Implementing Oracle Configure to Order

This chapter covers the following topics:

• Overview of Oracle Configure to Order
• Definitions
• Process Flows
• Feature Highlights
• Examples Used in This Guide

Overview of Oracle Configure to Order

The Oracle Configure to Order Process Guide describes how Oracle ERP products support configure-to-order capability and requirements. This guide provides detailed implementation considerations for each step of the process.

A configure-to-order environment allows the product or service to be assembled (kitted) on receipt of the sales order. Oracle applications support the configure-to-order environment with a range of features that include order entry, demand forecasting, master scheduling, production, shipping, and financial accounting.

Oracle Configure to Order:

• Includes Pick-to-Order (PTO) and Assemble-to-Order (ATO) items, models, and hybrids

• Supports building configurations using other configurations as subassemblies and is referred to as multilevel configure to order

• Supports internal sourcing of ATO models at any level of the Bills of Material (BOM)

• Supports purchasing of ATO models and items at any level of the BOM

Definitions

Assemble-to-Order Model (ATO Configuration)

The Assemble-to-Order (ATO) model consists of:

• Model bills of material containing optional items and selection rules

• Configurations created from mandatory components and selected options

Assemble-to-Order Item

Assemble-to-Order items consist of:

• Standard bills of material with standard components

• Items manufactured from standard components

The three types of ATO items are:

• AutoCreated Configuration Items: Configuration items created by CTO for a sales order that was placed for a model and options. These items have the following attributes:

  • The ATO indicator is selected on the Order Management tab of the item master

  • A base model is defined on the BOM tab of the item master

  • The AutoCreated Configuration indicator is selected

• Pre-configured Items: An item defined by the user with a "base model" along with a configured bill of material. These items have the following attributes:

  • The ATO indicator is selected on the Order Management tab of the item master

  • A Base Model is defined on the BOM tab of the item master

• Standard ATO Items: These include standard items with the ATO indicator selected on the Order Management tab of the item master.

Configurations

Hybrid models or multilevel ATO models can have multiple child models. Multiple instantiation is the ability to create and individually configure multiple occurrences of a model or model component, while configuring the model. A configuration model that contains models or model components that can occur multiple times is referred to as a solution model.

While configuring using the Oracle Configurator with setup completed for multiple instantiation, you can access a configuration model instance, as well as an instance of each component model that is contained within the model. You can also configure component model instances separately by selecting available options. For example, a computer system is represented by a solution model. A computer may contain a number of different servers, printers, and personal computer (PC) workstations. Each PC workstation in the system represents one instance of a configuration model, and you can configure each instance of the PC workstation differently. You can configure one instance of the PC workstation with a twenty-one inch flat screen monitor, 10 GB of disk space, and 512 KB of RAM. Another instance of the PC workstation may have a seventeen inch monitor, an ergonomic keyboard, 256 KB of RAM, and 4 GB of disk space. These two workstations are both part of the computer system solution model.

Additional Information: For additional information for setting up and using Oracle Configurator for multiple instantiated models, refer to the Oracle Configurator Developer User's Guide.

Pick-to-Order Model (PTO Configuration)

A Pick-to-Order model consists of:

• Model bills of material with optional items and option selection rules

• A pick slip used to assemble (kit) included items and selected options

Pick-to-Order Item (Kit)

A Kit consists of:

• Standard bills of material with mandatory included items

• A pick slip used to assemble (kit) included items

Hybrid

A Hybrid consists of:

• Pick-to-order models with optional assemble-to-order items

• A pick-to-order model containing an assemble-to-order model

Multilevel Assemble-to-Order Model (Multilevel ATO Configuration)

A Multilevel Assemble-to-Order model consists of:

• A model bill of material with a non-phantom model as a component.

• A configuration manufactured with mandatory components, selected options, and configured subassemblies.

Multilevel Assemble-to-Order Items

A Multilevel Assemble-to-Order item consists of:

• An auto-created, pre-configured, or standard ATO item with another auto-created, pre-configured, or standard ATO item as a component

• An item manufactured with standard components and configured components

Multi-Organization Assemble-to-Order Model (Multi-Organization ATO)

A Multi-Organization Assemble-to-Order model consists of an ATO model manufactured by and transferred from another organization.

Process Flows

The following illustrates three process flows:

1. Single Level, Single Organization ATO, and PTO

2. Multilevel, Multi-Organization ATO, and PTO

3. Purchase-to-Order Configurations

Example 1: Process Flow for Single Level, Single Organization ATO, and PTO

The following diagram illustrates the flow of a single level, single organization assemble-to-order sales order. Each numbered step is explained in the table following the diagram and is described in subsequent chapters.

Process Flow for Single Level, Single Organization ATO, and PTO

Single Level, Single Organization Process Flow Steps

Step	ATO	PTO	Name	Description
1	Yes	Yes	Define Model and Option Class Bills of Material and Routings	Define model and option class bills and optional routings to control order management, master scheduling and MRP, work in process, and costing.
2	Yes	No	Forecast Model/Option Demand	Forecast demand for model, options, or both. Expand forecasts through planning bills to models, and/or options.
3	Yes	No	Master Schedule Models and Options	Master schedule ATO models, options, or both.
4	Yes	Yes	Enter Sales Order	Enter sales orders for models with options.
5	Yes	Yes	Check ATP	Perform group ATP check for all supply-constrained components to establish the earliest possible ship date for the configuration.
	Yes	Yes	Book and Schedule the Order
6	Yes	-	AutoCreate Configuration Items	Automatically create a new item number, bill, and routing for each new sales order and assign new items to sales orders. Note: You can also "Progress the Order" through the Create Config Item function in the workflow. This creates the new item, bill and routing for that sales order's required configuration.
7	Yes	-	Create Production Supply	Discrete: AutoCreate Final Assembly Orders automatically opens a discrete job for each new ATO configuration order. Work-in-process jobs are assigned (reserved) to the sales orders. Flow: Use the line scheduling workbench to schedule your line based on sales orders. The sales order number is referenced on the flow schedule. Note: You can also “Progress the Order” through the Create Production Supply function which automatically opens a discrete job or creates a flow schedule for the active configuration order line.
8	Yes	-	Complete Production	Complete configuration item to inventory. The application automatically converts the work-in-process reservation or flow schedule reference into an inventory reservation.
9	Yes	Yes	Pick Release and Ship Configuration Orders	Pick release all configuration sales orders.
10	Yes		Deactivate Configuration Items	This function deactivates auto-generated configuration item numbers with order completion dates earlier than x days from the current date.

Example 2: Process Flow for Multilevel, Multi-Organization ATO, and PTO

Note: Oracle Advance Planning and Scheduling (APS) must be installed to support multilevel and multi-organization ATO models and ATO items.

The following diagram illustrates the flow of a multilevel, multi-organization ATO sales order. Each numbered step is explained in the table following the diagram and is described in subsequent chapters.

Process Flow for Multilevel, Multi-Organization ATO, and PTO

Multilevel, Multi-Organization Process Flow Steps

Step	ATO	PTO	Name	Description
1	Yes	Yes	Define Model and Option Class Bills of Material and Optional Routings	Define multilevel model and option class bills, and optional routings to control order management, master scheduling and MRP, work in process, and costing.
2	Yes	Yes	Set Up Sourcing Rules, Shipping Networks, Assignment Sets, and APS Plans	Define sourcing rules, shipping networks, assignment sets, ATP rules, and APS plans to control multi-organizational sourcing.
3	Yes	No	Set Up Global Forecast	Set up global forecast for the model, options, or both using demand planning.
4	Yes	No	Master Schedule Models and Options	Create the master schedule for ATO models, options, or both in the manufacturing organizations using the forecast set.
5	Yes	Yes	Enter Sales Order	Enter sales orders for models with options.
6	Yes	Yes	Check ATP (optional)	Process group ATP based on planning output to check for all supply-constrained components to establish the earliest possible ship date for the configuration. If you are using ASCP, then you can also run a global availability check to determine the shipping warehouse on the order.
	Yes	Yes	Book and Schedule the Order
7	Yes	-	AutoCreate Configuration Items	Automatically create a new item number, bill, and routing for all non-phantom models in the configuration structure in all potential sourcing organizations. The final configured assembly item is linked to the sales order. Note: Advanced Planning does not recognize demand for an ATO model order until this step. You can create a configuration for a scheduled order before it is booked. See: AutoCreate Configuration Items.
8	Yes	-	Create Top-Level Production Supply In a multilevel organization, you can create production supply in the shipping organization only if the final assembly is manufactured entirely within that organization. If the shipping organization does not manufacture the final assembly, and sources it entirely from another internal organization, then you can create an internal requisition to transfer it from the source organization. If the shipping organization has more than one source (any combination of Make, Buy or Transfer), then use Advanced Planning to recommend supply.	If the final assembly is being shipped from the manufacturing organization: Discrete: AutoCreate Final Assembly Orders automatically opens a discrete job for the top-level item on each new ATO configuration order. The work in process jobs are reserved to the sales order. This process can also create supply for lower level configurations if they are being built or purchased from the same organization. Flow: Use the Line Scheduling Workbench to schedule your line based on sales orders. The sales order number is referenced on the flow schedule. Internal Transfer: If the final assembly is entirely transferred from another manufacturing organization, then the AutoCreate Requisitions process automatically creates an internal requisition for this assembly and reserves it to the sales order. Note: You can also “Progress the Order” through the Create Production Supply function which automatically opens a discrete job, creates a flow schedule, or creates an internal requisition for the final assembly item of the active configuration order line. For items that are manufactured in the shipping organization, this process can optionally create supply for lower level configurations if they are built or transferred within the same organization.
9	Yes	-	Plan Lower Level Configuration Supply	In a multi-organization environment, use advanced planning to create and implement planned orders across your supply chain.
10	Yes	-	Process the Supply Chain Plan	Complete all required manufacturing in the respective source organizations and transfer to the shipping organization. If the shipping organization is the same as the manufacturing organization of the top-level configuration item, then the work-in-process reservation or flow schedule reference is automatically converted into an inventory reservation when you complete the top-level configuration item to inventory. If the final assembly is transferred from a different organization, then the reservation to an internal requisition is automatically transferred to inventory upon receipt of the assembly in the shipping organization.
11	Yes	Yes	Pick Release and Ship Configuration Orders	Pick release all configuration sales orders.
12	Yes	-	Deactivate Configuration Items	This function deactivates auto-generated configuration item numbers with order completion dates earlier than x days from the current date. A configuration item is deactivated if there is no sales order demand, open supply, or transactions within that organization.

Example 3: Process Flow for Purchase-to-Order Configurations

The following diagram illustrates the flow of a purchase-to-order sales order. Each step is explained in the table following the diagram and is described in subsequent chapters.

Note: In this example, the top-level configuration is being purchased. If the top-level configuration is manufactured and the lower level configuration is purchased, then the flow is similar to the multilevel multi-organization example with the lower level manufactured supply replaced with a purchased supply.

Process Flow for Purchase-to-Order Configurations

Purchase- to-Order Process Flow Steps

Step	ATO	Name	Description
1	Yes	Define Model and Option Class Bills of Material and optional routings	Define single or multilevel model and option class bills of material and optional routings to control order management, master scheduling/MRP, work in process, and costing. The entire BOM for a purchased configuration should be created in the validation organizations and receiving organization. Routings for all models and option classes should be created in the receiving organization.
2	Yes	Set up Sourcing Rules	Define a buy type sourcing rule for the models you plan to procure and assign it the assignment set specified in the MRP: Default Sourcing Assignment Set profile option.
3	Yes	Forecast Model Demand	Forecast demand for the ATO model. If you intend to buy the model configuration, then all components and option classes should have forecast control set to Null.
4.	Yes	Master Schedule the Top Model	Master schedule the top ATO model.
5	Yes	Enter Sales Orders	Enter sales orders for models with options.
6	Yes	Check ATP, Book and Schedule the Order	Perform group ATP based on planning output to reduce the promise date lead time of the model.
7	Yes	AutoCreate Configuration Items	Automatically create a new item number, bill, and routing for all non-phantom models in the configuration structure. The BOM and routing are created in the receiving organization if they do not exist in any other organization. The final configured assembly item is linked to the sales order.
8	Yes	Create Top-Level Purchase Requisitions In multiorganization scenarios, you can create requisition supply only if the final assembly can only be purchased from that organization. If the shipping organization can partially make or transfer the assembly from another organization, use Advanced Planning to recommend planned orders.	If the final assembly is being purchased directly from the shipping organization, then: AutoCreate Purchase Requisitions automatically places a row in the requisitions import tables for the top-level purchased configuration or ATO item. Run requisitions import to create the requisitions. The created requisitions are reserved to the sales order. Note: You can also “Progress the Order” through the Create Supply Order Eligible function which also places a line in the requisition import tables for the order line.
9	Yes	Create Purchase Orders	Create purchase orders or purchase order releases.
10	Yes	Plan Configuration Supply	Use advanced planning to create and implement planned orders if you are purchasing lower level configurations, or if you are purchasing lower level configurations from an organization other than your shipping organization.
11	Yes	Process the Supply Chain Plan	Create a requisition and purchase order for the configuration item. Receive into stock.
12	Yes	Pick Release and Ship Configuration Orders	Pick release all configuration sales orders.
13	Yes	Deactivate Configuration Items	This function deactivates auto-generated configuration item numbers with order completion dates earlier than x days from the current date. A configuration item is deactivated if there is no sales order demand, open supply, or transactions within that organization.

Note: Oracle Advance Planning and Scheduling must be installed to support purchasing of ATO items.

Feature Highlights

The following are key configure-to-order features supported by Oracle applications:

Product Definition

• Support for ATO, PTO, and hybrid (PTO/ATO, ATO/ATO) product structures

• Support for multilevel ATO and PTO, multilevel ATO hybrid structures that allows you to build configured items that have other configured items as sub assemblies

• Ability to ship configured items from a warehouse

• Ability to purchase configurations at any level in your multilevel BOM structure

• Planning support for complex configurations where configurations are sourced across the supply chain

• Options for specific sourcing

• Mandatory and mutually exclusive option selection rules

• Options for dependent routings

• Notification to the shipping organization when a change is made to the order request day, ship date, quantity, warehouse, configuration, or when a line is split after the configuration item has been created

Planning Configurations

• Forecast any planned item anywhere on your bill of material. This includes models, options, and mandatory components if your configurations are created in-house. If you use multilevel or multi-organizational models, then set up a global forecast using demand planning.

• Use forecast sets as demand schedule for the manufacturing plan, and use a manufacturing plan for ATP/Scheduling and planning supply.

• Use APS to check availability, determine a shipping organization using global availability, and schedule and plan supply across organizations. Promises are based on matching configurations and option-specific sources.

• Use constraint-based planning to create feasible plans based on material and capacity constraints.

• Master schedule models and options in the manufacturing organizations.

• Define multiple sources for models and options at any level in the BOM.

Ordering Configurations

• Interactive option validation or auto-selection using Oracle Configurator

• Multiply instantiate ATO models and sub-models using Oracle Configurator

• Support for ordering options in decimal quantities

• ATP inquiry across the supply chain based on option material and resource availability

• Match and reuse an ordered configuration or a configured subassembly

• Reserve to available on-hand configuration (partial or full)

• Automatic configuration pricing calculation taking discounts account

• Order capture from any source (for example, your web store)

• Workflow based order processing

Manufacturing Configurations

• Automatic creation of unique configuration item, BOM, and routing for the top-level model as well as lower level models

• Option to create items, BOMs, and routings based on sourcing rules, or the base model setup

• Discrete manufacturing and flow manufacturing environment support for building all levels of the configuration

• Supply chain cost roll-up support for all sourced configurations

• Automatic configuration lead time and cost calculation for all configured subassemblies and top-level assemblies

• Automatic final assembly work order creation for the top-level configuration

• Constraint-based finite scheduling of final assembly work orders within each manufacturing organization

• Automatic flow schedule creation for the top-level configuration

• Automatic sales order reservation of top-level configurations upon production completion (single organization environment only)

• Automatic internal requisition creation for the top-level configuration with support to reserve the internal requisition to the sales order with automatic conversion to on-hand on receipt

• Multiple level supply creation support to create supply for all levels of configurations (in the shipping warehouse only)

• Supply chain planning support to create supply for configurations at all levels across the supply chain

Procuring Configurations

• Automatic creation of unique configuration item, BOM, and routing for the top-level model as well as lower level models

• Calculation of list price and blanket price for the configuration based on prices for the model and options

• Transmission of configuration details through item attachments or the iSupplier Portal

• Automatic requisition creation for the top-level purchased configuration

• Automatic transfer of the reservation from the requisition to the purchase order

• Automatic sales order reservation of top-level purchased configuration upon receipt into inventory

• Supply chain planning support creation of supply for configurations at all levels across the supply chain

• Support for drop-shipped configurations

Integration

The following Oracle application products are integrated to provide configure-to-order features:

• Bills of Material

• MRP/MPS, SCP

• APS (required for multilevel or multi-organization configurations)

• Order Management products

• Configurator products

• Work in Process

• Inventory

• Flow Manufacturing

• Cost Management

• Purchasing

• iSupplier Portal

Examples Used in This Guide

Two examples are used in this guide that illustrate the difference between single level / single organization, and multilevel / multi-organization configure to order. Follow the example that best suits your manufacturing environment.

Example 1: A hybrid (PTO/ATO) in a single level, single organization environment

The following is an example of a hybrid (PTO/ATO) in the single level, single organization environment. It is for a PTO model Promotional Laptop that has three pickable items: diskettes, a battery pack, and the laptop computer ATO model. The laptop computer model is comprised of a phantom model for a monitor, option classes for CPUs, VGAs, and EGAs, and the actual options. The example is first shown as a diagram, then in a tabular format. This example is used throughout the entire book for illustration.

A Hybrid (PTO/ATO) in the Single Level, Single Organization Environment

A Hybrid (PTO/ATO) in a Single Level, Single Organization Environment

Level	Item	Item Type	Optional	Supply Type	Planning %	Qty	Mutually Exclusive
1	Promotional Laptop	PTO Model	-	-	-	-	-
.2	. Battery Pack	Kit	No	Assembly Pull	110%	-	-
.2	. Accessories	PTO Option Class	Yes	Assembly Pull	40%	-	No
.2	. Diskettes	Purchased Item	Yes	Assembly Pull	95%	-	-
. 2	. Laptop Computer	ATO Model	No	Assembly Pull	100%	-	-
. . 3	. . CPU	ATO Option Class	No	Phantom	100%	-	Yes
. . . 4	. . . Pentium I	Purchased	Yes	Assembly Pull	65%	-	-
. . . 4	. . . Pentium II	Purchased	Yes	Assembly Pull	35%	-	-
. . 3	. . Monitor	ATO Model	No	Phantom	100%	-	No
. . . 4	. . . VGA	ATO Option Class	Yes	Phantom	70%	-	No
. . . . 5	. . . . VGA Manual	Purchased Item	No	Assembly Pull	100%	-	-
. . . . 5	. . . . VGA1	Purchased Item	Yes	Assembly Pull	50%	-	-
. . . . 5	. . . . VGA2	Purchased Item	Yes	Assembly Pull	50%	-	-
. . . 4	. . . EGA	ATO Option Class	Yes	Phantom	30%	-	No
. . . . 5	. . . . EGA1	Product	Yes	Assembly Pull	55%	-	-
. . . . 5	. . . . EGA2	Product	Yes	Assembly Pull	45%	-	-
. . . 4	. . . Monitor Manual	Purchased Item	No	Assembly Pull	100%	-	-

Example 2: A multilevel ATO in a multi-organization environment

The following is an example of a hybrid (PTO/ATO) in a multilevel, multi-organization environment. It uses the same PTO model Promotional Laptop that has the three following pickable items:

• Diskettes

• Battery Pack

• Laptop computer ATO model

Note: The laptop computer model is sourced from another organization, and the monitor model has been made non-phantom and is sourced from a third organization.

The original structure is changed as follows:

• The orders are placed in organization W1 (your warehouse)

• The laptop computer is produced in organization M1

• The monitor sub model is changed to Assembly Pull (from phantom) and is produced in organization M2

• There are sourcing rules set up such that W1 receives the laptop from organization M1, and M1 receives its monitors from M2

The following illustration is of the BOM in the three organizations W1, M1, and M2. The BOM in the OM validation organization contains all models and options. This example is used throughout the entire guide.

A Multilevel ATO in a Multi-Organization Environment

Note: If the monitor model was bought instead of manufactured, then the entire monitor model BOM should reside in the receiving organization (M1).