Process standard cost transactions despite unresolved negative inventory

Standard costing can continue processing transfer receipts, transfer issues, and sales order issues even when upstream depletion layers remain unresolved because of negative inventory. When an inventory issue transaction that's costed using the standard cost method drives inventory negative, Cost Management will now process all the transactions and no longer wait for the unresolved negative inventory depletion layer to be fully costed before continuing with supported reference transaction processing like transfer receipts or issues and sales order issues.

This helps organizations that run high-volume automated supply chain flows where receipts and issues can arrive out of sequence. Transfer receipts, transfer issues, sales order issues, and applicable Financial Orchestration cost-based callbacks can continue based on the costed status of the upstream standard-cost transaction, while resolving receipts and standard cost updates continue through normal valuation and adjustment accounting.

Costing Transactions and Distributions page showing standard-cost item transactions with fully costed status and final accounted status

Costing Transactions and Distributions page showing standard-cost item transactions with fully costed status and final accounted status

Inventory Value by Item page showing a standard-cost item with negative inventory value and period activity.

Inventory Value by Item page showing a standard-cost item with negative inventory value and period activity.

Monitor Financial Orchestration Execution page showing a selected event with completed task status.

Monitor Financial Orchestration Execution page showing a selected event with completed task status.

Event Details page showing completed internal transfer tasks for a Financial Orchestration event.

Event Details page showing completed internal transfer tasks for a Financial Orchestration event.

Some of the benefits this feature provides include:

  • Process transfer receipts, transfer issues, and sales order issues without waiting for upstream negative inventory depletion layers to be resolved.
  • Reduce delays in standard-cost downstream transaction processing when receipts and issues arrive out of sequence.
  • Support high-volume automated supply chain flows that can temporarily create negative inventory.
  • Allow applicable Financial Orchestration cost-based callbacks to proceed after the upstream shipment or issue transaction is costed.
  • Preserve normal valuation and adjustment accounting for resolving receipts and standard cost updates during the negative inventory period.

Steps to enable and configure

You don't need to do anything to enable this feature.

Tips and considerations

  • This feature applies only to transactions that are costed using the standard cost method.
  • Standard cost applicable at the time of transaction processing will be used to cost transfers shipments, sales and drop-shipment flows even when the onhand is negative. 
  • Any standard cost updates during the negative inventory period are handled through standard cost adjustment accounting and won't be passed on to the transfer shipments as they are already processed.
  • Resolving receipts doesn't retroactively change the already processed shipment costs because they are costed using the standard cost available at the time of cost processing the shipments.

Key resources

  • Oracle Fusion Cloud SCM: Using Supply Chain Cost Management guide, available on the Oracle Help Center.
  • Oracle Fusion Cloud SCM: Implementing Manufacturing and Supply Chain Materials Management Guide, available on the Oracle Help Center.
  • Oracle Fusion Cloud SCM: Security Reference for Manufacturing and Supply Chain Materials Management guide, available on the Oracle Help Center.

Access requirements

If you are using custom job roles, then you need to validate that you have the previously delivered privileges listed.

Privilege Status Privilege name and code
Existing

Create Cost Distributions

CST_CREATE_COST_DISTRIBUTIONS
Existing

Review Cost Distribution

CST_REVIEW_COST_DISTRIBUTIONS
Existing

Create Cost Distributions by Web Service

CST_CREATE_COST_DISTRIBUTIONS_WEB_SERVICE
Existing

Review Cost Distribution by Web Service

CST_REVIEW_COST_DISTRIBUTIONS_WEB_SERVICE