement document during the course of its lifecycle.
Some of the document change terminology:
External Change Order
Internal Change Order
This is a type of change order that modifies an attribute or attributes that may be relevant to the supplier as defined in the change order template. Examples include changes to price, amount, or contract terms. This is also referred to as a supplier facing change order. In commercial organizations these types of changes are referred to as an amendment and in a Federal organization they are called MODs or modifications.
This is a type of change order that modifies an attribute or attributes that may not be relevant to the supplier as defined in the change order template. Examples includes changes to a descriptive flexfield or a certain category of attachments. These are also referred to as administrative changes.
Typically this will be a buyer or requester requested change order. That is a change order requested by a user whose role is either buyer or requester.
Purchase order document styles allow organizations to control the look and feel of the application to match the usage of the purchasing document. Through reusable document styles, organizations can turn on or off various document attributes, thereby simplifying the user interface to fit their business needs.
You can select the price break type that defaults on blanket purchase agreements from the Configure Procurement Business Function page.
Select Cumulative Pricing if you want to choose the price break by adding the current release shipment quantity to the total quantity already released against the purchase agreement line.
Cumulative Pricing can not be used with global agreements.
Select Non-Cumulative Pricing if you want to choose the price break by using the individual release shipment quantity of the agreement line.
Purchasing documents can be created to replenish goods stocked in an organization's inventory. You can associate each of your procurement business units with one inventory item master organization from the Configure Procurement Business Function page.
When you associate your procurement business unit (BU) with an inventory organization, items you define in this BU become available throughout procurement. Do not change the Inventory Organization after you have already assigned one to a procurement BU.
Retroactive price updates automatically update existing purchase orders retroactively with price break quantities from the parent blanket agreement.
Choose this option to allow retroactive price updates to open orders with no receiving or invoicing activity.
Choose this option to allow retroactive price updates to all orders irrespective of whether they have been received or invoiced.
Used to select the close point, which is when the shipment is closed for receiving: You can override this option for specific items and orders.
Selecting the close point gives you more precise control over when the shipment is accounted for.
The receipt close tolerance percentage must be set in combination with this setting.
Ordered goods have passed inspection and are ready for use.
Ordered goods have been delivered and are ready for use.
Ordered goods have been received and are ready for use.
A transaction status match combination after which the document may be considered approved for payment.
The invoice match option in the purchase order schedule and the match approval level described here are independent options. The invoice match option determines whether Payables performs invoice matching to the purchase order or the receipt.
Purchase order and invoice quantities must match within tolerance before the corresponding invoice can be paid.
Purchase order, receipt, and invoice quantities must match within tolerance before the corresponding invoice can be paid.
Purchase order, receipt, accepted quantities from inspection, and invoice quantities must match within tolerance before the corresponding invoice can be paid.
During automatic creation of purchase orders from requisitions use the following options to control how requisition lines are combined on order lines in the new document.
By default the requisitions are converted into purchase order lines individually. This option allows consolidation of requisition lines from across multiple requisitions into a single purchase order.
Select this checkbox to group requisitions into a single purchase order. The application will try to group all the requisitions which share the same:
Requisitioning BU and Sold-to BU
Supplier and site
Currency and conversion rates
By default the requisition lines are combined into individual lines based on document type. This option determines whether each requisition line being fulfilled in the order will have its own order line or can be combined with other requisition lines. Select this checkbox to group requisition lines into the same purchase order line. The application will try to group requisition lines which share the same:
Item, item revision, item description, supplier item number, supplier config ID
Source agreement and source agreement line
Need-by date (used optionally if the Use need-by date checkbox is selected)
Ship-to organization and location (used optionally if the Use ship-to organization and location is selected)
For all requisition lines being grouped into the same purchase order line, the application will further group these lines into schedules if they share the same:
Need-by date, ship-to location and ship-to organization
Standard terms and conditions outline any legal or functional constraints under which the purchase order or purchase agreement will be conducted. These terms and conditions apply to any orders executed by the procurement business unit and can be made available in all installed languages. Use the Define Purchasing Terms and Conditions window to enter standard terms and conditions for purchasing documents.
Standard terms and conditions are included with each purchasing document sent to the supplier.
Purchasing terms commonly indicate the buying organization's rules and expectations as related to pricing and payment.
Purchasing conditions typically describe the buying organization's rules related to but not limited to delivery, acceptance of delivery, cancellations, additions to the approved order, and general behavior of the supplier during the course of the transaction.
Indicate that this set of terms or conditions are not to be made available in all installed languages by selecting "Disable terms and conditions for all languages."
This setting is used in combination with the closing point to close a schedule for receiving. It is the allowable difference (expressed as a percentage) between the quantity stated on the order schedule and the actual quantity received. Quantities can vary up to this difference without preventing an automatic closed for receipt status. You can override this option for specific items and orders.
You must also set the receiving close point.
For example, with a receipt close tolerance percent of 99 with a quantity ordered of 100 and a closing point of receipt the schedule would automatically be closed for receiving when 1 of the 100 are received.
For purchasing documents select a contract terms layout for the document type. These templates determine what information is displayed along with providing the headers, footers, text style, and pagination of the printed document. You can create your own custom layout in RTF format and upload it to Oracle BI Publisher or select one already provided.
The Procurement Application Administrator has access to the Configure Requisition Business Function page for setting up a business unit that has a requisitioning business function associated with it. The attributes specified here are used to default values and behavior of the application when users are creating requisitions and purchase orders for the requisitioning BU.
Next Requisition Number
The Next Requisition Number is used to specify the next number to be used when generating a requisition. When a requisition is created online, the Next Requisition Number is assigned to the requisition; the number specified cannot be in use by an existing requisition. Note that when a requisition is created through the requisition import process, a numeric or alphanumeric requisition number can specified on the requisition record; it will be accepted if there is not in use by an existing requisition number.
Default Deliver-To Organization
The default organization is used as the deliver-to organization for a requisition line if it is a global location. This organization is used to derive the list of item master items that are accessible to the user when creating a purchase order for the requisitioning BU.
The Line Type is the value specified to be defaulted on requisition lines created for the requisitioning BU. Line Type can be modified.
The One-Time Location is the location code to be defaulted as the deliver-to location for the requisition line when the requester specifies a one-time delivery address on a requisition. The location specified must be a global location that is enabled for the requisitioning BU.
Reapproval required for changes made during an active approval process
Reapproval required for changes made during an active approval process is applicable when allowing approvers to modify a requisition when it is routed for approval. It controls whether the requisition must be sent back for reapproval when the approver submits the modified requisition.
Group Requisition Import
The Import Requisition process can be used to import requisitions from other Oracle or non-Oracle applications. On import, requisition lines are grouped first by requisition header number, then by the provided Group Code, then by the value set in the Group-by input parameter (None, Buyer, Category, Item, Location, or Supplier). The specified attribute is used as the default value for Group-by. All remaining requisition lines that have not yet been assigned a requisition number will be grouped together under the same requisition.
Create Orders Immediately for Requisition Import
Create orders immediately after requisition import controls whether the Generate Orders program will run immediately after the requisition import process is complete.
The contents specified in Purchasing News is displayed in the Purchasing News section on the Shop Home page. If the URL and URL display name are specified, they are displayed on the Shop Home page for the requesters to drill down and view more information.
Context Values for Requisition Descriptive Flexfields
You can extend the attributes of a requisition at the header, line, and distribution level using Descriptive Flexfields. Specifying the context value pulls in the associated descriptive flexfields when the user enters the requisition.
Default Procurement BU
A requisitioning BU can be served by multiple procurement business units. If a procurement BU cannot be determined based on information on the requisition line, the Default Procurement BU is used to process all requisition lines.
Price Change Tolerance
The Price Change Tolerance is applicable when there is a price change on the purchase order line associated with a requisition line. If the value is null, no checks will be performed. If the value is a valid numeric value, then any changes made to the price on the purchase order line must be within the tolerance percentage value, or the purchase order cannot be submitted. The tolerance can be specified using the tolerance percentage or tolerance amount. The more restricting of the two tolerances will take precedence if both are specified.
When the purchase order cannot derive a ship-to location, the specified Ship-To on the Requisitioning BU is defaulted.
Cancel Backing Requisitions
Cancel Backing Requisitions controls whether a backing requisition should be canceled when there is purchase order cancellation.
Always: When canceling the purchase order, Oracle Fusion Purchasing also cancels the requisition.
Never: When canceling the purchase order, Oracle Fusion Purchasing does not cancel the requisition, therefore it is available for inclusion on another purchase order.
Optional: When canceling the purchase order, the buyer is given the option to cancel the requisition.
Allow Requester-To-Agreement UOM Conversion
If a requisition does not have an agreement specified, Allow requester-to-agreement UOM conversion is used to specify whether Requisition UOMs can be converted to Agreement UOMs during agreement sourcing. Checking this box indicates that agreements that meet the sourcing criteria, but have Agreement Line UOMs different from Requisition Line UOMs, can be considered during agreement sourcing. If the box is left unchecked, such agreements will not be considered.
Use the Create Procurement Agent page to control a procurement agent's access to procurement activities for a business unit. You can implement document security for individual document types. You can also control a procurement agent's access to activities such as suppliers, approved supplier list entries, and business intelligence spend data through the settings on this page.
The key elements for document security are the procurement business unit, enabling agent access to document types, and the access levels to other agents' documents.
The Create Procurement Agent page is used to create or edit a procurement agent and define that agent's access to procurement functionality within a procurement business unit.
The following Fusion predefined roles are controlled by procurement agent access configuration: Buyer, Category Manager, Procurement Manager, Procurement Contracts Administrator, Supplier Administrator, and Catalog Administrator.
Assign the agent to one or more procurement business units.
Enable the agent to access one or more procurement action for each procurement business unit.
Manage Purchase Orders
Manage Purchase Agreements: Enable access to blanket purchase agreements and contract agreements.
Manage Negotiations: Enable access to Sourcing negotiations, if implemented by your organization.
Manage Catalog Content: Enable access to catalog content. This action allows an agent to add or update blanket purchase agreement line information as part of the collaborative catalog authoring
Manage Suppliers: Enable access to create and update supplier information.
Manage Approved Supplier List Entries: Enable access to create and update approved supplier lists.
Assign an access level to documents owned by other procurement agents for each procurement business unit. Note that an agent can perform all actions on their own documents as long as they have procurement BU access.
None: The agent cannot access documents owned by other agents.
View: Permits the agent to search and view other agents' documents.
Modify: Permits the agent view, modify, delete, and withdraw other agents' documents.
Full: Permits the agent full control of other agents' documents which include view, modify, delete, withdraw, as well as perform document actions including freeze, hold, close, cancel, and finally close.