7Utilizing Contract Fulfillment

This chapter contains the following:

Contract fulfillment makes it possible for you to track goods, services, reports and other fulfillment items you are purchasing in buy-intent contracts. Depending on the type of contract you are creating, you can use contract fulfillment to initiate the creation purchase orders or purchase agreements within Oracle Fusion Purchasing or in other integrated purchasing applications and monitor their fulfillment from within the contract. This topic explains how you create and work with contract fulfillment.

  1. You can create a fulfillment either on the contract header or on individual contract lines by selecting either the Autocreate Fulfillment Lines or the Create fulfillment actions. The Autocreate Fulfillment Lines action creates the fulfillment line and copies the contract basic header or contract line information to the fulfillment line so you do not have to enter it manually.

    Selecting the Autocreate Fulfillment Lines action from the header automatically creates one fulfillment line per contract line. If there are no contract lines, then the application creates one fulfillment based on the header details provided the contract type is of class Purchase Agreement. You cannot autocreate fulfillment lines for contracts without contract lines if the contract type class is Enterprise Contract.

  2. Review the notifications that are sent automatically to interested parties regarding fulfillment progress and deadlines. The contract type can be set up to automatically specify who is notified and when. You can change and add additional notifications for the contract.

  3. If you are using the fulfillment to initiate the purchase of goods and services using the integrated purchasing applications, then you must enter the required purchasing details. For autocreated fulfillment, these details are copied automatically from the corresponding contract lines.

  4. When the contract is approved and becomes active, you can initiate the creation of the purchasing documents in one of the purchasing applications. When you do, the application validates the information you entered to make sure it meets all the requirements of the purchasing application and creates the purchasing document. If it does not you must edit the fulfillment to enter additional information.

    Note: If the contract goes into amendment after being approved, you cannot create any further fulfillment lines or edit existing ones. If you initiated the creation of purchasing documents when the contract became active, you can still continue to execute the fulfillments on the purchasing document. In the event that you did not initiate a purchasing document for the approved contract before it went into amendment, you can create one based on the latest active version of the contract and treat this as an active contract on which you can execute existing fulfillment lines.
  5. After the purchasing document is created in the purchasing application, you can monitor the progress of its execution.

  6. You can mark a fulfillment as complete after execution of the purchasing document is completed.

The following figure illustrates how you can create and work with both contractual and noncontractual fulfillment lines and how you can initiate purchasing activity from those fulfillment lines.

Working with contract fulfillment.

Creating a Contract Fulfillment

If the fulfillment you are creating is related to the information entered in the contract, then you can select the Autocreate Fulfillment Lines action to create a fulfillment line in either the contract Header tab or the Lines tab. Using Autocreate Fulfillment Lines on the contract header creates a single fulfillment line for each contract line. On the Lines tab, you can select individual contract lines where you want to create a fulfillment.

Select the Create fulfillment action in the Fulfillment tab to create a completely new fulfillment.

Note: The Create Fulfillment and Autocreate Fulfillment Lines actions are not available for a contract that is under amendment.
Tip: You can create multiple fulfillment lines for a single contract line if you need the fulfillment line items to be shipped to different destinations, for example. This is accomplished by autocreating a fulfillment line, duplicating it, and then editing the fulfillment line information.

Setting Up Fulfillment Notifications

You can specify which internal contacts are automatically notified about contract fulfillment milestones and when.

You can notify internal contacts:

  • A specified number of days before or after the fulfillment due date

  • When the fulfillment line is placed on hold

  • When a purchasing document is created from one or more fulfillment lines

  • When purchasing document creation fails for the fulfillment

  • When purchasing activity is complete for a fulfillment line

Different notification types are available for different fulfillment types. Some notifications may already be specified for you by the contract type you selected to create your contract.

Creating the Purchasing Document

Before you initiate the purchasing document by selecting either the Create Purchase Order or Create Purchase Agreement actions, you must enter all purchasing information required by the purchasing document you are creating and wait until the contract is approved.

You can create one purchase document from multiple contract fulfillment lines. For example, selecting all the fulfillment lines created from contract lines when creating a purchase order, creates one PO with lines corresponding to each of the fulfillment lines.

The application validates your entries to make sure you have entered all the required information. You must correct any errors you receive and resubmit you request. You know that the purchase document is successfully created when the fulfillment status changes to the PO Created or Agreement Created status.

Note: Purchase orders are created automatically in Oracle Fusion Purchasing, but agreements are created only when you run the Import Blanket Agreements and Import Contract Agreements processes from the Purchasing work area as described in a related topic.

Monitoring Purchasing Activity

You can monitor the status of the purchasing activity for the fulfillment on the Purchasing Activity tab.

Note: For all agreements and purchase orders created in Oracle Fusion Purchasing, the tab information is updated each time you run the Track Purchasing Activity process as described in a related topic.

Specifying Purchasing Activity for a Fulfillment is Complete

You can specify the purchasing activity on a fulfillment is complete by selecting the Complete action on the Fulfillment tab. You also use this action to indicate fulfillment lines with no purchasing documents are complete.

This topic explains what types of contract fulfillment lines you can create in a supplier contract, and how you can use them to create and monitor purchasing documents in your purchasing applications.

Types of Contract Fulfillment You Can Create

You can create two types of contract fulfillment:

  • Contractual

    Fulfillment lines that are covered by the terms of the contract. You can initiate standard purchase orders or purchase agreements from contractual fulfillment lines, depending on the purpose of the contract.

  • Noncontractual

    Fulfillment lines that aren't negotiated as part of the contract, which are used to monitor the progress or quality of contractual fulfillment lines. You can also create purchase orders and purchase agreements from noncontractual fulfillment lines.

A contract fulfillment of either type can have one or two directions:

  • Inbound

    The fulfillment is the responsibility of the external party, such as the supplier for buy-intent contracts.

  • Outbound

    The fulfillment is the responsibility of the internal party, such as the buyer for buy-intent contracts.

You can initiate purchasing activity for buy intent contracts only from inbound fulfillment lines. Contractual fulfillment lines are always inbound for buy contracts.

Contract fulfillment are of the two following types; contractual and noncontractual. The contractual contract fulfillment is inbound only whereas the noncontractual contract fulfillment is inbound as well as outbound. The following figure illustrates the different contract fulfillment types, the purchasing activity you can initiate, and track from each type is discussed in the next section.

Basic contract fulfillment types.

Types of Purchasing Activities That a Contract Fulfillment Can Initiate

You can initiate purchase orders or purchase agreements from fulfillment lines, depending on the purpose of the contract.

  • The contract is used for immediate purchases and has at least one contract line item defined.

    You can create purchase orders from the fulfillment lines of such contracts. The contract type class for such contracts must be Enterprise Contract.

  • The contract is used for future purchases and has at least one contract line item defined.

    You can create blanket purchase agreements from the fulfillment lines of such contracts.

  • The contract is used for future purchases and doesn't have contract line items defined.

    You can create contract purchase agreements from the fulfillment lines of such contracts.

The following table lists the purchasing documents that you can create from different contract fulfillment lines in Oracle Fusion Purchasing, the purchasing application that is integrated with Oracle Fusion Enterprise Contracts.

Fulfillment Properties Purchasing Document Created in Oracle Fusion Purchasing
  • The fulfillment is inbound.

  • Contract is for immediate purchase.

  • The contract includes contract lines.

Purchase order

You can create only one purchase order from each fulfillment line, but you can create multiple fulfillment lines for each contract line if you have to stagger the purchases or ship to different destinations, for example. You can also combine multiple fulfillment lines to create one purchase order.

  • The fulfillment is inbound.

  • Contract is for immediate purchase.

  • The contract has no contract lines.

Purchase order

You can duplicate a fulfillment line to create multiple fulfillment lines if you have to create multiple purchase orders.

  • The fulfillment is inbound.

  • Contract is for future purchase.

  • The contract includes contract lines.

Blanket purchase agreement

You can create only one blanket purchase agreement from each fulfillment line, but you can create multiple fulfillment lines for each contract line if you have to stagger the purchases or ship to different destinations, for example. You can also combine multiple fulfillment lines to create one blanket purchase agreement.

  • The fulfillment is inbound.

  • Contract is for future purchase.

  • The contract has no contract lines.

Contract purchase agreement

You can duplicate a fulfillment line to create multiple fulfillment lines if you have to create multiple contract purchase agreements.

The action you can take on a contract fulfillment depends on its status. This topic explains the available statuses and how they relate to the actions you can take.

Contract fulfillment statuses are specific to the kind of purchasing document being created, if any.

A contractual fulfillment that is used to create a purchasing document in a purchasing application can have one of the following statuses:

  • Incomplete

  • PO Creation Started or Agreement Creation Started, depending on the nature of the purchasing document.

  • PO Created or Agreement Created

  • PO Creation Failed or Agreement Creation Failed

  • Completed

  • Canceled

  • On Hold

Statuses and Available Actions

The following figure shows statuses and actions for a contractual fulfillment used to create a purchase order.

Note: The actions and transitions for purchase orders and agreements are the same so you can substitute the word Agreement for PO in the figure.

  • When you create a fulfillment, it is in the Incomplete status.

  • When the contract is active, you can initiate the creation of the purchase order or agreement in an integrated purchasing application. When the fulfillment passes validation, then it is set to the PO Creation Started or Agreement Creation Started status.

  • You can also apply a temporary hold on incomplete fulfillment lines or cancel them.

    Canceling the contract line or the contract automatically cancels the fulfillment.

  • If the purchase order or agreement is created successfully, it is set to the PO Created or Agreement Created status.

  • If creation fails, the status is set to PO Creation Failed or Agreement Creation Failed.

  • When the status is PO Creation Failed or Agreement Creation Failed, then you can try creating the purchase order again or you can cancel the fulfillment.

  • You can indicate purchasing activity is complete for a fulfillment in the PO Created or Agreement Created status by selecting the Complete fulfillment action.

  • You can also select the Complete fulfillment action to indicate the completion of any fulfillment in the Incomplete status, which is useful for tracking the completeness of noncontractual fulfillment lines with no purchasing activity. If necessary, you can use the Reopen fulfillment action (not shown here) to revert the status back to Incomplete.

The following figure shows contract fulfillment statuses and actions.

This figure shows contract fulfillment statuses and actions.

Create and Monitor Agreements in Oracle Fusion Purchasing

To create purchase orders and agreements in Oracle Fusion Purchasing and monitor their status from contract fulfillment, run the Track Purchasing Activity, Import Blanket Agreements, and Import Contract Agreements processes. This topic outlines when and how to run these processes which communicate information back and forth between contracts and purchasing.

Monitoring of Purchase Order and Agreement Status Information

You must run the Track Purchasing Activity process to display information about the status of purchase orders or agreements created in Oracle Fusion Purchasing. You can run this process in the Contracts work area, the Manage Processes task. Select Schedule a New Process to schedule this process to run periodically, depending on your business needs.

Enabling the Creation of Agreements

Purchase orders are created automatically when you initiate a purchase order from a contract fulfillment line. However, you must run Import Blanket Agreements to create blanket purchase agreements and Import Contract Agreements to create blanket contract agreements. You can run these processes from the Purchasing work area, by selecting the appropriate task under the Agreements heading. You can schedule these processes to run periodically, depending on your business needs.

For both processes, you set the following parameters:

  • Procurement BU

    Select the business unit on the contracts for which you are creating the agreements.

  • Default Buyer

    Select the buyer on the contract fulfillment for whom you want to create agreements.

  • Approval Action

    Select one of the following: Do Not Approve, to create a draft agreement, Bypass Approval, to go straight to the buyer for signature, or Submit for Approval, to submit the agreement for approval first.

This example illustrates how you can use contract fulfillment lines to specify multiple shipping destinations for the items in a purchase order you want to create for a single contract line.

Scenario

Suppose your organization has a contract with a supplier that includes a contract line to purchase 1000 laptops. You want to create a PO in your purchasing application that ships half the laptops to Destination A and half to Destination B.

Here is how you would use contract fulfillment to achieve that result:

  1. Navigate to Lines tab of the contract and select the contract line.

  2. Select the Autocreate Fulfillment Lines action from the Actions menu.

  3. Navigate to the Fulfillment tab and select the fulfillment line that was just created.

  4. Change the quantity to 500.

  5. Duplicate the fulfillment line.

  6. Edit each fulfillment line and enter the two shipping destinations, one in each fulfillment line.

  7. When the contract is approved, you select both fulfillment lines on the Fulfillment tab and select the Create PO action form the Actions menu.

  8. The application initiates the creation of one purchase order with two fulfillment lines to ship 500 laptops to each of the two destinations.

The Autocreate Fulfillment Lines action automatically creates contractual fulfillment lines for whole contracts or for specific contract lines, depending on where you select it. This topic explains the difference between selecting this action from the Action menu on the Edit Contract page and from the Action menu on the Lines tab. Contractual fulfillment lines are a type of contract fulfillment that you can use to initiate purchasing activity in integrated purchasing applications.

Autocreating fulfillment lines populates basic contract fulfillment information that you have to enter in manually when you select the Create fulfillment action on the Fulfillment tab.

Autocreating Fulfillment Lines on the Edit Contract Page

Select the Autocreate Fulfillment Lines action on the Edit Contract page to create one contractual fulfillment line for the contract as a whole if your contract has no contract lines, or to create one fulfillment line for each contract line. If a contract has no contract lines, the application creates one contractual fulfillment line only for those contracts created with contract types for future purchases.

Autocreating Fulfillment Lines on the Contract Lines Tab

Select the Autocreate Fulfillment Lines action on the Lines tab to create contractual fulfillment lines for each of the contract lines you selected on the tab.

You can specify which internal contacts are automatically notified about contract fulfillment milestones and when.

The notifications you specify on the contract fulfillment's Notifications tab are sent automatically to the individual's Contracts Worklist when the condition is met.

Different notification types are available for different fulfillment types. Some notifications may already be specified for you by the contract type you selected to create your contract.

Available Notification Types

You can notify internal contacts:

  • A specified number of days before or after the fulfillment due date

  • When the fulfillment line is placed on hold

  • When a purchasing document is created from one or more fulfillment lines

  • When purchasing document creation fails for the fulfillment

  • When purchasing activity is complete for a fulfillment line

You can monitor the execution of purchase orders and agreements for a contract fulfillment on the Purchasing Activity tab. Any changes must be made in the purchasing application itself. If the purchasing activity is in Oracle Fusion Purchasing, then you can navigate to the purchasing document itself by using the link provided on the agreement or PO number.

What You Can Monitor

For purchase orders, you can monitor the order and line status, the ordered quantity and price, the requested delivery date, the ship-to location, and the receipts.

For agreements, you can monitor the agreement status, the agreed amount, and the released amount for the agreement and its lines.

What contract fulfillment actions are available and when depends on the status of the contract and the status of any purchasing documents you created in an integrated purchasing application. This topic lists the most important contract fulfillment actions and when you can use them.

The following figure lists the major contract fulfillment actions which are explained in this topic.

This figure lists the major contract fulfillment
actions.

Create a Contract Fulfillment

This section lists the different ways you can create a contract fulfillment. All of these actions are available in any contract status that permits editing, for example, when the contract is in the Draft status. For contracts under amendment, these actions are only available for the latest active version of the contract.

Note: The fulfillment actions and tabs aren't available in contracts that have a contract type class of Enterprise Contract and that have no contract lines.
Action When Available Where Description

Autocreate Fulfillment Lines

In any contract line status except Under Amendment, Canceled and Closed.

Contract page Actions menu and Lines tab Actions menu

Creates contractual fulfillment lines with the basic fulfillment information already populated.

Selecting this action for the contract creates one fulfillment line for each contract line, if the contract has contract lines, and one fulfillment for contracts with no contract lines.

Selecting this action on the Lines tab creates a fulfillment line for each of the contract lines you selected.

Create fulfillment

In any contract line status except Under Amendment, Canceled and Closed.

Fulfillment tab

Use this action to create a contractual fulfillment line or a noncontractual fulfillment line.

Duplicate fulfillment

In any contract line status except Under Amendment, Canceled and Closed.

Fulfillment tab

Duplicates an existing fulfillment line.

Actions Available on an Existing Contract Fulfillment

This table lists and describes the different actions available on the Fulfillment tab for an existing contract fulfillment.

Action When Available Description

Edit fulfillment

  • Contract line status: Any except Under Amendment

  • Contract fulfillment status: Incomplete, On Hold, PO Creation failed or Agreement Creation Failed

You can edit most fulfillment information and add documents as attachments.

Add attachments to a fulfillment

  • Contract line status: Any except Under Amendment

  • Contract fulfillment status: All except Canceled

Attach files.

Set up, edit, and delete notifications

  • Contract line status: Any except Under Amendment

  • Contract fulfillment status: Any

You can specify whom to notify and when.

Synchronize contract line and fulfillment line information by selecting the Autocreate Fulfillment Lines action

  • Contract line status: Any status other than Under Amendment, Canceled and Closed

  • Contract fulfillment status: Incomplete, On Hold, PO Creation failed or Agreement Creation Failed

If you changed the contract line that was used to create a fulfillment, you can update the information in the fulfillment with your changes by selecting the Autocreate Fulfillment Lines action again on that contract line. The application synchronizes the information in the read-only fields of the fulfillment.

Note: The application synchronizes this information for you automatically when you submit the contract for approval.

Create Purchase Order or Create Agreement

  • Contract line status: Active

  • Contract fulfillment status: Incomplete, PO Creation failed or Agreement Creation Failed

Initiates the creation of either a purchase order or a purchase agreement in an integrated purchasing application.

Cancel fulfillment

  • Contract line status: Active

  • Contract fulfillment status: Incomplete, On Hold, PO Creation failed or Agreement Creation Failed

Sets a fulfillment to a canceled status.

The application automatically moves a fulfillment to this status when you cancel or close the related contract line, provided no purchasing document was created for the fulfillment.

Delete fulfillment

  • Contract line status: Any except Under Amendment

  • Contract fulfillment status: Incomplete, On Hold, PO Creation failed or Agreement Creation Failed

Deletes the fulfillment.

Complete fulfillment

  • Contract line status: Any except Under Amendment

  • Contract fulfillment status: Incomplete, PO Created or Agreement Created

Indicates a fulfillment is complete.

You can use this status to indicate purchasing activity of a fulfillment is complete or a report was delivered, for example.

Reopen fulfillment

  • Contract line status: Any except Under Amendment

  • Contract fulfillment status: Complete

Reopens a fulfillment that was previously set to complete.

Apply Hold

  • Contract line status: Any except Under Amendment

  • Contract fulfillment status: Incomplete

This action places the fulfillment line in the On Hold status and prevents any further edits until the hold is removed.

Remove Hold

  • Contract line status: Any except Under Amendment

  • Contract fulfillment status: On Hold

Removes the hold and sets the fulfillment line to the Incomplete status.

Actions Taken by the Application Automatically

This table lists and describes actions the application takes automatically.

Automatic Action Description

Synchronizes data between contract lines and fulfillment lines

When you submit the contract for approval, the application automatically transfers changes you made in the contract lines after you created fulfillment lines from them. The application synchronizes only the read-only fields on the fulfillment such as the description or unit price.

If you want to have the contract line and fulfillment line information synchronized before you submit the contract, then you must do so by selecting the Autocreate Fulfillment Lines action again on those lines.

Validates

The application validates the information required to initiate the creation of the purchasing document.

Tracks purchasing activity

The application displays key information about the purchasing activity on your fulfillment.

Sends notifications

The application automatically sends notifications based on the notifications you set up for the fulfillment.

Fulfillment Validation

The application automatically validates the information you entered in the fulfillment when you select the Create PO or Create Agreement actions. The application validates:

  1. The basic information required by the contract fulfillment itself

    You review any validation errors immediately after you take the action.

  2. The information required by the purchasing application where you are creating the PO or agreement

    Any validation errors prevent the creation of the PO or agreement and set the fulfillment status to PO Creation Failed or Agreement Creation Failed. You can review the errors by selecting the Error icon next to the status.

Contract Fulfillment FAQs

You can create multiple contract fulfillment lines from a contract line by selecting the Autocreate Fulfillment Lines action on the contract line and then duplicating that fulfillment line on the Fulfillment tab. You can then adjust the contract fulfillment line information as required.

Use the Procurement Application field to select the purchasing application where you want to initiate purchasing activity for a contract fulfillment.

Your Oracle Fusion Enterprise Contracts application comes with Oracle Fusion Purchasing already integrated, but your implementation may integrate others.

For more information about integrating purchasing applications, see Integrating Oracle Fusion Contracts with Purchasing Systems: A Technical White Paper published on My Oracle Support.