Introduction to Outside Processing
Oracle Manufacturing provides complete life cycle support of your outside processing business needs from setup through receipt.
| Inventory
| Define outside processing items
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| Define outside processing item list prices and lead times
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| Define units of measure
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| Purchasing
| Define and assign supplier sourcing rules
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| Define outside processing line types
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| Link employees to application users
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| Define quantity received tolerances and control
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| Define receiving routing controls
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| Define ship to, deliver to locations
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| Define receiving, PPV, IPV, and AP accrual accounts
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| Bills of Material
| Define outside resources
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| Define departments
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| Define routings
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| Attach supplier-sourced components to bills of material
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| Perform cost rollup
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| Work in Process
| Define WIP accounting classes
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Outside Processing Business Examples
Oracle Manufacturing provides flexible outside processing that you can adapt to match your business flow. You can review the business examples in this section to better understand how the Oracle Manufacturing outside processing features are used in real business scenarios.
Understanding the Physical Flow of Outside Processed Assemblies
Oracle Manufacturing supports your physical outside processing flow by providing you with the tools necessary to record and charge each activity. Before you implement the system, you should understand your physical material flows to and from your suppliers and then tailor your implementation to match your physical model.
Setting Up Inventory
You define outside processing items in Inventory. These items can be non-stocked items which represent the actual supplier contribution in your build process or you can define the assembly itself as an outside processing item. When you create purchase requisitions and purchase orders, you enter outside processing items on the requisition and purchase order lines.
You must define all outside processing items in your purchasing organization. In addition, you must define and maintain these outside processing items in all your work in process organizations. You must maintain the outside processing item list price and lead time which are used when automatically creating a purchase requisition. You must maintain consistent item attributes for outside processing items you include in multiple organizations.
You also define outside processing item and outside resource units of measure in Inventory. You can receive an item in an alternate unit of measure. When Purchasing charges the resource to the job or repetitive schedule, it converts the receiving unit of measure back to the resource unit of measure.
Setting Up Bills of Material
You define outside resources, departments, routings, and components in Bills of Material. Resources identify the item, resource, or service you are purchasing from a supplier. You must associate an outside resource with a manufacturing department so you can attach the resource to a routing operation.
When you define your bills of material, you can identify the components supplied by a supplier. You do this by choosing the Supplier supply type for these components on your bill of material.
Setting Up Purchasing
You can define supplier sourcing rules and Approved Supplier List entries to reference source documents such as blanket purchase agreements when you requisition outside processing items. Also, the preparer on a requisition comes from the employee who is linked to the application user who enters the move transaction which creates the requisition.
You must also define ship to and deliver to locations which Purchasing uses when receiving outside processing items. The ship to location represents the delivery dock and/or inspection location and the deliver to location represents the destination location, which is work in process. The destination location is the same location that you associate with the department of the outside operation.
You can also enable receiving tolerance percentages as well as receiving routing controls in Purchasing. Finally, you must specify several accounts which Purchasing uses when receiving outside processing items.
Setting Up Work in Process
You define your standard discrete, non-standard, and repetitive assembly accounting classes in Work in Process. You must enter an outside processing account to charge when you receive outside processing items linked to outside resources on jobs and repetitive schedules.
Planning Outside Resource Load
Capacity plans either rough-cut or detailed resource load for outside resources with time-based units of measure.
Requisitioning Outside Processing Items
Work in Process automatically requisitions appropriate outside processing items when you move into Queue of an operation with an outside resource. You can also manually define a purchase requisition for an outside processing item and link it to a job or repetitive schedule.
Purchasing Outside Processing Items
You can automatically create a purchase order or blanket release from an outside processing purchase requisition. The purchase order or release contains lines referencing outside processing items, shipments referencing delivery information, and distributions referencing jobs or repetitive schedules and resources to charge. You can also manually define a purchase order for an outside processing item and link it to a job or repetitive schedule.
Receiving Outside Processing Items
When you receive outside processing items linked to jobs or repetitive schedules, Purchasing automatically charges your job or repetitive schedule for the cost of the outside processing item at standard or at the purchase price, depending upon how you define the outside resource linked to the outside processing item you are receiving. Purchasing also moves outside processed assemblies to the next operation on the shop floor if you defined the resource as To Move.
Managing Returns and Adjustments
You can return outside processed assemblies to suppliers for rework, and you can reverse over-receipts you erroneously transacted. Purchasing reverses move transactions and accounting charges associated with the initial transactions.
